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Cyprus Enacts Robust Tax Reform to Boost Foreign Investment And Business Growth

by THEFUTURE.TEAM

December 24, 2025

Parliament Endorses Landmark Tax Reform

Cyprus’ legislature has approved a comprehensive tax reform that marks a pivotal chapter in the nation’s economic evolution. According to Invest Cyprus, this decisive action both preserves and enhances the country’s reputation as a premier destination for business and foreign capital.

Enhancing Competitiveness Through Strategic Tax Adjustments

The new framework introduces several targeted reforms for legal entities. Key measures include the elimination of the deemed distribution of dividends, along with a reduction in the withholding tax on actual dividend distributions from 17% to 5%. Additional adjustments such as the abolition of stamp duty, broadened exemptions for capital gains tax, and more favourable stock option treatments, collectively underpin a reassured investment environment. A modest corporate tax increase from 12.5% to 15% further aligns the system with evolving economic needs.

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Investor Confidence And Long-Term Policy Vision

In a recent interview with InBusinessNews, Invest Cyprus chief executive Marios Tannousis emphasized that the reform fortifies the stability, predictability, and clarity indispensable to foreign investors. He noted that such a refined tax framework is foundational for Cyprus’ sustained economic appeal, extending the country’s competitive edge well into 2026 and beyond.

Collaborative Efforts Driving Economic Resurgence

Expressing appreciation for the role of both public bodies and private sector stakeholders, Tannousis commended the government, the Finance Ministry, and parliament for their collaborative efforts. This reform not only resolves a long-standing issue but also ushers in a renewed era poised to significantly bolster foreign investment and entrepreneurial growth in Cyprus.

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Cyprus Posts Record Annual Growth In Q4 2025, Outpacing EU Peers

by THEFUTURE.TEAM

February 16, 2026

Record Annual Growth In Q4 2025

According to Eurostat, Cyprus posted the strongest annual GDP growth among EU member states with available data in the fourth quarter of 2025. The economy expanded by 4.5% year on year, underscoring sustained economic momentum. Quarterly, GDP also advanced by 1.4% compared with the previous quarter, reinforcing the picture of steady expansion toward the end of the year.

Moderate Economic Expansion In The Eurozone And The EU

Across the euro area and the wider European Union, growth remained considerably more modest. Seasonally adjusted GDP in the eurozone increased by 0.3% quarter on quarter in Q4 2025, matching the 0.3% rise recorded across the EU. In the preceding quarter, growth reached 0.3% in the eurozone and 0.4% in the EU.

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On an annual basis, GDP rose by 1.3% in the eurozone and 1.5% in the EU during Q4 2025, slightly below the 1.4% and 1.6% increases registered in the previous quarter. For the full year 2025, preliminary estimates point to average growth of 1.5% in the eurozone and 1.6% in the EU, based on seasonally and calendar-adjusted data.

Marginal Increase In Employment

Labour market figures show a gradual but positive movement. In the fourth quarter of 2025, employment in both the eurozone and the EU rose by 0.2% compared with the prior quarter. Year-on-year employment gains reached 0.6% in the eurozone and 0.7% across the EU. Projections for the full year indicate overall employment growth of 0.7% in the eurozone and 0.5% in the EU.

Overall, the data highlight Cyprus’s notably faster growth pace relative to the European average, pointing to strong domestic performance even as broader regional expansion continues at a measured rate.