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Cyprus Unemployment Drops To 4.0% In Q4 2025 As Workforce Participation Rises

by THEFUTURE.TEAM

March 1, 2026

The unemployment rate in Cyprus fell to 4.0% in the fourth quarter of 2025, according to data from the Cyprus Statistical Service. This compares with 4.5% in the corresponding quarter of 2024 and 4.1% in Q3 2025, reflecting continued improvement alongside growth in both employment and labour force participation.

Robust Growth In The Workforce

The Labour Force Survey shows that the labour force expanded to 531,062 individuals, representing 65.2% of the population, up from 518,053 individuals (64.3%) a year earlier. Participation rates reached 70.3% for men and 60.4% for women, indicating stronger overall engagement in the labour market.

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Employment Trends And Sector Performance

Total employment rose to 509,773 people, lifting the employment rate to 62.6% from 61.4% in Q4 2024. Employment among men reached 67.6%, while women recorded 57.9%. Within the 20–64 age group, the employment rate increased to 81.7% from 80.2% a year earlier, with rates standing at 86.2% for men and 77.4% for women. Employment among those aged 55–64 also improved, rising to 71.7% compared with 69.9% in the previous year.

Sectoral Composition Of Employment

The services sector remained the dominant employer, accounting for 81.3% of total employment. Industry represented 16.5%, while agriculture accounted for 2.2%, with sector shares largely unchanged from 2024.

Part-Time And Temporary Employment Dynamics

Part-time employment represented 8.6% of the workforce, or 43,703 individuals, slightly down from 8.8% a year earlier. The share remained higher among women (10.4%) than men (6.9%).

Employees accounted for 90.2% of all employed persons, totaling 460,003 individuals. Among them, 14.8% were working under temporary contracts, up from 13.6% in the previous year, indicating a moderate increase in flexible employment arrangements.

Shifting Landscape In Unemployment

The number of unemployed declined to 21,289 from 23,454 in Q4 2024. However, youth unemployment among individuals aged 15–24 increased to 14.7% from 9.6% a year earlier.

At the same time, long-term unemployment continued to ease, falling to 18.3% from 25.4%, while 66.6% of unemployed persons reported searching for work for less than six months.

Outlook

The latest figures point to a labour market that continues to strengthen overall, supported by higher employment and labour force participation. At the same time, rising youth unemployment highlights a segment that may require closer policy attention going forward.

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Cyprus Expands Tax Incentives To Attract And Repatriate Skilled Talent

by THEFUTURE.TEAM

March 1, 2026

Parliament Approves Strategic Tax Relief Bill

The Cypriot Parliament has approved a new tax relief framework aimed at attracting expatriates back to the country under the national Minds in Cyprus initiative. The bill passed with minimal changes, signaling strong political support for measures designed to strengthen competitiveness and expand the domestic talent base.

Robust Bipartisan Support And Broad-Based Eligibility

The bill was supported by 18 MPs from DISY, DIKO, DIPA, and EDEK, while 16 lawmakers from AKEL, the Ecologists, and several independents abstained. The framework expands eligibility criteria and increases the ceiling for tax exemptions, targeting individuals who have lived abroad for at least seven years.

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Detailed Provisions And Implementation Conditions

Under the new scheme, returning expatriates may benefit from tax exemptions of up to 25% of their income, capped at €25,000 annually. The incentive applies to both salaried employees and self-employed professionals, provided their annual income in Cyprus reaches at least €30,000.

Criteria For Eligibility And Residential Obligations

To qualify, applicants must have been residents of Cyprus during at least one year before their period abroad. Eligibility also covers individuals who worked full-time outside Cyprus for at least 84 months before returning, regardless of academic background, or those with at least 36 months of employment abroad who hold a university degree recognized by the Cyprus Council of Scientific and Technical Advisors.

Presidential Endorsement And National Strategic Vision

President Nikos Christodoulides welcomed the vote, describing it as a key step in advancing the Minds in Cyprus initiative. According to the presidency, the policy forms part of a broader strategy aimed at attracting highly qualified professionals and strengthening long-term economic resilience.

Investing In Human Capital For A Competitive Future

The tax incentive framework reflects Cyprus’ broader effort to enhance its talent pool and improve international competitiveness. By encouraging skilled expatriates to return, policymakers aim to support sustainable growth and reinforce the country’s position as a regional hub for expertise and innovation.