Cyprus’ tech sector picks up speed with TechIsland at its core

In just four years, TechIsland has firmly established itself as a driving force behind Cyprus’ transformation into a regional technology hub.

Since its launch in 2021, the organisation has been working with a clear vision: to accelerate the growth of the tech sector and turn Cyprus into a global centre for innovation, investment and entrepreneurship.

Speaking to Cyprus Mail, the association explained how its approach, combining advocacy, community building and social impact, has shaped the island’s fast-growing tech ecosystem, while also pointing to the structural challenges that could hold it back in the years to come.

TechIsland is far more than a trade association, it has become a community-powered movement, with its efforts spanning three core areas: advocacy, community engagement and social impact.

Together, these pillars play a strategic role in driving forward Cyprus’ tech ambitions.

From the very beginning, TechIsland recognised that real progress doesn’t come from top-down mandates but from aligning with grassroots initiatives.

This philosophy, it explained, is reflected in its diverse membership of more than 350 companies, split almost evenly between local Cypriot firms (51 per cent) and international businesses (49 per cent).

These members range from startups to global corporates, from venture capital firms to accelerators, covering industries such as software development, fintech, videogaming, AI, health tech, blockchain and cybersecurity.

What makes the community stand out, TechIsland noted, is a shared sense of purpose. It has created an inclusive platform where Cypriot entrepreneurs, foreign founders and global executives can work side by side, exchange ideas and contribute to the island’s collective success.

The numbers also back this up. According to a 2025 KPMG Cyprus study, the ICT sector now contributes 16 per cent to national gross value added (GVA), equivalent to €8 billion.

Over the past decade, Cyprus has seen its information and communications technology (ICT) GVA soar by 347 per cent, placing it at the top of the EU27 in terms of growth.

Meanwhile, the sector’s workforce has tripled to more than 26,000 employees, growing at a compound annual rate of 12.1 per cent between 2015 and 2024.

Cyprus also ranks second in the EU for ICT contribution to national GVA and fifth in GVA per ICT employee – clear signs of a sector that has taken off and shows no signs of slowing down.

At the same time, Cyprus’ unique blend of business-friendly regulation, sunny Mediterranean lifestyle and strategic geography has long made it an attractive base for international companies.

But recent shifts in global policy dynamics have only added to its appeal.

For instance, with the UK abolishing its non-dom status (Non-dom describes a UK resident whose permanent home – or domicile – for tax purposes is outside the UK) and countries like Lithuania tightening tax rules, Cyprus stands out for maintaining a stable, innovation-friendly fiscal regime.

Combined with its welcoming atmosphere and highly skilled workforce, the island is increasingly being mentioned in the same breath as Dubai and Singapore when global companies consider new headquarters.

Yet, as TechIsland pointed out, this success comes with responsibilities and challenges that need to be tackled head-on to sustain momentum.

Since its founding, the organisation has rolled out six working groups aimed at improving the operational environment for tech companies.

Its main priorities include attracting and retaining talent, strengthening local infrastructure and boosting economic resilience through technology.

At the same time, TechIsland has developed five professional communities: HR, finance, legal and marketing communications networks, as well as Women in Tech Cyprus, the official local chapter of Women in Tech® Global in partnership with Adsterra.

These communities, it explained, provide platforms for networking, mentoring and peer support – tools that are vital for helping professionals thrive in a fast-changing industry.

Moreover, TechIsland has joined forces with global names such as TikTok, Snapchat, Microsoft and Amazon Web Services (AWS), opening doors for collaboration and knowledge sharing.

Its data partnership with StartupBlink paved the way for Cyprus to feature in global startup ecosystem rankings, bringing even more attention to the island’s growing tech scene.

Locally, the association has signed memoranda of understanding (MoU) with Invest Cyprus and the Cyprus Chamber of Commerce and Industry (Keve), helping align public and private efforts to grow the ecosystem.

Beyond business, TechIsland has also placed a strong emphasis on social impact.

Since 2021, it has raised over €5 million for community initiatives, including infrastructure upgrades and environmental sustainability projects.

Its educational initiatives further reflect this long-term vision. The Mentors’ Hub, created in partnership with Capacitor Partners, provides one-on-one guidance for startups from seasoned professionals.

TechIsland GenTech, run alongside local universities, inspires students through guest lectures and company tours.

Meanwhile, the Startup School helps equip founders with the practical skills needed to grow and scale their businesses.

Still, as TechIsland stressed, one of the most pressing issues is the growing demand for ICT professionals, driven by the rapid expansion of the sector.

However, the local talent pool remains limited due to the newness of the sector as well as the small population of the country.

This imbalance creates a dual imperative: to continue attracting highly skilled individuals from abroad while also investing in reskilling and upskilling domestic talent to meet current and future workforce needs.

As the population grows, so too does the need for expanded social infrastructure. Museums, hospitals and sports facilities are all essential to maintaining a high quality of life, TechIsland said.

Private school capacity has also emerged as a stumbling block.

Many professionals moving to Cyprus bring their families, and access to high-quality education is often a deal-breaker. When suitable schooling options are limited, it reduces the island’s appeal for top-tier talent and investors alike.

To attract private investment into social infrastructure – schools, museums, hospitals – TechIsland suggested targeted incentives such as reducing VAT-related expenses for developers and operators, given that many of these institutions do not charge VAT to customers.

Affordable housing and modern office spaces are also becoming increasingly scarce in key urban centres like Limassol.

The lack of coworking hubs and shared R&D labs has, in turn, limited the ecosystem’s capacity to support early-stage and scaling companies.

Cyprus’ exclusion from the Schengen Zone creates another obstacle. If resolved by 2026, as President Nikos Christodoulides recently announced, it could make a significant difference in attracting talent and international partnerships.

As TechIsland pointed out, mobility is a baseline requirement in today’s fast-moving global industry; without it, Cyprus risks falling behind competitors such as Portugal and Estonia.

Although Cyprus boasts a thriving network of professionals and corporates, the ecosystem still lacks robust accelerator programmes tailored to early-stage startups.

Expanding access to capital, mentoring and market entry support will be key to nurturing the next generation of high-growth ventures, it added.

In the end, TechIsland’s story is as much about Cyprus’ global ambitions as it is about the community driving them forward.

The momentum built over the past four years shows what’s possible when vision and collaboration meet. But keeping Cyprus on the map as a serious contender will take more than optimism.

It will require bold decisions, joined-up action and a willingness to think beyond the island’s borders.

For now, TechIsland’s message is clear: Cyprus has everything it needs to go from rising star to global tech player.

What happens next depends on how far the island is willing to push and adapt.