Foreign firms added €3.5 billion to Cyprus economy in 2023

Cyprus was among EU member states where foreign-controlled companies accounted for the smallest share of jobs and economic output in 2023, despite such enterprises having a significant overall impact across the bloc, according to a report from Eurostat released on Wednesday.

Focusing on employees and self-employed persons, the data showed that foreign-controlled enterprises in Cyprus represented 10 per cent of all jobs.

This figure was matched only by Italy, and was just slightly above the lowest rate recorded in Greece, which stood at 8 per cent.

Specifically, data showed that foreign-controlled enterprises in Cyprus represented 32,119 people employed, placing the country at the lower end of the EU scale, compared to the EU total of 24,145,727 people employed by foreign-controlled enterprises.

On the other hand, foreign-controlled enterprises accounted for 45 per cent of jobs in Luxembourg, and 28 per cent in Slovakia and the Czech Republic

In terms of economic output, the proportion of total value added generated by these foreign-controlled firms in Cyprus was €3.5 billion, a small fraction of the EU total of €2.39 trillion.

The highest share of total value added by foreign-controlled firms was recorded in Ireland (71 per cent), followed by Luxembourg (61 per cent), and Slovakia (50 per cent).

By contrast, the lowest shares of value added by foreign-controlled enterprises across the EU were observed in France (15 per cent), Italy (17 per cent), and Greece and Germany (each 18 per cent).

The data suggests that the local economy of Cyprus remains heavily dependent on domestically controlled enterprises for employment and economic output, making it an outlier compared to some of the EU’s larger economies.

However, it is worth pointing out that some enterprises in Cyprus may be owned by foreign nationals who have relocated to the island but have established their companies under Cypriot jurisdiction.

As such, these firms are classified as domestically controlled, even though their ownership or management may be foreign in origin.