The start-up ecosystem is supported by private and public institutions looking to incubate or finance start-up initiatives that are generating innovation in sciences, finance and entertainment.
The main body for financing business research and subsidizing the development of start-ups with global reach is the Research and Innovation Foundation (RIF).
Co-funded by the Cypriot government and European Union structural funds, RIF offers schemes (based on eligibility and qualitative criteria) financing start-ups for research and initial development. The grants cover up to 85% of the invested capital.
The Cypriot government offers significant financing schemes to support start-up ventures throughout their development.
Research and Innovation Foundation (RIF)
The two major activity pillars of RIF activities are the following:
a) The development and management of national research, technological development and innovation programmes in Cyprus;
b) The promotion of Cypriot research organisations, enterprises and researchers in European and other international research and innovation programmes.
The RIF organizes training and awareness-raising activities; represents Cyprus in European and other research and innovation committees, working groups, networks and initiatives; implements studies; and submits suggestions to the relevant authorities for further research and development policy initiatives.
Industry and Technology Service
The Industry and Technology Service (part of the Ministry of Energy, Commerce and Industry) manages and distributes funds under a variety of programmes. Recent examples include:
a) Enhancing SME competitiveness in the manufacturing sector and other specific economic activities;
b) Women’s entrepreneurship;
c) Youth entrepreneurship;
d) Manufacturing / marketing / development of agricultural products;
e) Encouraging investment activity and enhancing competitiveness in the wine industry;
f) Strengthening business innovation.
Initiatives in Cyprus, especially those that have the potential to penetrate large international markets or sectors, are often supported by Cypriot banks through financing.
In order to acquire a loan, you must provide collateral in the form of liquid or illiquid assets and be able to partially finance your initiative.
To acquire debt financing in Cyprus, you must show the financing institution a fully detailed business plan, showing the strategic and development potential as well as projected income of your venture.
Shareholders that can show experience at the domestic or international level are considered a confidence-boosting advantage.
Cyprus has a relatively simple and transparent tax system with one of the lowest corporate tax rates in the EU and several potential exemptions for both corporations and individuals. Due to the range of benefits for residents and non-residents alike, the Cypriot tax system provides a welcoming business environment for companies of any size or structure.
Some basics of the Cyprus tax system:
To facilitate investors in identifying investment targets in Cyprus, the Ministry of Finance set up a list of start-ups and projects that have been approved and certified (i.e. Innovative Certified Enterprises). Investors can receive substantial tax incentives if they commit resources to these start-ups.