President Nikos Christodoulides on Thursday outlined the incentives he plans to introduce with the aim of convincing Cypriots living abroad to return to the island.
Speaking ahead of the day’s cabinet meeting, he said returning Cypriots will receive a 25 per cent tax exemption in their first job after coming back to the island, and that the upper limit of that tax exemption will increase from €8,550 per year to €25,000 per year for scientists and professionals who have worked abroad for at least seven years after having completed their studies.
These tax incentives were announced among others, with Christodoulides saying that “many others” will be announced when he travels to London next month on May 21.
The other incentives, he said, “do not require legislative regulation”, and relate to issues such as education and housing.
“Let’s go with a comprehensive package and proposal. I am sure that the results, taking into account the interest which has been expressed so far, will be positive,” he said.
After the meeting, government spokesman Konstantinos Letymbiotis said cabinet’s approval of Christodoulides’ plan “essentially confirms the government’s political will” for the initiative, which he called the “talent repatriation plan”.
He said the tabling of a bill at parliament over the tax initiatives will “constitute another decisive step towards achieving a strategic goal of national importance: the reversal of the drain of scientific and professional potential and the transition to a new era of brain gain for Cyprus”.
He then added that the tax plans are “not just a tool for attracting talent from abroad”, but “a substantive political act which sends the message that the Republic of Cyprus invests in its people, in the talent of our compatriots, and actively seeks to bring back Cypriots who possess valuable experience, expertise, and knowledge”.
“At a time when economic conditions in Cyprus remain consistently favourable and macroeconomic indicators strengthen confidence in the country’s course, we are creating attractive and competitive prospects for the return and utilisation of human capital which was once forced to seek opportunities abroad,” he said.
Christodoulides had announced his intention to visit London back in February, saying, “we will go to attempt to bring these people back to our country and have a brain gain rather than a brain drain, and I believe that we will be successful.”
In an interview with newspaper Phileleftheros at the end of last year, he said he was working on a plan to go abroad and woo Cypriots back to the island, “following the example set by Greece” in recent years.
In saying this, he was likely referring to his long-time ally Greek Prime Minister Kyriakos Mitsotakis’ sizeable tax offering for Greeks returning to the country from abroad.
Mitsotakis had in 2020 announced that Greeks abroad who return to Greece for work would only pay 50 per cent of their income tax for their first seven years, saying at the time he had offered the tax break “to attract human capital, which we need, to our homeland”.
Four and a half years later, last November, he declared victory, telling a European People’s Party conference that 300,000 Greeks abroad have returned to the country since the tax break was introduced.
If true, it could mean that as many as one in 15 working-age people in Greece right now was persuaded back to the country by Mitsotakis’ tax plans.
The Cypriot high commission in London estimates that there are around 300,000 Cypriots living in the UK.
However, the number of young Cypriots choosing to study in the UK has dropped drastically since the UK left the European Union in 2020, with just 4,780 Cypriot students currently enrolled at British universities.
This figure is just half of the number who were enrolled in British universities in 2017.
