Cyprus is poised to reap significant benefits as an investment destination following last week’s approval by the Councils of a new plan to provide urban incentives for developments in both primary and secondary education sectors.
Initiated by the Ministry of Interior, this plan aims to bolster the education sector—a fundamental pillar of the state’s strategy for societal and economic development.
This dual-purpose initiative not only seeks to attract investment from both local and international sources into the burgeoning educational sector but also addresses the pressing need for more educational options.
This issue is particularly critical for expatriates working in Cyprus, whose decisions to settle permanently are often hindered by the limited educational choices for their children.
The policies are designed to benefit highly skilled workers and their families, thereby enriching the socio-economic landscape of Cyprus.
The plan focuses on increasing the capacity and upgrading the infrastructure of existing educational institutions to bridge the current gap between demand and supply.
Several private educational institutions have expressed interest, with the town planning department reviewing 14 applications for educational development projects, which include expansion and construction of new facilities, according to the outlet InbusinessNews.
The specificity of the plan is worth noting; it applies solely to educational developments. For example, any increase in the building coefficient is restricted to the land area utilised by educational institutions and cannot be transferred for other uses.
Tanya Romanyukha, General Director of TechIsland, has welcomed the government’s initiative as crucial for addressing the limited availability of school places—a significant bottleneck for further development of Cyprus’ technology sector and its broader competitiveness as a business hub.
“Access to quality education is a key criterion for skilled professionals and entrepreneurs moving to the island,” she explained.
Romanyukha’s observations are supported by a recent survey conducted by TechIsland in collaboration with the IMR/University of Nicosia.
The survey revealed a significant strain on the private education system, as nearly 60 per cent of technology professionals relocating to Cyprus bring their children, with an average of two children per family.
Moreover, more than 2,600 children have relocated to Cyprus due to their parents’ jobs between 2020 and 2024.
Furthermore, the demand is expected to rise as approximately 68 per cent of companies with an international presence plan to bring an average of 49 new skilled professionals per company over the next five years.
Romanyukha suggested that while the current incentives are a positive step, additional actions are needed to ensure sustainable development.
She proposed allowing the transfer of unused building factors to other projects, akin to incentives for renovating listed buildings.
Additionally, she mentioned that there should be a significant reduction in VAT for constructing school infrastructure to encourage more investments, noting that similar strategies have been effective in other EU countries.
For instance, in Belgium, a reduction in VAT under the ‘Scholen van Morgen’ programme released significant funds for new school projects.
Such practices, Romanyukha argued, could be beneficial for Cyprus, potentially extending to universities, museums, and sports facilities to enhance the overall development of social infrastructure.
She also emphasised the need for streamlined procedures to recruit foreign teachers, particularly those whose mother tongue is English, by integrating them into the Business Facilitation Unit (BFU) to expedite recruitment and meet the escalating demands of private schools.
She concluded that “We look forward to introducing additional actions that will strengthen Cyprus’ educational infrastructure and establish the island not only as a technology and entrepreneurship hub, but also as an education cente”.
Marios Tannousis, CEO of Invest Cyprus, also stressed the plan’s critical role in modernising private schools and attracting investments.
“Meeting the educational needs of highly qualified foreign workers’ families is essential. Without this, we risk losing valuable foreign investments,” he said during an interview.
He noted the high demand for educational places in cities like Nicosia, Limassol, Larnaca, with expected expansion to Paphos and Famagusta.
“The issue was and is of concern and such moves will help those who are considering relocating to Cyprus,” Tannousis concluded.
