In the IMD World Competitiveness Ranking 2025, Cyprus slipped from 43rd to 44th place out of 69 economies. While the shift appears small, the underlying metrics reveal key changes in the island’s investment environment, affecting its appeal to both local businesses and foreign investors. Strengthening government efficiency contrasts with ongoing infrastructure bottlenecks and declining international investment flows, raising strategic questions for those operating—or planning to operate—in Cyprus.
Cyprus Competitiveness 2025: Key Highlights
The IMD Competitiveness Center identifies two main causes for the ranking shift:
- A downturn in economic performance, tied to reduced foreign direct investment (FDI) and fewer outbound investments from Cyprus.
- A significant drop in the infrastructure score, with Cyprus now ranking 46th—its weakest showing since 2017. Key concerns include limited energy capacity, underdeveloped urban infrastructure, water resource issues, and reduced air transport efficiency.
Yet, areas of resilience remain:
- Government efficiency rose to 26th, backed by enhanced fiscal policy and institutional reforms.
- Business efficiency improved to 52nd, with better access to capital, stronger corporate governance, and improved external perception of Cyprus as a business destination.
The 2025 executive opinion survey still cites Cyprus’s favourable tax regime, skilled labour force, political stability, and pro-business legislation as major advantages.
What This Means for Investors and Businesses in Cyprus
The mixed results in the 2025 ranking reflect both opportunities and risks:
✅ Investors benefit from a more agile government and improved financial accessibility.
⚠️ But infrastructure constraints—especially in energy, water, and transport—could affect logistics-heavy industries, real estate, and manufacturing.
As regional and EU competitiveness intensifies, these structural issues may influence long-term planning for multinational companies, startups, and relocation decisions.
Eurofast’s Take: Strategic Guidance for a Shifting Landscape
At Eurofast, we help businesses interpret what rankings don’t always show at first glance. Through local expertise and regional perspective, we assist clients in:
- Evaluating market-entry potential and investment structures
- Mitigating risks tied to infrastructure limitations or FDI policy shifts
- Optimising tax planning and operational compliance in Cyprus
- Designing scalable expansion frameworks aligned with EU competitiveness trends
In a volatile global economy, understanding the real-time competitiveness of a jurisdiction like Cyprus is key to staying ahead. Eurofast ensures that clients make decisions not just based on data—but on what that data truly means for their business.
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