Postcard From Cyprus
Business opportunities led me to Cyprus. Frankly, besides knowing it was an island split between Turkey and Greece, I knew almost nothing about it. I had this vague memory of a fiscal paradise, crowded with investment companies. I remembered the time I had to contact hundreds of asset managers to build a “Poster of Asset Managers” during my time at PwC. Back then (2018) Cyprus kept popping up as a fund domicile.
I arrived late at night. One of the first things that struck me was the darkness. No lights on the roads. Just black, uninterrupted stretches of asphalt. I later learned that Cyprus struggles with electricity production and grid capacity. Still, it felt unsettling at first, almost as if the country was a desert.
The weather, on the other hand, was a gift. Coming from the cold and rain of Porto and Bucharest, the mild air felt generous. And slowly, Cyprus started to reveal itself. Overall, it was a pleasant surprise.
Cyprus has always been a crossroads. Long before it became a financial hub, it was fought over by empires (the Assyrians, Egyptians, Persians, Romans, Byzantines, Venetians, Ottomans, and eventually the British). Independence came in 1960, but stability… not really. In 1974, a Greek-backed coup triggered a Turkish military intervention, splitting the island in two. To this day, Cyprus remains divided: the Republic of Cyprus in the south (internationally recognized and part of the EU) and the Turkish Republic of Northern Cyprus in the north (recognized only by Turkey). Nicosia is the last divided capital in Europe, a city literally cut in half.
Historical beauty in Larnaka
Politically, Cyprus is a presidential republic. The president is both head of state and government, elected by popular vote. On paper, it is a democracy aligned with European institutions. In practice, politics are deeply shaped by geopolitics, unresolved reunification talks, and regional tensions in the Eastern Mediterranean.
Economically, tourism is an obvious pillar but highly seasonal one. It is always striking to see large beachfront hotels entirely closed and empty, a clear indication of how strongly seasonal tourism in Cyprus remains.
Celebrating my birthday at a nice hotel near the beach
Finance, professional services, shipping, and real estate are the real engines of the Cypriot economy.
Cyprus hosts one of the largest merchant shipping fleets in the world, thanks to its favorable maritime regime. Fund domiciliation, asset management, forex brokers, and holding structures are still very much part of the landscape, though regulation has tightened significantly since the 2013 banking crisis, when the country became the first in Europe to impose losses on bank depositors.
That crisis forced Cyprus to clean up its financial sector, strengthen supervision, and rebuild credibility. Since then, the economy has become more diversified, with growing contributions from technology, startups, and foreign entrepreneurs relocating under various residency and tax schemes.
But challenges remain. Energy dependency is a major one. Cyprus relies heavily on imported fuel, making electricity expensive and vulnerable to supply shocks. Water scarcity is another. Desalination plants are needed but costly. Add to this the unresolved division of the island, inflationary pressures, housing affordability issues, and the delicate balance of being a small state in a volatile region.
Frankly, Cyprus feels cosy. Nicosia comes across as a lively city, with many good and often very trendy restaurants – probably one of the best places I have been to overall in terms of food. It is still striking to see how such a small, relatively under-the-radar place has managed to attract so much capital.
At a restaurant playing a brain-teaser while waiting for the bill.
Anyway, I will be very happy to be back to Cyprus soon!
Sincerely yours,
Marie