Some Background

Over the centuries, Cyprus has found itself under the control of many of the historical powers that held sway in the Mediterranean. After being settled predominantly by Greeks, everyone from the Assyrians and the Persians to Romans and the Ottomans came to control the island, leaving their various marks on the local culture. After falling to the British Empire in 1878, Cyprus finally gained its independence in 1960.

Cyprus’ political status is unusual. The international community considers the northern part of the island to be illegally occupied by Turkish forces. The dispute goes way back to 1974 when the Greek military junta carried out a coup in a bid to unite Cyprus with Greece, with which much of its population had strong links. In response, the Turkish army invaded. Ever since, Turkish forces have held the north of the island where a sizable Turkish Cypriot population still lives.

Today, things are at a stalemate. While the Republic of Cyprus has de jure sovereignty over the whole island of Cyprus under international law, in reality, the island is divided. While the south is governed by the Republic of Cyprus, the Turkish still govern the north as the Turkish Republic of Northern Cyprus—an entity no country other than Turkey actually recognizes.

While contested territory is usually a big red flag in the stability stakes, Cyprus is politically sound, and hostilities have been absent for some time. Since gaining membership in the EU in 2004, the country has opened up investment to foreigners, and there had been a gradual inching towards reunification… though after the 2020 election of Ersin Tatar as president of the North, it’s thought reunification is off the table.

Unification aside, Cyprus has been a popular investment destination with Europeans for decades already and the outlook is only becoming more promising, with credit ratings ever on the up. In 2020, Fitch rated it BBB-, in 2019 Moody’s gave it a Ba2 and S&P also rated it BBB- for 2018—all these up from previous ratings.