Cyprus has a 'brain gain' plan

Summary

Business Daily: Cyprus Has a 'Brain Gain' Plan

BBC World Service | Host: Daniel Rosney
Release Date: September 22, 2025

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Episode Overview

This episode explores Cyprus’s ambitious new "Minds in Cyprus: Brain Gain" initiative—a government plan aimed at reversing the “brain drain” by luring back talented professionals from its large diaspora. Host Daniel Rosney investigates the details of the program, the challenges of enticing citizens to return, and addresses the criticisms of a potential two-tier employment system. The episode also places Cyprus’s efforts in a broader, global context, looking at how other nations are responding to similar demographic and economic challenges.

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Key Discussion Points & Insights

1. The ‘Brain Gain’ Initiative: What Is It?

• Cyprus seeks to attract Cypriot professionals working abroad—especially in business, technology, and innovation—to return and contribute to a modernizing economy (00:58).
• Main incentives include:
  • 25% tax cut for returnees after seven years abroad
  • Tripling of maximum tax exemption
  • Housing support, and assistance with education and healthcare for returning citizens (00:58–01:37).
• Launch took place in London, home to an estimated 300,000 Cypriots, highlighting the scale of the diaspora (02:54).

Notable Quote

"Together we can reverse the brain drain into a brain gain."
—Daniel Rosney (00:58)

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2. Voices from the Diaspora: Real Stories

• Nicholas: 28-year-old Cypriot paralegal, left seven years ago for better career prospects in the UK (03:39).
  • Highlights the challenge of independence and housing affordability in Cyprus versus London.
  • Finds the initiative attractive but notes that career trajectory remains his primary concern.
• Pavlos Clientes: Left Cyprus amid financial crisis, built a business in the UK before returning (17:00).
  • Skeptical about financial incentives as a motivation:

    “You are not coming back because someone is giving you for a few years some tax break.”
    —Pavlos Clientes (17:02)

  • Emphasizes need for greater international trade links and not just reliance on local market (17:28).

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3. Government Perspective: Deputy Minister Irene Pickey Interview

• Stresses the urgency: Cyprus has “nearly as many people abroad as at home” (04:51).
• Refuses to set hard targets for returnees but suggests a few thousand returns would be a “great success” (06:22).
• Responds to criticism about possibly creating a two-tier workforce due to tax breaks:
  • The incentive is temporary (7 years).
  • It's designed to aid relocation costs, not to create permanent inequality (08:16).
  • Plans to abolish the prior residency requirement for housing grants for returnees (06:47).

Notable Quotes

“The project for me is going to be a success from having the right people moving back to the country.”
—Irene Pickey, Deputy Minister (05:56)

“It's just a trigger for people to come back. It's not creating an inequality forever...”
—Irene Pickey (08:16)

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4. International Context: Comparisons & Academic Insight

• Other countries’ approaches:
  • Croatia: Financial incentives for returnees, but focused on less developed regions.
  • Portugal: Major tax breaks for under-35s to prevent emigration (12:52).
• Academic perspective (Katja Batista, economics professor):
  • Highlights multiple benefits of diaspora—remittances, educational motivation, international investment, and trade ties (13:35–15:02).
  • Policy should address more than just financial incentives—lifestyle and career opportunities also drive migration.
  • Demographic decline means that attracting skilled migrants is critical.
  • Notes these policies are common but especially hard in low-income countries most affected by brain drain.

Notable Quote

“When the most skilled people leave the country, this will be a drag on its growth and development. But… both the diaspora... and those that come back... can benefit the country in multiple ways.”
—Katja Batista (13:42)

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5. Challenges & Criticisms

• Housing Crisis: Recognized as a major barrier, and government is adapting grants to include new returnees (06:47).
• Risk of Two-Tier System: Differing tax burdens for returnees and locals could cause workplace tension (07:56–09:03).
• Preparedness: Some, like Pavlos Clientes, note the initiative is still in proposal/PR phase, not yet law (17:28).
• Market Readiness: If Cyprus cannot develop strong international links for local companies, returning professionals might face limited career progression (17:28).

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6. Returnees’ Real Motivations

• Financial perks matter, but personal choice, career development, and sense of home are key.
• Some, like Nicholas, may time their return to maximize tax incentives but make career their main driver (19:33).

Notable Quote

“It is a positive change. It is something I will consider... If I'm close to the threshold or not, maybe I extend my stay in the UK to get that benefit. My main goal… is to qualify as a solicitor and then if I have this benefit, this tax incentive, then that's an added benefit.”
—Nicholas (19:33)

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Notable Quotes & Memorable Moments

• The vision:
  “Together we can reverse the brain drain into a brain gain.” (00:58 – Daniel Rosney)
• Returnee’s skepticism:
  “You are not coming back because someone is giving you for a few years some tax break.” (17:02 – Pavlos Clientes)
• Government’s stance:
  “It’s just a trigger for people to come back. It’s not creating an inequality forever...” (08:16 – Irene Pickey)
• Academic context:
  “Both the diaspora... and those that come back... can benefit the country in multiple ways.” (13:42 – Katja Batista)

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Segment Timestamps

• Intro & Cyprus Brain Gain launch context: 00:58–04:28
• Interview with Nicholas (diaspora perspective): 03:39–04:28; 19:33–20:06
• Interview with Deputy Minister Irene Pickey: 04:51–11:08
• International comparisons & academic analysis: 12:52–16:57
• Pavlos Clientes interview (returnee/business owner): 17:00–19:09

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Conclusion

Cyprus’s Brain Gain plan is an ambitious, multi-faceted response to the loss of skilled human capital over decades. The initiative provides financial incentives, but faces real challenges—including societal tensions, infrastructure limits, and the need to create a dynamic ecosystem that competes not just on tax but on career opportunity and quality of life. The episode highlights both optimism and skepticism in the community, situating Cyprus’s efforts within a broader global trend among smaller and aging nations.

For policymakers and the diaspora alike, the underlying reality is that attraction—and retention—go beyond tax breaks to the heart of what makes a nation a place worth coming home to.

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Transcript

[Daniel Rosney]

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[Irene Pickey]

You don't look like police.

[Daniel Rosney]

I'll take that as a compliment. See it differently when you stream the best of British TV with BritBox, watch with a free trial today. May 2025. Tonight marks a turning point. This initiative led by the government of Cyprus is not just a call to action, it is a homecoming. Described as a flagship initiative of the Cypriot government, a new project aimed at luring back its brightest minds is launched. Together we can reverse the brain drain into a brain game. Not in its capital Nicosia, though, instead two and a half thousand miles away in London. The Minds in Cyprus program taglined the Brain Gain initiative. Its aim is to attract talented professionals who've moved abroad to return to Cyprus and contribute to the country's ongoing transformation. With emerging industries, a growing tech ecosystem and a vision for a knowledge based economy, the time to act is now. One proposal is a 25% tax cut for those returning after seven years. Another is a near tripling of the maximum tax exemption. There are also pledges to help with housing and support with education and healthcare. I'm Daniel Rosney and on today's Business Daily on the BBC World Service, I'm going to explore this initiative and and examine whether it's a forward thinking project or is it a two tier system in the making. And we'll also hear how other countries are trying to bring their talent back home. Hello? Hello. Whereabouts are you?

[Nicholas]

I'm outside of New Moon.

[Daniel Rosney]

We're starting in the financial district of London. This capital capital city was chosen as the place to launch mines in Cyprus because of the estimated 300,000 Cypriots living in the UK. Many of those work in these tall skyscrapers that surround us. And everywhere you look there are people in suits on their way to meetings, tapping furiously on their phones as they wait in line for some takeaway food. Cyprus wants to attract people like this, those working in the business, technology and innovation sectors. Someone that fits that bill is 28 year old Nicholas, who is a paralegal for a shipping firm and first left his home country seven years ago.

[Nicholas]

My reasoning for coming to the UK was career based. If bigger companies, more higher paid roles are opened up in Cyprus, I think that will definitely make it more attractive for me to return. What is quite common in Cyprus is that you would live with your parents for a while until maybe you are 30 here in London. Even if you are not the highest earning yet, you can still live on your own. With the initial salaries, I think so.

[Daniel Rosney]

Do you live on your own?

[Nicholas]

I live in a flat share, but I still don't have any contributions from my family, if that's what I'm trying to say in Cyprus. You wouldn't be able to, I think straight away to do that.

[Daniel Rosney]

More from Nicholas later. There are fewer than a million people that live on the small island nation in the Mediterranean Sea, close to the Middle East. It has one of the smallest economies of the European Union, making up just 0.2% of the block's total GDP. But the country has huge ambitions to make waves and grow.

[Irene Pickey]

Hello, very nice to meet you. I'm Irene Pickey. I'm the Deputy Minister to the President. My role is coordinating the government program. We have been experiencing a very strong growth. We have some sectors that are really growing, like the ICT sector, health sector, education sector, green tech sector, which need a lot of talent. Nearly the size of our population, the people that live in the country. We have a similar number of people living abroad. So we thought it was the right time to initiate this clerkship initiative and bring back our people, our talented professionals.

[Daniel Rosney]

Do you have a projection or an ideal of how many people you want to move back to Cyprus in the next five or 10 years?

[Irene Pickey]

I think it's quite difficult to put a number on it. I mean, we were welcoming everybody that wants to come back. There are more than 800,000 Cypriots living abroad. So you can understand this is a huge pool for our country.

[Daniel Rosney]

But if you don't have a specific number, then how do you measure whether or not the project has been a success?

[Irene Pickey]

The project for me is going to be a success from having the right people moving back to the country. And by right people I mean this talent that it's abroad and they want to move back to the country.

[Daniel Rosney]

The reason I asked that question is, is I'm just trying to better understand the infrastructure you might have in place if say 80,000. So 10% of the diaspora move back.

[Irene Pickey]

Well, I'm not sure we're looking at these kind of numbers. I mean, I'm not sure that 80,000 people are going to be moving back to Cyprus. Maybe 5,000 moving, three, 4,000 people moving back. I think that would be a great success.

[Daniel Rosney]

How will you facilitate that? Cyprus, like a lot of European countries, has a housing crisis. Lots of Cypriots move abroad because they can't get housing.

[Irene Pickey]

I fully agree that housing is an issue in Cyprus. Like it's another most, I think of the EU member states right now. But our government has initiated a number of schemes especially geared towards young people. And I'll give you an example. We have a scheme for young couples under 41 years old that they can get a grant if they want to start their own house here in Cyprus. This initiative have a condition that you had to be living for two years in Cyprus before you could get the grant. So this is something that we're abolishing now. It's an example of what we're trying to do with the Mines in Cyprus initiative, how we're saying that even if you are new to the country, you're a Cypriot coming back to the country, you can get this initiative. So although housing, it is an issue here in Cyprus, we're trying through a number of schemes. When we were in in London and also when we went in the States with the President earlier this year, we met a lot of young Cypriots, very talented, that they have their own businesses abroad and they would like to bring them also here back in in the country. So we're not looking only for employees. The talent can be in all the sectors.

[Daniel Rosney]

There will be critics that say that inevitably you're creating a two tier system because it's. If you're working in it in Cyprus and somebody who has lived abroad for more than seven years comes to do the exact same job as you, they get more money because they won't need to pay as much tax.

[Irene Pickey]

I agree partly to this point. First of all, let me say that brain gain mindset Cyprus is one, only one of the initiatives we're doing also a lot of initiatives about the people that they're here in Cyprus. And also the tax incentive is going to be limited only for a few years. It's only, I mean, they're going to be liable for the tax credit tax benefit for only seven years. So it's not like that somebody's going to be moving back and get this tax benefit forever. It's going to be for a certain amount of time. You know, at the initiation of their job, somebody that moves back has to relocate their family. Obviously they have more expenses. So it's just a trigger for people to come back. It's not creating an inequality forever, which is what maybe you are referring to.

[Daniel Rosney]

But it presumably will create some form of tension in companies if two people are doing the exact same job. But when somebody gets a pay slip, they're getting more money for doing the same job as somebody else because they've moved back.

[Irene Pickey]

Well, I have to say that the companies and the chambers have been very forward looking to this initiative also. Not only CPU companies, but we have a lot of foreign companies that they live here in. They have been stationed here in Cyprus and they see the initiative very favorably.

[Daniel Rosney]

And is the hope that by bringing people back to Cyprus and by showing international companies that you have highly skilled workers in Cyprus that they might move their offices, their headquarters.

[Irene Pickey]

Well, it is true that as I said back in April, we did a roadshow with the President in the US we visited New York, Texas and Silicon Valley. We met with a number of big enterprises there, big names, especially in the tech sector in Silicon Valley. And the first question they were asking was what type of talent you have in the country. So for these companies to relocate to bring even part of their business here in Cyprus, the talent that they can find here in the country is very important.

[Daniel Rosney]

Is it hard for Cyprus as a small nation to compete with Silicon Valley for talent because you just won't be able to match the salaries that people there get?

[Irene Pickey]

We are trying to build a new, different ecosystem. I think each country has its own competitive advantages. Being a small country and geopolitically where we are, we are very close to the Middle east, to very big economies there, very close to Europe being part of the European Union. So we have our own competitive advantages. Of course, we're not trying to compare ourselves with the Silicon Valley, but what we're trying to do is to really build a new knowledge economy here at the edge of the European Union.

[Daniel Rosney]

Minister, thank you very much for your time. You're listening to Business Daily from the BBC World Service.

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[Daniel Rosney]

See mintmobile.com I'm Daniel Rosni and as well as the Mines in Cyprus project, we've just been hearing about where the Cypriot government is trying to encourage thousands of its diaspor. Other nations are also adopting similar schemes. Croatia is offering financial benefits for people to come back, but it wants citizens to resettle in less developed regions, while Portugal is slashing taxes for under 35s to try and prevent them from leaving in the first place.

[Katja Batista]

When Southern European countries are looking at their diaspora, their highly skilled diaspora, thinking that maybe this is a loss because we invest in the human capital of these people. I mean, maybe we should pause.

[Daniel Rosney]

Katja Batista is a professor of economics at the Nova School of Business and Economics in Lisbon, Portugal.

[Katja Batista]

Most of my research is on international migration, and I've been studying both the effects of migration on destination countries, but also ethiology. People always were concerned about the brain drain, the fact that when the most skilled people leave the country, this will be a drag on its growth and development. But actually what we find from looking at the variety of studies is that both the diaspora that is migrants that are still abroad, and those that come back to the home country can actually benefit the country and they can do so in multiple ways. The most obvious effect is obviously financial remittances, right? This is the one that we can measure better, that has been documented for a long while. But what we see also is that for example, when people, highly skilled migrants leave a country, they actually create in many instances incentives for the people that stay back home to invest more in their education because just the possibility that they may later in time leave the country. I mean, and then of course there are the international linkages. The fact that you have a strong diaspora abroad is conducive to more foreign direct investment, to more international trade linkages. And all of these can have very positive impact in the countries of origins of immigrants.

[Daniel Rosney]

It's not just European countries looking at brain gain. The Commonwealth published a paper in July where it estimated there was a diaspora investment potential of more than US$73 billion within its 56 countries. To unlock this, it said member states, the vast majority, which are smaller nations like Tonga and the Seychelles, must embrace a wider range of financial instruments in order to power startups and and fuel venture capital.

[Katja Batista]

Governments can try to implement policies that reap the benefits of existing immigration flows of existing diaspora. They can try to attract people back home. Taxes are an incentive. But usually that's not the only reason why people leave. Many times people leave because they have international career motivations and they are looking for different types of life, especially when they are young. I mean, we know that most immigrants, these highly skilled, they leave right after their undergrad degrees. All of these countries are in demographic decline, right? So I mean all of these countries are aging and so more people, especially highly skilled individuals, are obviously very welcome. The Philippines or India, this is clear. Another country that I've been working with very closely that has a huge diaspora compared to its size is Cape Verdes in Portugal. There are also initiatives that are meant to bring the diaspora back to the country. There are several meetings where people connect. It serves different purposes which are at the same time connecting with people and then maybe trying to bring their investment and trade connections back home and possibly also the people themselves. So I would say this is something that I've seen being done by a variety of countries. I mean low income countries like in Africa, those are the ones that are most affected by the so called brain drainage and those are the ones where policy responses are harder.

[Daniel Rosney]

But how will people react to the Cypriot government's proposals?

[Pavlos Clientes]

First of all, it's not fair for.

[Daniel Rosney]

Any local Pavlos clientes. Left Cyprus 12 years ago during a.

[Pavlos Clientes]

Financial crash, returning to your motherland. It's a purely personal choice. You are not coming back because someone is giving you for a few years some tax break.

[Daniel Rosney]

He eventually started his own IT company called Persectix in the uk, which then opened an office in his home country in 2021, where he's now based full time.

[Pavlos Clientes]

For many years we used to have projects only outside of Cyprus because the local market wasn't mature or didn't need our expertise. Now, the last two years we're seeing that this wave of modernization coming to Cyprus in their seek our services locally. If the government wants this to succeed, one thing is to attract people back, but the other thing, they need to build bridges with other countries or bigger markets in order to serve them. Otherwise it just be a competition between the companies locally and will be raised to the bottom to just offer the cheaper services. Cyprus is a rock. You just live in your small world. You need to understand how the rest of the world works with the proposed changes, because what the government already announced is just a PR for now, because they're not passed through the parliament yet. I can see two different set of companies. The local companies, most of them are based in Nicosia, the capital. Traditional banks, insurance companies, those guys are most of them serving the local market. And then you've got the Limassol cluster. Most of the companies that are foreign and they just operate from Cyprus, they don't do any operations inside Cyprus or serve any clients in Cyprus. They just move their headquarters. Most of the time they are Russian, Ukrainian, and it's not easy to break in through the door. This cluster in Imazon, they employ some Cypriots, although the majority of their employees, around 80, 90% are all foreigners.

[Daniel Rosney]

And how many people do you employ?

[Pavlos Clientes]

We're 10 now.

[Daniel Rosney]

Are they all Cypriot?

[Pavlos Clientes]

Yes.

[Daniel Rosney]

Was that a conscious decision?

[Pavlos Clientes]

Yeah. I wanted to give opportunity to people to stay in Cyprus and thrive and not have to do the journey that I did and move abroad for many years in order to half the career that they want.

[Daniel Rosney]

Back then to the initiative itself, the Mines in Cyprus program. Targeted adverts are appearing online saying, follow your way home. Your future awaits work. Live and thrive in your homeland. But will citizens return? Let's end with Nicholas, who we heard from at the beginning of the program.

[Nicholas]

It is a positive change. It is something I will consider and of course, if I'm close to the threshold or not, maybe I extend my stay in the UK to get that benefit. My main goal at the moment is to qualify as a solicitor and then if I have this benefit, this tax incentive, then that's an added benefit. I guess it's my career that dictates my next move at the moment. Ask me in three years time and maybe I changed my mind.

[Daniel Rosney]

This edition of Business Daily from the BBC World Service was produced and presented by Daniel Rosny. Thanks for listening.

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