Israeli defense firms consider establishing manufacturing hubs in Cyprus

Major Israeli defense corporations are exploring the establishment of production facilities in Cyprus to gain enhanced access to the European Union market and the 150-billion-euro European defense program, SAFE. The potential investment was a key topic of discussion during Israeli President Isaac Herzog's visit to Nicosia on September 11, 2026. The companies reportedly interested in this expansion include industry giants such as Elbit Systems, Israel Aerospace Industries (IAI), and Rafael Advanced Defense Systems, alongside smaller firms specializing in artificial intelligence and electronic warfare.

By establishing industrial units within a European Union member state, these firms aim to secure easier access to EU-wide defense initiatives and bilateral cooperation agreements. According to reports from the Turkish newspaper Hürriyet, which cites Greek-Cypriot sources, this move is part of a broader strategy by the Israeli defense sector to expand its European footprint, similar to existing operations in Germany and Romania. While the initiative is in the exploratory phase, it is expected to provide significant economic benefits for Cyprus. No official timeline for the construction of these facilities or further governmental decisions have been disclosed following the presidential meeting.