Israeli defence firms explore production expansion into Cyprus

Major Israeli defence companies, including Elbit Systems, Israel Aerospace Industries (IAI), and Rafael Advanced Defense Systems, are reportedly exploring the establishment of production facilities and headquarters in Cyprus. This interest was a key topic during Israeli President Isaac Herzog’s visit to Nicosia last Thursday. By setting up operations within an EU member state, these companies aim to gain better access to the European Union’s €150 billion SAFE defence programme.

Industry representatives are seeking to build upon existing bilateral relations and models of cooperation similar to those established in countries like Germany and Romania. Beyond the major industry leaders, smaller firms specializing in artificial intelligence and electronic warfare have also expressed interest in the Cypriot market. This strategic shift is driven by the desire to integrate more deeply into the European defence industrial base through both EU-wide initiatives and direct bilateral agreements.

For Cyprus, the potential influx of investment is viewed as an opportunity to foster economic growth and technological development. While reports from Turkish media outlets like Hürriyet highlight these developments, the collaboration remains part of a broader trend of Israeli defence firms seeking European bases. Currently, discussions are ongoing, and stakeholders are evaluating the potential for further industrial integration between the two nations.