Gateway or outpost? Inside Israel's growing footprint in Cyprus

On the southern coast of Cyprus, the signs of a growing Israeli presence are becoming harder to miss.

There are new housing developments marketed to Israeli buyers, large parcels of land changing hands, political posters, and a network of schools, synagogues, kosher businesses, and other institutions serving a community that is no longer made up solely of tourists and second-home owners.

The result is an increasingly visible Israeli footprint on an island that has long relied on foreign capital to drive its property market.

Yet the scale and concentration of some projects have prompted a debate on the island: is this simply another wave of foreign investment, or is something more permanent taking shape?

A new wave of foreign investment

Cyprus’s economy has long depended on third-state investment, with successive schemes – including the controversial “golden passports” and golden visas – designed to attract capital, particularly into property.

Historically dominated by the United Kingdom and Russia, capital has more recently come from Lebanon, Ukraine, and Israel. 

The golden visa scheme enables non-European Union (EU) nationals to obtain residency by investing €300,000 in property or a company, raising concerns over transparency and regulation.

Direct investment vis-à-vis Israel stood at around €3.5 billion in stock in 2025, with €308 million in transactions, according to preliminary data from the Central Bank of Cyprus.

Recent Israeli investments have involved large land purchases and projects combining housing developments with resorts and gated communities. In 2023, liberal Israeli newspaper Haaretz wondered whether Cyprus was becoming the “second Israel?”

Israel's growing exodus

The trend coincides with rising Israeli emigration. Since 2023, political tensions surrounding judicial reforms proposed by Israeli Prime Minister Benjamin Netanyahu's far-right coalition government, followed by the Gaza war, have fuelled mounting insecurity and pessimism about the country’s future. 

“The justice reform from January 2023 was the first turning point. Many lost hope in the future of Israel. October 2023 confirmed this trend, and many decided to move,” Michael Harari, Israel’s former ambassador in Cyprus, told The New Arab.

Between 2023 and 2025, 270,000 citizens left Israel, a recent study based on data from the Israel Central Bureau of Statistics (CBS) found, highlighting particularly substantial emigration among highly educated and economically strong groups.  

In Cyprus, this movement has translated into both relocation and investment – helping turn what was once largely a tourism and property relationship into a more visible presence.

Cyprus as a haven

In this troubled landscape, removed from regional convulsions, Cyprus has become “Israel’s favourite island escape” – less than an hour away by plane, relatively affordable and safe.

“Cyprus offers the closest escape,” Louisa Varaclas, director of the Israel Office within the Cyprus Tourism Ministry, told The New Arab.

Israel was Cyprus’s second-largest tourism market in 2025, accounting for 13% of all arrivals, or 600,000 visitors. The Israeli Embassy estimates that around 15,000 to 20,000 Israelis currently live in Cyprus, compared with 6,500 in 2018, although the exact number is difficult to determine because many hold European Union (EU) passports.

Geographical proximity, political ties, a favourable tax regime, business opportunities, and a sense of security have helped make the island attractive for residence and investment.

“Cyprus is a security partner,” Roee Kibrik, Director of Research from the Israeli Institute for Regional Foreign Policies (Mitvim), told The New Arab. For Israel’s strategic logic, he argues, the island can almost be understood as an extension of Israel’s security space - while the partnership also serves Cyprus’s security interests.

“Given that political and economic relations between Israel and Cyprus deepen, there will also be growing Israeli interest in tourism, residence, and investment in Cyprus,” Zenonas Tziarras, a lecturer in the Department of Turkish and Middle Eastern Studies from the University of Cyprus, told The New Arab.

Cyprus also offers a “gateway” to the European Union (EU), its market, its electricity and gas infrastructures and sea routes, but also its institutional structures and political channels, Kibrik argues.

From property to communities

The growing Israeli presence is particularly visible in coastal areas around Larnaca, Limassol, and Paphos, where Israelis have purchased property and marketed dedicated housing complexes. Jewish institutions, kosher businesses, and Hebrew-language services have expanded alongside them.

“Some definitely left Israel. Some others live in Cyprus while continuing to work in Israel, while others are moving part of their assets or establishing companies in Cyprus,” Kibrik says.

This trend has also fueled concerns over housing affordability. Property prices rose by 11.7% in Larnaca and 10.7% in Limassol between 2025 and 2026, with the Central Bank of Cyprus attributing part of the inflation to stronger demand from third-country investors, alongside construction and labour costs.

Harari admits there are tensions. “This migration is a natural process and contributes largely to the local economy. But of course, for a small place as Cyprus, these numbers are substantial, and you can also understand concerns from local populations because there is influence on property prices.”

The island’s role as a refuge during crises has further deepened these connections. In October 2023, 5,000 Israelis landed in Cyprus. During the Israel-Iran conflict in June 2025, 15,000 Israelis were stranded after airspace closure.

Chabad centres provided accommodation, food, and emergency assistance, illustrating how a network initially serving religious and tourist needs has also become part of the infrastructure supporting a growing Israeli community.

Chabad, a global Hasidic Jewish movement, operates around 4,000 centres in 100 countries. Publicly apolitical, recent investigations have documented support from parts of the movement for Otzma Yehudit (Jewish Power), the far-right party led by National Security Minister Itamar Ben-Gvir.

In Cyprus, Chabad operates six centres, alongside a synagogue, kindergarten, mikvah, kosher certification agency, a cemetery, and summer programmes. Its founder and Cyprus’s chief rabbi, Zeev Raskin, also promotes the development of resorts and tourist complexes designed to comply with Jewish law.

Gated communities and contested projects

Several projects have sparked controversy over planning and environmental regulation, the role of national and local authorities, and the longer-term character of this presence.

In Latchi, a large hotel complex completed the final stages of construction while licensing issues remained unresolved. In Polemidia, a €50 million Jewish school designed for up to 1,500 students has generated concerns over traffic and planning, while the municipality had not been involved in the process.

Its slated director, Rabbi Yehoshua Smukler, has described the project as the future “cornerstone” of Cyprus’s Jewish community.

In Trozena and Gerovasa, Hungarian-Israeli businessman Uriel Kertesz has proposed redeveloping abandoned villages into an “ecotourism” project combining homes, vineyards, a wellness centre and restored ruins. The project has faced environmental scrutiny, as the area falls within the Natura network of protected natural areas.

In Zygi, a 60,000-square-metre luxury development is marketed as a gated complex of residences serving the Jewish community. When announced in 2024 by property entrepreneur Daniel Morris Goldberg and Rabbi Ziv Raskin, the project was promoted as a “kosher slice” of Cyprus.

“Do we have closed communities, rather than absorbing individuals into the local culture?” Kibrik asks, pointing to an emerging debate over housing, culture, and the transformation of some areas.

The speed and concentration of Israeli investments distinguish them from the longer-established Russian presence, notes Nasia Hadjigeorgiou, Assistant Professor in Transitional Justice and Human Rights from the University of Central Lancashire - Cyprus.

“Russians have had a very long-standing presence on the island, which developed gradually, whereas Israelis have been much more sudden and economically aggressive, with entire areas being purchased. Russians are primarily based in Limassol and live within the city, whereas some Israelis have begun constructing gated communities, separating themselves within exclusive areas," Hadjigeorgiou tells The New Arab.

"There is also an oversensitivity here because of what is happening in Israel and Palestine and the history of Israelis settling on land, accompanied by violence and displacement, while the local history of occupation vis-à-vis Türkiye adds another layer.”

Theodosis Pipis, a doctoral candidate in History from the University of Leiden, puts the question more bluntly.

“Given these projects and the high concentration of land purchases happening swiftly in coastal and port cities, could Cyprus be falling under the auspices of some form of permanent or semi-permanent Israeli expansionism?”

Growing influence and public outrage

In July 2026, campaign posters for Gadi Eisenkot, former Israeli army chief-of-staff and candidate in Israel’s elections, popped up along highways around Larnaca airport, generating an unusual debate over Israel’s growing influence in Cyprus.

This event echoed wider concerns. “Israeli buyers are purchasing significant land parcels and strategic economic assets. This cannot but sound the alarm for us,” Stefanos Stefanou, a spokesperson for the Progressive Party of Working People (AKEL), warned in June 2025.

And this trend has become a significant issue across the political spectrum, from the election posters to the redevelopment of abandoned villages.

“It’s a topic most circles on the island discuss - no matter though you are from the left, the far-right, the centre, we can all see the growing Israeli presence on the island,” Pipis tells The New Arab.

Growing economic connections also involve powerful business interests. Cypriot-Israeli real estate businessman Yakir Gabay, whose fortune is estimated at around $4 billion, has become a prominent figure in Cyprus.

He is involved in an €856 million investment project around Limassol and recently purchased a 950,000-square-metre plot from the Bank of Cyprus for €28 million.

In February 2026, he also joined the executive committee of the 'Board of Peace'. He visits Israel frequently, operates behind the scenes, and has close personal and business ties to Jared Kushner and, as early as November 2023, reportedly submitted a reconstruction plan for Palestine.

Cyprus, alongside Greece, has recently become an essential part of Israel’s strategic environment. The relationship spans defence, military cooperation and energy, and has developed into a deeper strategic partnership.

Since June 2017, the Israeli military has regularly conducted exercises on the island, including air force, naval, and ground forces units, and intelligence and evacuation drills. The exercises have included simulations relevant to operations in southern Lebanon, making Cyprus a uniquely accessible training environment for Israel’s military.

“Of course, the deepening strategic relationship between both states has made Cyprus an attractive place to Israeli citizens, as a place to invest and live. Both come together,” Harari says.

Sylvain Henry is a writer based in Samos, Greece, and a master's graduate in sociology and political philosophy. He recently worked with the Cyprus Refugee Council

Edited by Charlie Hoyle