Cyprus is an open free market economy and is generally regarded as a high-income country, enjoying a standard of living that is quite high. Both the performance of its economy and its average per capita GDP compare favourably with that of most EU countries. The economy is driven mainly by the tourism and service sectors as well as an export-oriented industry. The most important sectors of the economy are: trade, restaurants and hotels; community, social and government services; finance, insurance and business services; and manufacturing.

The main exports relate to machinery and transport equipment, pharmaceutics, cigarettes, wood and metal products, cement, potatoes and citrus fruit. With regard to imports, the main categories are intermediate inputs and consumer goods.

Due to the advantageous tax regime, the quality of professional services highly developed infrastructure, in the past decade Cyprus has been sought as a base for several offshore businesses.