Cyprus, a member of the European Union (EU) since 2004, has been an important centre for trade & commerce since antiquity. The small but dynamic country has a long established reputation as a “Centre of Excellence” for international business activities & retains unique clusters of expertise & service capabilities to support every investment. Key factors that make Cyprus an attractive destination for investment are the highly specialised human capital, reliable legislative & regulatory framework, stable tax system, the safe and stable conditions prevailing in the country & the fact that it offers both a Permanent Residency & Citizenship by Investment Program. With its strategic geographical location, Cyprus is the ideal hub for investments into Europe, Middle-East, Africa & Asia.
Cyprus is a diversified, open market economy, with a highly-educated workforce. Moreover, it offers ease of doing business in an investor-friendly environment, which is connected to an efficient business infrastructure, a rich & sophisticated business culture, white pristine beaches & enviable weather, perfectly blending a superb quality of life with maximum business benefits.
The island, which is largely famous for its warm hospitality & welcoming people has transformed itself into a free market economy & one of the most attractive FDI destinations in the region where, amongst others, market access to more than 500 million EU citizens is readily available.
Cyprus has approached the recent global, but also its own, economic challenges as an opportunity to reassess, recalibrate & refocus on core & emerging strengths and potential opportunities. In 2012, the financial & banking crisis in Cyprus was mainly due to the financial exposure of the three largest banks in Cyprus to the Greek financial crisis. However, after only three & a half years, the Cyprus economy recovered, with GDP projected to grow at 3.2% in 2019.
Cyprus has the lowest corporate tax regime in the EU (12.5%) & is a hub for thousands of offshore companies. The economy of Cyprus is classified by the World Bank as a high-income economy, and was included by the IMF in its list of advanced economies in 2001.
The recent natural gas discovery in the exclusive economic zone of Cyprus will have a substantial impact on all aspects of the Cypriot economy & especially in the real estate industry. Energy will be a significant new source of growth. US-based Noble Energy has estimated natural gas reserves in just one of the 12 offshore licensing blocks to be in the range of 3.6 – 6 Trillion Cubic feet (TCF), with a mean of approximately 5 TCF, enough to allow Cyprus to become a gas exporter, Cyprus has ambitious plans to become a regional energy hub & successful extraction of natural gas from its waters could allow the island to build a LNG terminal & export to European & East-Asian markets.
Some key economic factors which investors keen to invest in Cyprus should note are:-
- Highly specialized human capital
- Reliable legislative & regulatory framework
- Safe & stable conditions prevailing in the country
- Excellent system of infrastructure & telecommunications
- Almost 3 million tourist arrivals per year
- Unrivalled access to 3 continents – Europe, Asia & Africa
- Access to 500 million EU population, being a member of the EU
- Major sectors: Tourism, Wholesale & Retail Trade, Construction & Real Estate, Accommodation & Food Services, Banking & Insurance, Transport, Education, Shipping Management, Business Services, Public Administration, Health & Social Sectors
- Corporate Tax Rate : 12.5%.
- Entry point for investments from West to Europe, Russia, Eastern Europe, Asia, South America & Middle-East.
- Close to 50 double taxation avoidance agreements with countries around the world.
- Significant hydrocarbon reserves with the potential to open up tremendous opportunities in future.
- Tax-incentives for investments.
- Credible, highly reputable & advanced business & financial center.
- Presence of leading international banks & multinational companies.
- Shipping : 10th largest fleet globally / second largest ship management center in the world.