Cyprus – Country Overview
Cyprus is the third largest island in the Mediterranean Sea, located at the eastern end of Europe, at the crux of the busy shipping and air routes linking 3 continents, Europe, Africa and Asia.
The island, through its rich and turbulent history, going back more than 10 000 years, has developed from a Stone Age settlement into a modern and thriving European Union state today, with a host of opportunities and prospects for economic growth and prosperity.
This small but dynamic country has long established a strong reputation as a “center of excellence” for international business activities, retaining unique clusters of expertise and service capability to support key growth sectors of the economy.
Capitalising on its competitive advantages, driving and enhancing both traditional and new economic sectors and continuously improving and enhancing its business environment, Cyprus has a modern, free-market, service-based economy with an effective and transparent regulatory and legal framework offering international investors and domestic businesses confidence to invest, grow and prosper. It continuously and systematically strives to offer an innovative, diverse and investor-friendly environment.
Cyprus has developed into a destination of choice for doing business.
Cyprus offers exciting potential in both traditional and emerging economic growth sectors, continuously aiming at diversifying and enriching its product. Traditional sectors, such as shipping,tourism, banking, financial and professional services,have been the key driving forces of the island’s economy for years,while new sectors, such as energy, investment funds, research & development, education and wellness tourism, offer a modern perspective and give impetus to the country’s path towards growth and a varied, knowledge-based economy.
Numerous opportunities are waiting to be explored in all development sectors, while various incentives and funding opportunities are frequently introduced in order to improve Cyprus’ competitiveness and enhance ease of doing business.
Tourism, one of Cyprus’most resilient and strong economic sectors with a significant contribution to the country’s GDP, continuously experiences substantial growth, as per the record number of more than 2.5m tourists visiting Cyprus every year. The island has all the prerequisites to further develop this industry and offers great potential for investments in niche areas such as Health & Wellness, Sports, Luxury, and Lifestyle.
Cyprus’ tourism industry has been honored with numerous prestigious awards, such as the Sustainable Destinations Global Top 100, while Cyprus’ famous beaches have been awarded with 57 Blue Flags and hold three records:
- Most Blue Flags per capita in the world
- Most dense concentration of BlueFlag Beaches
- Most Blue Flag beaches per coastline
Cyprus is a renowned International Shipping Centre, offering the only EU approvedTonnage Tax regime with benefits for ship-owning,
ship-management and crew management, and home to some of the world’s leading names in the global shipping industry. Currently, more than 1000 registered vessels with 21 million gross tonnage are registered under the Cyprus flag, rendering the island:
- The largest Ship Management Centre in EU
- Among top 3 ShipManagement Centres globally
- 3rd largest merchant fleet in EU
- 11th largest fleet worldwide
Real Estate and Large-Scale Development Projects
Acquiring property in Cyprus, either as an investment or as a second home, has always been a popular choice among foreign investors. A combination of high quality of life, year-round sunshine and natural beauty, ease of doing business and investment incentives offer investors an attractive experience in terms of both living and doing business
- A wide range of prestigious Large-Scale Development projects are available, ranging from residential and commercial developments, to luxury tourist attractions, such as marinas, golf courses, tourist resorts
- There are schemes for acquiring the Cypriot Citizenship and ImmigrationPermit through investment, subject to conditions
Banking and Financial Services
The Cyprus financial services sector is diverse, comprising domestic banks, International BankingUnits (IBUs), insurance and other companies that offer financial intermediation services. Several foreign banks from the Middle East, Europe, and Asia operate subsidiaries, branches or representative offices in Cyprus.
Cyprus is rapidly developing into not only a European but a global investment funds and asset management domicile.
Due to its modern and well-regulated framework, Cyprus attracts increased interest and substantial investment from funds and asset managers worldwide. The relevant law has also been enriched with provisions that increase Cyprus’ attractiveness vis à vis other jurisdictions, both forUCITSandAIFs.
Cyprus is recognised as an international centre of excellence for the provision of a wide range of professional services,with highly qualified and experienced professionals offering efficient legal, accounting, auditing, consulting and other specialised services,at competitive costs. Notably, two of the world’s leading accountancy organisations, the Institute of Chartered Accountants in England and Wales (ICAEW) and the Chartered Institute of Management Accountants (CIMA), chose the island as the first country in the world outside the UK to train ICAEWand CIMA accountants. Currently, there are:
The discovery of hydrocarbons in Cyprus’ Exclusive Economic Zone (EEZ) has created new and exciting prospects for Cyprus to become an energy hub in the Eastern Mediterranean.This development has attracted worldwide interest and significant investments from leading international energy giants, such as Noble Energy, Delek, Total, ENI and KOGAS,as well as renowned international providers operating in the oil and gas auxiliary services sector. Comprehensive strategies are being developed to exploit the country’s wealth not only for local needs, but also for export purposes.
Cyprus aspires to become a major educational centre of excellence in the region, through the establishment of international universities’ branches in the island. Cyprus is committed to further strengthening education, consistently allocating over 6%of GDP as public expenditure on this sector.
Research and Development and Innovation
Research and Development (R&D) is an emerging priority sector with the country aiming at cultivating a knowledge-based economy. The Cyprus startup ecosystem is a promising and developing area, with existing incubators,also supported by Universities operating research centres within their premises.
Various incentives are constantly introduced, such as:
Technology is an important driver of productivity, growth and economic performance crossing horizontally all sectors of the economy. Cyprus’ technology strategy aims at developing a digital economy and is fully aligned with flagship initiatives “Digital Agenda for Europe” and“Innovation Union” of the “Europe 2020” growth strategy, and supports projects one-Government, e-Business, e-Learning, e-Inclusion, e-Health and overall services.