Cyprus: Investing

FDI in Figures

In recent years, Cyprus was ranked among the top destinations in terms of attractiveness for foreign direct investment. The country gradually removed most investment restrictions when it became a candidate for accession to the European Union. Sectors such as financial intermediation could benefit from these initiatives and Cyprus began receiving a large amount of FDI annually.

However, the influence of the international economic environment has been significant. FDI, which had fallen sharply in 2008 and 2009, primarily due to lower investment in real estate, has since been struggling to resume growth and in 2012 should be affected by the crisis in Europe and the Greek crisis.

Tourism, wellness activities, medical services, development projects of natural resources (oil, gas), research and technology are the most promising areas for future investments. Almost complete liberalization of foreign investment increases the country's attractiveness.

In 2011, among the major investors in Cyprus were the United Kingdom, the Netherlands, Russia and Panama.

Why You Should Choose to Invest in Cyprus

Strong Points

The country's strong points are:
- Its European Union membership and use of the Euro currency;
- A corporate tax rate among the lowest in Europe;
- A strategic geographical location at the crossroads of three continents and in particular giving access to Middle-Eastern markets;
- A prosperous and stable economy;
- a skilled, multilingual and low-cost workforce; and
- High quality infrastructures, especially in the harbor sector.

Weak Points

The country's main weaknesses are:
- The division of the island since 1974 and the difficulties in reaching an agremeent between the Turkish and Greek Cypriots. This could have a negative impact on the country's appeal in the long term.
- The limited size of the domestic market should also be taken into account. Indeed, the population is not over 1 million inhabitants.

Government Measures to Motivate or Restrict FDI

The Cypriot government has created a positive environment for business. The government's liberal policy has promoted investment development. Some measures constitute the key points of the country's appeal:
- The possibility of 100% foreign shareholding in almost all sectors of the economy;
- One of the lowest corporate tax rates of the European Union;
- An attractive tax environment. Cyprus has signed the double-taxation treaties with more than 40 countries; and
- Particularly competitive corporate establishment and operational.

Bilateral Investment Conventions Signed By Cyprus

Cyprus has signed bilateral convention with about 10 countries. To this figure, we have to add the 26 other European Union countries. On the Mediterranean basin, and out of EU, Cyprus only signed bilateral conventions with Egypt and Lebanon. 7 conventions can be found on the UNCTAD. They define the protection framework of FDIs in Cyprus for each signatory country.

Procedures Relative to Foreign Investment

Freedom of Establishment

Freedom of establishment is guaranteed.

Acquisition of Holdings

Foreign investors based in the European Union can acquire stakes in a Cypriot companies, without any limit on the percentage of stake acquired or on minimum capital invested. Moreover, investors from the European Union can acquire up to 100% in the capital of companies listed on Cyprus Stock market except for the banking sector where such a percentage is limited to 50% only.

Obligation to Declare

Licenses are required when operating in some sectors of the economy like construction.

Competent Organization For the Declaration

CIPA - Cyprus Investment Promotion Agency

Requests For Specific Authorizations

Apart from the licensing procedures, there are no particular authorizations that are needed.

Investment Opportunities

Investment Aid Agency

Invest in Cyprus

Tenders, Projects and Public Procurement

Tenders Info, Tenders in Cyprus
Globaltenders, Tenders & Projects from Cyprus
Ted - Tenders Electronic daily, Business opportunities in EU 27
DgMarket, Tenders Worldwide

Other Useful Resources

Focus Business Services

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