Cyprus Capital Nicosia Currency Cypriot pound (CYP) Population 780,000 EU status Member GDP $16.82 billion Employment 96.5% Government type Republic Religions Greek Orthodox 78% Muslim 18% Maronite, Armenian Apostolic, and other 4% Languages Greek, Turkish, English Exports Republic of Cyprus: $1.237 billion f.o.b.; north Cyprus: $69 million f.o.b. (2005 est.) Imports Republic of Cyprus: $5.552 billion f.o.b.

Cyprus

The Republic of Cyprus, covering about two-thirds of the island of Cyprus itself, entered the EU in 2004. It has a thriving service sector accounting for 76% of the economy, with financial services and tourism the most important contributors. The island has some agriculture and light industry, and a strong marine sector. Government policy is actively aimed at attracting foreign investors, and grants are available in the SME and manufacturing sectors. The official languages are Greek and Turkish, but English is widely spoken. Cyprus is a member of the euro zone, and is considering entry into the Euro in 2007.

Kourion Theatre.

Attractive tax regime

Because its economy was already fully developed long before its entry into the EU, labour rates are considerably higher than those in most other new EU entrants. However, a corporate tax rate of just 10% has attracted a large number of companies from other locations, particularly in the financial services sector. Since 2002, it has been necessary for a company to be managed and controlled in Cyprus, rather than just registered there, in order to be subject to the tax regime. There is an extensive network of double tax treaties. However, there are restrictions on property purchases.

Between three continents

Cyprus has a small internal market, but because of its location, the island presents itself not only as a location for trade within the immediate market, but as a base for export to the Middle East, North Africa, Eastern Europe and the Balkan countries. One of the government’s main objectives when reforming fiscal laws for entry into the EU was that the country would maintain its position as a strategic location for investment into and from the Russian, Central European and Eastern European markets.

Cyprus at sea

Cyprus has a large marine services sector, with particular emphasis on ship management. Ship registration rules were liberalised on accession to the EU in 2004, and ships registered under the Cyprus flag now make up 25% of the total EU fleet, second only to Greece.

Quality of life

Beach of Magosa, Northern Cyprus.

Cyprus is well known as a tourist resort, and the same features that make it an attractive holiday location make it an attractive place to live. A warm climate, good infrastructure, and good leisure facilities are all features that will attract tourists and residents alike.

Political issues

The northern part of the island is claimed and administered by Turkey (a claim which is not acknowledged by the independent republic of Cyprus). It is not subject to EU jurisdiction. Although a 2004 referendum on the Annan plan to unite the island showed a clear “no”, relations between the two parts have become less strained in recent years.

Since 2004, the embargo preventing Cyprus-flagged ships from calling at Turkish ports has been lifted, allowing the development of a cruise and ferry business between the two countries. Commitment to a diplomatic solution to the partition is likely to be one of the major issues to be resolved if Turkey is to succeed in its application to the EU.

 

Facts in brief

Cyprus’s location is in the Middle East, an island in the Mediterranean Sea, south of Turkey. The thirdlargest island in the Mediterranean Sea (after Sicily and Sardinia)

Its climate is temperate; Mediterranean with hot, dry summers and cool winters

Natural resources include copper, pyrites, asbestos, gypsum, timber, salt, marble, clay earth pigment

Agricultural products are citrus, vegetables, barley, grapes, olives, vegetables; poultry, pork, lamb; dairy, cheese

Industries include tourism, food and beverage processing, cement and gypsum production, ship repair and refurbishment, textiles, light chemicals, metal products, wood, paper, stone, and clay products

Cyprus is based on common law, with civil law modifications; accepts compulsory ICJ jurisdiction, with reservations

Diplomatic representation in the US — Chief of mission: Ambassador Euripides L Evriviades

Diplomatic representation from the US — Chief of mission: Ambassador Ronald L Schlicher

 

Contact Information

Cyprus-American Business Association
PO Box 21455
CY-1509 Nicosia
Cyprus
Tel: +357 2288 9830
E-mail: androulla@ccci.org.cy
Website: www.cyaba.com.cy

Useful websites

nicosia.usembassy.gov	US Embassy in Cyprus
www.buyusa.gov.cyprus	US Commercial Service
www.cdb.com.cy	Cyprus Development Bank
www.mcit.gov.cy	Ministry of Commerce, Industry and Tourism
www.visitcyprus.biz	Tourism and holiday information

 

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