Cyprus Capital Nicosia Currency Cypriot pound (CYP) Language Greek, Turkish, English Population 784,000 EU status member GDP 2006 $16.35 billion Employment 94.5% Exports $68.1 billion f.o.b. (2006 est.) Imports $1.2 billion f.o.b. (2006 est.)

setting up business Number of days to start business Data not available Cost (% of income per capita) Data not available Nonwage labor cost (% of salary) Data not available Total tax rate (% profits) Data not available

 

Cyprus

The easternmost and most southerly member of the European Union, Cyprus offers an ideal gateway for export from the EU into the Balkans, Africa and the Middle East. A low cost base, investor-friendly regulations, longstanding experience in the offshoring sector and an excellent quality of life are just a few of the factors that attract investors to this island in the Mediterranean. Access to a skilled, well-educated workforce – most of whom speak English, and 44% having a tertiary education – and a modern infrastructure round out the business case for Cyprus.

STABLE, DEVELOPING ECONOMY

Tourism is a major investment sector

Financial services and the tourist sector are the major contributors to the economy, which currently has a GDP growth rate of some 3.7%. Cyprus is currently working to achieve convergence criteria for entry into the Euro, though at the time of writing it is not clear whether this will proceed in 2008, as planned, or whether it will be postponed until 2009. Foreign investment over the last five years has come from around the world, with major investors including Greece, India, the UK, the US and Russia. In line with the importance of the financial sector, the largest foreign investors are banks, including the Bank of Beirut and the Central Cooperative Bank. Other sectors that have attracted investment include food production and the tourism and leisure sectors.

Cyprus has one of the fastest-growing high-tech sectors in south-east Europe, according to a 2006 survey, and as indicated by the number of FDI projects in the IT and IT services sector. Investors here include CTL Card Tech Services Ltd, Amdocs Ltd, GFI Software Cyprus Ltd, Siemens Building Technologies, and Softimpact Ltd.

Low cost base

Telecommunications costs are among the lowest in the European Union, and hourly labor costs just above half of the average for the European Union as a whole, at E11.10 per hour compared to E21.22 for the EU as a whole.

Attractive tax regime

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.

an r&d hub

The government aims to establish Cyprus as a regional hub for R&D. Medical and biotech research is a particularly strong area following the establishment of a joint project between the Harvard School of Public Health and the government of Cyprus. A research promotion foundation and a technology incubation programme have been put in place to provide a support framework and, in some cases, financial assistance, for companies looking to establish themselves in the sector.

INVESTMENT INCENTIves

Cyprus is keen to promote the overall level of foreign direct investment in the country, to support and develop existing sectors of the economy, and to further strengthen the overall skills base in the country. Financial support is available to investors in sectors including: Energy and environment; Industrial development; Research and development; Trade and services.

AMCHAM CYPRUS

The American Chamber of Commerce in Cyprus aims to: Promote, expand and encourage economic and trade relations between Cyprus & USA. Facilitate, co-ordinate and improve trade and economic relations between the two countries. Promote to the governments of the two countries ways and means to safeguard smooth flow of trade and further strengthen economic and business relations. Create and maintain regular communication between the business communities and politicians of the two countries.

Present to the American market the opportunities for American companies not only for trade with Cyprus, but also for the use of Cyprus as a base for export via Cyprus to the Middle East, North Africa, Eastern Europe and the Balkan countries.

Please note: this article refers to the Republic of Cyprus, excluding the northern part of the island, which is under Turkish administration.

 

Contact Information

Cyprus-American Business Association
PO Box 21455
1509 Nicosia
Cyprus
Tel: +357 2288 9830
E-mail: info@cyaba.com.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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