Cyprus’ attractiveness as a business centre is attributed primarily to the country’s international orientation, strategic location and ease of doing business, which is supported by a pro-business tax and legal system, modelled on English common law.
Over the last few years, Cyprus has established itself as an international business hub, which is ideal for headquartering and attracting foreign investments. The country has all the ingredients to build on its success as a regional business centre and as an investment hub because of its modern infrastructure, strong availability of multilingual and high-quality professionals across various competencies and wide use of English as the business language.
Cyprus has also been voted as one of the top five safest countries in the world, with a pleasant climate — over 300 days of sunshine per year — and a hospitable multi-cultural population. There are a number of other factors that elevate Cyprus to be at the forefront of attracting foreign direct investment. Its full alignment and harmonisation to the EU regulatory environment make Cyprus a solid entry-point for investments into Europe. Moreover, the introduction of a range of fund vehicles, such as AIF’s, RAIF’s, etc., have contributed in addressing the growing needs of investors, which demonstrates the willingness of Cyprus to create the appropriate legal vehicles to match the needs of the foreign investors.
Other sectors which have contributed to Cyprus’ ability to appeal to foreign investors include the country's positioning in the shipping industry as well as the buoyant tourism and real estate sectors. Cyprus is the largest ship management centre in the EU, and in the top five ship management centres worldwide. The island’s strategic location, coupled with the competitive tonnage tax regime, which has been in place for decades, make Cyprus the ideal choice for ship-owners, charterers and ship-managers. It is anticipated that the country will continue to strengthen its position in the world economy by maintaining and enhancing our solid maritime infrastructure. With regards to the sectors of tourism and real estate, they are still one of the key pillars of our economy, contributing significantly to the country’s GDP in the last few years, attracting lots of foreign investors in the high-end residential projects as well as in hotels and other tourism projects. Due to the ongoing crisis in the region, especially Lebanon, there has been a significant wave of interest from individuals who have invested in private residences and mid-range commercial properties across the island. Moreover, Cyprus's pleasant climate as mentioned above, safe environment, along with a high-quality education and academic sector, has meant that the country is attracting a variety of individuals — pensioners, students from the region and beyond, etc. — which has also contributed to the country’s overall economic benefit in the real estate industry.
The strategy of Cyprus is to attract more international businesses with real presence in the country, in line with the stringent international tax developments. The transparent and tax efficient corporate system, as well as the wide range network of more than 60 double tax treaties, make Cyprus an attractive location for setting up presence for international groups. At the same time, Cyprus has introduced incentives for high-net-worth-individuals (HNWIs) in order to facilitate the physical relocation of key decision makers and business owners to the island. This solidifies the country’s positioning as a regional hub to headquarter and manage international businesses.
The recent enactment of the newly approved migration policy enables the relocation of large numbers of staff — up to 200, that can go as high as 300 — through a fast-track process for obtaining relevant working permits. This was also extended to allow flexibility for family members, which has proved to be very attractive to many groups and individuals who have been thinking about relocating. The political turbulence in neighbouring countries, the various crises affecting the region, and Cyprus’ close proximity to the area, has meant that the Mediterranean country has emerged as a very strong and attractive EU destination.
Cyprus is also emerging as a technology hub with a growing number of international groups and start-ups locating themselves in Cyprus, taking advantage of the favourable business environment such as the IP Box regime, as well as the relaxed immigration rules for IT personnel.
The outlook for the future is overall optimistic, with the key to the economic success being the country’s commitment to long-term, sustainable working practices, reflected in a modern and well-functioning regulatory framework, aimed at increasing Cyprus’ competitiveness in this challenging international economic environment.
Despite the demanding economic realities that Europe and the world are facing, Cyprus is strategically located to assert its position in the global business market and be a driving force for international investment. PwC Cyprus, and the professional services sector as a whole, remains focused, committed and motivated to continue servicing the country’s investors.