Foreign Investments in Cyprus

The attraction of foreign direct investment, including the promotion of joint ventures between Cyprus and foreign enterprises, has always been a major objective of government policy, with a view at facilitating the transfer of advanced technology and expertise.

In particular, the Government of the Republic of Cyprus has proceeded with the liberalisation and simplification of the procedures governing the approval of foreign direct investment.

As of 1 January 2001, the ceiling on interest rates has been abolished. Money markets have since continued to function in an orderly manner and rates are already beginning to decline. This development has been proceeding hand in hand with the liberalisation of capital movements by the Central Bank of Cyprus.

Additionally, direct investments in Cyprus by residents of the EU member states and Cypriot residents in the EU have been liberalised, blocked accounts have been abolished and medium and long term borrowing by Cypriot residents in foreign currencies is now free.

Naturally, the following question arises: why would a foreign investor choose Cyprus? The answer can be found in the following traits:

• Cyprus is now part of the EU
• Democratic system of governance
• Free market economy
• Strategic location at the crossroads of three continents
• Excellent telecommunications system - direct dialling to over 200 countries
• Modern and efficient legal, accounting and banking services based on English practices
• Favourable tax regime including 10% rate of corporation tax (as of 1 January, 2003)
• Double tax treaties with 40 countries
• Bilateral investment agreements with 16 countries
• Low set up and operating costs
• Highly qualified managerial, clerical and technical staff available.