A. GENERAL
Over the last years, Cyprus has been actively courting foreign direct investment into the country, offering a number of attractive incentives to establish the island as a world-class destination for international business activity. As a result, Cyprus managed to become one of the most attractive destinations for foreign investors due to, inter alia, favourable tax regime, its well-established legal system, membership with the European Union, its highly qualified and multilingual labour force alongside with the high standards adhered to by the legal and accountancy professions. All these factors contribute significantly to the country's international reputation as a financial hub and business centre. The purpose of this publication is to outline some of the main factors that make Cyprus a financial centre
B. CYPRUS AT GLANCE
GEOGRAPHY, POPULATION AND OTHER GENERAL INFORMATION
Cyprus is a small island in the eastern Mediterranean, at the meeting point of three continents (namely, Europe, Asia and Africa) and close to the busy trade routes linking Europe with the Arab World and the Far East.
Cyprus' total area is 9,251km2 , making it the third-largest island in the Mediterranean. The island enjoys an excellent climate with about 300 days of sunshine per year. The temperature varies from 6°C to 13°C in winter to 21°C to 36°C in summer. Cyprus' population is estimated at approximately 1.2 million. The official languages of the Republic are Greek and Turkish, but English is widely spoken and regularly used in business. Nicosia, with an estimated population of approximately 300,000, is the capital city and situated in the middle of the island. All other major cities are on the coast and all are popular holiday resorts, as well as business centres.
HUMAN RESOURCES
Cyprus has a young, highly educated and highly skilled labour force with wide experience and fluency in English. A high proportion of Cypriots have obtained a university degree, either in Cyprus or abroad. This has led Cyprus to rank among the leading countries in the world in terms of its proportion of university graduates.
OPERATING AND LABOUR COSTS
Cyprus offers one of the lowest set up and operating costs within the European Union. With regard to labour costs, an average annual starting salary for a young graduate with a bachelor degree is €22,800.
PROFESSIONAL SERVICES
Major international and local accounting companies with in-depth knowledge of the local tax and accounting environment and highly qualified lawyers specialised in international work can assist and support a foreign investor with both set-up and contractual formalities.
TRANSPORT AND TELECOMMUNICATIONS
A wide network of air-routes connects Cyprus with Europe, Africa and Asia. The island has two busy international airports, in Larnaca and Paphos, handling a large number of scheduled flights and served by many international and chartered airlines.
Seaborne traffic is served by a fully renewed port system comprising the multi-purpose ports of Limassol and Larnaca, the industrial port of Vassiliko, and the three specialised oil terminals of Larnaca, Dhekelia and Moni. A large number of shipping lines include Cyprus in their regular schedules to and from five continents, ensuring that thousands of ships call at Cypriot ports each year.
ECONOMY
The economy of Cyprus is based on free enterprise, with most economic activity taking place in the private sector.
The service sector, which dominates the Cypriot economy, accounts for about half of employment and almost two-thirds of its GDP. In 2021, the average rate of inflation was 1.67 % and the unemployment rate was 7.10%. The standard of living is relatively very high with estimated annual income per capita for 2021 of USD 31,500.
The economy of Cyprus is in a relatively good state, despite the challenges created by the ongoing COVID-19 crisis, with economic growth and improving public finances.
GOVERNMENT
The structure of government is similar to other western democracies where human rights, political pluralism and private property are safeguarded.
The head of state is the President who is elected for a five-year term of office. The Council of Ministers, appointed by the President, is the executive organ of Cyprus. Legislative power lies with the House of Representatives whose members hold office for five years.
Cyprus is a member state of the European Union as well as member of Eurozone, British Commonwealth, Council of Europe, International Monetary Fund, United Nations, World Bank and World Trade. It is signatory to may international conventions and treaties. As a result, Cyprus is politically stable.
CURRENCY
Cyprus joined the Euro zone on 1 January 2008. There are no exchange controls in Cyprus.
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