Cyprus - Andreas Neocleous & Co

CYP/6
INTERNATIONAL AGENCY AND DISTRIBUTION LAW
the ICC seeks to strike a balance by protecting the interests of both exporters
and importers. At the same time, it attempts to provide flexibility by allowing
the insertion of a choice of law clause. The ICC model form of contracts may
offer useful guidance if adopted to meet the parties' specific requirements and
the particular circumstances.
General Business Climate
As noted above, Cyprus has an open, free-market, economy. It is service-based
with some light manufacturing. According to the latest IMF figures, Cyprus's
per-capita GDP at purchasing power parity was (PPP) $28,256, placing it
thirtieth in the world. The United Nations Human Development Index for 2010
ranks Cyprus thirty-fifth in the world as regards quality of life.
The government's economic policy is aimed at promoting and maintaining
favorable investment conditions and supporting private initiatives. Foreign
participation in the economy has been officially encouraged and liberalized for
some time. Administrative procedures have been simplified and in all but a few
strategic industries such as banking there are no limits on foreign investment.
This has led to a growing awareness among foreign corporations and individuals
of the particular advantages of using Cyprus as a business base for both inward
and outward investment. In recent years, the inflow of approved foreign
investment has increased considerably.
Cyprus has 24 bilateral treaties for the encouragement and reciprocal protection
of investments and more are under negotiation. The purpose of the treaties is to
create and maintain favorable conditions for investments made by nationals of
one treaty state in the other treaty state for their mutual benefit on a long-term
basis, to guarantee the protection of such investments (including the repatriation
of profits) and to establish procedures for settling any disputes that may arise.
Cyprus is a signatory to the convention which in 1988 established the
Multilateral Investment Guarantee Agency, a member of the World Bank Group.
Import Regime, Customs and Duties
As an EU member, Cyprus is a member of the European Customs Union and
applies the Community Customs Code. The EU and the neighboring Middle
Eastern countries absorb the majority of Cyprus's exports.
Cyprus imports large quantities of durable consumer goods, capital equipment,
and raw materials, mainly from the European Union, and oil from the
neighboring Middle East countries in order to satisfy its growing domestic
market and industrial needs.
Exchange Control
Following the abolition of exchange controls on 1 May 2004, both residents and
non-residents of Cyprus, whether individuals or corporate bodies, may hold and
manage assets and liabilities in any currency and in any country, including
(Release 2 – 2013)