2020 Cyprus Country Report

Foriegn Direct Investment
FDI Destination
Cyprus has attracted formidable foreign investment over the last five years
with billions of euros flowing into multiple sectors. Although the coronavirus
pandemic has slowed down the global economy, the country has forged ahead
with the launch of new incentives and reforms that continue to offer interesting
opportunities to investors with capital and interest in the East Med region.
The growth performance of Cyprus over
the last five years has been exceptional
and even exceeded international expectations,
while successive credit
rating upgrades and new incentives
have attracted billions in foreign investment
since 2015, with significant
inflows from the US, Asia, Russia and
the Middle East. Cyprus’ return to an investmentgrade
credit rating in 2018 gave both the economy
and investor confidence a much-needed boost,
and the successful recapitalisation of its major
banks and numerous large-scale projects, have all
contributed to the resurgence of Cyprus as a top
foreign direct investment (FDI) destination. The
sectors that have seen the most significant FDI
are banking, shipping, retail, tourism, pharmaceuticals
and energy, while new luxury and infrastructure
developments are underway across the
country with significant foreign investor backing.
A fast-track system is also encouraging international
companies to set up international and
regional headquarters on the island, which is becoming
an increasingly attractive gateway to both
established and emerging growth markets.
DIVERSIFIED INVESTMENT OPTIONS
For the last few years, Cyprus has been a hive of
activity with several notable projects already implemented
or in the pipeline, strengthening the
country’s image and appeal. Foreign investment
flows have been significant. In the ten-year period
2010-19, inflows of FDI averaged €24 billion per
year, while cumulative net FDI reached €17.3
billion. This investment was driven by equity,
with the shipping and real estate sectors playing
a significant role.
New large-scale real estate projects, luxury
marinas and tourism infrastructure, coupled with
exciting opportunities in the energy and shipping
sectors have all reinforced Cyprus’ status as an interesting
investment location. An added benefit
of Cyprus is its secure and stable EU environment
in a turbulent region, which provides an ideal
base for regional headquarters or ancillary and
support services for investors with clients in the
wider Eastern Mediterranean region.
Already renowned as a popular holiday destination
and a thriving business hub servicing
international companies with multinational
26 Country Report CYPRUS 2020