2020 Cyprus Country Report

Foriegn Direct Investment
security it provides.
Two of the industry’s most highly respected
privately-owned shipmanagement companies,
Columbia Shipmanagement and Marlow
Navigation – both based in Cyprus – merged in
2017 to form Columbia Marlow, creating one of
the world’s largest ship and crew-management
companies. Another transaction constituting FDI
was the 2018 buyout of Limassol-based Songa
Offshore SE by Transocean Ltd, the world’s
largest offshore drilling contractor for oil and gas
wells, in a deal worth US$3.4 billion.
In the past six years there has been an increase
of more than 65% in the number of shipping
companies that have registered with Cyprus’
specialised shipping taxation system, boosting
the sector’s revenue by around 25%. In addition,
natural gas finds within Cyprus’ EEZ and efforts
to exploit it in cooperation with neighbouring
countries have expanded opportunities for the
island’s already thriving shipping sector.
EXCELLING IN EDUCATION
Cyprus has seen a rapid expansion of tertiary
education in the past few years, and is well on
its way to develop the island into a regional education
centre and knowledge hub. Cyprus has
already attracted cooperation and synergies
with international universities, most notably the
University of Nicosia launching the island’s first
degree programme in medicine in collaboration
with St George’s Medical School at the University
of London, and University of Central Lancashire
– Cyprus (UCLan), being the first British university
to establish a campus on the island. The
number of foreign students choosing Cyprus for
their studies has almost tripled in the last five
years, representing over 60 different countries
and supporting the growth of Cyprus into a true
global educational centre. This fact underlines
the great opportunities that exist in Cyprus for
the establishment of new universities, colleges
and research institutes.
FOCUS ON INNOVATION
A new Deputy Ministry of Research, Innovation
and Digital Policy was established in March
2020 to leverage Cyprus’ potential for innovation
and to support digitisation in the economy,
which has accelerated during the Covid-19
pandemic. In addition, a range of initiatives
are under way to support start-ups, including a
Startup Visa scheme to attract more international
talent to establish ventures with high growth
potential. Opportunities are therefore opening
up for business angels and venture capitalists
looking for innovative start-ups, and to invest
risk capital in exchange for equity in promising
business ideas and products. Recent changes to
taxation on intellectual property (IP) also supports
innovative research.
The technology and communications sector
in Cyprus has become fiercely competitive, with
a number of players deploying cutting edge solutions
to both increase their local market
share and generate growth through the launch
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 is driven by equity, with the
shipping and real estate sectors playing a significant role.
The new
reality has
brought
significant
changes
globally with
FDI flows expected to drop
at least by 40% as predicted
by UNCTAD. Clearly the
pandemic crisis has affected
all countries, which are now
paving the way for recovery
and mobility. According to
the EU Commission forecast,
real GDP in Cyprus, will
contract by 7.75% in 2020 and
recover in 2021 by 5.25%.
George Campanellas
CEO
Invest Cyprus
2021 will
be a year of
challenges.
The
uncertainty
caused by
Covid-19 will continue to affect
businesses both in Cyprus and
internationally and the extent to
which Cyprus will be adversely
influenced depends on the
measures taken to alleviate the
loss of GDP from the reduction
of tourism and overall
Covid-19 impact. As Cyprus
has gone through a similar
shock in 2013, it is our belief
that the same determination
exhibited then will enable
Cyprus to recover quickly.
Doxia Nikia Hadjivassiliou
President
Cyprus International
Businesses Association (CIBA)
30 Country Report CYPRUS 2020