2020 Cyprus Country Report

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.
Foriegn Direct Investment
Professional
services are
constantly
being
upgraded
in order to
meet the emerging needs of
businesses, investors and the
society in the post-Covid-19
era. Technology and the
provision of remote services
are now key, increasing the
likelihood of saving time while
creating economies of scale.
I expect that the sector will
adapt once again to the new
business environment, as
the country’s professionals
foster their efforts towards
the recovery of the sector.
Christos V Vasiliou
Managing Director
KPMG Cyprus
of new technology and products. The sector
saw new investment in July 2018, with South
Africa’s telecom MTN Group – which entered
the Cypriot market 11 years ago and has around
one-third of the market – selling its Cyprus
operations to Monaco Telecom S.A. in a €260
million deal. In 2019, the company was rebranded
Epic, and the group announced strategic cooperation
with China’s Huawei on developing a
5G network in Cyprus.
CAPITALISING ON OPPORTUNITIES
Time and again, Cyprus has proven its resilience
as an economy and FDI location. Having endured
a challenging economic climate earlier this
decade, and now tackling the effects of the global
coronavirus pandemic, Cyprus has nevertheless
exceeded expectations and the transformation its
economy is going through today, presents many
opportunities for serious investors.
To further enhance investor interest, the government
is making staunch efforts to improve its
FDI framework and has vowed to cut through
red tape. Reforms accelerated in 2020 include a
specialised commercial court and upgrades to
the judicial system, as well as targeted incentives
to better facilitate investment. These efforts have
been recognised, with Cyprus seeing an increase
in FDI and the registration of new companies
setting up on the island.
Cyprus’ open economy, European Union status
and established role as a regional business hub
between three continents continue to appeal to
investors. The island also hosts a thriving forex industry
with many global giants basing their operational
headquarters in Cyprus. In addition, the investment
funds sector has grown exponentially in
the last few years with continuous upgrades to the
regulatory framework. Assets under management
have more than tripled from €2.1 billion in 2012
to €7.97 billion in the second quarter of 2020, recording
a 5.3% increase over the first quarter of the
year. If recent growth rates are sustained, industry
experts predict assets under management could
reach €20 billion in the next five years.
Cyprus’ liberalised FDI Policy, both for EU
citizens and investors from third countries, along
with its favourable tax regime makes it one of the
most attractive investment targets in Europe. At
12.5% Cyprus’ corporate tax rate is one of the
most competitive in the EU, and its extensive
network of double taxation treaties with 65 countries
have strengthened its position as a business
gateway and a preferred location for corporate
headquarters. The country’s skilled talent, low
cost of doing business, top-tier professional services,
and high quality of life renders Cyprus
not only a wise business choice but also a great
relocation destination. As work progresses on
implementing structural reforms to bolster the
business environment, the attractive incentives
and the ever-expanding opportunities will continue
to attract foreign investors. n
Discover more at www.cyprusprofile.com
Country Report CYPRUS 2020 31