2023 Doing Business in Cyprus (UK Edition)
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DOING BUSINESS C YPRUS<br />
16<br />
UNITED KINGDOM EDITION<br />
major success story for <strong>Cyprus</strong><br />
A has been the maritime sector,<br />
which accounts for around €1 billion <strong>in</strong><br />
annual revenue and approximately 7%<br />
of the island’s GDP – and of this figure,<br />
shipmanagement alone accounts for 5%.<br />
Apart from offer<strong>in</strong>g shipmanagement<br />
and bus<strong>in</strong>ess services to the <strong>in</strong>dustry, the<br />
<strong>Cyprus</strong> Registry is classified as the third<br />
largest merchant fleet <strong>in</strong> the European<br />
Union and the 11th largest <strong>in</strong> the world.<br />
In addition, <strong>Cyprus</strong> is the EU’s largest<br />
GLOBAL SHIPPING HUB<br />
I<strong>Cyprus</strong> has reta<strong>in</strong>ed and<br />
strengthened its status as<br />
an attractive <strong>in</strong>vestment<br />
gateway to the EU and<br />
other high-growth markets,<br />
as well as a secure base<br />
to tap <strong>in</strong>to opportunities<br />
<strong>in</strong> the Middle East<br />
shipmanagement centre and amongst<br />
the top three <strong>in</strong> the world. The sector has seen growth <strong>in</strong> the past few years and <strong>Cyprus</strong><br />
is currently look<strong>in</strong>g at restructur<strong>in</strong>g the commercial shipp<strong>in</strong>g sector to strengthen its<br />
competitive edge. S<strong>in</strong>ce <strong>in</strong>troduc<strong>in</strong>g an advantageous EU-approved tonnage tax system<br />
<strong>in</strong> 2010, the island has cont<strong>in</strong>ued to attract <strong>in</strong>creas<strong>in</strong>g numbers of shipp<strong>in</strong>g companies<br />
from across the world. The country’s maritime capital, Limassol, is home to some of the<br />
most <strong>in</strong>fluential names <strong>in</strong> shipp<strong>in</strong>g today manag<strong>in</strong>g around 20% of the world’s thirdparty<br />
managed fleet.<br />
EAST MED ENERGY PLAYER<br />
Apart from the sun and the sea, <strong>Cyprus</strong> has few natural resources and has been<br />
dependent on oil imports to satisfy its energy demands. However, the substantial<br />
discovery of natural gas and potential oil deposits <strong>in</strong> <strong>Cyprus</strong>’ Exclusive Economic Zone<br />
(EEZ) <strong>in</strong> the Mediterranean Sea is expected to change all this. Exploratory drill<strong>in</strong>gs<br />
by global energy giants have confirmed natural gas reserves that could meet <strong>Cyprus</strong>’<br />
domestic gas demand for over 100 years, and a surplus for export. The hydrocarbons<br />
race <strong>in</strong> <strong>Cyprus</strong>’ waters has attracted <strong>in</strong>ternational energy heavyweights, such as Total,<br />
ENI, Chevron, Kogas, Royal Dutch Shell, and ExxonMobil to explore the island’s waters<br />
for new discoveries and multiple auxiliary services companies have set up to support<br />
these efforts. With 340 days of sunsh<strong>in</strong>e to harness, solar energy has also become a<br />
bit of a boom segment for <strong>Cyprus</strong> recently. The government is plac<strong>in</strong>g strong focus<br />
on renewable energy and work<strong>in</strong>g towards achiev<strong>in</strong>g a zero-carbon economy. The<br />
country’s top-tier universities and research <strong>in</strong>stitutes are also play<strong>in</strong>g a pivotal role <strong>in</strong><br />
these efforts to create a more susta<strong>in</strong>able energy mix through <strong>in</strong>novation <strong>in</strong> smart tech<br />
and research <strong>in</strong> ways to battle climate change.<br />
DIVERSIFYING TOURISM<br />
Tourism has been a key driv<strong>in</strong>g force of the Cypriot economy for decades, and pre-<br />
Covid the country saw consecutive years of record-break<strong>in</strong>g numbers of tourist<br />
arrivals and revenue. Although the pandemic temporarily stifled the thriv<strong>in</strong>g sector,<br />
tourist arrival figures are rebound<strong>in</strong>g and new projects currently underway are set<br />
to strengthen and diversify <strong>Cyprus</strong>’ tourism product and encourage more yearround<br />
visitors, a strategy <strong>Cyprus</strong> is fully committed to. These projects range from the