2023 Doing Business in Cyprus (UK Edition)

DOING BUSINESS C YPRUS
32
UNITED KINGDOM EDITION
to become one of the biggest producers of clean energy – could support the EU’s
hydrogen strategy through Cyprus as an interconnector to Saudi’s biggest hydrogen
production plant currently under construction.
The long-awaited full liberalisation of the electricity production market in Cyprus
has seen many delays, but once this materialises it would allow a fresh inflow of new
private players operating in both renewables and gas to compete in the local market
– and in a broader regional market, thanks to the EuroAsia Interconnector project to
connect Cyprus, Israel and Greece via a submarine electricity cable along with the
related EuroAfrica Interconnector to connect Egypt.
STABLE BANKING AND RISING INVESTMENT FUNDS
Cyprus banks maintain high levels of
capital adequacy and liquidity and
have cut their non-performing loan (NPL)
ratios to single digits. The restructuring
of the banking sector after 2013 attracted
important international institutional
investors and fresh foreign capital and
encouraged accelerated sales of NPLs.
These developments substantially
reduced risk and enabled the financial
system to operate on a healthier basis.
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
IThe restructuring of the
years with Assets under Management
(AuM) seeing a staggering increase from
€2.7 billion in 2016 to €10.7 billion in the second quarter of 2023, proving Cyprus is
being recognised by the global asset management community. Investment funds have
already invested more than €2.5 billion in several sectors of the Cypriot economy, such
as shipping, hospitality, education, healthcare, and renewable energy.
TOURISM AND HIGH-END REAL ESTATE
banking sector after
2013 attracted important
international institutional
investors and fresh foreign
capital and encouraged
accelerated sales of NPLs.
These developments
substantially reduced risk and
enabled the financial system to
operate on a healthier basis.
Cyprus continues to be on the top of the list for investors, holiday-home seekers,
expats and retirees. Tourism and real estate have always been robust sectors of the
Cypriot economy, and a concerted effort to diversify Cyprus’ offering in recent years
has paid off. The number of foreign investors closing multimillion-euro deals in the last
several years underlines the fact that tourism-related real estate and infrastructure
continues to be one of the most attractive investment opportunities in Cyprus. Total
sales in 2022 reached more than €4.2 billion.
Pre-pandemic years of record-breaking tourism numbers saw the island attract
new interest in conference, sports, health and wellness tourism. The construction and
investment in multipurpose projects and mixed-use developments such as luxury
marinas, golf courses and more recently the island’s first-ever and only integrated
luxury casino resort, are all part of the ongoing strategy to upgrade Cyprus’ tourism