2023 Doing Business in Cyprus (UK Edition)

DOING BUSINESS C YPRUS
37
UNITED KINGDOM EDITION
CYPRUS-UK RELATIONS
C
yprus has a strong bilateral relationship with the United Kingdom,
reflecting the two countries’ long historical ties which date back to the
19 th century. Cyprus gained its independence from the United Kingdom in
1960, after 82 years of British control, however the UK continues to have
British Overseas Territory in Cyprus – the Sovereign Base Areas (SBAs) in
Akrotiri and Dhekelia which include British military bases.
Today, the two countries maintain close links in the political, economic,
and cultural fields. These are enhanced further through the strong position of
Cyprus as member of the European Union and the Commonwealth. The
United Kingdom is also one of the guarantor powers of Cyprus’ independence
and territorial integrity and is committed to a comprehensive settlement in
Cyprus.
Cyprus and the UK have entered into a number of bilateral agreements
and memoranda which solidify their cooperation even further. The
Memorandum of Understanding (MoU) on Establishing a Strategic
Cooperation, which was signed in November 2022, seeks to put in place a
more structured bilateral strategic cooperation in various fields, such as
foreign and regional policy, security, trade, education, maritime, climate
and crime. The two countries have also signed a Double Taxation Agreement
(DTA) for the elimination of double taxation with respect to taxes on income
and capital gains and the prevention of tax evasion and avoidance. Another
significant MoU was signed at the beginning of 2023 to lay a solid foundation
for the further expansion of bilateral cooperation in all important aspects of
shipping.
In addition, the two countries maintain strong personal ties. It is
estimated that there are around 300,000 Cypriots living in the UK and over
10,000 Cypriot students are currently enrolled in British universities. At the
same time, there are around 30,000 Britons living in the Republic of Cyprus
– constituting the largest British migrant community in the region. Also,
more than 1 million British tourists visit the island every year, representing a
significant proportion of tourist arrivals to Cyprus.
The UK is one of the most important economic partners for Cyprus and
the biggest export market for Cypriot products – not just in goods but also
in services. It is also an important source of foreign direct investment. The
major sectors, by economic activity, that attracted foreign investments
were real estate, financial and insurance activities, as well as various
professional, scientific, and technical activities. Post Brexit, the robust
bilateral relationship between Cyprus and the UK has continued to
strengthen considerably as Cyprus can serve as an ideal and familiar EU
base for British investors. As a result, a growing number of UK companies
and investors have been expanding their operations in Cyprus through
participation in large-scale or infrastructure projects, corporate entities
and various financial vehicles and schemes, including investment funds.
The overall relationship between Cyprus and the UK, including the business
and trade links, will continue to flourish and benefit both countries.