Download Phidias Pilides

CYPRUS
INVEST WITH CONFIDENCE
Using Cyprus as Your Springboard for
International Expansion
Mr. Phidias Pilides
Chairman of the Board, CIPA
Moscow, Russia
June 23, 2011
Historic moment…
Page 2
Cyprus and Russia: Dynamic Relationship
Signing of the Protocol between the
Republic of Cyprus and Russia
Federation – October 2010
Protocol will:
Further strengthen the bilateral investment relationships;
Increase flow of trade
Act as a catalyst of new investment opportunities;
Enhance the business environment and benefit other
areas of growth.
Country Overview
Official Name: The Republic of Cyprus
Capital: Nicosia
Area: 9,251 sq km
Population: 870,000
Official Languages: Greek, Turkish
English Widely Spoken
Real GDP Growth: 1.0%
GDP per inhabitant: €21,700
Inflation (HICP): 2.6%
Unemployment Rate: 6.5%
Monetary Unit: Euro
Life Expectancy: 79 years
Form of State: Presidential Republic
(Data 2010)
CYPRUS
INVEST WITH CONFIDENCE
Cyprus Economy and
Competitive Advantages
“Global Competitiveness Report 2010-2011”
 Cyprus was ranked number 40 out of 139
countries by the World Economic Forum "Global
Competitiveness Report 2010 - 2011"
 The Global Competitiveness Report is a yearly
report published by the World Economic Forum
 The report assesses the ability of countries to
provide high levels of prosperity to their citizens
The World Economic Forum is an independent international
organization committed to improving the state of the world by
engaging leaders in partnerships to shape global, regional and
industry agendas.
10
“Doing Business Report 2011”
 Cyprus ranked #37 of 183 countries on the overall ease of doing
business and #15 of the EU 26
High – 1
4
6
9
14
13
25
17
22 23 24
26
32 30
31
37 41
51
46
42
56
49 45
70
63
80
109
Low -183
Cyprus as an Attractive Investment
Destination
 EU and European Monetary Union Member
State
 Strategic geographical location – ideal for
expansion in new markets
 Well-developed socio-economic
infrastructure
 An active Stock Exchange and robust
Securities and Exchange Commission
More than 30 years experience as
An International Business Center
Cyprus as an Attractive Investment
Destination
 Market-oriented economy
 Macroeconomic stability and performance
 Highly educated, qualified and multilingual talent
 Stable and welcoming business environment
 Low set up and operating costs
 Advanced transport and telecommunications network
 Renown international shipping centre
 Enviable quality of life
Cyprus as an Attractive Investment
Destination




Broad range and international quality of
financial and business services - legal, tax,
accounting, investment and brokerage
Transparent accounting system harmonized with
international standards
Well developed banking sector for all
financial needs
Low-risk business environment offering quick
and efficient operations
The Global Integrated Economy is a reality
and Cyprus can play a key role as a
Business and Financial Center
Cyprus: Simple, Low Taxation
Cyprus has the lowest corporate tax in Europe of 10%.
A tax administration regime that wants to help foreign investors.
Exempt from tax:
Dividend income
Profits from overseas permanent establishments
Profits from the sale of securities
No withholding tax on:
Dividends
Interest
Royalties paid from Cyprus
Most international transactions exempt from VAT
Cyprus has concluded Double Tax Avoidance Treaties
with 43 countries worldwide.
Cyprus as a holding company location
Russian Outbound Investments
Russian
Ultimate
Holding Co
Invest through Cyprus in:
an EU country or
a country with no DTT with Russia or
a country with a better DTT with Cyprus
Cyprus
Holding Co
Benefits
 Wide Cyprus DTT network
 EU Parent Subsidiary Directive
 Zero/Low withholding tax in target country
Treaty
subsidiary
EU
subsidiary
 Dividends received by Cyprus Holding Co
exempt from tax
 No withholding taxes on payments to
Russian Ultitmate HoldCo
Cyprus as a financing company location
Russian Outbound Investments
Russian
Ultimate
Holding Co
Russian investor establishes Cyprus
company to be the group finance
company of foreign operations.
Capitalisation with equity.
Benefits
Cyprus
Financing Co
 Tax on profit 10%
 Access to EU interest & royalty
directive
 Zero/Low withholding tax on interest
from target country
Treaty
subsidiary
EU
subsidiary
 Interest deductibility in paying
company
 No WHT on dividends paid to
Russia
Cyprus as an Ideal International Business
Services Centre
What Cyprus also offers…
 Shipping Companies
– Zero tax rate
 Financial Group Companies
– Low tax rate within a small profit margin
 Companies Trading Securities
– No tax on profits from sale of securities
 Investment Trusts
– Tax exemption
Doing Business Through Cyprus
• Cyprus is a dynamic
business and financial
centre for inward FDI
• Investors have the
opportunity to access,
through Cyprus, new
markets both within Europe
and non-EU countries
• The Global Integrated
Economy is a reality and
Cyprus can play a key role
as an business and financial
center
Cross-border IPOs through Cyprus
Tax benefits important, but also:
– Legal environment based on common law –
similar to UK
– Companies’ Law based on previous version
of English equivalent
– Capital markets legislation fully harmonised
with EU directives
CIS IPOs at the London Stock Exchange
(LSE)
The LSE has been the preferred destination for CIS IPOs abroad
over the last few years.
 17 CIS IPOs in LSE during the period 2008-2011
 7 of these with topco jurisdiction other than Russia and UK
 Cyprus chosen in 4 out of these 7 IPOs
 Pipeline appears to be growing
 Total funds raised by CIS companies in LSE IPOs 2008-2011
amounted to $6bn.
Russian IPOs into the LSE in 2011
Company Name
Status
Jurisdiction
Cyprus
\
Cyprus
Russia
UK
IPO- Aborted
IPO- Aborted
Russia
Russia
IPO- Aborted
Netherlands
IPO- Aborted
Netherlands
IPO- Aborted
Russia
Cyprus is now an
established and
credible TopCo
jurisdiction, with
increased confidence
placed by issuers,
investors, bankers
and lawyers
\
International Transit Trade Centre
 Efficient Customs
Formalities
 Reliable Handling and
Delivery System
 Advanced Regional
Warehouse &
Distribution Centers
Some of the companies already in Cyprus
GROME MARKETING
Cyprus: Safe & Sunny
 Security and safety
 Excellent public and private
international schools
 High standard of living
 High quality tourist facilities
year round
 Gastronomy
 Millenia of culture, history and art
 Fabulous weather
CYPRUS
INVEST WITH CONFIDENCE
Cyprus: Investment Opportunities
Banking & Financial Services
 B&F Services account for 9% of GDP
(2009) and the sector is characterized by
economic stability
 Offers a strong regional platform for the
provision of various banking products and
financial services, including investment
funds
 Unique opportunities for cross-border and
international transactions of mutual funds
through reliable infrastructure
Cyprus: International Shipping Center
 Ranks 3rd top maritime nation in EU27
and top 10 globally
 Shipping accounts 4% of Cyprus GDP
(2009)
 More than 2,000 vessels with 40 million
gross tonnage
 Over 130 ship owning and ship
management companies based in Cyprus
 2 deep-sea ports with easy access to Suez
Canal and other major freight routes
 New legislation enacted 29 April 2010 with
the New Competitive “Tonnage Tax System”
(TTS)
 Favorable tax regime and other benefits for
ship owning, ship management, charterers
and crew members
Energy
 Opportunities for the development of Renewable Energy Sources
(RES), Technologies and Production
 Important Energy Projects underway:
 Establishment of the Energy Centre at Vasilikos
- Terminal for the importation and storage of petroleum products
 Exploration of vast natural gas reserves in Cyprus’ Exclusive
Economic Zone (EEZ)
Development and Infrastructure Projects
 Projects for promotion of sea
tourism (Five marinas in
coastal cities)
 Large international-scale
development projects and
thematic parks
 Luxurious and state-of-the-art
resorts and golf courses
 Infrastructure for development
of advanced educational and
health services
Contact CIPA to learn more!
For more information regarding investment
opportunities in Cyprus, please contact us:
 +357-22-441133
 www.cipa.org.cy
 [email protected]
Thank you!
Спасибо!