Download “The Economist” 16 February 2012 Hilton Park Nicosia, Cyprus

CYPRUS
INVEST WITH CONFIDENCE
“The Economist”
16 February 2012
Hilton Park Nicosia, Cyprus
Cyprus – An International Business & Financial
Hub as a Response to the Economic Crisis
Mr. Christodoulos E. Angastiniotis
Chairman of the Board, CIPA
Country Overview
Official Name: The Republic of Cyprus
Capital: Nicosia
Area: 9,251 sq km
Population: 840,000 (2011)
Official Languages: Greek, Turkish
English Widely Spoken
Real GDP Growth: 1.0% (2010)
GDP per inhabitant: €21,600 (2010)
Inflation (HICP): 2.6% (2010)
Unemployment Rate: 6.2% (2010)
Monetary Unit: Euro
Life Expectancy: 79 years
Form of State: Presidential Republic
Cyprus facing the challenges of world financial crisis
The Government has taken measures to:
 Reduce the public debt
 Provide economic stability and predictability
on a sustainable path
 Enhance and protect future growth prospects
 Promote economic development projects
 Provide growing-friendly economic policies
 Reduce investment risk
 Provide safety and security for investments
Global Economic Environment
 Reduction in international investment flows
 Foreign investors looking at safe destinations
offering reduced costs
 Strong competition among investment destinations
Cyprus Macroeconomic Stability
 Cyprus's real GDP growth has been following a positive trend with the
exception of 2009. GDP is forecasted to experience future growth.
6
Real GDP Growth Rate (%)
5,1
5
3,6
4
2,9
3
1,8
1,6
2
1,0
0,7
1
0,3
0
2007
2008
2009
2010
-1
-2
-1,7
-3
-4
-4,2
-5
Source: EUROSTAT; 2011 is forecast
2011
Cyprus
EU-27
Cyprus as an Attractive Investment Destination
 EU and European Monetary union Member State
 Strategic geographical location at the crossroads
of three continents – ideal for expansion in new
markets
 Well developed socio-economic infrastructure
 Broad range and international quality of
financial and business services - legal, tax,
accounting, investment and brokerage
 Well developed banking sector for all
financial needs
 A robust and transparent 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 business environment, with simple
administrative procedures
 Low set up and operating costs
 Advanced transport and telecommunications network
 Renown international shipping centre
 Enviable quality of life
More than 30 years experience as
an International Business Center
Cyprus: Stable, Reputable
Political and Legal System

More than 50 years as a Presidential Democracy

Very good relations with neighbouring countries





Majority of laws harmonized with the European Union Legal
Framework
Common Law based,
transparent system
Transparent accounting system
harmonized with international
standards
Independent courts applying
precedents
Welcoming to foreign investors
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 44 countries worldwide and as an EU member has access
to EU Directives, reducing/eliminating foreign withholding taxes.
Cyprus: On the map of International Business
 237,372 total registered companies in 2010 in Cyprus
New Company Registration 2006-2010
35000
29016
30000
24453
25000
20280
19278
20000
16101
Cyprus
15000
10000
5000
0
2006
2007
2008
2009
Source: Registrar of Companies and Official Receiver, Republic of Cyprus
2010
Cyprus: Track Record in FDI
How
–
–
–
–
much?
2010 € 578 M*
2009 € 2,499 M
2008 € 965 M
2007 € 1,626 M
Cyprus Inward Direct Investment flows (€ Million)
3.000
2.499
2.500
2.000
1.626
1.500
965
(Source: Central Bank of Cyprus) (*Provisional) 1.000
578
500
0
2007
2008
2009
2010*
Where?
In 2010, the top 3 FDI sectors:
1) Financial & Insurance Activities: €197 Million (34.1%)
2) Real Estate Activities: €138 Million (23.9%)
3) Professional, Scientific & Technical Activities: €110 Million
(19%)
(Source: Central Bank of Cyprus)
Global Competitiveness
Cyprus was ranked number:
 40 out of 183 countries by the World Bank‟s
“DoingBusiness Report 2012”
 18 out of 183 countries by the Heritage Foundation
“2011 Index of Economic Freedom with a freedom
average score of 73.3%
 28 out of 134 countries by FORBES Magazine – Best
countries for business in 2010
 47 out of 142 countries by the World Economic Forum
"Global Competitiveness Report 2011 - 2012“
Professional Services
Accounting Services
 Cyprus offers a wide range of
professional accounting, auditing,
management consultancy, taxation,
financial advisory and other
administrative services to both the
private and public sectors
 Top international accounting firms
are established in Cyprus providing
services to international investors
 Cyprus follows the International
Financial Reporting Standards (IFRS)
Institute of Certified Public
Accountants of Cyprus,
(www.icpac.org.cy.)
Professional Services
Legal Services
 Cyprus‟s legal system is based on U.K.
Common Law principles. As a member of
the European Union, Cyprus has
introduced the body of laws and
regulations of the E.U. known as the
Acqui Communautaire into the national
legal order.
 High quality legal services are offered in
specialist areas such as international
law, corporate administration, and
management services
 Cyprus-based Law Offices co-operate
extensively with international Law Firms
Cyprus Bar Association,
(www.cyprusbarassociation.org.)
Banking & Financial Services
 In 2010, Financial Intermediation services
accounted for 7.3% of GDP
 All banks maintain correspondent networks
around the world
 Offers a strong regional platform for the provision
of various banking products and financial
services, including investment funds, private
banking, retail, corporate and investment
banking
 Unique opportunities for cross-border and
international transactions of mutual funds
through reliable infrastructure and low costs
 Independent banking supervision by the Central
Bank of Cyprus
 Foreign operations of Cyprus Banks
Cyprus: International Shipping Center
 Ranks 3rd top maritime nation in EU27
and top 10 globally
 Shipping accounts 5% of Cyprus GDP
 More than 1,000 registered vessels with 21 million
gross tonnage are registered under the Cyprus flag
 More than 130 ship owning and ship
management related companies maintain offices in
and conduct international activities from Cyprus
collectively controlling a fleet of 2,300 ships with 46
million gross tonnage
 2 deep-sea ports with easy access to Suez Canal
and other major freight routes
 New competitive legislation enacted on April 2010,
with favorable tax regime and other benefits for
ship-owning, ship-management and crew members
Energy
Oil and Gas
 Exploration of vast natural gas reserves within the
Cyprus‟ Exclusive Economic Zone (EEZ)
Renewable Energy Sources (RES)
 Opportunities for the development of Renewable
Energy Sources (RES) and Technologies
 Development of partnerships with foreign investors in:
• Co-financing of already licensed projects or future
Renewable Energy projects
• Assembly and light manufacturing of photovoltaic
products
• Regional Operations Centers
• Research and Development (R&D)
• Testing/Piloting of new Renewable Energy
technologies
Information & Communication Technologies (ICT)
Opportunities
 Broad array of companies offering a variety of services including
software development, internet service providers and web
design
 Potential for Research and Development (R&D)
 Innovation and optimal utilization of human resources in
activities to produce goods and services of high added value in
knowledge and expertise
Warehousing and Logistics
Warehousing and Logistics International market:
 Driven by key factors: Qualified Personnel, Cost of
Land and Leases as well as Location
 The Global Crisis is forcing companies to re-think their
strategies and action plans
 The adoption of outsourcing strategies is an ideal
alternative for the reduction of costs and profit increase
Cyprus ranks 19 among 183 countries in „Trading
Across Borders’ in the World Bank‟s “Doing Business
Report” 2012
Source: Cyprus Bonded Warehousing Logistics Association , www.mof.gov.cy
Development and Infrastructure Projects
 Projects for promotion of sea
tourism (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 details regarding
investment opportunities in Cyprus
please contact us:
 +357-22-441133
 www.cipa.org.cy
 [email protected]
Thank You