Cyprus

Investing in Cyprus

FDI in figures | Why you should choose to invest in Cyprus | Procedures relative to foreign investment | Finding assistance for further information

FDI in figures

The FDI inflow for 2006 were above 1.4 billion dollars continuing an upward trend for the third consecutive year.
Cyprus ranks among the world leaders in terms of attractiveness for foreign direct investment. With the aim of adhering to the European Union, the country gradually dismantled most investment restrictions, thus making it a world leader in this field.

Foreign Direct Investment	2005	2006	2007
FDI inward flow (millions USD)	1,186	1,504	2,079
FDI stock (millions USD)	8,688	14,577	18,414
Performance Index*, ranking on 141 economies	24	22	18
Potential Index**, ranking on 141 economies	43	47	-
Number of Greenfield investments***	6	13	7
FDI inwards (in % of GFCF****)	35.7	40.4	46.9
FDI stock (in % of GDP)	51.2	79.4	86.5

Source: UNCTAD

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk. *** Green field investments are a form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. **** Gross fixed capital formation (GFCF) measures the value of additions to fixed assets purchased by business, government and households less disposals of fixed assets sold off or scrapped.

Why you should choose to invest in Cyprus

Strong points: The strong points of Cyprus are numerous: European Union membership and the use of the Euro currency, a strategic location at the crossroads of three continents, a prosperous and stable economy, a skilled and multilingual workforce, excellent infrastructure, and a nice environment to live in.
Weak points: The division of the island since 1974 and the difficulties in reaching an agremeent between Turkish and Cypriots as well as the small size of the domestic market are the challenges to be faced when doing business with Cyprus.
Government measures to motivate or restrict FDI: The government has created a positive environment for business in Cyprus.
A liberal FDI policy which allows 100% participation in almost all sectors of the economy, the lowest corporate tax rate of the European Union, double tax treaties with over 40 countries, low set up and operation costs are among others the best elements for foreign direct investment.
Bilateral investment conventions signed by Cyprus: Cyprus has signed bilateral convention with about 10 pays. To this figure, we have to add the 26 other European Union countries. On the Mediterranean basin, and out of EU, Cyprus only signed bilateral conventions with Egypt and Lebanon. 7 conventions can be downloaded on the UNCTAD. They define the protection framework of FDIs in Cyprus for each signatory country.

Procedures relative to foreign investment

Freedom of establishment: Freedom of establishment is guaranteed.
Acquisition of holdings: Foreign investors based in the European Union can acquire stakes in a Cypriot companies, without any limit on the percentage of stake acquired or on minimum capital invested. Moreover, investors from the European Union can acquire up to 100% in the capital of companies listed on Cyprus Stock market except for the banking sector where such a percentage is limited to 50% only.
Obligation to declare: Licenses are needed when operating in some sectors of the economy like construction.
Competent organization for the declaration: Invest in Cyprus
Requests for specific authorizations: Apart from the licensing procedures, there are no particular authorizations that are needed.