Business Opportunities

One of the priority growth sectors in the Goverment of Cyprus Strategic Development Plan (2007-2013), is Information Communication Technology. Specifically, Cyprus wellcomes FDI to expand and/or develop projects on e-Government, e-Business, e-Learning, e-Inclusion, e-Health and overall ICT services.

The sector is relatively advanced and well regulated by the Office of the Commissioner of Telecommunications and Postal Regulation. This regulator was established in 2002 and the fundamental principles of its operation, based on the acquis communautaire and the European experience, are transparency, equal treatment, non-discrimination and good faith in its relations with the licensed operators and the consumer.

Cyprus was ranked 32nd out of 142 countries with score 4.66 out of 7.0 for the “Global Information Technology Report (GITR) 2012” – the “Networked Readiness Index 2012”.

Advantages/Opportunities

Established great infrastructure with nodes connecting Cyprus to the rest of the world

Switching to digital terrestrial TV broadcasting by 2011

Focusing on Wireless Access System Networks

Broad array of companies offering a variety of services including 50 software development companies, more than 10 internet service providers, 5 telecommunication companies and 15 web design companies

Excellent education level of the workforce in Cyprus (32.3% of the workforce of the age group 25-64 in 2010 have completed tertiary education)

Over 1000 graduates in the fields of mathematics and computing every year

In the audio, visual and film production services, more than 20 companies are operational, taking advantage of the sunny weather conditions in Cyprus

Government commitment to further expansion in this sector

Cyprus is committed to:

Ensuring Security of Energy Supply

Protecting the Environment

Fostering Healthy Competition in the Energy Sector

Encouraging Development of renewable energy technologies and production

Sector Synopsis

Cyprus ranks number one in the world in solar energy use for water heating in households.

1.96 million toe (tons of oil equivalent) were consumed in 2009

2.6% increase in energy consumption (2000-2009)

€20,33 million were given by a special fund created by the Government to promote the use of Renewable Energy Sources in 2009

4.9% of the national energy needs in 2009 were met through Renewable Energy Sources

6.8% increase in electricity consumption (2000-2009)

Cyprus is an internationally renowned shipping centre. The island’s merchant fleet has been growing steadily, reaching a top 3 position in Europe and a top 10 global ranking. The unique geographical position at the juncture of three continents, the advanced infrastructure and services, as well as the very attractive taxation and other advantages makes Cyprus an ideal location for ship owning, ship management and ancillary shipping-related companies.

Sector Synopsis

The merchant fleet of Cyprus is the 3rd largest in the European Union and the 10th largest in the world

Nearly 1,000 ships exceeding 21 million gross tonnage are registered in Cyprus

More than 130 ship owning, ship management and shipping related companies maintain offices in and conduct international activities from Cyprus collectively controlling a fleet of 2,300 ships with 46 million gross tonnage

Shipping contributes about 5% to the Gross Domestic Product (GDP) of Cyprus (2011)

The Cyprus shipping sector employs approximately 4000 people ashore and approximately 40,000 seafarers onboard Cypriot flag ships

New Shipping Tonnage Tax System

The European Union´s approval of a fully revised and upgraded Cyprus Shipping Taxation System in March of 2010 is a turning point for Cyprus and European Shipping. The new Shipping Taxation System covers the three basic Shipping activities in International Shipping, namely Ship owning, Ship management (including Crew Management) and the Chartering of vessels. The benefits of the new system may soon render Cyprus, the “Shipping Metropolis” of Europe. Ship owners are exempted from Income Tax and are automatically taxed under the Tonnage Tax System. Ship managers and Charterers can exercise their option to be taxed under the Tonnage Tax System.

Key Industry Players

Some of the world’s largest international ship management companies have headquarters in Cyprus, including:

Bernhard Schulte

Columbia Ship management Ltd

Dartmonth Shipping Limited

Hanseatic Shipping Company Ltd

Ocean Challenge

OceanWide

Schoeller Holdings Ltd

Synergy

Advantages/Opportunities

Excellent geographical position at the crossroads of Europe, Africa and the Middle East

“Open Registry” (one of two countries in the European Union), allowing non-Cypriot citizens to register ships under the Cypriot flag

Advanced maritime infrastructure (two deep sea multi purpose ports in Limassol and Larnaca)

Sound international relations

Favourable taxation regime and other benefits for ship owners and crew members

Low ship registration fees

No income tax, estate duty or capital gains tax for

Cyprus-registered ships

No stamp duty on documents or mortgage deeds

Anonymity of beneficial owners through nominee or trustee shareholders

Recognition of Competence Certificates from many countries

Easy deletion from the Cyprus Shipping Register

The Cyprus banking and financial services sector is diverse, comprising of the domestic banks, the co-operative credit institutions (CCIs), the former international banking units (IBUs), insurance companies, and other companies that offer financial intermediation services.

There are many foreign banks from the Middle East, Europe, Africa and Asia that operate as subsidiaries, branches or representative offices in Cyprus.

In 2004, Cyprus completely liberalised capital movements enabling the former IBUs to provide credit and full banking services as branches or subsidiaries of foreign banks.

Sector Synopsis

All banks maintain correspondent networks around the world and subscribe to SWIFT, Reuters, Telerate and other services

In 2011, the Financial Services sector accounted for 9% of GDP

The Cyprus banking sector operated almost 900 branches and employed over 12,800 people in 2011

At the end of 2011, the banking sector held almost 54 billion Euros in deposits and loaned over 53.8 billion Euros

Opportunities

Many opportunities exist in financial products and services such as fund registration, administration and management. Cyprus welcomes investors interested in Banking and Financial Services. As the global market of business processes outsourcing and knowledge processes outsourcing is forecasted to expand significantly, Cyprus is well placed to attract more of this growing market by offering its expertise, financial stability, cost competitiveness, educated human resources as well as other comparative advantages.

Cyprus welcomes investor interest in education. Cyprus is committed to further strengthening education and is focusing on reforms to achieve sustainable growth. The Ministry of Education and Culture is harmonising the education system in line with the European Standards & Guidelines for Quality Assurance.

The Cyprus Council for the Recognition of Higher Education Qualifications (www.kysats.ac.cy) has been established since 1996.

In addition, Cypriot educational institutes actively participate in EU programs, like the Eurydice Network and the ERASMUS program.

Sector Synopsis

3 public Universities, including one Open University, and 4 private Universities

341 public and 29 private primary schools (2009/10)

127 public and 38 private secondary schools (2009/10)

32.3% of Cypriots in the 25-64 age bracket have a tertiary educational level (2010)

38% of Cypriot tertiary students studied abroad (2010)

38% of Cypriot tertiary students studied in Cyprus (2010)

Opportunities

With an average annual increase of 10.5% in the total number of tertiary students in the last 5 years, and with almost a third of all tertiary students studying in Cyprus coming from abroad, there is a great opportunity for new universities, colleges and research institutes to be initiated in Cyprus.

Cyprus is recognized as an international centre of excellence for the provision of professional services. The accession of Cyprus to the European Union and the euro zone, in conjunction with the developed, free market economy, strategic geographical location, advanced and attractive tax environment, extensive double taxation treaty network, and robust and transparent regulatory environment, provides FDI opportunities, including Business Process Outsourcing and Knowledge Process Outsourcing, leveraging the professional services sector.

Accounting Services

There are approximately 2,700 active, English-speaking, registered accountants in Cyprus

Cyprus offers a wide range of professional accounting, auditing, management consultancy, taxation, financial advisory and other administrative service to both the private and public sectors

In 2009, there were approximately 120 limited accounting firms and 40 partnerships operating in Cyprus

Top international accounting firms are established in Cyprus providing services to international investors

Cyprus follows the International Financial Reporting Standarts (IFRS)

Supervisory/Regulatory Framework

The Institute of Certified Public Accountants of Cyprus (ICPAC), registered in 1961, is the authorized body that regulates and supervises the accountancy profession in Cyprus

The right to join ICPAC is conferred to members who meet U.K. professional standards or equivalent

The Institute of Chartered Accountants in England and Wales and the Chartered Institute of Management Accountants have chosen Cyprus as the first country in the world to train U.K. Chartered and CIMA accountants outside the U.K. as well as the training of U.K. Certified Accountants on the island

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.

There are over 2100 registered advocates and 160 limited liability law firms providing a wide range of legal services in Cyprus

Over half of lawyers hold U.K. legal qualifications

High quality legal services are offered in specialist areas such as international law, corporate administration, and management services

Cyprus-based Law Offices cooperate extensively with international Law Firms

Supervisory/Regulatory Framework

The Cyprus Bar Association, established under the Advocates Law Cap.2 in 1960, is the professional legal body

Under the Advocates Law, the Cyprus Bar Association, the Disciplinary Board and the Legal Council are the bodies regulating the legal profession in Cyprus

Legal professionals are expected to adhere to the highest professional and ethical standards

Opportunities

There are opportunities for cooperation with local service providers to service investors who invest in Cyprus or through Cyprus

Many opportunities exist for the establishment of new offices or branches in Cyprus, taking advantage of its geographical position, its membership of the European Union, as well as its good relations with Middle Eastern, Central European and Eastern European countries

The Government of Cyprus aims in the differentiation and enrichment of the tourism sector by focusing on the promotion of health services. Health services tourism is a developing industry that combines medical treatment with vacation. Health services address the needs of ill tourists, providing medico-pharmaceutical care and stay in hospitals and recuperation centres.

Sector Synopsis

Expenditure of health services was €1,200 million in 2009, €552 million of which constitutes expenditure of the public sector and €648 million of the private sector

The share of expenditure as a percent of GDP increased was around 6.3% in 2009

Six public General Hospitals: two in Lefkosia, and one each in Limassol, Larnaca, Ammochostos and Paphos and around 80 Private Hospitals and Clinic

Approximately 60,000 health travellers came into Cyprus according to the CTO 2010 Study (UK-78%, Germany-9%, Israel and Middle East-7%, Sweden-3%, Italy-3%)

In 2011, EU Cross Border Healthcare Directive was passed/approved and will result in the increase of individuals looking for alternative health tourism locations

Other specialized medical institutes, offering services in:

Cancer treatment

Organ transplants

Services on bone marrow

Cardiac surgery procedures and non-invasive Cardiac surgery

Neurology and Genetics

Advantages/Opportunities

Cyprus welcomes investor interest in Health Services. Several FDI opportunities exist to build and transfer or operate centers offering care in several fields including: pathology, general chirurgical, heart operation, plastic chirurgical, ophthalmology, gastroenterology, pediatric, otorhinolaryngology, obstetrics and gynecology, urology, orthopaedics. In particular, centers providing these specialized services:

Cardiac Surgery interventions

Kidney transplants

Renal insufficiency care

Oncology services

Preventive/diagnostic tests

Dental examinations/treatments

Surgical remedial or aesthetic surgery/treatment

Rehabilitation for people who need long recovery after surgery

Mental rehabilitation

Rehabilitation for patients with respiratory problems

Neurosurgery

Other medical services such as orthopedic, plastic surgery, gynecology, in vitro fertilization, gerontology, rheumatology, endocrinology, dermatology, nature cure, etc.

Cyprus focuses on health services and offers several opportunities for partnership between private companies and local government.

The Cyprus Tourism Organisation aiming at the sustainable and balanced development of tourism in Cyprus, has recalibrated its strategy to support the development of new tourism products and services, which also includes the wellness tourism products and services.

Main elements of Wellness Tourism

The body fitness: exercise and therapy / diet: food / skin: beautification

The soul relaxation: stress management, meditation

The spirit culture: health education, health advice

 Investment opportunities in wellness services:

Mineral Spas. Make use of the natural properties of thermal springs,gases and mud baths with healing properties.

Hydrotherapy centres. The properties of water, with or without chemical additives, are used for therapeutic reasons. Hydrotherapy centres may even provide gases and mud. The centres may be near thermal springs.

Thalassotherapy centres. The natural properties of sea water, its products (mud, seaweed) and local climate are combined to soothe body, mind and spirit.

Climatotherapy centres. The advantages of the local climate are used for therapeutic purposes,and extra services for health and beauty are provided.

 Advantages

Sea and sun, moderate climate and rich natural environment

Exceptional sea quality which may contribute to an increase in thalassotherapy services

Existence of thermal springs

World renown hotels and resorts with international marketing and recognition

Already established tourism product which may be enriched and differentiated

Well trained human resources with strong track record in tourism

State commitment for the development and implementation of the wellness product

Opportunities

Possibilities for partnership between private companies and local government for the development of wellness tourism services

Utilisation of EU- and nationally-funded incentives

Enhancing the prerequisites for developing the sector including training, capacity building and infrastructure