Cyprus is going through exciting times of growth and development thanks to a renewed boost in confidence with foreign investors flocking back to its shores, attracted by the improved economic climate, large-scale projects and bourgeoning prospects in the real estate, investment fund and energy sectors.

Located in the eastern Mediterranean at the crossroads of Europe, the Middle East and Africa, its strategic position has always played a key role in shaping its 10,000-year history and in developing the island into a convenient center for trade and international business. Despite being a country of only 854,800 people, the Republic of Cyprus has steadily built itself into a thriving business center over the decades. An EU and eurozone member for over a decade, and with one of the highest educated populations in Europe, Cyprus has built a strong service-based economy . Its low-cost business environment with a wealth of support services, a sophisticated ICT infrastructure and investor-friendly tax regime – backed up by an extensive network of double taxation agreements with 64 countries – has developed Cyprus as an important European and regional financial and business services hub.

The country is also one of Europes favorite holiday destinations, enjoying an astounding 340 days of glorious sunshine a year and boasts a beautiful coastline teeming with stretches of golden sand, secluded bays and rocky coves, all surrounded by some of the cleanest beaches and waters in the Mediterranean Sea. The landscape is dotted with the fascinating remains of history, from Neolithic settlements and ancient city-kingdoms to exquisite Byzantine art and magnificent Venetian architecture. Add to this the vibrant and cosmopolitan lifestyle where East meets West, Cyprus offers the perfect balance between business and leisure.

People and Culture

While Cyprus is a Greek-speaking nation, English is almost universally spoken and is the language of international business. German, French and Russian speakers are also easily found, thanks to the high number of Cypriots with international degrees, the countrys commercial ties with the global business community, and the islands popularity as a tourist destination.

Cyprus is well known for its hospitality, a fact reflected in the Greek word, xenos, used for both stranger and guest.Life is meant to be enjoyed in Cyprus, which is renowned for its excellent quality of life. Cafe culture predominates, with both business and social meetings taking place over a leisurely frappe (iced coffee) in the numerous cafes in every town and city. As with most Mediterranean cultures, food also plays a vital role in family and social life. The famous Cyprus meze a large selection of small, delectable dishes is best enjoyed siga siga (slowly}, alfresco and accompanied by excellent local wine.

Growing EU Economy

Cyprus has a resilient economy that has time and time again proven its capacity to adjust to continuously changing conditions and bounce back from external shocks. Before its independence from the UK in 1960, the Cyprus economy was primarily based on agriculture and the export of minerals. However, in the last few decades the country has established itself as a serious international business and service center for shipping , financial services and commerce, and is classified by the World Bank as a high-income country.

The islands accession to the EU in 2004 with the subsequent adoption of the euro in 2008, was the catalyst for its transformation into a competitive financial and business services hub. Following the countrys financial crisis in 2013, Cyprus undertook a major reform agenda and albeit still facing some economic challenges, the small EU nation has demonstrated in- credible resilience and an ability to bounce back to growth. The year 2015 signaled a sooner-than- expected exit from recession and a rapid economic turnaround followed, with 2017 recording almost 4% growth- earning Cyprus praise as an economic success story. The islands international financial center did suffer a blow in the wake of the crisis, especially to its reputation, but today the country stands tall with recapitalized andstable banks and stronger institutions with better supervision. Consistent credit rating upgrades have further boosted confidence and foreign direct investment has been pouring into all key sectors, with 2014-2016 FDI in flows reaching 9.1 billion.

Cyprus has retained and strengthened its status as an attractive investment gateway to the EU and other high-growth markets, as well as a secure base to tap into opportunities in the Middle East. Offering a tax-efficient EU company domicile, the country is also now emerging as a compelling destination for regional headquarters as well as an increasingly attractive location for fund managers and promoters.

Booming Investment Fund Sector

Cyprus has big ambitions in the investment funds sector to establish itself as a contender in the global asset management industry- and with upgraded legislation, assets under management (AuM) and the number of funds steadily growing, the country is well on its way. AuM in Cyprus stood at 4.8 billion in March 2018 and are projected to reach an incredible 20 billion in the next five years provided the current rate of growth continues. Cyprus offers both EU-regulated Undertakings of Collective Investment in Transferable Securities (UCITS) and Alternative Investment Funds (AIFs).

In July 2018, the country upgraded its AIF framework and introduced Registered AIFs (RAIFs), which do not require authorization by the supervising Cyprus Securities and Exchange Commission (CySEC) to commence operations provided they are externally managed by an Alternative Investment Fund Manager (AIFM) based in Cyprus or another EU country. The upgraded legislation has been hailed ground-breaking and offers a significantly more time- and cost-efficient means of establishing AIFs in Cyprus. Today, the majority of alternative investment funds in Cyprus are of a small and medium size and focus on debt and equity securities, real estate and private equity.

However, Cyprus has also attracted larger funds including one with assets of 500 million under management. The number of alternative investment funds has more than doubled in the last five years and foreign UCITS are now widely marketed in Cyprus, including ones promoted by international financial institutions such as JP Morgan, UBS and Julius Baer.

Global Shipping Hub

A maritime sector, which accounts for 1 billion in annual revenue and around 7% of the islands GDP. Apart from offering ship management and business services to the industry, the Cyprus Registry is classified as the third largest fleet in the European Union and for years was ranked as one of the top 10 largest merchant fleets in the world. The sector has seen growth in the past few years and Cyprus is currently looking at restructuring the commercial shipping sector to strengthen its competitive edge. Since introducing an advantageous EU-approved tonnage tax system in 2010, the island has continued to attract increasing numbers of shipping companies from across the world. The countrys maritime capital, Limassol, is home to some of the most influential names in shipping today. With Greece still trying to overcome its economic woes and with a looming Brexit in 2019, increasing numbers of shipmanagers and owners are relocating their operations to Cyprus.

Tourism Breaks Historic Records

Tourism has been a key driving force of the Cypriot economy for decades, and 2017 saw another consecutive year of record-breaking numbers of tourist arrivals and revenue- and so far, 2018 numbers project yet another year of consistent growth. New projects currently underway are set to strengthen and upgrade Cyprus tourism product and encourage more year-round visitors, a strategy Cyprus is fully committed to. These projects range from the construction of new golf courses, luxury marina developments and the upgrading of the islands wellness and medical tourism product. A new and exciting prospect is the current construction of the Republics first-ever luxury casino resort. The 550 million integrated resort, run by a consortium with renowned Hong Kong player Mele, will exceed five-star status and open a whole new market for niche tourism on the island.

Regional Energy Hub

Apart from the sun and the sea, Cyprus has few natural resources and has been dependent on oil imports to satisfy its energy demands. However, the substantial discovery of natural gas and potential oil deposits in Cyprus Exclusive Economic Zone {EEZ) in the Mediterranean Sea is expected to change all this. Exploratory drillings by global energy giants have confirmed natural gas reserves that could meet Cyprus domestic gas demand for over 100 years, and a surplus for export. The hydrocarbons race in Cyprus waters has attracted international energy heavyweights, such as Total, ENI, Kogas, Royal Dutch Shell, and Exxon Mobil to explore the islands waters for new discoveries and multiple auxiliary services companies have set up to support these efforts. With 340 days of sunshine to harness, solar energy has also become a bit of a boom segment for Cyprus recently.The European Bank for Reconstruction and Development (EBRD) alone has financed five solar parks across the island with an investment of 10.85 million in a bid to increase photovoltaic capacity in Cyprus by 12%, while Scandinavian Solar Parks, a Cyprus company with Swedish investors, has established nine solar power generation parks. In addition, a solar field on the islands southern coast in Pentakomo aims not only to generate electricity but to provide fresh water by powering energy intensive desalination plants. The research facility is a result of a partnership between the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the Cyprus Institute, which is pioneering research in renewable energy systems.

Rise in Real Estate

Confidence levels in the Cyprus real estate sector have been steadily rising with 2016 and 2017 showing strong market performance, and the upswing continuing straight through to 2018. Major projects are forging ahead with more planned and in the pipeline, and residential housing projects as well as luxury developments are back in demand. In fact, 2017 saw an impressive 45% increase in sales contracts for high-end residential properties. Cyprus appeal has remained strong amongst international investors, expats and retirees thanks to its Mediterranean climate, high quality of life and safety, as well as its status as an EU member state conveniently located between three continents. Interest from foreign house hunters and investors has once again become a driving force of the sector, and real estate prices are finally recovering. Cyprus has one of the highest home ownership rates in Europe and also has a longstanding market for second homes and holiday villas, making the economy heavily reliant on the sector, which contributed 14% to Cyprus Gross Value Added (GVA) in 2017. With new up-market developments, increased foreign investment in top hotels and major infrastructure projects springing up, Cyprus attractiveness as a property investment location is set to grow in the coming years.

FDI Superstar

The improved economic climate has revived interest in Cyprus and its numerous large-scale development projects. Most capital, predominantly coming from Greece, Egypt, Lebanon, Russia, the US and UK, has been invested in the banking, wholesale trade and real estate sectors. The banking sector has seen more consolidation in 2017-2018 through major acquisitions. Hellenic Bank acquired the good assets of the Cyprus Cooperative Bank, a group of international investors acquired the majority stake of the Cyprus subsidiary of Greeces largest lender Piraeus Bank, now branded AstroBank , which in turn is finalizing a deal to acquire the operations of USB Bank. As for real estate, Limassol in particular has seen a boost in investment that is set to reconfigure the citys skyline to the likes of Dubai with new innovative high-rises reaching for the sky along the citys seafront. Over the last few years, privatisations were of interest with a consortium led by German Eurogate International GmbH- the largest container company in Europe -winning the concession of Limassol Ports container terminal, generating 44 million in immediate revenues. Luxury marinas have become a popular investment, with Egyptian billionaire Naguib Sawiris investing in the 220 million project to construct the Ayia Napa marina. Also, the new casino resort is expected to contribute 700 million annually to the economy from the second year of being fully operational, revenue which is projected to be 4% of the countrys GDP.

Cyprus liberalized Foreign Direct Investment Policy, both for EU citizens and investors from third countries, along with its favorable tax regime makes it one of the most attractive centers for FDI in Europe, and evidence of this came in 2018 when Cyprus was ranked 8th out of the top 20 countries globally for FDI performance and appeal in Global Finance magazines FDI Superstars 2018.

A European Top Performer

The economic growth of Cyprus continues to surpass all expectations, and as one of the fastest growing eurozone economies the countrys priority is now shifting to ensure the strong momentum is maintained by improving efficiency, implementing reforms and strengthening investor confidence.Cyprus has continued on a solid growth path in recent years with key sectors flourishing, foreign investment flowing in, large-scale projects underway and natural gas exploitation in the pipeline. The small EU country has outperformed international expectations and consolidated its status as a self-determining and thriving economy. It recovered rapidly following the financial crisis of 2013, thanks to tough reforms to restructure and diversify its economy. Protecting its competitive edge is a key priority and Cyprus pro-business government is determined to further unleash the productive forces of its economy to achieve its vision of a technologically driven country focused on innovation.

Investor Credibility

Cyprus regained its investment-grade status in 2018, with both Standard and Poors and Fitch Ratings assigning a BBB- credit rating to long-term sovereign debt. Agencies recognised the countrystrong fiscal record, stabilised banking system and robust growth outlook, with the IMF expecting growth rates in excess of 3% to 2020. The government has taken advantage of the successive upgrades to improve its debt profile by issuing cheaper debt with longer maturities. A 30-year bond issue in April 2019 was more than 12 times oversubscribed, and underlined Cyprus credibility in the eyes of international investors.

Solid Banks

The year 2018 marked a watershed in tackling the legacy of the 2013 financial crisis. Non performing loans were slashed in half, dropping to 20 billion or 30.5% of the total.

Major initiatives induded the sale of mainly performing loans of the Cyprus Cooperative Bank to Hellenic Bank, the establishment of a state-owned bad bank to handle the rest, and a new state programme for supporting the most vulnerable borrowers. In addition, credit rating agencies welcomed a major set of laws passed in July 2018 that significantly strengthened the legal framework for tackling NPLs, allowing for the securitisation of loans and the speeding up of loan recovery rates. Even before these laws, the drop in NPLs in Cyprus is proportionately the fastest in the EU. Banks have successfully raised private capital and have maintained strong capital positions since the turmoil of the 2013 crisis and bail-in.The banking sector took full advantage of the tough supervision and reform programme in 2013-16 to correctfundamental weaknesses in the financial system. Having shed a large proportion of their NPLs and expanded new lending, banks should be in a position from 2019 to post profits on a more consistent basis.

Healthy GDP Growth

The Cyprus economy has been expanding rapidly, with robust growth rates averaging 4.4% in 2015-18. The island was among the top five Eurozone performers in 2018, with an impressive growth rate of 3.9%, compared with a Eurozone average of 1.9%. The European Commission predicts a growth rate of 3.1% in 2019 and 2.7% in 2020. The growth is being driven by both strong private demands, spurred by growing employment, and an expanded and upgraded tourism sector after four successive years of record tourism arrivals.

Shrinking Unemployment

Unemployment has been falling for several years and is set to continue its decline. The annual unemployment rate declined from a peak of 16.1% in 2014 to below 8% in 2018- and dropped to 6.9% in April 2019. Youth unemployment continues to be a challenge but fell from a peak of 38.7% in 2013 to 19.3% in the fourth quarter of 2018, thanks to an expanding economy and a range of government training and support programs.

Trade and Investment

More than half of Cyprus trade in goods is done with the European Union, and the country has achieved strong numbers in recent years for exports of both services- 10 billion in 2018 from 8.1 billion in 2014- and domestically produced goods-1.6 billion in 2018 from 735 million in 2014. Cyprus main export partners for goods are Greece and the United Kingdom. The main domestic export commodities are industrial products of mineral origin, pharmaceuticalproducts, raw and manufactured food products. The three leading import partners are Greece, the United Kingdom and Italy. The island mainly imports hydrocarbons, machinery, chemicals, vehicles, and iron and steel.As a small open economy that is currently dependent on energy imports, Cyprus trade balance is traditionally in deficit, while its services balance is normally in surplus. After a recession-driven divestment in 2013-14, foreign direct investment (FDI) liabilities (reflecting investment into the country) turned positive, reaching 7.4 billion in 2015, 7.4 billion in 2016 and 9.8 billion in 2017. In 2018, net FDI (net of assets, or outward investment) was a negative 246 million according to initial estimates, reflecting outward investment (an increase in assets abroad).

A range of new initiatives under way are attracting more investment and there is renewed investor interest in large-scale developments. New deputy ministries for shipping in 2018 and tourism in 2019 have also provided for increased focus on key growth sectors.

Investor Incentives

Tax measures approved in recent years have further improved the long-established comprehensive and transparent character of the Cypriot tax framework. The new measures, which are fully aligned with EU directives, support the promotion of economic development by encouraging the introduction of new equity capital as an alternative to excessive debt financing – Notional Interest Deduction (NID) regime on equity- and encourage the creation of business substance by offering compelling advantages to individuals from a personal tax perspective, including benefits for non-domiciled individuals.

Tax incentives for intellectual property, innovative small and medium-sized enterprises (SMEs), start-ups and film production were also introduced in the last few years. These incentives will further improve Cyprus international competitiveness as a location of choice for multinationals seeking to do business in the EMEA region.

Fiscal Performance

Cyprus has maintained a strong fiscal position since the 2013 crisis, allowing it to cut debt and deal with legacy issues without recourse to official lenders. Excluding spending relating to the closure of the Cyprus Cooperative Bank, the budget in 2018 recorded a general government surplus of 3.2% of GDP and a primary surplus (excluding interest payments) of 5.2% of GDP, following large surpluses also recorded in 2017. The general government budget deficit inducing Coop expenditure was 4.8% of GDP in 2018 but is expected to return to surplus in 2019. Cyprus debt-to-GDP ratio peaked in 2015 and dropped below 100% of GDP in 2017, thanks to early repayment of Central Bank and IMF debt.

During 2019, Cyprus is also expected to pay off early the 2.5 billion bilateral loan from Russia. While debt rose to 102.5% of GDP in 2018 owing to expenditure relating to the closure of the Coop, the most recent IMF forecast envisages the debt ratio falling back below 100% of GDP in 2019. Ongoing structural reforms are expected to put long-term public finances on a more sustainable path which will also improve competitiveness.


Inflation has been muted in recent years. After declining by 1.2% in 2016, owing to low oil prices and historically high unemployment, the EU-harmonized consumer price index rose by just 0.7% in 2017 and 0.8% in 2018. It is expected to reach only 0.9% in 2019 and to 1.1% in 2019, according to the European Commission. Earnings started to pick up again from 2017 after four years of decline, and are expected to continue rising in 2019 and 2020.

Enhancing Efficiency

Having regained investment grade in 2018, the next main challenge for the Cyprus economy is to ensure that the robust growth of 2015-18 can be maintained, by implementing more structural reforms that will cut red tape for investors and improve efficiency.

Cyprus has established its fiscal discipline credentials, and banks now have a range of tools to reduce non-performing loans (NPLs) even more, including loan-sales and faster foreclosure procedures. These elements will further improve Cyprus attractiveness as an investment destination and there is growing confidence and interest from foreign investors in the country.

Strong Economic Performance

Cyprus has an open, free-market, service-based economy with a long record of resilience and successful economic performance. The expansion and upgrading of the tourism sector, the rapidly developing investment fund sector and the discovery of significant quantities of natural gas in Cypriot waters raise the prospect of a transformation of the Cypriot economy in the medium to long term.

Its strong business environment, highly educated workforce and favorable and stable tax regime remain the keystones for investors looking to take advantage of the growing number of investment opportunities emerging in Cyprus.

Large Scale Investment Projects

Cyprus offers international investors attractive opportunities with a number of large-scale development projects underway. Ranging from residential to commercial projects including marinas, golf courses and theme parks, Cyprus has much to offer investors looking for new opportunities on the island.

First Electric Ltd.

First Electric Ltd. is the first Independent Power Producer in Cyprus looking for a strong and reliable financing/investment partner with whom it can realise the full potential of the following projects: construction and subsequent operation of a fully developed heavy fuel oil fired 49.9MW power plant located in Larnaca district in Cyprus, a young liberalising energy market and the expansion and operation of a waste management and treatment plant (rendering plant), a renewable energy cogeneration power plant of 4.5MW, 20t/d biodiesel plant.

Helios Power

Helios Power is a 50,76MW Concentrated Solar Power (CSP) Project to be implemented in Cyprus. The project will make use of the Cyprus abundant solar energy to generate electricity to be delivered to the Utilitys Grid. Being a solar power project, it will give a helping hand in the effort to relief the Grid during those hot summer days when demand for electricity is at its peak.

Medlife Village

The Medlife Village is an innovative development which has been specifically designed to cater for the particular needs of mature residents, who wish to enjoy an active and healthy lifestyle while enjoying high quality (five star) services. MedLife Village will be set in 38 acres, (51,000m2) of land on the outskirts of Droushia village in southern Cyprus. Set in the hills on the border of the Akamas National Park, some 10-minute drive from the sea (Latchi). The development will contain 208 properties and a range of sport and leisure facilities on-site. There will be also a Medical Clinic and facilities on-site dealing with Cosmetic and Plastic Surgery, Dentistry and Rehabilitation. Of the 208 properties 7 are 2- bedroom villas with their own gardens and swimming pools, 11 are 2-bedroom apartments, 174 are 1-bedroom apartments, 5 are studios apartments and 25 are Luxury Suites.

Athena Medical Centre

A unique, professional, state-of-the-art medical centre in the heart of Nicosia, on the main by-pass of Nicosia, close to the main highways, within easy reach from the whole of the island. Its purpose is to provide professional medical treatment to both local and foreign patients, with emphasis on Medical Tourism in cooperation with local and foreign specialists and hoteliers. The Centre was designed by a group of architects and doctors to create a modem environment of well functioning professional spaces and provide ample parking space with three underground parking areas to satisfy the needs of its daily visitors.

Santa Roza Tower

Santa Roza is a smart, new sustainable landmark building in the city Centre of Nicosia designed by Atkins. The project offers an attractive public realm and a sustainable design solution. Great care is taken to ensure that Santa Roza Tower integrates into the natural surroundings and respects the environment.

The project is situated at a privileged and strategic location which makes it an ideal focal point to signal the WESTERN GATE to Nicosia. The site is located centrally within a new vibrant developing commercial Centre to the South West of the historical heart of the capital city of Cyprus on Spyros Kyprianou Street.

A Sustainable Future

Offering a professional yet relaxed atmosphere that makes doing business pleasurable as well as profitable, Cyprus Mediterranean lifestyle coexists happily with a cutting-edge international business hub, allowing investors to enjoy the best of both worlds, a safe and comfortable environment for family life and a sophisticated infrastructure from which to grow and develop business.Cyprus combines numerous advantages as a business base with its EU-approved tax regime, competitive 12.5% corporate tax rate and tax breaks for high earners, its pro-business government and highly skilled workforce- as well as promising growth and development across numerous economic sectors.With Cyprus Prospects on an upward trajectory, the country has all the right elements firmly in place to maintain its reputation as an international centre of business excellence in one of Europes most interesting investment location.