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Global Edition 2019 | €10


country REPORT

Cyprus ranks first per capita out of EU28 in competing for Horizon 2020 funding Cyprus’ economic growth continues in 2019, exceeding expectations and attracting new foreign investment New natural gas discoveries fuel interest in Cyprus as an East Med energy hub Formidable shipping sector grows further with new companies and ship registrations

Fostering a Knowledge Economy Economy • Foreign Direct Investment • SECTOR PROFILES • BUSINESS OPERATING ENVIRONMENT • Business Directory

Education sector thrives with more foreign students enrolling in the island’s top universities

Sectors to Watch Energy, Investment Funds, ICT, Film Production and Real Estate

Who’s Who Cyprus’ leaders and CEOs share industry insights and business prospects

First class legal services focused on results L Papaphilippou & Co LLC offers legal services to businesses, individuals, and public organizations. We have a strong litigation team handling also all forms of commercial dispute resolution and have considerable experience in arbitrations. Furthermore, our Immigration and Citizenship Department is well respected and renowned for leading by example in the field and our high calibre and experienced lawyers ensure first class service and results. Additionally, being a full-service law firm, L Papaphilippou & Co LLC is capable of delivering secure and compliant cross-border legal and wealth management solutions, as well as to coordinate international business structures, trusts and private banking matters for our clients.

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BY CYBARCO A unique sky-rise leisure hub in Cyprus Now a year into construction and sales, Trilogy Limassol Seafront is another success story for established developer Cybarco – member of the Lanitis Group. A statement of high living in the heart of the city’s affluent waterfront, the mixed-use destination has already received sales and reservations in excess of €140 million for its luxury sea view apartments and offices in the West and East Towers – due for delivery in 2021 and 2022 respectively.


rilogy is high living in every sense - a trio of shimmering beachfront towers, surrounded by a bustling inner plaza, right in the heart of Limassol, the most vibrant and cosmopolitan city in Cyprus. A place to live, work and play with unobstructed views of the Mediterranean Sea, it is as much an experience as it is a destination. Brought to life by a world-class collaboration of architects, designers and developers, it offers a lifestyle experience, blending the aspirational dream of high-end beachfront living, with the sophistication of urban cool. Astonishing design flair and unsurpassed levels of finish characterise the luxury apartments and offices in Trilogy’s North, East and West Towers. Each residence is a statement of discerning taste and understated wealth. Spectacular layouts are complemented with high standards of finish and sea views enjoyed by everyone. Elegant resident-only health, fitness and spa retreats occupy two floors of each tower, offering relaxation with unparalleled first-class services and outstanding views of the infinite horizon. The high-rise destination’s offices also ooze prestige, sophistication and credibility with their exclusive landmark address, functional workspace, stylish interiors and impressive range of facilities. A lifestyle destination to live or do business, with the beach and city centre at your doorstep, Trilogy has been just as thoughtfully considered on the outside. A breathtaking private oasis pool, tennis court, children’s play area and tranquil gardens offer everyone a place to escape. And at the centre of it all, the beautiful plaza is home to fine restaurants, bars and shops – an inviting hub and the beating heart of this unique integrated development. Cybarco Development’s CEO, Michalis Hadjipanayiotou, updated us on the project’s status: “Works on site are progressing according to schedule and sales have already exceeded expectations. Given our experience and record-breaking sales at developments like Limassol Marina and The Oval, we are confident Trilogy’s unique offering, design, location and competitive prices will continue to attract a broad range of local and international buyers.” Trilogy has high ambitions – not just to create one of the world’s premier sky-rise living experiences, but to combine three lifestyle aspirations in one ecosystem of prosperity. It is a unique opportunity to play a part in the city’s ever-changing story and begin an exciting new chapter of your own.

Your story begins here… For more information, contact 8000 50 30 or visit trilogylimassol.com

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Global Edition 2019 | €10



Cyprus ranks first per capita out of EU28 in competing for Horizon 2020 funding Cyprus’ economic growth continues in 2019, exceeding expectations and attracting new foreign investment New natural gas discoveries fuel interest in Cyprus as an East Med energy hub Formidable shipping sector grows further with new companies and ship registrations


Education sector thrives with more foreign students enrolling in the island’s top universities

Sectors to Watch Energy, Investment Funds, ICT, Film Production and Real Estate

Who’s Who Cyprus’ leaders and CEOs share industry insights and business prospects

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Country Report CYPRUS 2019

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Country Report CYPRUS 2019

Foreword Nicos Anastasiades, President of the Republic of Cyprus

Cyprus at a Glance Key Facts & Figures Government & Politics Strengthening Regional Cooperation

Economy A European Top Performer Foreign Direct Investment FDI Magnet FDI Insights Why did you choose to invest in Cyprus? Headquartering HQ Appeal HQ Insights Why did you choose Cyprus? Interview Minister of Energy, Commerce & Industry Yiorgos Lakkotrypis

International Trade Exports Head Upwards

Expertise Solutions Value


© 2019 PricewaterhouseCoopers Ltd. All rights reserved.


Sector Profiles 48

Agriculture & Food Agile Agribusiness


Banking Future-Proofing Banks


Capital Markets Regional Investment Gateway


Construction & Real Estate Mediterranean Pull Factor


Education Knowledge Hub


Energy: Oil & Gas Exploration Race


Energy: Renewables Harnessing RES Potential


Film Production Lights, Camera, Action!


Health World Class Medical Services


Insurance Surpassing Expectations


International Financial Services Managing Global Business


Investment Funds On the Radar


Manufacturing & Industry Industrial Revolution


Maritime & Shipping Propelling the Economy


Research & Development R&D Powers Ahead


Technology & Start-Ups Investing in Innovation


Telecoms & Satellite Communications Digital Island


Tourism Rebranding Cyprus


Transport & Logistics In the Right Place, At the Right Time

Operating Environment 150 Business Doing Business in Cyprus

158 Travel & Living CountryProfiler’s Expat Guide 170 Who’s Who Cyprus Business Directory 8

Country Report CYPRUS 2019


Foreword Nicos Anastasiades President of the Republic of Cyprus


Country Report CYPRUS 2019



t is a fact that a few years back, Cyprus, being on the verge of financial collapse, made the headlines for all the wrong reasons. But since then what has been achieved is nothing short of a remarkable recovery, confirming the resilience and strong foundations of Cyprus’ economy and the excellent prospects of its key productive sectors. We currently enjoy a growth rate of around 4% and Cyprus being in the ‘junk’ category seven years ago is now rated to investment grade. This year is the sixth consecutive year with a balanced budget, including primary surplus, while unemployment which in 2013 rose to 16%, has dropped to almost 7% and is expected to be reduced even further. The banking system, re-focusing its operations and fully adhering to the strictest international transparency and compliance regulations, is now based on a stronger and healthier base in terms of capitalisation, liquidity and profitability. At the same time, we have promoted significant reforms in the public administration, the welfare and healthcare system and in tax administration, while Cyprus’ comparative advantages which have established our country as a major centre for international businesses, not only remain intact, but have been further reinforced leading to a number of new and substantial investments in the fields of banking, energy, shipping, telecommunications, real estate and tourism, new sea ports, marinas and the largest integrated casino resort in Europe – which is currently under construction. These advantages, amongst others, include the combination of EU membership, the use of the Anglo-Saxon legal framework, an attractive corporate taxation of 12.5%, a highly skilled and professional workforce, modern infrastructure and a unique geographical location which provides easy access not only to European markets but also to those of North Africa, the Near and Middle East, the Gulf region and Asia. On behalf of the Government, I would like to emphasise that we remain committed to main-

taining sound public finances and firmly keeping Cyprus on a path of sustainable growth, and facilitating investment and economic opportunities. To this end, we shall continue preserving and enriching our competitive tax and legal framework and reinforcing our position as a businessfriendly economic and investment destination, through promoting further structural reforms and in particular via fully reforming the public service so that it facilitates growth in a modern, knowledge-based, scientific, high-tech and innovative economy. In addition, we are adopting new specific incentives in order to enrich and diversify Cyprus’ economic sectors, such as a tax incentives package for investment to innovative companies, a new investment law to fast-track licensing procedures for large investments, implementing a National Strategy for Decentralised Ledger Technology – better known as blockchain technology – establishing a new enhanced investment funds framework, as well as a comprehensive package for the development and promotion of the filming industry. We are also investing in our human capital through supporting higher education, research and innovation. At the same time, important opportunities exist for international investors in sectors such as Renewable Energy Sources, technology, real estate, telecommunications, research and innovation and education, while a series of tax incentives are also provided for the growing start-up industry. Further, the discovery of natural gas reserves within Cyprus’ Exclusive Economic Zone (EEZ) creates exciting investment prospects, including for auxiliary service providers, many of which have already established subsidiary companies in Cyprus. In concluding, I would like to extend my deepest appreciation to the producers of the Cyprus Country Report 2019 and for their efforts to attract new business and investment that would enhance competitiveness, development and sustainable growth in Cyprus. Nicos Anastasiades President of the Republic of Cyprus

Country Report CYPRUS 2019


Cyprus at a Glance


at a Glance

Lying at the crossroads of Europe, Asia and Africa, Cyprus has long served as a major eastern trading post. It is a small country, but the third largest island in the Mediterranean Sea and shares a maritime border with Egypt 300km to the south, Lebanon 108km to the east and Turkey 71km to the north, while inland Greece lies 800km to the north-west. With 10,000 years of history, the island’s strategic location has long made it a jewel in the crown of the powers of the day. Cultural influences have come from all directions, with many civilisations leaving their mark on the island, contributing to the development of a rich and diverse cultural heritage.

Total Population




Greek & Turkish

EU & Eurozone World Trade Organization United Nations Council of Europe Commonwealth World Bank & IMF

(business generally conducted in English)

NonCypriot 21%

Cypriot 79%


October 1st


Country Report CYPRUS 2019



Cyprus Mail Phileleftheros Politis CyBC

Cyprus at a Glance

35ยบN 33ยบE



(Lefkosia) Population: 332,200


(Ammochostos) 47,000

Larnaca International Airport


Paphos International Airport

Larnaca 144,900

Limassol 239,400




+2 Hours ahead of GMT

340 Days of sunshine / year


9,251 km2

(3,355 km2 in the occupied area)

population density

89.1% Greek Orthodox


(persons per km2)






790.1 mm average



2.9% Roman Catholic 2.0% Protestant/Anglican 1.8% Muslim 1.7% Unknown/Atheist 1.4% Other 1.0% Buddhist

Country Report CYPRUS 2019


Cyprus at a Glance

Business figures GDP BY SECTOR

87% Services

11% Industry 2% Agriculture




€20.7 billion


1-3 days

GDP per capita











0.9 per 100 persons


(May 2019)

(April 2019)

international rankings

26th 29th 44th 44th 57th 49th

for access to quality healthservices

Healthcare Access and Quality Index (HAQ) (out of 126 countries)

Innovation Index 2018 INSEAD and the World Intellectual Property Organization

Open Market Index 2017 International Chamber of Commerce

(out of 75 countries)

Economic Freedom Index 2019 Heritage Foundation (out of 180 countries)

in World Bank’s 2019 Doing Businss Report (out of 190 economies)

Cyprus is the safest country in the world for young people out of 184 countries across the globe. (World Health Organisation WHO 2017)

in World Happiness Report (out of 156 countries)

(out of 126 countries)

Standard & Poor’s






(September 2018)

(April 2019)

(July 2018)


UK Germany Italy France Greece


Country Report CYPRUS 2019

China Israel

The race has no finish line. Is your business ready for continuous transformation?

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Government & Politics


REGIONAL COoperation The Republic of Cyprus has been one of the fastest growing EU economies in the last few years and with growing cooperation with both its European and regional neighbours, 2019 brings with it new attempts to successfully reach a political solution for the divided island.


icos Anastasiades, the seventh president of the Republic of Cyprus, was re-elected for another five-year term on 4 February 2018. The conservative candidate and head of the DISY party won the Cyprus presidency once again, following a run-off presidential election with a majority of 55.99% of the vote. Embarking on his second term in office, the President called for unity to address future challenges. At the start of his first term, Cyprus suffered a major financial crisis, and President Anastasiades had to take robust measures to steer the country back on track from one of the most challenging economic times in the island’s history. Six years on, Cyprus is on a strong path of recovery and has become one of the fastest growing economies in the European Union. The division of Cyprus remains a key issue in the political arena, but UN-brokered peace talks between the Greek and Turkish Cypriot leaderships gained significant momentum following the election win of Turkish Cypriot leader Mustafa Akinci in 2015. These renewed negotiations aimed at finding a sustainable solution to the ‘Cyprus Problem’, which led to the de facto division of the island – between the mainly Greekspeaking south and the mainly Turkish-speaking north – for over four decades. Anastasiades and Akinci have been holding direct talks for around three years in a bid to reunify the island, and although the negotiations have been complicated, both parties have underscored their strong resolve and determination to reach a solution.

Divided Island

In 1960 Cyprus gained independence from Britain and became a unitary state of both Greek- and Turkish-Cypriots (respectively around 80% and 20% of the population). In July 1974, a right- wing coup backed by the military junta in power in Greece overturned the democratically elected government, forcing the Cypriot President Archbishop Makarios to flee. This prompted Turkey, one of the guarantor powers, which also include Greece and the UK, to send its troops into the island to support the Turkish Cypriot minority. Fierce fighting followed and the ensuing ceasefire line – known as the Green Line and patrolled by United Nations troops – has effectively partitioned the island ever since. However, visitors can safely access either side through various checkpoints along the Green Line. Today, Nicosia is the world’s last divided capital, since the fall of the Berlin Wall. The population of the southern two-thirds of the island, controlled by the government of the Republic of Cyprus, is almost entirely Greek Cypriot, while the population of the northern third, controlled by the breakaway Turkish Republic of Northern Cyprus (recognised only by Turkey) comprises Turkish Cypriots, settlers from the Turkish mainland and around 42,000 Turkish troops.

Constitution, Institutions and Administration The 1960 constitution provided for power sharing between the Greek Cypriot and Turkish Cypriot communities. Votes on important issues required separate parliamentary majorities, and the Greek Cypriot president and the Turkish Cypriot vice president both had the right of veto on important decisions. The system of government is presidential, with the separation of powers between the executive and the legislature. The presidential term lasts five years, with the next presidential election due in 2023. Ministers, who are appointed by the president, cannot hold seats in the House of Representatives. The House of Representatives is elected by proportional representation. Its normal term is five years.

Political Parties

Dominant Political Parties: Democratic Rally (DISY), a right-wing party led by Averof Neophytou Progressive Party of the Working People (AKEL), a left-wing party led by Andros Kyprianou Democratic Party (DIKO), a centre-right party led by Nicolas Papadopoulos Movement of Social Democracy (EDEK), a social democratic party led by Marinos Sizopoulos Smaller Political Parties: Ecologists Movement, also known as the Cyprus Green Party, led by Giorgos Perdikis Allileggii (Solidarity), a nationalist party led by Eleni Theocharous Citizens’ Alliance (Symmaxia Politon), a centre-left party led by Giorgos Lillikas National People’s Front (E.L.A.M.), an ultranationalist party led by Christos Christou


Country Report CYPRUS 2019

Government Structure

Government & Politics

President of the Republic of Cyprus Nicos Anastasiades Minister of Foreign Affairs Nikos Christodoulides Minister of Finance Harris Georgiades Minister of Interior Constantinos Petrides Minister of Defence Savvas Angelides Minister of Health Constantinos Ioannou Minister of Education and Culture Kostas Champiaouris Minister of Transport, Communications and Works Vassiliki Anastassiadou Minister of Energy, Commerce and Industry Yiorgos Lakkotrypis Minister of Agriculture, Rural Development and Environment Costas Kadis Minister of Labour, Welfare and Social Insurance Zeta Emilianidou Minister of Justice and Public Order George L. Savvides Government Spokesman Prodromos Prodromou Under Secretary to the President Vasilis Palmas Shipping Deputy Minister Natasa Pilides Deputy Minister for Tourism Savvas Perdios

From Foreign Rule to the Republic of Cyprus

Colonised by the ancient Greeks in 1400 BC, Cyprus has had a succession of foreign rulers through the centuries, including the Romans, the Byzantines, the Franks and the Venetians, whose 300-year rule ended in 1571 when the island became part of the Ottoman Empire. After almost 250 years of Ottoman rule, Cyprus was placed under British administration in 1878. The island finally became independent in 1960 after a protracted and violent struggle against the colonial power between 1955 and 1959. After lengthy negotiations, Britain, Greece and Turkey drafted a constitution for the new state, along with Treaties of Guarantee and Alliance. The Republic of Cyprus came into being in August 1960. The constitution and the two accompanying treaties established a complex power-sharing structure between Greek and Turkish Cypriots, which precluded partition of the island, or union with Greece or Turkey. Both countries, along with Britain, were also designated guarantors of the independence, territorial integrity and security of the Republic. The constitution provided for a Greek Cypriot president and a Turkish Cypriot vice president, while the Turkish Cypriot community was granted three ministerial positions out of a total of 10, and 15 out of the 50 seats in the House of Representatives. After intercommunal strife between the two communities, in 1963, Turkish Cypriots vacated their seats. Since then, ministerial positions have increased to 11, all duties carried out by Greek Cypriots and the number of parliamentary seats has extended to 80 of which 30% (24) are allocated to Turkish Cypriots as per the constitution but remain vacant.

International Relations

Cyprus joined the EU on 1 May 2004 together with nine other European countries. Under the terms of its accession the entire island is considered technically to be a member of the European Union, despite its continued division and the fact that the government of the Republic has no effective authority in the northern part of the island. However, the terms of the acquis communautaire, the EU’s body of laws, have been suspended in the north. Cyprus has historically followed a nonaligned foreign policy, although it increasingly identifies with the West in its cultural affinities and trade patterns, and maintains close relations with Greece. Turkey refuses to recognise the government of the Republic of Cyprus, arguing that the latter – as established by the Constitution of 1960 – ceased to exist when the intercommunal violence that broke out in December 1963 ended Turkish Cypriot participation in government. As a result, Turkey still refuses to allow Cypriotflagged vessels access to its ports, despite pressure from the European Union. Cyprus is a member of the United Nations and most of its agencies, as well as the Commonwealth of Nations, World Bank, International Monetary Fund and Council of Europe. In addition, the country has signed the General Agreement on Tariffs and Trade (GATT) and the Multilateral Investment Guarantee Agency Agreement (MIGA). n

Discover more at cyprusprofile.com Country Report CYPRUS 2019



A European

Top Performer The economic growth of Cyprus continues to surpass all expectations, and as one of the fastest growing eurozone economies the country’s priority is now shifting to ensure the strong momentum is maintained by improving efficiency, implementing reforms and strengthening investor confidence.

European Commission Economic Forecast for Cyprus – Spring 2019 GDP growth


















102.5 2018

CURRENT ACCOUNT balance (% of GDP)

1.8 -4.8 3.0 2017
















Country Report CYPRUS 2019





PUblic budget balance (% of GDP)

1.1% 2020

0.9% 2019

0.8% 2018

0.7% 2017

2.8 2020

A Show of Resilience

Cyprus gained independence from the UK in 1960, became a member of the EU in 2004, adopted the euro as its national currency in 2008 and was listed by the IMF as one of the 31 advanced economies in the world in 2016. Throughout its history the Cyprus economy has experienced external shocks that have been followed by astonishing revival. The Greek sponsored  coup d’état and subsequent Turkish invasion in 1974 of the northern part of the island led to a sharp real GDP contraction of 16.9% in 1974 and 19% in 1975. But hard work and collective focus led to a rapid bounce back, with growth of 18.2% in 1976 and 15.8% in 1977, followed by an uninterrupted period of strong growth lasting more than 30 years. Since independence, the economy has gone through several transformations: from an exporter of minerals and agricultural products in 196173, an exporter of manufactured goods from the late 1970s to the early 1980s, to transforming into an international tourist, business and services centre since the 1980-1990s. Classified by the World Bank as a high income country, today the economy is mainly built upon the services sector, including tourism, financial services and real estate, which accounts for over 80% of both total GDP and employment. The island went through yet another transformation in 2013, when at the height of the eurozone sovereign debt crisis Cyprus became the 5th EU member state to request a financial assistance package from the European Commission


yprus continues to be one of the fastest growing economies in the eurozone. Established sectors like tourism, shipping, business services and real estate offer significant opportunities, as do emerging sectors such as fund management, higher education, renewable energy and offshore natural gas, halloumi cheese and wine making, as well as pharmaceuticals and the film industry. Cyprus is a small, open and dynamic economy with a skilled workforce, unrivalled access to regional markets, a broad network of double-tax treaties and a firm commitment to tax certainty. A joint effort between government and industry is already creating a supportive environment for research and innovation and a blockchain national strategy is now part of our digital transformation effort. We are keeping a steady course and remain committed to maintaining macro-economic stability and continuous reform efforts. We are absolutely confident that Cyprus will continue to be an excellent destination for new business and investment.

Harris Georgiades Minister of Finance

(EC), the European Central Bank (ECB) and the International Monetary Fund (IMF) – collectively known as the Troika. Cyprus recovered quickly from the €10-billion bailout deal and the controversial and unprecedented decision by the Eurogroup to impose a bail-in of bank deposits. The country exited the programme in early March 2016, having only drawn €7.2 billion of the €10 billion available, and cut its debt-toGDP ratio below 100% in 2017. Restructuring the economy and restoration of credibility in Cyprus’ banks has been a top priority – and true to form, the country’s economic recovery has been faster than many first projected.



yprus has continued on a solid growth path in recent years with key sectors flourishing, foreign investment flowing in, large-scale projects under way 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 Standard & Poor’s assigning a BBBcredit rating to long-term sovereign debt, followed by Fitch in 2019. Agencies recognised the country’s strong 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. Nonperforming loans were slashed in half, dropping to €20 billion or 30.5% of the total. Major initiatives included 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 correct fundamental 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. Country Report CYPRUS 2019



Healthy GDP Growth

The Cyprus economy has been expanding rapidly, with robust growth rates averaging 4.4% in 201518. 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 demand, spurred by growing employment, and an expanded and upgraded tourism sector after four successive years of record tourism arrivals.

Rating agencies have recognised Cyprus’ strong fiscal record, stabilised banking system and robust growth outlook 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 programmes. Trade & 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, pharmaceutical products, and 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. 20

Country Report CYPRUS 2019


he reform of the judicial system in Cyprus is at the top of my priorities. In order to achieve this all competent authorities must be involved in the process. As soon as I was appointed, I expressed my willingness to work hard and collectively with all stakeholders towards the strengthening of the justice system, so that our citizens will regain their confidence in the system and Cyprus will benefit from its strategic position and serve as an attractive European business and investment destination. The fight against corruption, the reorganisation of the police, the measures undertaken for road safety and juvenile delinquency, the review of the legislation of the prisons’ department are also very important priorities and coordinated effort needs to be stepped up. My vision is to proceed with all necessary reforms in all areas under the Ministry’s competence in a spirit of cooperation with all political parties, competent authorities and NGOs in order to achieve the best for Cyprus and all its people. George L. Savvides Minister of Justice and Public Order

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.

Cyprus is a small and adaptable free-market economy with a positive long-term outlook. The island promotes itself as the business gateway between Europe, Asia, the Middle East and Africa, and leverages its highly educated, English-speaking population. Its EU and eurozone memberships, excellent information and communications technology (ICT) infrastructure and businessfriendly environment continue to attract international companies and investment – particularly in natural gas exploitation following the discovery of significant reserves in Cyprus’ waters.  Company formation, tax planning, trusts, foreign exchange trading and  fund administration are all strong segments of the business services industry, encouraged by a network of double tax treaties with 65 countries and a legal system based on English Common Law. The key instrument of Cyprus holding companies has attracted many companies to set up and manage their investments in key markets from the island. Despite the challenging economic climate in 2012-14, the attraction of Cyprus has not faded, and the number of applications led for registrations of new companies has seen a solid increase since 2014. The developing funds industry, which is evolving into a multibillion business for Cyprus, is also placing the island on the map as an exciting emerging market.  Professional services  continue to be one of the country’s most consistently growing sectors, rising on average by 6.5% per year in 2016-18. Cyprus hosts the largest third-party ship management centre in the EU, underlining the success of the country’s formidable  maritime sector, which prompted the creation of a dedicated Shipping Deputy Ministry in 2018. The Cyprus Registry is classified as one of the top 11 merchant fleets in the world and ranks as the


he latest statistics reveal a sizable decrease in unemployment during the last year. We remain optimistic that this trend will continue in 2019 and all our efforts are aimed towards reaching conditions of full employment. By the end of 2019, we will have completed the detailed impact assessment we have undertaken with the help of the International Labour Office regarding the setting of a national minimum wage and we will be ready to begin the social dialogue for this very important reform. Also, we aim to press forward with the scheme to restructure social welfare services – another crucial reform we have been working towards. Zeta Emilianidou Minister of Labour and Social Insurance

third largest fleet in the EU. Flying its flag are more than 1,000 ships, totalling a gross tonnage of around 22 million. The tourism sector  has shown solid growth and 2018 saw a fourth record year for tourist arrivals. Ongoing efforts to upgrade the product have been driving the renaissance of the industry, which currently contributes around 13% to GDP. Recognising the importance of this sector, the government established a separate Deputy Tourism Ministry in 2019. After a long decline, construction has also been rebounding, growing by an average 23% in 2016-18. Although traditionally strong, primary sectors such as agriculture and manufacturing – contributing around 2% and 5% respectively to GDP – have faced challenges which have led both to follow a similar strategy of creating value-added products targeting niche markets willing to pay a premium for quality. Both sectors of the economy have placed strong focus on innovation and diversification, which has supported the industries’ efforts to increase productivity. Energy  will be a significant new source of growth, following the discovery of natural gas reserves in Cyprus’ EEZ. As Cyprus consolidates its good relations with neighbours, the island has ambitious plans to become a regional energy hub in the Eastern Mediterranean and the successful extraction of natural gas from its waters could allow the island to export to European or EastAsian markets. The already-established involvement of major oil and gas companies in Cyprus, such as US energy giant ExxonMobil, French energy major Total, the Italian-Korean consortium ENI-Kogas, and the UK-Dutch company Royal Dutch Shell, have strengthened the development of these plans coming to fruition. The sector saw a further boost in 2019, when ExxonMobil announced an offshore gas discovery of an estimated 5 to 8 trillion cubic feet.


Main Economic Activities

Tourism, financial services and real estate account for over 80% of both total GDP and employment

Country Report CYPRUS 2019



19% 20% 25% Public Admin, Defence, Education & Healthcare

Financial, Professional & Administrative Services

Tourism, Trade, Transport


Agriculture, Forestry & Fishing Gross Value Added (GVA) by sector (2018)


Utilities & Mining

16% 6% Real Estate & Construction


The Three Pillars of Cyprus Economy


Entertainment, Arts & Other Services




Tourism, Trade, Transport

Financial, Professional & Administrative Services

Real Estate & Construction


ship management, tourism, financial services, professional services, including legal and accounting


5% 4%

Country Report CYPRUS 2019


pharmaceuticals, food and beverage processing, cement and gypsum production, ship repair and refurbishment, textiles, light chemicals, metal products, wood, paper, stone, and clay products

2019 will be another prosperous year for the Cyprus economy characterised by high growth, low unemployment and moderate inflation. One key area is the tourism sector which includes the development of marinas, the integrated casino resort and the opening of new hotels. Furthermore, the construction industry is also growing with the development of new commercial and housing projects. We are confident that the actions taken by the government during the past year will also enhance areas such as shipping, energy and manufacturing. George Petrou Chairman Cyprus Employers and Industrialists Federation (OEB)

The Cyprus economy is expected to continue showing strong growth rates in 2019 and 2020. Among the main factors contributing to the continuous prospect development are the strong fiscal performance of the country in view of the increase in domestic economic activity, and the continuous improvement of the conditions in the domestic labour market. Tourism and hospitality will continue to thrive while professional services, shipping, health, education and real estate show great potential. At the same time the energy sector – in RES and hydrocarbons – is looking more attractive than ever. Christodoulos Angastiniotis President Cyprus Chamber of Commerce and Industry (CCCI)

Cyprus is on a stable economic path having continued to register positive growth across economic sectors in 2019. Ensuring that fiscal consolidation and economic growth go in hand, the government is doing its outmost to ensure stability in the banking sector mainly in compliance issues as well as the reduction of non-performing loans. European AML directives will continue to be carefully implemented by the Central Bank and we are looking forward to initiatives by the new Governor of the Central Bank ensuring implementation without disruption of business activities. Cyprus is becoming a hub for companies who want to enjoy the benefits the country has to offer both in terms of quality of life as well as corporate benefits. The IP box scheme, the harmonisation with EU regulation and the inherent safety, the high education level of the workforce are cited by companies having their operations in Cyprus and we expect this trend to continue. Doxia Nikia Hadjivassiliou President CIBA

Cyprus has a great deal of untapped potential which structural deficiencies are currently holding back. These include red tape obstacles to large strategic investments, delays in setting the right conditions for cheaper, greener, utility-scale solar electricity which would slash business costs, and the slow judicial system. Nevertheless, the economy continues to grow. Sapienta Economics is expecting real GDP growth of 3.4% in 2019, following an expansion of 3.9% in 2018. Fiona Mullen Director Sapienta Economics Ltd


Cyprus continues to push forward with several major projects to upgrade and expand its tourism offering. One of the most exciting developments is Cyprus’ first-ever integrated luxury casino resort, which was licensed to a consortium including the globally renowned Melco and Hard Rock – with Melco later buying Hard Rock out of the project. The €550-million resort – branded ‘City of Dreams’ – started temporary operations in Limassol and other towns in 2018, with a fully operational Limassol resort expected in 2021. Government chiefs expect the project could increase tourist numbers by up to 500,000 annually and create thousands of job opportunities. Several new marinas are also planned in key coastal towns of Cyprus, with luxury marina complex Limassol Marina attracting record sales and the Ayia Napa Marina already under construction with significant Egyptian investment. Cyprus also commercialised services at Limassol port in 2016, while other potential prospects for future privatisation are the State Lottery and dominant telecommunications provider  Cyprus Telecommunications Authority (Cyta).

Inflation has been muted in recent years. After declining by 1.2% in 2016, owing to low oil prices and historically high unemployment, the EUharmonised 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.

Cyprus 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% 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 including 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.


conomic diplomacy has been high on our agenda since the establishment of a dedicated Unit in the Foreign Ministry. The Unit is tasked with enhancing cooperation with all key stakeholders from the public and private sector, with a view to collectively shape modern economic diplomacy tools and mechanisms. A public consultation on economic diplomacy was organised by the Ministry, coinciding with the launch of a process for the development of Strategy and Action Plans for the Economic Diplomacy of Cyprus, funded by the Structural Reform Support Service of the EU, that is expected to identify priority sectors of the economy, along with target countries and to propose effective coordination mechanisms between all key national actors. We also plan to provide relevant training to our diplomats, in order to equip them with tailored skills that will enable them to pursue our economic diplomacy objectives even more effectively.

Nikos Christodoulides Minister of Foreign Affairs


Major Projects and Privatisation

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. Cyprus Settlement Opportunities

Research suggests that a solution of the Cyprus Problem could bring an additional ‘peace dividend’ of €20 billion, through an expansion of markets in areas such as tourism, shipping and professional services. It would also attract more foreign investment, boosting the economy and creating new employment opportunities for the young. A solution would also open up substantial opportunities for energy, especially given the synergies available from regional cooperation on hydrocarbons. 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 favourable and stable tax regime remain the keystones for investors looking to take advantage of the growing number of investment opportunities emerging in Cyprus. n

Discover more at cyprusprofile.com Country Report CYPRUS 2019


Foriegn Direct Investment 24

FDI MAGNET Cyprus has attracted billions of euros in investment thanks to its rapid economic growth, incentives and advantageous European business operating environment. Investment has flowed into multiple sectors fuelling the economy and placing the island on the radar of foreign investors worldwide.

Country Report CYPRUS 2019

Foriegn Direct Investment


he growth performance of Cyprus continues to exceed international expectations, while successive credit rating upgrades have attracted billions in foreign investment since 2015, with significant inflows from the US, Asia, Russia and the Middle East. New luxury and infrastructure developments are underway across the country with significant foreign investor backing, and international companies are setting up headquarters on the island, which is becoming an increasingly attractive gateway to growth markets. The island’s return to an investment-grade credit rating in 2018 gave both the economy and investor confidence a boost, and the successful  recapitalisation  of its major banks and numerous large-scale projects, have all contributed to the resurgence of Cyprus as a top foreign direct investment (FDI) destination. The sectors that have seen the most significant FDI are banking, shipping, retail, tourism, pharmaceuticals and energy.  These developments have also been noticed on the world stage, with Global Finance magazine’s FDI Superstars 2018 ranking Cyprus eighth out of the top 20 countries globally for FDI performance and appeal, and the Financial Times fDi Intelligence Division ranking Cyprus in first place out of 31 islands in its 2019/20 Island Economies of the Future ranking. Growing Investment Appeal

The sectors that have seen the most significant FDI are banking, shipping, retail, tourism, pharmaceuticals and energy

After a recession-driven divestment in 20132014, foreign direct investment into Cyprus turned positive, reaching €7.4 billion in 2015, and climbing up to €9.8 billion in 2017. The percentage increase in Cyprus’ FDI for 2016-2017 was the highest in the European Union. Today, the country is a hive of activity with several notable projects already implemented or in the pipeline, strengthening Cyprus’ image and appeal. New large-scale real estate projects, luxury marinas and tourism infrastructure, coupled with exciting opportunities in the energy and shipping sectors are all reinforcing Cyprus’ status as an interesting investment location. Already renowned as a popular holiday destination and a thriving business hub servicing international companies with multinational operations, the island is sharpening its competitive edge by streamlining processes, modernising  legislation, introducing  incentives and speeding up licensing procedures to better cater to investors. An added benefit is its secure and stable EU environment in a turbulent region, which provides an ideal base for regional headquarters or ancillary and support services for investors with clients in the wider Eastern Mediterranean region. Country Report CYPRUS 2019


Foriegn Direct Investment

Large-Scale Projects and Privatisations

Improvements in Cyprus’ macroeconomic and financial environment are reviving international interest in around 30 major development projects on the island, and with the economy posting a healthy 3.9% growth in 2018, the island’s FDI appeal is on an upward trajectory. Investment opportunities in Cyprus’ large-scale projects span various sectors, including high-value tourism and housing developments, projects with a special focus on golf courses and luxury marinas, as well as education, energy and, more lately, the international film sector. The liberalisation  of markets in which stateowned entities used to dominate presents new opportunities in terms of FDI. The  2017 commercialisation  of the country’s largest port in Limassol marked a new era for Cyprus as a commercial hub. The privatisation deal with Eurogate International GmbH and DP World Limited is expected to boost state coffers by €2 billion over the next 25 years, while the new port operators are injecting millions in upgrading services and infrastructure. Other targets for future privatisation are the State Lottery and the dominant telecommunications provider  Cyprus Telecommunications Authority (Cyta). Diversifying Tourism

Tourism has long been a driving force of the Cypriot economy, and expansion of capacity as well as quality upgrades have seen both arrivals and expenditure break new records for three years running. Cyprus has been attracting new interest thanks to the diversification of its offering, by developing nautical, golf and wellness tourism and by extending the tourist season. The construction and investment in multipurpose projects such as luxury marinas, golf courses and more recently the island’s first-ever and only integrated luxury casino resort, are all part of the ongoing strategy to upgrade Cyprus’ tourism product. Investment in the Ayia Napa Marina project is seeing a transformation of the area, while the casino will have extensive facilities and exceed five-star status. The casino resort is Hong Kong-based Melco’s first expansion outside of Asia and will be the biggest casino of its kind in Europe, with the investment for this mega project expected to exceed €500 million. Following the success of  Limassol Marina, there has been a swell of interest in these types of projects. The €300 million luxury Ayia Napa Marina is due for completion in 2019, offering capacity for 600 yachts of up to 60 metres, a shipyard, and a range of luxury villas and fa26

Country Report CYPRUS 2019


yprus is moving more and more towards sustainable growth and diversification of the economy. I will expect to see more investors for energy, education and research and development considering the motives. I would also expect to see a further increase in the trend of investments in alternative forms such as agritourism, boutique and city hotels and more complex nature investments. For the first time we are experiencing significant foreign direct investments in economic activity, a trend which we expect to continue consistently bringing comparative advantages and sustainability to the economy. More importantly, the growth we are expecting is not a bubble-led growth financed by easy credit which proves that the prospects of the economy stand on solid ground.

Constantinos Petrides Minister of Interior

The percentage increase in Cyprus’ FDI for 2016-2017 was the highest in the European Union

cilities. With significant Egyptian investment backing the innovative project, the seafront residences, which will be completed by 2021, are already being marketed to investors worldwide. In addition, a €110 million marina project has already broken ground in Paralimni, and plans are in place to establish new luxury yacht marinas in the country’s other coastal towns of Larnaca and Paphos. The number of foreign investors closing multimillion-euro deals in the last three years underlines the fact that tourism-related real estate and infrastructure continues  to be one of the most attractive investment opportunities in Cyprus. Worthwhile investments have been made in the hospitality industry with acquisitions and the construction of new luxury hotels of well-known hotel management chains. These include the prestigious Sun City Spa and Residences by Chinese group Jim Chang Global with an initial investment of €100 million to construct a five-star resort hotel and exclusive beachfront residences in cooperation with the Giovani Group. The Radisson Hotel Group, one of the largest and most dynamic hotel groups in the world, has big plans to grow its existing portfolio in the country to six hotels and almost 1,000 rooms by 2025. In 2019, the Luxury Collection, part of Marriott International, opened the  Parklane Luxury Collection Resort & Spa resort in Limassol. Owned and operated by Parklane Hotels Limited, the property marks Marriott International’s entry into Cyprus. Another major international deal in recent years was South African Atterbury acquiring two of the country’s flagship Nicosia retail outlets, the Mall of Cyprus and the Mall of Engomi, for €200 million. Booming Property Market

Cyprus continues to be on the top of the list for investors, holiday-home seekers, expats and retirees, with the traditionally popular areas of Paphos and Limassol leading the way. One of the latest projects is the Sofitel Resort & Spa, a joint venture between Singapore-headquartered Oxley Holdings and Planetvision on the Limassol beachfront. The project will be the first Sofitel Resort with branded residences in Europe and is expected to be completed by 2022. Health and wellness developments are increasingly popular, and a prime example of this is the Eden Seniors Resort in Larnaca which opened its doors in 2018. The project, developed by the Cypriot-Lebanese joint venture Eveningfall Investments Ltd, is a wellness and rehabilitation centre, with spa and relaxation facilities for the elderly.

Michalis P. Michael Chairman Invest Cyprus

Cyprus has entered a new era of economic growth, demonstrating progress in attracting foreign investments. Importantly new sectors such as the funds industry, the education and health sectors are emerging. Further changes are needed that will enhance competitiveness and productivity, strengthening the growth prospects and providing more opportunities to the younger generation in a more diversified economy. The professional services sector is called to handle multiple challenges and in order to maintain its dynamic profile, it should focus on providing quality services, leveraging the potential of digital and on building the necessary skills to be fit for the future.     Evgenios C. Evgeniou CEO PwC Cyprus

The high-end residential property segment accounted for 19% of the total transaction value of real estate in Cyprus during 2018, and almost half of all properties sold were purchased by foreigners – with 67% of properties acquired by non-EU buyers. A key driving force has also been the government’s schemes encouraging direct investments in Cyprus, such as the permanent residency and citizenship programmes which require investment in property. According to a government report in February 2019, the schemes have generated around €6.6 billion in transactions since 2014, of which €3.7 billion were in real estate. New Energy Industry

Since US company Noble Energy made the first natural gas discovery in 2011 with estimated resources of 4.5 trillion cubic feet (tcf) in the Aphrodite field, Cyprus’ hydrocarbons discoveries have captured the attention of several global energy giants. ENI, Kogas, ExxonMobil, Royal Dutch Shell, and Total have all secured exploration licences and conducted exploratory drilling. ExxonMobil announced the discovery of an estimated 5 to 8 tcf in Block 10 in early 2019 and ENI announced a promising discovery in Block 6 in early 2018. More drilling is expected in the next two years and in 2019 Cyprus agreed to build a subsea pipeline connecting Aphrodite to Egypt’s liquefaction plants and concluded a production-sharing deal with Noble Energy and its partners over the Aphrodite gas reservoir – which is set to bring Cyprus an estimated €9.3 billion over 18 years. New opportunities are being created for a range of energy investments, including gas imports for power generation, the expected liberalisation  of the electricity market by 2021, the growing share of renewables, the EuroAsia Interconnector project to connect Cyprus, Israel and Greece via submarine electricity cable and a related one to connect Egypt, and the potential for the world’s longest gas pipeline from Israel via Cyprus to Italy. The discoveries have boosted the development of a new energy industry in the country, which is also well positioned to offer a multitude of auxiliary services to companies operating in the region. Stable Banking Sector

Since the 2013 financial crisis, Cyprus banks are at a substantially improved level of capital adequacy and liquidity. The gradual restructuring of the banking sector attracted important institutional investors and fresh foreign capital, as well as measures to sell off non-performing loans –

which has enabled the financial system to operate on a more sound basis. The island’s biggest lender, Bank of Cyprus, secured €1 billion of investment from worldrenowned investors in 2014 and issued another €220 million in Additional Tier 1 (AT1) capital in December 2018. The bank listed on the London Stock Exchange in January 2017, which has substantially opened up access to foreign investors. Hellenic Bank completed a capital increase of €150 million in March 2019 to support its acquisition of mainly performing loans from the former Cyprus Cooperative Bank. The acquisition boosted the bank’s assets to €16 billion and raised market share for loans to 30%. The capital raise brought in new international investors, such as US-based Poppy Sarl (PIMCO), with the other major shareholders being Demetra Investments Ltd, Wargaming, Third Point and investment fund 7Q Financial Services Ltd. Mergers and acquisitions in the past few years have transformed the landscape somewhat with strategic new investment entering the sector from the sale of the majority stake of the Cyprus subsidiary of Greece’s largest lender Piraeus Bank, to Lebanese Holding M. Sehnaoui SAL – which injected €40 million in fresh capital into the bank in 2017, now renamed AstroBank. In January 2019, AstroBank went on to acquire the locally based USB Bank for €40 million. The deal is expected to contribute to the further consolidation of the Cyprus banking sector and highlight potential investment opportunities in Cyprus. Negotiations are also said to be underway between AstroBank and the National Bank of Greece, to acquire the latter’s subsidiary in Cyprus. The banking sector has seen more activity and investment in recent years, providing opportunities for new players to enter into the market to encourage healthy competition and a wider scope of services. Investment opportunities that could be tapped into by international banks and financial groups are mergers and acquisitions, private equity and venture capital projects via the budding funds sector, as well as financing of large infrastructure projects.

Foriegn Direct Investment

We definitely have high expectations for 2019 as regards to increase in FDI inflows and we are intensifying our efforts not only to promote Cyprus abroad, but also to improve the country’s international image. Cyprus offers multidimensional benefits for investors, especially in an increasingly interconnected broader Mediterranean area. The key is to keep the momentum by continuously improving our business environment and unlocking investment opportunities with long-term value-add for the economy.

Global Shipping Hub

The maritime industry has been one of Cyprus’ most successful export services and now has its own dedicated deputy ministry. The decision in July 2018 by leading London ship insurer P&I Club to open a post-Brexit EU subsidiary in Cyprus, reaffirming the island’s position as one of the top global hubs for ship owning and shipmanagement  services. Another coup came in early 2019, when British shipping firm P&O Country Report CYPRUS 2019


Foriegn Direct Investment

Ferries decided to register its English Channel operating fleet under the Cyprus flag to take advantage of the benefits and security it provides. Two of the industry’s most highly respected privately-owned shipmanagement companies, Columbia Shipmanagement and Marlow Navigation – both based in Cyprus – merged in 2017 to form Columbia Marlow, creating one of the world’s largest ship and crew-management companies. Another transaction constituting FDI was the 2018 buyout of Limassol-based Songa Offshore SE by Transocean Ltd,  the world’s largest offshore drilling contractor for oil and gas wells, in a deal worth US$3.4 billion. The growth of Cyprus’ resident shipping sector over the past 50 years has developed a strong maritime cluster that caters to the needs of Cyprus-based companies, including banking, professional services,  insurance and  IT. The cluster has gone from strength to strength over the years and is consistently attracting more quality tonnage and shipping-related companies to its shores. In the past six years there has been an increase of more than 65% in the number of shipping companies that have registered with Cyprus’ specialised shipping taxation system, boosting the sector’s revenue by 25%. In addition, natural gas finds within Cyprus’ EEZ and efforts to exploit it in cooperation with neighbouring countries have expanded opportunities for the island’s already thriving shipping sector. Regional Education Centre

Cyprus has seen a rapid expansion of tertiary education in the past few years, and is well on its way to develop the island into a regional education centre and knowledge hub. Cyprus has already attracted cooperation and synergies with international universities, most notably the University of Nicosia launching the island’s first degree programme in medicine in collaboration


Cyprus Investment Programme The Cyprus Investment Programme (CIP) has been credited with attracting substantial investment from around the world, and establishing Cyprus as an attractive option for high-net-worth individuals seeking a second citizenship and a means to secure their assets. The key benefits of the programme are EU settlement and excellent visa-free travel possibilities, no obligation to renounce existing citizenship and no Greek language proficiency requirements. Following amendments in force since May 2019, an applicant and his/her family are eligible to receive citizenship through CIP, provided they meet specific criteria. Investment

Residential Property Investment


Option 1

€2,000,000 Eligible investment options include financial assets of Cypriot companies and/or organisations, investment in Alternative Investment Funds, and investment in the shipping sector, or a combination of these investments

€500,000 + VAT

Option 2


€2,000,000 + VAT

€75,000 donation to the Cyprus Land Development Corporation to be used for affordable housing AND €75,000* donation to the Foundation for Research and Innovation to promote entrepreneurship in Cyprus

* can be waived under certain conditions


Country Report CYPRUS 2019

Andreas Demetriades Chairman Association of Large Investment Projects

Global investors’ focus is on investing and preserving capital in a sustainable and compliant manner. The scope of services in financial centres is bound to change and broaden significantly, which will lead to a higher level of service complexity and require upgraded levels of skill and knowledge as well as support from a solid organisational structure. This is the framework that Cyprus should be looking to adopt in defining its future strategy. Christos Michael Managing Director IQ-EQ

with St George’s Medical School at the University of London, and University of Central Lancashire – Cyprus (UCLan), being the first British university to establish a campus on the island. Since joining the EU in 2004, the number of foreign students studying in Cyprus has soared. The number of foreign students choosing Cyprus for their studies has almost tripled in the last five years, representing over 60 different countries and supporting the growth of Cyprus into a true global educational centre. This fact underlines the great opportunities that exist in Cyprus for the establishment of new universities, colleges and research institutes. Focus on Innovation

A range of initiatives are under way to support start-ups, including a Start-up Visa scheme to attract more international talent to establish ventures with high growth potential. Opportunities are therefore opening up for business angels and venture capitalists looking for innovative startups, and to invest risk capital in exchange for equity in promising business ideas and products. Recent changes to taxation on intellectual property (IP) and the Cyprus Investment Programme also support innovative research. The technology and communications sector in Cyprus has become fiercely competitive, with a number of players deploying cutting edge solutions to both  increase  their local market share and generate growth through the launch of new technology and products. The sector saw new investment in July 2018, with South Africa’s telecom MTN Group – which entered the Cypriot market 11 years ago and has around one-third of the market – selling its Cyprus operations to Monaco Telecom S.A. in a €260 million deal. In 2019 the company was rebranded epic, and the group announced strategic cooperation with China’s Huawei on developing a 5G network in Cyprus.

Expanding Opportunities

Cyprus is firmly back on the fast track in reclaiming its title as an economic outperformer, having endured a challenging economic climate earlier this decade. To enhance investor interest, the government is making staunch efforts to improve its FDI framework and has vowed to cut through red tape. Reforms under way include a specialised commercial court and upgrades to the judicial system, and a planned strategic investment law to better facilitate investment. These efforts are bearing fruit, with Cyprus seeing a steady increase in FDI and the registration of new companies setting up on the island. Cyprus’ open economy, European status and established role as a regional business hub between three continents continue to appeal to investors. The island also hosts a thriving forex industry with many global giants basing their operational headquarters in Cyprus. In addition, the investment funds sector has grown exponentially in the last few years with continuous upgrades to the regulatory framework. Assets under management have more than tripled from €2.1 billion in 2012 to €6.7 billion in May 2019. If recent growth rates are sustained, assets under management could reach €20 billion in the next five years. Cyprus’  liberalised  FDI Policy, both for EU citizens and investors from third countries, along with its  favourable tax regime makes it one of the most attractive investment targets in Europe. At 12.5% Cyprus’ corporate tax rate is one of the most competitive in the EU, and its extensive network of double taxation treaties with 65 countries has strengthened its position as a business gateway and a preferred location for corporate headquarters. The country’s skilled talent, low cost of doing business, top-tier professionals services, and high quality of life renders Cyprus not only a wise business choice but also a great relocation destination. As work progresses on implementing structural reforms to bolster the business environment, the attractive incentives and the ever-expanding opportunities will continue to entice foreign investors. The transformation Cyprus’ economy is going through today, presents many opportunities for serious investors who are ready to tap into the potential of one Europe’s fastest growing economies – and reap the rewards of a nation determined to succeed. n

Foriegn Direct Investment

Cyprus offers a wide range of opportunities for large investment projects, which among others include high-rise buildings, mixed-use development resorts, office and commercial development projects, residential projects, marinas and golf resorts. Following its economic recovery, the country currently has, both the potential and the capacity to achieve long-term sustainable and sound economic growth, and become an attractive destination for foreign investors. We are confident that the increasing interest of foreign investors in large development projects over the past few years will continue in 2019.

Discover more at cyprusprofile.com Country Report CYPRUS 2019


FDI Insights

Why did you choose to

invest in Cyprus? AstroBank

Country of Origin: Lebanon We believe in Cyprus, its potential and its future. We believe in Cyprus, as a country, as a promising economy and as a privileged gateway between the East and Europe. We are confident that the Cypriot banking sector in particular, after weathering the storm, is gradually stabilising and offers interesting investment opportunities. In addition to that, the seriousness and commitment of the Central Bank of Cyprus to maintain a solid and supportive regulatory environment which provides stability and sustainability was a decisive factor. For us Cyprus is a perfect illustration of the saying “never let a good crisis go to waste”, which means that a crisis often offers the opportunity to do things you could not do before. It is this reasoning that made us invest in Cyprus and we look forward to becoming a channel for others to invest in Cyprus as well. Maurice Sehnaoui Vice Chairman AstroBank

Oxley Planetvision Country of Origin: Singapore

We see a renewed vigour and enthusiasm in Cyprus, driven by robust economic growth, political stability, a resurgence in tourism, and a stable and growing financial sector. We have great confidence in Cyprus’ overall economy and its property market. This improved economic backdrop has encouraged direct foreign investment into Cyprus for large-scale projects and provides a solid platform for future investments. Therefore, the time is right to invest in Limassol’s future as the country embraces its evolving role on the international economic scene. As the local market is experimenting with multi-storey towers, Oxley will apply its vast international experience to provide Limassol with a distinguished landmark which will offer a genuinely new lifestyle experience everyone will want to be part of. Ching Chiat Kwong Executive Chairman Oxley Holdings Limited, Oxley Planetvision Properties Ltd

M.M. Makronisos Ltd (Ayia Napa Marina) Country of Origin: Egypt

We invested in Cyprus right after its financial crisis, as we saw it as a big opportunity, it could only go upwards. This coupled with one of the most attractive and transparent tax systems in Europe, which is fully compliant with EU laws and regulations, as well as a modern and business-friendly legal system, have proven Cyprus to be an attractive destination for a foreign investor interested in Europe. Our experience as investors in Cyprus has been very positive. The government and authorities are welcoming and don’t spare any efforts to facilitate hurdles faced by foreign investors and have been efficient in providing necessary permits for our project. The citizenship and permanent residency programmes are great incentives for foreigners to invest in real estate and are helping to create a big opportunity for us to develop a huge project like Ayia Napa Marina, which we envisage to change the face of the Cypriot coastline and become the latest luxury destination in the Mediterranean basin. Finally, I am very happy to acknowledge that construction is progressing according to plan and I am confident that the marina and the commercial area will welcome their first guests in Summer 2019. Naguib Sawiris Chairman M.M. Makronisos Ltd.


Country Report CYPRUS 2019

Country of Origin: South Africa There are various reasons for companies such as Atterbury and Attacq – both originating from South Africa – to invest in Cyprus. Our recent acquisition of The Mall of Cyprus and The Mall of Engomi indicates a strong relation between two countries in different hemispheres. With both countries former British colonies, the influence is evident in legal and land ownership structures that provide significant common ground. As an added benefit, investments in Cyprus provide much sought-after exposure to the Euro currency. Infrastructure is world class and professional service providers are highly skilled and reliable in their responsibilities and communication with clients. There are lucrative tax benefits for companies investing in Cyprus, making it much more than a beautiful and culturally rich destination. From an economical perspective, Cyprus is rapidly recovering as can be seen in the recent upgraded credit ratings and positive progress on various issues that further improve the reputation of Cyprus as an investment destination on the world stage. We intend to establish a long-term presence in Cyprus with further investments in our existing portfolio as well as other locations on the island. Raoul de Villiers Managing Director Atterbury Europe

FDI Insights

Atterbury Europe

UCLan Cyprus

Country of Origin: United Kingdom The University of Central Lancashire (UCLan), the fourth largest University in the UK, through its strategy of developing educational satellites around the globe, showed strong interest in choosing Cyprus as the first step in expanding its presence, primarily due to the geopolitical position and large local demand for UK higher education in Cyprus. After researching the best location for their branch campus and the local procedures for setting up a University, UCLan chose Larnaca as the ideal strategic location to establish the first British university on the island. Floros Voniatis CEO - Chair of the Council - Founding Partner UCLan Cyprus

Melco International Country of Origin: Hong Kong

Cyprus is an ideal location for Melco’s initial plans for expansion beyond Asia. It is a fitting site for what will become Europe’s largest integrated casino resort, ‘City of Dreams Mediterranean’. Cyprus is the only jurisdiction in the region to have successfully passed legislation and complete a transparent RFP for a large-scale integrated resort; and has a great history of implementing the rule of law. Furthermore, Cyprus’ location, with its proximity to Europe, the Middle East, and Africa is hugely appealing. Developments in infrastructure and hospitality means Cyprus has huge potential for tourism expansion. Our investment of €550 million for the integrated casino resort project aims to create a unique world-class development, which will support important advances to Cyprus’ economy and touristic product. Lawrence Ho Chairman and CEO - Melco International

Elena Baturina International Entrepreneur and Philanthropist

Country of Origin: Russia

I have been visiting Cyprus for many years, and I know and love the island. Beyond its great climate, Cyprus has great business potential, benefits and advantages. The conditions it has created for foreign investments are welcoming. Though a small country, Cyprus is developing in pace with the rest of Europe in terms of economy, technology and business. There are several niches that are not as densely occupied as in mainland Europe, such as renewable energy production and energy efficiency projects. I believe that tourism is the main area of opportunity for Cyprus – the sea, climate, culture, hospitality and the rich ancestry are in place, but the infrastructure needs to be developed more in non-capital areas.

Country Report CYPRUS 2019



HQ Appeal Thanks to its convenient EMEA access and time zone, low operational costs, and tax breaks for expat executives, Cyprus is on the shortlist of decision makers when it comes to choosing the right location to establish international and regional headquarters.


he appeal of Cyprus as an efficient management and corporate location is growing thanks to its pro-business attitude and strong regulatory framework. The country is currently one of the fastest growing economies in the EU and its cost-effective operational environment, stable banking sector and increasing foreign investment in multiple sectors are being recognised by companies worldwide. Another key attraction to set up international headquarters (HQ) in Cyprus is the country’s good relations in the region and its access to the EU’s market of over 500 million people, as well as the evolving markets of the Middle East, Asia and Africa. Keen to build on this success, the country’s government and private sector are expanding the list of incentives to attract more headquarters to its shores and establish the island as the ideal HQ base in the East Med. 32

Country Report CYPRUS 2019

Regional Base and EU Access

The geostrategic position of Cyprus in the Eastern Mediterranean has long played a pivotal role in influencing the country’s destiny and prosperity and has led to close cultural and business relationships with countries in the region. Cyprus’ entry into the EU in 2004, and the eurozone in 2008, was welcomed by the international business community, who saw it as a new opportunity for foreign companies to use Cyprus as a convenient entry point into the EU marketplace. As part of the European Single Market, Cyprus enjoys the free movement of goods, services and capital with other EU member states and members of the European Free Trade Association. This comes without tariffs, complex bureaucracy or regulatory obstacles.

Global Maritime Hub

Cyprus is one of the most influential global hubs for ship owning and shipmanagement services. Thanks to its advantageous legislative framework, the island has attracted some of the world’s most influential names in shipping for the last 50 years. Today, Cyprus is the largest third-party shipmanagement centre in Europe and the largest crew management centre in the world, while the island’s international ship register is the third largest in Europe and the 11th largest in the world. The newly established Deputy Ministry of Shipping has created a roadmap to ensure Cyprus maintains its competitive edge. The goal is to protect the stable and business-friendly framework provided to foreign investors in shipping by further expanding the island’s registry and maritime cluster, strengthening international relations, and upgrading available services. UK-regulated ship insurers have identified Cyprus as an attractive jurisdiction for an outpost or base amidst fears that Brexit will hinder their access to the bloc’s financial market, for example, the major global shipping insurer, London P&I Club, announced in July 2018 that it was setting up a ‘post-Brexit subsidiary’ in Cyprus. Also, several Greek shipowners and shipmanagement companies previously based in London have already relocated to the island. Cyprus is the EU’s largest shipmanagement centre, with one in five vessels under third party management controlled from Cyprus. With more than 200 ship-owning, management and other shipping-related companies based in Cyprus, such as Columbia Marlow and BS Shipmanagement, the success of the sector has developed clusters and auxiliary services, which is a model that could be successfully replicated in other sectors, such as the growing oil and gas sector. Cyprus provides a secure and convenient base for operations for various ancillary services to the oil and gas industry as well as for company headquarters to support activities in the EMEA region.


Cyprus offers a strategic location and a competitive EU-approved tax environment

Multinationals from a range of different sectors have already chosen Cyprus as the location for their regional headquarters. Global companies such as NCR, Kardex, Wargaming and amdocs are just some of the corporations that have based operational or corporate management functions on the island. An added benefit of Cyprus is its secure and stable EU environment in a turbulent region. Prominent news organisations, such as AFP, have capitalised on this aspect and use the island as their base between Europe and the Middle East due to its security, convenient time zone and travel times, reliable communication infrastructure and availability of multilingual support staff. Cyprus is an ideal base for regional headquarters or ancillary and support services for investors with clients in the wider Eastern Mediterranean and Middle East region. Two prime examples of this are Sykes and Whipper. The global leader in business process outsourcing, Sykes Enterprises, picked Cyprus from 20 other competing jurisdictions as its base, citing the right work-life balance as a key reason. High-tech and entertainment start-up Whipper, led by a founding team of executives and advisors who hail from Riot Games, Netflix, Swiftkey, Amazon, Echo UK, Omnicom, and Viber, also established its global headquarters in Limassol – adding more weight to the growing start-up culture in Cyprus. Major multinational firms in the ICT industry, including consulting, fintech and regtech firms, are based in Cyprus using the country as a gateway into and out of the EU for various corporate services, such as sales and marketing, project management, software development, systems integration, testing services, training and development, disaster recovery and business continuity, as well as joint R&D among countries in the region. Also, international giants such as Microsoft, Oracle, SAP and IBM have been on the ground, supporting Cyprus’ tech evolution for many years. A crucial element especially when it comes to the ICT industry is guarding intellectual property (IP), and Cyprus offers strong IP protection through domestic legislation and a network of EU and international agreements. Brexit is another development providing new opportunities. A former British colony, Cyprus has a longstanding relationship with the UK, enjoying close business ties as well as a comprehensive, modern and forward-looking legal and regulatory framework based on English Common Law principles. With continuing Brexit uncertainty, Cyprus offers companies the advantages to continue operating in an EU jurisdiction with a familiar UK legal framework.

Corporate Capability

Cyprus offers a strategic location, a competitive and EU-approved tax environment, a 12.5% corporate tax rate, an educated English-speaking labour force, excellent telecommunications, modern banking and legal infrastructure, and a high quality of life – all of which make it a convenient international management centre and springboard into neighbouring markets. Foreign companies already based in Cyprus comment favourably on their experiences with local employCountry Report CYPRUS 2019




ees in terms of productivity, language skills and dependability. The country has one of the youngest and most highly educated workforces in the EU, with over 40% holding a tertiary degree. In addition, the EU has a workforce of 240 million people, all of whom are eligible to legally reside and work in Cyprus, allowing companies to tap into a vast talent pool. Doing business in and from Cyprus is easy and straightforward. Home to a major international business and financial services sector, the country is an ideal base for region-wide corporate coordination and central management functions, sales, marketing and customer service. As a pro-business, neutral, cost-effective and politically stable country, Cyprus offers companies a perfect climate to successfully compete in the region. A fiscally efficient tax structure leads the way and is complemented by double tax treaties with 64 countries and more than 40 EU trade agreements, facilitating international business and ensuring a smooth trading environment. 34

Country Report CYPRUS 2019

High Earners and Non-Doms Cyprus has introduced attractive incentives for expatriates and high-net-worth individuals to adopt non-domiciled (non-dom) tax resident status in Cyprus. Under the non-dom rules, Cyprus tax resident individuals who are not domiciled in Cyprus are completely exempt from Special Contribution for Defence (SDC) on dividends, interest and rental income. The tax exemption makes the holding of investments (including shares and bonds) earning dividends and/or interest extremely attractive for Cyprus tax residents non-Cyprus domiciled individuals. The maximum income tax rate on personal income in Cyprus is 35% for income in excess of â‚Ź60,000. However, Cyprus has introduced a specific tax incentive, according to which 50% of remuneration from any employment exercised in Cyprus by an individual who was not resident in Cyprus prior to commencing employment is exempt for a period of ten years provided the annual income exceeds â‚Ź100,000. A 20% tax exemption is available for those earning less than â‚Ź100,000.

Best island economy 2017/2018 for lifestyle & human capital (fDi magazine, FT group)



Strategic Location

In addition to its geographical proximity to major markets, Cyprus has good connectivity. The country is connected by its two international airports with major cities in Europe and key destinations in Asia, North Africa and the Middle East. In the last two years, connectivity has seen further improvement with new airlines adding Cyprus to their schedules and existing airlines increasing the frequencies of their flights. Thanks to its location, Cyprus enjoys business-friendly time zones, enabling international companies to do business with the East in the morning, Europe throughout the day and with the West in the afternoon. The country also has long-established links with Russia and Eastern European countries with many Cypriot professionals having in-depth knowledge of these markets, and often acting as key business introducers. Turn-Key Office Space

The influx of new companies setting up in Cyprus has spurred the development of new luxury multi-use office complexes in Limassol and Nicosia. Over the years, the coastal city of Limassol has steadily grown to become the main international business hub, while the inland capital city Nicosia attracts multinationals that require closer access to government. The majority of international companies choose Limassol, due to the cosmopolitan seaside lifestyle, the large expat community and the short distance to both Larnaca and Paphos international airports. Landmark commercial buildings like The Oval and Trilogy have raised the bar for prestigious commercial addresses in Cyprus. As some of the tallest office buildings in Limassol these projects offer large open-air balconies and uninterrupted views across the Mediterranean – an enviable working environment for mixing busi36

Country Report CYPRUS 2019

ness with pleasure. A number of other mixed-use buildings are springing up across the city offering residential, commercial and retail space and are changing the skyline of Limassol, offering stunning views and luxury living. For companies needing proximity to ministries and government departments, the capital Nicosia is also expanding its stock of state-ofthe-art offices. For jet-setters, Larnaca – located on the sea and adjacent to the airport – might be the right choice. Cyprus caters for companies of all sizes, and smaller organisations or those new to Cyprus can easily find companies offering serviced office rental on a short-let or permanent basis. Regus, with offices across the world, have locations in both Limassol and Nicosia, and have been joined by numerous local companies offering turn-key spaces. Work-Life Balance

Cyprus has established itself as a magnet for foreign-owned companies and is continuously improving its competitive position. A stable business environment and excellent quality of life are just a few of the many reasons why companies relocate senior decision makers to perform strategic functions from Cyprus. In the long term, the country has great prospects to benefit from growth in the region and become an increasingly popular choice as a location for international and regional headquarters. Boasting one of the lowest crime rates in the EU, a superb Mediterranean climate, competitive personal tax rates, as well as excellent educational and healthcare systems, Cyprus is an easy sell for expats and in particular to those with families. Cyprus is an ideal location to achieve work-life balance, and to make business both pleasurable and profitable. n

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Cyprus is well positioned to cater to the needs of enterprises wishing to expand and operate in Europe, North Africa and Middle East. It comes therefore as no surprise that it is becoming home to a number of multinational companies. We follow a targeted strategy to attract corporate headquarters, while promoting a diverse growth model for the county, advancing new sectors which have tangibly shown results, such as filming and investment funds, as well as unlocking opportunities in new target markets, such as the South East Asia, India and Japan. George Campanellas Director General Invest Cyprus

HQ Insights

Why did you choose Bernhard Schulte Shipmanagement (BSM) was the first shipmanagement company incorporated on the island as Hanseatic Shipping Co in 1972. Cyprus was chosen due to its ideal geographical location as a ‘gateway’ to Europe and the Middle East. Foreign investors benefit tremendously from the availability of very educated local personnel as well as the high quality of life for expatriates. In addition, foreign companies benefit from the ease of doing business which is enhanced by the island’s well developed infrastructure. Another key factor is the strong support provided to investors by the government and local industrial associations such as the Cyprus Shipping Chamber. Cyprus is one of the key ship management clusters in the world and a global company like BSM benefits a lot by being part of this advanced and dynamic business community. Ian Beveridge CEO - Bernhard Schulte Shipmanagement (BSM)

Cyprus has been an important base of operations for 3CX to enter the European and Middle Eastern markets. The country’s emphasis on creating a business-friendly climate has meant that we have been able to quickly grow our operations in Cyprus to a team of over 100. Our team benefit from the great climate, friendly people and the safety and security that Cyprus provides. Nick Galea CEO - 3CX

When we came to Cyprus back in 1988, we were first attracted by Cyprus’ location and proximity to the Middle East, which was our main target market at the time. We remained in Cyprus because it has matured into a solid international business centre offering many benefits, such as its advantageous and EU-compliant tax and regulatory framework, good access to various markets and an excellent quality of life

Cyprus? For Whipper, Cyprus has aggressively set itself up to be a strong, next-level, start-up destination. There really was no comparison to where we would headquarter Whipper. The favourable Cypriot tax legislation benefitting innovative businesses made it highly rewarding as an R&D, investment and taxation environment. Look out California and London! What are the most important metrics? 326 to 284 to 224 – that's the number of sunny days Limassol vs. Santa Monica vs. London, and the average commute – 6 min in Limassol, to 25.5 min in Santa Monica to 74.2 min in London. By basing our HQ in Cyprus, Whipper gets to apply more of every euro it makes into scaling into a global behemoth and enjoy the sun whilst doing it. Ask a Java Script engineer if they'd like to work in London or Limassol, Cyprus near the beach? For a company with a vibrant culture and an innovative product, they'll choose Cyprus every time. The Cypriot Government has proactively given the tech industry every reason to storm the gates and take up residence. Clark Westerman CEO - Whipper.live

Johny Abuaitah CEO - Windsor Brokers

Kardex export HQ for MEA area has been based in Cyprus since 1980 and is the Kardex Group company responsible for the sales, marketing, technical and software support services to our distributors in the Middle East, Gulf, Africa, Balkans and Central Asia. After over 35 years in Cyprus, we will definitely stay on the island, as time has proved that we made the right decision to have Cyprus as our base. We still maintain the same advantages of operating in an efficient business environment with experienced professionals, an attractive tax framework and overseas market proximity to Africa, the Middle East, Gulf, Europe and Asia. Demetris Kouloundis Regional Sales Director MEA - Kardex Systems Ltd


Country Report CYPRUS 2019

HQ Insights

NCR has been doing business in Cyprus for 64 years, and we have been a significant contributor to the Cyprus economy and the evolution of the local IT industry. Cyprus is an excellent host for our investments and our headquarters for the Middle East and Africa region. We have always maintained a significant share of the IT market in Cyprus in the sectors of retail, banking, and government. There are many reasons why NCR has been investing in Cyprus for decades. The country’s high number of IT-educated people from top universities allows us to find young high-flyers and turn them into revenue generating professionals for NCR. The strong financial sector and upgraded airports and ports support our financial needs and we can easily import our products – also our executives can travel with ease. Last, but not least, Cyprus is one of the safest countries in Europe, with low crime rates, and less effort and cost to ensure the wellbeing of our employees. Kyriakos Kyriakou General Manager, NCR Cyprus Ltd

Cyprus combines numerous advantages as a business base with quality of life. Our decision made good business sense and we remain committed to the country, having relocated a large number of our top executive employees and invested in a local bank and property. Cyprus’ geographical location allows us to serve our operations in Europe, Asia, the CIS region and US, while retaining a significant presence in Belarus, where half of our employees are based. Cyprus’ business advantages include political stability, EU membership, and a free market economy with a favourable tax regime, a modern and transparent legal and tax framework and a highly developed professional services sector. The infrastructure and communications network is well developed, while the workforce is highly educated and multilingual. Cyprus is welcoming to international business and recently enacted reforms and offered additional incentives to attract foreign investment. The excellent living conditions, including the climate and low crime rate, are also an important factor. Victor Kislyi CEO - Wargaming.net

In July 2017, SYKES opened a new service delivery facility in Larnaca as the result of conducting a thorough investigation and due diligence looking at about 20 locations in southern Europe. SYKES Cyprus operation has augmented and strengthened its multilingual customer engagement capabilities. Given the growth opportunities in certain key language segments of the EMEA market, Larnaca is well situated geographically and serves as an optimal place for commerce given its diverse multilingual human capital talent pool and its competitive operating model. Worth mentioning that the Cyprus investment promotion agency Invest Cyprus provided us with remarkable proactive support in getting this effort off the ground. Christian Schaffer Senior Vice President SYKES Central & Northern EMEA

Amdocs is a leading provider of software and services for communications and media companies with 25,000 employees serving customers in 85 countries. Our development centre in Cyprus opened more than 20 years ago and is a strategic centre for the company and the European HQ of corporate services such as finance and learning. The centre has continuously employed a highly skilled, multinational workforce, offering a variety of languages and cultures onsite, empowering great communication at ease. In addition to its excellent education infrastructure, there are numerous advantages for foreign companies to establish presence in Cyprus. The island offers quality of life and climate, a welcoming social environment for expats, and is a safe destination for our employees and their families due to the low crime rate and political stability. English is widely spoken and there is a good immigration process and support system for emerging country nationals. Yiannis Tinis Head of amdocs Cyprus

Country Report CYPRUS 2019



Yiorgos Lakkotrypis Minister of Energy, Commerce and Industry

Synergies of

Success Cyprus offers investors an attractive base for operations and preferential access to multiple global markets. A return to investment grade last year has resulted in substantial inward investments in a wide range of sectors, and with new gas discoveries and renewable solutions in the pipeline, Cyprus is an economy with real prospects.


Country Report CYPRUS 2019

The recent news from Block 10 and the gas discovery at ‘Glaucus – 1’ well by ExxonMobil/Qatar Petroleum, were an excellent development. We hope that more such good news will follow soon, as new exploration wells will be drilled in the Exclusive Economic Zone (EEZ) of the Republic of Cyprus. Obviously, to proceed with the exploitation of gas discoveries, infrastructure investments of billions of euro are needed, such as upstream facilities, pipelines, shorebase facilities and a liquefaction plant. And, of course, investments of such magnitude require a stable and vibrant business environment. To create this environment, we are now working towards several goals, such as expanding the industrial port at Vassilikos to host shorebases that will support offshore hydrocarbon activities in the Eastern Mediterranean region, improving the coordination of governmental authorities to efficiently serve oil and gas companies in Cyprus, particularly with regard to permits, and creating local skilled personnel, necessary for the industry. In addition, we are concluding and signing intergovernmental agreements with neighbouring countries, necessary for investments in the oil and gas industry, especially in such situations where there is infrastructure crossing the countries’ EEZs. Establishing multilateral cooperation in the energy sector with other countries in the Eastern Mediterranean will enhance the region’s competitiveness and energy security, by for example building on synergies arising from hydrocarbons exploitation.

Renewable energy solutions have also gained momentum in Cyprus over the last few years, what plans does your ministry have to encourage more investment in state-of-the-art RES infrastructure in line with international and European targets? In conjunction with the various support schemes for renewables operated by the Ministry of Energy, we also have several pilot projects ongoing with regard to the electricity grid, by both distribution and transmission system operators. One such project is an integrated platform for increased flexibility in smart transmission grids with storage. Given Cyprus’ electricity isolation, our overall aim is for the new and disruptive smart grid technologies, as well as state-of-the-art control and storage methods, to be used in parallel with new market approaches, to introduce flexibility to our power system. 2019 is a critical year as far as our 2020 Renewable Energy goals are concerned, set by the EU at 13%. In 2017, the percentage of renewables in the gross final energy consumption of Cyprus rose to around 10% and we are now confident that all the necessary support schemes are already in place to achieve our goals. For example, we now operate a scheme for the production of electricity from Renewable Energy Sources (RES) for own use, which includes installations of net-metering photovoltaic (PV) systems with capacity up to 10 kW for all consumers, residential and nonresidential, net-billing RES systems, mainly PV and Biomass, with capacity 10 kW to 10 ΜW for commercial and industrial consumers and offgrid RES systems with no limit in total capacity. For some of these, the Government is offering subsidies to consumers, intended to encourage further RES installations by reducing the recuperation period of their investments. Moreover, following a very successful support scheme for the installation of RES systems that will operate in the competitive electricity market – approximately 100 MW PV systems, 2.3 MW Biomass and 12.5 MW from a wind park have been approved – and in April 2019 a new scheme was announced for another 150 MW. The major difference from its predecessor is that for this new scheme producers will now need to form bilateral contracts with independent suppliers. In both cases, the RES systems that enter these schemes are expected to be operational before the end of 2020.


2019 started off well with yet another new natural gas discovery in Cyprus’ EEZ, how do you see the energy sector evolving and what are the key aspects to ensure the sustainable development of this important sector in terms of both energy security and in creating a successful business cluster?

“Establishing multilateral cooperation in the energy sector with other countries in the Eastern Mediterranean will enhance the region’s competitiveness and energy security” Country Report CYPRUS 2019



The professional and financial services sector is a significant economic driver, what do you see as Cyprus’ key strengths over other jurisdictions and how can the country attract more international business? Cyprus is an excellent investment destination and a highly competitive international business centre, whose many comparative advantages set it apart from most jurisdictions. These advantages include, amongst others, one of the most competitive corporate tax rates in Europe at 12.5%, a significant network of Agreements for Avoidance of Double Taxation with 64 countries, a highly qualified workforce and a robust and attractive tax and legal system, fully harmonised with EU and international best practices. As an EU and eurozone member, our Mediterranean island offers investors an attractive platform for operations and preferential access to markets in Europe, the Middle East, North Africa and Asia. In fact, the return of our economy last year to investment grade, mainly due to the ongoing public sector reforms, prudent fiscal policy and recent moves to strengthen the banking sector, has resulted in renewed substantial inward investments in a wide range of sectors. Among these are investment funds, the oil and gas industry and large tourism infrastructure. The economy of Cyprus is expected to grow at a healthy pace over the long term. The budgetary surpluses created in recent years have enabled the Government to offer a range of tax and other incentives to attract foreign investment to the productive sectors of our economy, especially boosting entrepreneurship by placing emphasis on innovation and start-ups, higher education and headquartering.

“Cyprus is an excellent investment destination and a highly competitive international business centre, whose many comparative advantages set it apart from most jurisdictions” 42

Country Report CYPRUS 2019

What other key targets have you set to be achieved in 2019? Given the broad range of economic sectors that fall under our Ministry, we have a number of key targets that we aim to achieve this year. Regarding hydrocarbons exploitation, we are expecting to conclude in 2019 an agreement with the ‘Aphrodite’ gas field contractor, to unlock its development and begin gas production as soon as possible. We expect to issue an Exploration Licence for Block 7 of Cyprus’ EEZ to the Total/ENI consortium, and, at the same time, that our current licensees proceed with their exploration programmes in order to make additional gas discoveries. In 2019 we are also launching a new National Industrial Policy to 2030, with a vision to create a robust, flexible, intelligent and technologically advanced industry with relevant services, contributing substantially to the growth and competitiveness of the Cypriot economy and the well-being of its citizens. In this context, we are introducing two new grant schemes in 2019, aimed at helping small and medium sized enterprises create strategic clusters and engage in their digital transformation.

What are your expectations for Cyprus and its economy and what message would you like to convey to the international community? Cyprus today offers what foreign investors are looking for: one of the fastest growth rates in Europe, a favourable fiscal and legislative framework, professional services of the highest level and, above all, an economy with real prospects. To maintain momentum, our Government plans to remain focused on the careful management of state finances, as well as on forging forward with our ambitious reform program, which have led to successive budget surpluses, a dynamic growth rate of around 4% over the past years and the successive upgrades by international rating agencies that have brought our economy back to investment grade. The positive outlook created for Cyprus enhances the trust of existing investors and, at the same time, sends a strong message to new investors to explore our country’s significant potential. n

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International Trade




Cyprus has established itself as a key EU trading post in the Eastern Mediterranean thanks to its advantageous geostrategic location at the crossroads of Europe, Asia and Africa. For decades, the island’s agricultural produce has been sought after in Europe and beyond. Today, Cyprus-grown produce is in even greater demand around the world, while exports of manufactured products are also on the rise. 44

Country Report CYPRUS 2019


rade – deeply ingrained in Cyprus’ DNA – has played a pivotal role in shaping the local economy and the country has cultivated excellent and long-standing relationships with international export partners. These global export links have also supported the development of the island and its transport infrastructure into a modern and efficient regional trading hub and transhipment centre. In 2018, exports including petroleum products registered a growth of 27.2%, reaching €1.57 billion, and excluding petroleum products exports stood at €927 million, increasing by 8.7% compared to 2017. Of manufactured goods, minerals and pharmaceutical products continue to head the list, followed by dairy products. Exports of manufactured items and the famous indigenous cheese halloumi increased by 13% and 21% respectively in 2018, and when it comes to agriculture, potatoes lead the way, followed by citrus fruit.

Cyprus has established itself as one of the most successful service centres in the Eastern Mediterranean, with spokes from this island hub reaching far into Europe, the Middle East, Asia and Africa. The export of services in 2018 brought in €10 billion, with the sale of both goods and services overseas accounting for 67.6% of GDP. Strong EU Trade Links

Unsurprisingly, more than a third of Cyprus’ trade in goods is with the European Union. The main EU markets in 2018 were Greece, the UK, Sweden, Germany, France and Ireland. About a quarter of exports were to the Central America and Caribbean region, and to the Middle East and North Africa. With Cypriot industry growing, and efficient and modernised port and airport facilities already in place, the expectation is that the island will expand its centuries-old role as a leading Eastern Mediterranean trading nation.

Nelly Koulia Director of Trade Service Ministry of Energy, Commerce and Industry

To build on the momentum achieved, Cyprus is continuously searching for new avenues to promote its products. To this end the Ministry of Energy, Commerce and Industry , in cooperation with the Cyprus Chamber of Commerce and Industry (CCCI) and the Employers and Industrialists Federation (OEB), targets countries considered to have strong potential for Cyprus exports. Joint efforts by the government and the dynamic local private sector to open new and previously untapped trade markets are beginning to pay off. Cyprus is already expanding trade ties with China – with a deal signed for the export of Cypriot dairy products to this vast Asian market. The two sides are also exploring how Cyprus could benefit from China’s Belt and Road Initiative (BRI). President Nicos Anastasiades, ahead of a visit to Beijing in April 2019, said BRI presented an excellent chance to develop further opportunities in trade and investment. Agri-Exports Lead the Way

Cyprus has strong competitive advantages especially within the agricultural products category, and particularly in organic, gourmet and artisan products that are quintessentially Mediterranean yet hold an EU badge of quality. Since Cyprus’ EU accession in 2004, both primary and secondary exports have had to comply with stringent European phytosanitary standards and quality thresholds, which has only helped further promote Cypriot produce. Agricultural products remain an important component of the economy, accounting for over 20% of domestic exports. At the top of the list is halloumi cheese, followed by the Cyprus potato. By far the island’s most important raw export crop, 86,000 tonnes of potatoes worth €42.3 million were exported in 2018. Thanks to Cyprus’ ideal climatic conditions, the country is able to harvest three crops annually. The spring harvest is the most important for export as it arrives earlier on supermarket shelves than the harvest of other countries, and the different varieties of potato are used for direct domestic consumption as well as for the production of crisps. Other key fresh export produce includes citrus fruit, grapes, melons, vegetables and aromatic herbs, while a number of agri-food products are making headway in the international market, such as fruit and vegetable juices, fish and meat products. Cyprus has highly positive net exports in international trade under the dairy, eggs and honey category. In turn, these cashflows indicate Cyprus’ strong competitive advantages under that agricultural products category.

Star-Performing Halloumi

Perhaps the most globally renowned of the island’s exports is the famous halloumi cheese. Halloumi has become synonymous with Cyprus and can now be found in upmarket supermarket chains worldwide. With export numbers on a steady upward trajectory, it is no surprise the unique cheese has become one of the country’s biggest and most formidable trademarks internationally. The value and quantities of halloumi shipped around the world has grown every year, and in 2018 Cyprus exported 30 million kilos worth €194.3 million worldwide. The Ministry of Energy, Commerce and Industry of the Republic of Cyprus is the registered proprietor of the Certification Trade Mark ‘Halloumi’ in Cyprus, the United States of America, the Kingdom of Jordan, the Sultanate of Oman, the State of Qatar and the Kingdom of Saudi Arabia. ‘Halloumi’ is also registered, as a Community Collective Trade Mark in the European Union, under the name of the ‘Foundation for the Protection of the Traditional Cheese of Cyprus named Halloumi’. ‘Halloumi’ marks certify that Halloumi is produced only in the Republic of Cyprus, by authorised producers, who meet the high standards and specifications set forth, with respect to the production, and labelling for cheese carrying that name. In July 2014, Cyprus submitted an application for acquiring a European Protected Designation of Origin (PDO) in respect of the Halloumi name, in order to further protect and maintain its name and reputation in accordance with authentic Cypriot production methods. The PDO application is still under examination by the European Commission.

International Trade

The signs regarding the performance of Cypriot exports in 2019 are modestly positive. It should be reminded that Cypriot exports have been hitting record highs, which attests to the growing dynamism of the sector in recent years. Exports including petroleum products registered a growth of 27.2% reaching €1.57 billion whereas, when petroleum products are excluded exports stood at €927 million, increasing by 8.7% as compared to 2017. The Government’s steadfast aim remains to boost exports even further, as extroversion is the only way to build a sustainable economy which will be generating sustained surpluses.

Growing Wine Industry

An exciting growth area in Cyprus is wine production. Recognising the evolving success of this sector the government is working hard to popularise Cypriot wine in the European market. To give a further boost, the government has announced €23 million in subsidies to the local industry through the National Viticulture Support Programme for the period 2019-2023. Boasting some of the oldest grape varieties in the world, and with evidence of wine production on the island since 4,000 BC, Cyprus is on a winning streak today. The work of over 70 boutique wineries has supported the rebranding of Cyprus as a new territory with exceptional and unique small-batch wines. Some in the local industry are experimenting with new varieties, while others have turned their focus to protecting and rediscovering old ones. Country Report CYPRUS 2019


International Trade

Four different wine regions have been designated as producing their own unique product with controlled appellations of origin. In each case, different proportions of indigenous Cypriot red grapes such as Maratheftiko, Ofthalmo or Mavro, or the white grape Xynisteri, are blended with smaller quantities of specified foreign varieties such as Cabernet Sauvignon, Cabernet Franc, Syrah or Merlot. Exporting Services

With over 80% of the economy based on services, Cyprus has a wide range of expertise to support business both locally and internationally. The services sector has long been the backbone supporting cross-border economic activity and has also become one of the island’s top exports. Ranging from travel and tourism to legal, accounting and business support services, from banking and insurance, to shipping and ship management, from education and healthcare to information technology and software development. Cyprus’ transformation into a European and regional support hub means that companies can take full advantage of its services, which include warehousing, headquartering, high-tech repair and servicing centres, along with software development and testing facilities. Cyprus-based enterprises also benefit from numerous government-sponsored incentive schemes, including the creation of industrial parks and free industrial zones, designed to encourage the diversification and expansion of manufactured exports.   Re-Exports and Transhipment

Already an established international business centre and a thriving 21st century trading hub, the country provides a full range of regular and customised services to support the import and export of goods by both Cypriot and foreign companies to and from the EU, as well as internationally. Cypriot exports are supported by an excellent transport infrastructure. The island is served by over 70 shipping lines, connecting it to all key ports and destinations worldwide, and two international airports guarantee the fast and efficient transport of goods, ensuring Cyprus remains one of the most attractive bases for logistics and transhipment companies. Growing Fuel Exports

The island’s reputation as a leading logistics and support provider for the oil and gas industry in the East Med is complemented by its emerging role as a centre for the processing, storage and re-export of fuel. This is largely due to the 46

Country Report CYPRUS 2019

development of a sophisticated €300-million fuel distillation terminal at Vassilikos, thanks to which exports of mineral fuels and oils jumped from zero in 2014 to €98 million in 2015 when the terminal opened, and reached €646 million 2018. Operated by VTTV, the Cyprus subsidiary of Dutch multinational VTTI, the terminal processes so-called ‘white’ or ‘clean’ products that have already been refined, such as diesel or middle distillates. These are shipped to Vassilikos from producers in the Gulf and the former Soviet Union and are then blended or modified to meet the specifications of the European market. VTTV is the first energy terminal of its kind in the Eastern Mediterranean which connects Europe and the Black Sea with markets in the Middle East and Asia. Product fuel oil from the Black Sea area heading to markets in Asia must first be transported in small ships because of shallow waters in the Bosporus. At Vassilikos, VTTV helps to ‘build bulk’ and processes the cargo to the correct specifications for it to be exported economically to neighbouring markets and to the more distant markets of Asia via much larger vessels. VTTV anticipates that in 2019 up to 240 vessels will call at its Vassilikos jetty – an increase of 46% on the previous year – and the company is engaged in talks with the government about implementing flexible marine tariffs and port charges to make jetty transfers more commercially competitive. As a percentage of Cyprus’ GDP, petroleum is only worth around 1%, but the industry has tremendous growth prospects with the country’s determination to establish itself as a key energy hub and a bastion of stability and security in the region. Further opportunities for growth are expected to arise from the implementation of the International Maritime Organisation’s sulphur cap on fuel content in January 2020, when an upper limit of 0.5% sulphur content will lead to demand for new blends for ship fuel. Quality Exports

Cyprus’ strong track record of producing quality and sought-after exports coupled with the island’s healthy economic growth of almost 4% are encouraging signs of bright future prospects. Further down the line lies the possibility of Cyprus also becoming an exporter of natural gas, having already established its role as a service centre for the East Mediterranean energy sector. The island’s unique position along key Mediterranean trade routes is further strengthening its longstanding reputation as a service provider providing gives exporters strong competitive advantages. n

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30 million kilos of halloumi worth €194.3 million was exported worldwide in 2018

Exports of mineral fuels and oils jumped from zero in 2014 to €646 million 2018

Star Performers

Export of Domestically Produced Goods (2018)

Mineral Fuels



Pharmaceuticals Meat

Fish Citrus Fruit

Agricultural products (raw) citrus fruit, grapes, melons, vegetables and aromatic herbs

Fruit & Vegetable Juices Halloumi

0.8% Unclassified

0.4% Minerals

Export of Goods (2018):

â‚Ź4 billion


Industrial products of agricultural origin fruit and vegetable juices, fish and meat products.

Export of Services (2018):

â‚Ź10 billion Ratio of Goods and Services Exports to GDP (2018):


London United Kingdom


Industrial products of manufacturing origin

Paris France

Berlin Germany

Vienna Austria

Athens Greece

Warsaw Poland

Beirut Tel Aviv Lebanon Israel

Moscow Russia

Dubai United Arab Emirates

New York United States


Industrial products of mineral origin

Tehran Iran Beijing China

Exports by Main Regions (2018) Central America & Caribbean



North Africa

Near & Middle East

30% 36% 16%


9% Country Report CYPRUS 2019


Sector Profile

Agriculture & Food


Agribusiness Agriculture in Cyprus is undergoing a revival with the reintroduction of traditional crops and products to capture new markets around the world, and fresh focus on battling climate change through world-class research and strong support for farmers.


yprus agriculture is transforming into a more efficient and value-added industry with the help of innovation and investment in renewable energy and smart tech, and with a business-minded younger generation keen to tap into the future potential of this sector. Fostering resource-efficient farming and focusing on quality rather than quantity are key aims as the government invests heavily in modernising and reorganising the overall agricultural sector with the help of generous funds available under the European Union’s Common Agricultural Policy (CAP). Over the last year, €102 million has been granted to Cypriot farmers via EU common agricultural policy measures, and the Ministry of Agriculture has taken an active stance to further develop and support the sector through various programmes and subsidies. The country is determined to create a cleaner and greener Cyprus by adopting principles of sustainability.


Country Report CYPRUS 2019

Bearing Fruit

Since 2018, Cyprus has introduced a number of initiatives to boost the sector in areas such as water and waste management, smart farming, environmental protection and new measures to ensure better animal welfare. In addition, the country is focusing on protecting and promoting quality traditional products worldwide, which will soon be marked with a new national and official ‘seal of origin’ to identify products made by the local agricultural sector using local raw materials. As healthy eating trends have spread worldwide, Cyprus has seized the opportunity to achieve commercial success in niche markets by the systematic cultivation of long-overlooked fruit and vegetables – and bring back traditional local varieties of grapes to expand its rapidly developing wine industry. Long renowned for its citrus fruit, potatoes and olives, Cyprus is also becoming associated with high-value produce

KEY contacts

Ministry of Agriculture, Rural Development and Environment moa.gov.cy

Superfood Success

Due to the size of Cyprus it cannot compete with countries that produce huge quantities at low cost, but it can excel when it comes to quality, organic farming, bioproduction and superfoods. The decades-old success of the famous Cyprus potato provides a good example of what can be achieved by combining quality produce with strong marketing campaigns in key markets. The delicious flavour and quality, as well as their early harvest, make Cypriot potatoes one of the island’s most important agricultural export products constituting around 40% of total raw agricultural products. They get their winning flavour from the distinctive potassium-rich red soil of Cyprus. Around 96% of potato exports are to the EU, with main markets in 2018 being Greece at 36%, the UK at 20% and Germany with just over 13%. At the same time, there is less cultivation of various types of citrus fruit. Exports of these were hit around a decade ago after the EU reduced tariffs on imports of citrus from third countries in the Mediterranean such as Morocco, Egypt and Turkey – where labour costs are far lower and production volume significantly greater. Farmers dedicated to citrus were encouraged to shift to varieties that perform well in export markets, such as the tango orange and lemons. Government incentives are in place for farmers to also replace citrus trees, which require a lot of irrigation and expensive pesticides, with hardy crops that naturally thrive in dry climates, such as vitamin-rich fruit like pomegranates and prickly pears, which are now available and command good prices in every supermarket. The medicinal oil from the


or Cyprus it is particularly important to take urgent action to combat climate change, as it is located in the Eastern Mediterranean and Middle East region, which according to most studies is highly vulnerable to the impact of climate change and classified as one of the global ‘hotspots’. The President of the Republic has a vision for Cyprus to undertake an international initiative and assume a coordinating role in the efforts of the region to ameliorate climate change and its impacts. The aim is to develop an Action Plan for recording and mitigating climate change impacts on sectors like environment, agriculture, tourism and health. It will be fed by multi- and crossdisciplinary research on societal challenges, requiring regional and local solutions. Our aim is to develop an inclusive ‘dialogue forum’ for national and regional stakeholders to discuss science-based practical solutions to challenges related to climate change. Costas Kadis Minister of Agriculture, Rural Development and Environment

seeds of prickly pears can sell for up to €40,000 a litre, proving that developing these types of fruit can be a highly specialised and lucrative business. In addition, aloe vera holds much potential and is being cultivated mainly in the Pissouri area near Limassol by producers who have formed an association and use it to make beverages, skin lotions and cosmetics. The health benefits of olive oil is no secret, but one Cypriot farm is garnering worldwide attention for its oil. The positive effects come from the number of phenolic compounds, and Atsas olive oil has by far the highest number of these compounds ever recorded worldwide. The oil, which is exported to Russia, Canada and the US, has attracted the attention of the scientific world who are researching the benefits of high phenolic olive oil in lowering cholesterol and combatting cancer. California’s UC Davis research institute is now running clinical tests in the anti-inflammatory effects of the oil, and the University of Athens school of pharmacology started clinical tests on Alzheimer’s. More recently, the prestigious Yale University announced its interest in researching the Cypriot oil. The philosophy of the organically certified Atsas farm, run by French environmental engineer Nicolas Netien, is to use agroecology design to create agricultural systems which have the diversity, stability and resilience of a natural ecosystem. The idea is part of the new regenerative agriculture movement which is gathering momentum around the world, and for now the Cyprus-based environmental engineer remains a pioneer in the field.

Sector Profile

such as prickly pears, pomegranates, carobs, aloe vera and others that grow well in the island’s dry climate. Over 50% of agricultural exports go the EU, followed by other European countries, the Middle East and Asia. Although unlikely that Cyprus’ agricultural sector will regain its high-performing levels of the 1960s, when it contributed 20% to the GDP, there is no doubt that its economic significance is set to grow rapidly in coming years. The value of agricultural production plunged during the 2012-2014 economic crisis but picked up again in 2015 and grew by an impressive 12% over the next two years. In 2017, the value of agricultural production exceeded pre-crisis levels, reaching nearly €740 million, accounting for 2.1% of GDP compared to 1.8% in 2014. Niche crops and traditional products unique to Cyprus are leading the way in this renaissance, with exports of halloumi alone showing an upward swing over the past six years, and increasing by 21% in 2018.

Boosting Biodiversity

Innovation has helped revitalise traditional minor crops, or ones that were set aside by the advent of high-intensity cropping systems. For instance, a current joint effort spearheaded by the University of Cyprus (UCY), the Agricultural Research Institute (ARI) and the Central Chemistry Laboratory, is screening the indigenous carob genetic resources and developing food, beverages and medicinal products of high added value. Once dubbed ‘black gold’, but gradually abandoned over the decades, carobs are making a strong comeback. Under the UCY project, 6,000 carob trees were planted in November 2017, with another 34,000 to follow on land leased from the forestry department in Orites, Paphos, for what will be the island’s biggest organic carob plantation. The ARI is also conducting research on how Cyprus can produce a bigger biodiversity of crops while improving yield, quality, resilience and taste. The objective is to increase the biodiversity in agricultural ecosystems by looking at tradiCountry Report CYPRUS 2019


Sector Profile

Agriculture & Food tional species no longer grown in Cyprus, as these old species – genotypes – have suitable characteristics to diversify crops and also improve the quality of products that can be enjoyed by consumers. Scientists from this European research project are testing an experimental breeding technology aimed at identifying plants adapted to Cyprus’ scorching heat and lack of water. In an experimental field that covers some 11 hectares, more than 20 varieties are grown, including corn, barley, ancient wheat, chickpeas and cowpeas. The more promising candidates will be naturally crossed among them to produce drought-resistant varieties. The project’s aim is to help local farmers expand their offering to potential new markets, and researchers predict that new crops could become a market reality in Europe by 2023. Funding the Future

Significant investment is helping to overhaul the agricultural sector, with a rural development programme co-funded by the EU and Cyprus, 52% and 48% respectively. More than €485 million is expected through the Common Agricultural Policy (CAP) between 2014 and 2020, with further funds for modernisation and development under the new CAP from 2021 to 2027. The programme is open to all sectors for investment in the primary and secondary sectors, including organic farming, training, promotion, agritourism and applying for Protected Designation of Origin (PDO) or Protected Geographical Indication (PGI) status. Recognising Origin

To promote the quality of Cyprus’ agricultural products, the government has pushed to register more PDOs and two other international quality logos that attest to specific traditions and qualities of food, agricultural products and wines. Like the PDO, the PGI denotes a specific link to a region’s product while the third logo, the Traditional Speciality Guaranteed (TSG), highlights a traditional production process. There is growing interest to gain these unique badges of quality because they bring added value to any produce, especially as European consumers are prepared to pay more for well-sourced food and ingredients. Cyprus has five food products already registered as PDOs, and four products have PGIs, with more applications for both PDO or PGI certification in the pipeline. In the wine category Cyprus boasts the famous Commandaria, which is said to be the earliest known wine brand in the world. In addition, Zivania and Ouzo are potent alcoholic beverages listed as PGI products since 2004.


Country Report CYPRUS 2019

Growing Appetite for Halloumi

Halloumi has become one of the country’s most formidable trademarks worldwide. The value and quantities of halloumi shipped around the world has grown every year, and in 2018 Cyprus exported 30 million kilos worth €194 million to over 40 countries worldwide – and with more markets steadily being opened for exports, these figures are sure to grow further in the coming years. In fact, producers predict that exports will reach over €300 million by 2023. Demand for halloumi has been surging across Europe and Asia, which led to an export deal with China and a consequent shortage in the UK where halloumi prices soared by 12% in May 2019. To protect the heritage of the cheese, the name ‘halloumi’ is now registered in the European Union as a Community Collective Trade Mark. In a legal ruling in London in November 2018, halloumi lost its Certification Trade Mark in the UK, but retains it in the EU and a number of other countries, including the US. It also holds this classification in Jordan, and the Ministry of Commerce is in the process of registering it in other Middle Eastern countries. Cyprus is also awaiting the classification of halloumi as an EU PDO in 2019, which would boost and protect the product and its brand appeal. The government is investing €35 million to increase production of sheep and goat milk from which halloumi is traditionally made, and the number of sheep and goats is to be increased by 35,000, boosting milk production from three to 14 million cubic litres a year by 2020. Grants of €20,000 are available under an EU programme for first-time farmers aged between 18 and 40 who raise these animals, attracting educated young people into an area with a bright future. Production of the famous white cheese is now also associated as much with laboratories as it is with a rustic lifestyle. A further boost will come in late 2019, with the expected launch of yet another government programme to support sheep and goat farming and the installation of desalination units for farmers. Growing Aquaculture Industry

Aquaculture products are the third most important produce in Cyprus, in terms of export value. There are nine licensed marine open sea cage farms in operation in Cyprus culturing mainly European seabass and gilthead seabream, three marine hatcheries, one land-based shrimp hatchery/farm and seven small trout farms. In addition to private fish production units, there are also two government-operated aquaculture research stations, one for marine species and the other for freshwater species.


million in grants to boost wine industry through the National Viticulture Support Programme 2019-2023

Key Crops Cereals, potatoes, carrots, tomatoes, watermelons, sweet melons, cucumbers, grapes, oranges, lemons, grapefruit, apples, pears, peaches, cherries, bananas, almonds, olives, carobs

€300mn by 2023

Marine fish production (mariculture) in open sea cage farms accounts for some 90% of the total sales value, and steady growth in this sector due to strong marketing on both a local and international level is likely to attract further investment. The main commercially cultured marine species are the gilthead seabream and European seabass, accounting for around 70% and 30% respectively of total production. Total aquaculture production in 2017 reached 7,277 tonnes of table size fish including 28 tonnes of shrimp, 44 tonnes of trout, and 31.8 million marine fish fry were produced. The aquaculture sector represents about 75-80% of the total national fisheries production in terms of both volume and value. Fish export value – including live, fresh, chilled or frozen fish – was €31.2 million in 2018, with Israel absorbing 75% of the fresh fish exports. Around 65% of the total national production of marine species is exported to markets in Europe, the Middle East and the US, with the rest consumed domestically. New Wines with Ancient Roots

The wine scene has developed dramatically in recent years, with now around 70 wineries growing vines and producing award-winning wines in the foothills and high-altitudes of the Troodos mountains – establishing some as the highest altitude vineyards in Europe. Some wineries have also focused on preserving the heritage of indigenous Cypriot varieties and are developing exciting and complex boutique wines. Cyprus has been producing wines since 3,500 BC which were widely traded in the Eastern Mediterranean region and the Aegean Sea. Perhaps the best known ancient variety of Cyprus wine is Commandaria, a unique dessert wine made from sun-dried Xynisteri and Mavro grapes and reputedly enjoyed by Richard the Lionheart on his way to the crusades. The wine holds the distinction of the world’s oldest named wine still in production

Cyprusproduced Atsas holds the record of the healthiest olive oil in the world

and is documented as far back as 800 BC, while the name Commandaria dates back to the 12th century crusades. In the 1980s the country embarked on a campaign to eradicate local grapes in favour of foreign varieties, such as Chardonnay, Sauvignon, Merlot, Grenache and Syrah in the belief that they would be more exportable. Fortunately, the trend was reversed after Cyprus joined the EU in 2004 and with the Union’s focus on highlighting local produce of its member states. A programme was adopted to save native varieties that have been grown for centuries and were in danger of becoming extinct. Efforts to save the heritage of Cypriot viticulture has seen enormous success, and with the country now producing interesting vintages, the reputation of Cyprus wine and this new territory is growing rapidly worldwide. Four different wine regions have been designated as producing their own unique product with controlled appellations of origin. In each case, different proportions of indigenous Cypriot red grapes such as Maratheftiko, Ofthalmo or Mavro, or the white grape Xynisteri, are blended with smaller quantities of specified foreign varieties such as Cabernet Sauvignon, Cabernet Franc, Syrah or Merlot. The unique native varieties and local character of Cyprus wines reflect the country’s terroir – which is also one of the few places left in the world that is free from phylloxera, the pest dreaded by winemakers worldwide. The government has recognised the budding success of this sector and is working hard to popularise Cypriot wine in the European market. To give a further boost to the sector, the government announced €23 million would be made available to the local industry through the National Viticulture Support Programme for the period 2019-2023. Many vineyards today are run by young entrepreneurial Cypriots with solid training in viticulture and oenology from famous winemaking regions such as France, Italy and Australia. This along with the establishment and promotional work of an association of 11 leading Cypriot wineries – branded the Ambassador Wineries through the Evoinos partnership programme – are definitely putting Cyprus’ wine territory on the map for international wine connoisseurs. Showcasing the rich viticulture of the island, Cyprus has created a wine trail project, offering six different organised routes for visitors to tour the island’s wine-producing regions. The reputation of the annual Limassol Wine Festival, launched in 1961, has also spread beyond the country’s borders and attracts over 100,000 visitors every August to the city’s municipal gardens to discover the wine portfolios of one of the world’s oldest wine-producing countries. Country Report CYPRUS 2019

Sector Profile

Halloumi export value expected to reach


Sector Profile

Agriculture & Food


Opportunities and Challenges

Agriculture in Cyprus is rapidly diversifying and modernising, with greater input from scientists and researchers. This, together with the successful experience of those who have put money into boutique wineries, aquaculture or cultivating plants that produce nutritious and medicinal fruit will attract further investment. Demand for such products in niche domestic and export markets is steadily rising because of the increased interest in well-sourced, nutritious food and the growth of European vegetarian and vegan communities. Most of these fashionable foods come from hardy plants that thrive in Cyprus’ climate and wider cultivation of such crops will help to address the challenge of water scarcity, a pressing problem over the centuries. Farmers have enjoyed greater water security in recent years thanks to the latest desalination and recycling technology. Also, many of these crops do not require large land holdings, which again suits Cyprus where around 90% of holdings are under five acres and most farms are owned and run by individual families. Climate change is undeniably one of the biggest challenges facing Cyprus and the entire region, and the agricultural sector has felt the effects first hand. For example, €16 million in compensation has been paid out by the government to cover losses deriving from damage caused by extreme weather. This reality has placed research at the heart of finding solutions to fight the effects of global warming. To this end, Cyprus along with 15 other countries has launched an initiative to create a new climate change action plan. The research and recording of relevant measurements in the region will be led by the pre-eminent and globally renowned research organisation the Cyprus Institute (CyI), and the data gathered combined with the scientific expertise is expected to result in new ideas and solutions. Currently there are around 55 research projects in various stages of completion in Cyprus thanks to the numerous research centres and universities leading the way in innovation. New trends in farming methods and produce are helping to address another challenge that Cypriot agriculture has long faced, the everincreasing average age of farmers. Younger educated people are now entering what is seen as a cutting-edge sector and many also have the marketing skills to make their agribusiness a success – changing the image of farming. The University of Central Lancashire (UCLan), the first British university to establish a campus in Cyprus, now offers a popular diploma programme in agriculture and animal husbandry, and the numerous private and university-led research projects and initiatives are also enticing the younger generaCountry Report CYPRUS 2019

tion to explore opportunities in the sector. Another interesting initiative is the recent legislation allowing for the cultivation and trade of medical cannabis. Apart from the benefits it would bring patients – a number-one priority – it would also bring a boost to the economic development of the island, as well as attract significant foreign investment for the entire production chain.

Agriculture accounts for


of GDP

A Fertile Future

Agriculture in Cyprus is blossoming again as resilient and resourceful farmers, with government support, respond to fast-changing trends in the European market. Worldwide demand for agricultural technology will explode in coming years, and start-ups and research centres are working more closely with farmers for fresh ideas to transform agribusiness in Cyprus. Innovative thinking focused on quality and sustainable environmentally-friendly methods are filtering into the sector, while the younger generation’s skilful marketing of more PDO and PGI products is supporting the growth of unique exports. With these developments the sector is enjoying bright prospects and a full image rebrand. n

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Cyprus can excel in quality, organic farming, bioproduction and superfoods



Ministry of Energy, Commerce and Industry 6 Andreas Araouzos street, CY-1421, Nicosia - Cyprus T: +357 2286 7100 • E: ts@mcit.gov.cy • W: www.mcit.gov.cy

Sector Profile




The broad-based economic recovery of Cyprus has continued straight through to 2019, significantly exceeding eurozone dynamics, and the country’s buoyant banking sector has gone from strength to strength cleaning up balance sheets, attracting new investment and focusing on a more efficient digital future.


he banking sector of Cyprus has seen a surge of activity in the last few years and new initiatives and reforms have set banks on a stronger course to tackle the legacy problems of the 2013 financial crisis. Strong economic growth of almost 4% and continuous credit rating upgrades have boosted market and investor confidence, banks have successfully raised private capital and maintained strong capital positions, non-performing loans have been slashed in half, while fresh investment through acquisitions has reshaped the banking sector into a more consolidated and agile industry. The rapid rate of technological advancements, new market demands and growing funding needs of both households and businesses are driving developments in the banking industry. The sector is introducing products and services to companies, start-ups and ventures with high growth potential, and at the same time keeping a clear focus to expand lending to key sectors such as shipping, tourism, real estate and professional services – which are substantial economic drivers for Cyprus. 54

Country Report CYPRUS 2019

Taking full advantage of the tough supervision and reform programme in 2013-16, the banking sector has corrected fundamental weaknesses in the financial system and is on a solid path towards sustainability. Cyprus, along with the rest of Europe, is operating in an increasingly tougher regulatory environment with much of the burden falling squarely on the shoulders of the banks. However, the industry is embracing new fintech solutions and innovation to ensure its adaptability and competitiveness in the future. A Sustainable Future

The last few years have underlined the stability of the Cyprus banking sector, it has shrunk and reorganised, developed its capital strength and invested in corporate governance. All core banks in Cyprus have passed successive and rigorous European Central Bank (ECB) stress tests and have strong foundations to move toward sustainable development with the number of non-performing loans (NPLs) on a steady downward trajectory.

KEY contacts

The Central Bank of Cyprus centralbank.cy The Association of Cyprus Banks (ACB) acb.com.cy

Constantinos Herodotou Governor Central Bank of Cyprus

We are delighted to say that the banking sector is finally leaving behind it the aftermath of the financial crisis in Cyprus. There is a steady reduction of NPLs, while at the same time new legislations, regulations and compliance standards have been adopted, to the benefit of the banking sector as well as the economy. We can now be more optimistic about the near future but at the same time must remain vigilant against risks to growth. Now, more than ever, Cyprus can attract foreign investments, by promoting its beneficial tax regime, highly educated workforce and the implementation of rigorous legal and regulatory standards. Michael Kammas Director General Association of Cyprus Banks (ACB)

The sector has seen interesting developments tional deposit and lending services to households, with new investment and acquisitions transform- corporations and SMEs, banks in Cyprus operate ing the landscape, specialised units taking over under the ‘universal banking model’ and offer a NPL management and new international players diverse range of products and services. Deposits buying up distressed asset portfolios from local from customers have traditionally been the main banks’ balance sheets. While the volume of non- source of funding for banks. performing exposures continues to be a chalBanking in Cyprus is regulated by the Central lenge, banks should be in a better position to Bank of Cyprus and is fully harmonised with post profits on a more consistent basis from 2019 EU legislation and directives. Changes introhaving shed a large proportion of their NPLs and duced by the EU’s Single Supervisory Mechanism expanding new lending. (SSM) saw the transfer of supervision of all the Reforms in the country’s legal and judicial eurozone’s largest banks to the European Central framework have given banks more avenues to Bank (ECB) in 2014, harmonising the landscape reduce the burden of problematic assets and for all big banks in Europe. economic imbalances, which are a legacy of the crisis. Significant initiatives include a new state Consolidation through Acquisitions programme – Estia – for supporting the most vulnerable borrowers, a major set of laws passed Key players in the Cyprus banking landscape in 2018 substantially strengthening the legal are Bank of Cyprus, Hellenic Bank and RCB framework and allowing for the securitisation of Bank which are under the direct supervision of loans and speeding up loan recovery rates – de- the ECB, with the rest of the market made up of velopments that were welcomed by credit rating smaller banks and foreign subsidiaries such as agencies. However, even before these laws, the Greek Eurobank and Alpha Bank. The Cyprus drop in NPLs in Cyprus is proportionately the Cooperative Bank (CCB) was one of the top three fastest in the EU. Liquidity and solvency in the banks, until the healthy assets of the state-owned banking system have improved significantly in lender were acquired by Hellenic Bank in June recent years, with deposits in2018. As part of the deal, Hellenic Total deposits creasing by more than €3 billion Bank (HB) acquired CCBs total in 2016-17, allowing the full redeposits amounting to €9.7 billion payment of Emergency Liquidity and took on €10.3 billion in assets Assistance (ELA). consisting of performing loans, Total deposits in the Cypriot bonds and cash, and around €500 banking sector reached €47.5 million in non-performing loans. (March 2019) billion in March 2019, while total While assets worth approximately loans stood at €38.3 billion, ac€8.2 billion were transferred to cording to the Central Bank of Cyprus (CBC). the state, with the so-called bad assets managed The vigorous domestic economic environment by state-owned Cyprus Asset Management has had a positive impact on the solvency of pro- Company (KEDIPES), which is managed by the spective borrowers and the reduction of risk un- Cyprus arm of Spanish company Altamira. dertaken by banks. Net loan demand is projected The acquisition has strengthened Hellenic to increase further in 2019, which is expected to Bank’s status as a major player in the market. have a positive impact on domestic activity and Following the 2013 financial crisis, Hellenic Bank will mainly be supported by the historically low was successfully recapitalised through private level of lending interest rates as well as the in- funds, and also led the way in 2017 in becoming crease in consumer confidence and investments, the first financial institution to join forces with an according to the January 2019 Bank Lending asset management company, APS Holdings, to Survey of the Central Bank of Cyprus. manage its NPLs. The agreement with the Czech debt-servicing specialist, whose clients include Merrill Lynch, Bank of America, Unicredit, Fortis Sector Structure and Regulation Bank, Banco Populari and Deutsche Bank, is of Cyprus’ banking sector is comprised of two tiers: strategic importance for HB and is part of the domestically-oriented banks and international group’s strategy of reorganising and transforming banks. International banks have long been at- its business model. The bank further reduced its tracted to the island for its fiscal regime and to troubled assets in June 2018, when it sold off nonuse the country as a launch pad into high-growth retail secured and unsecured exposures worth and emerging markets. The list of banks of €145 million to B2Holding, a Norwegian firm foreign origin in Cyprus consists of over 30 in- specialising in distressed bank loans. A new deal that will further shuffle the state of stitutions, which mainly carry out international banking business and have limited interaction play in Europe’s NPLs management market and with the domestic economy. Beyond the tradi- also have an impact on Cyprus is Japanese tech

Sector Profile

According to the Supervisors’ expectations and strategic and business plans, banking institutions shall continue their efforts to clean-up their balance sheets from the legacy assets, such as non-performing loans and real estate assets. It is anticipated that banks will take advantage of the current economic recovery and the available legal tools in order to continue with the disposal of certain assets and internally through workouts by their specialised units. Further structural changes in their business models are also expected, with the ultimate target being the establishment of sustainable business models and robust balance sheets.

€47.5 billion

Country Report CYPRUS 2019


Sector Profile


30+ Banks

ations long and short investments giant SoftBank’s bid to take over across the capital structure. Their Spanish group Altamira through investment universe comprises doBank – the largest independcorporate issuers, financial instituent Italian loan management sertions and sovereigns predominantvicer. The new doBank-Altamira ly within the region of Europe, the company structure will have under (March 2019) Middle East and Africa. its management assets and mostly RCB Bank’s profitability remained healthy in non-performing loans of around €130 billion. At the same time, Altamira is one of the main 2018 with net profit after tax amounting to €76.4 bidders for the management of the NPL portfo- million and over 15% return on equity. The bank lio of Alpha Bank Cyprus and its subsidiary AGI has maintained a very low level of non-performCypre Ermis. The portfolio amounts to a total of ing exposures and high level of coverage. RCB’s €3.7 billion, and Altamira is pegged as one of the new five-year strategy also  includes a gradual reduction of exposures to large Russian corporate favourites to take it over.  The island’s largest lender Bank of Cyprus borrowers and funding operations with VTB (BoC) has come a long way since 2013. A mile- Bank, which will reduce concentration risk and stone for the bank was listing on the London result in a more balanced structure of assets and Stock Exchange (LSE) in 2017 in a bid to in- liabilities focused on operations on the domestic crease the visibility of BoC shares and to expose and broader European market. In June 2019, the bank to a broader base of investors. The dual Moody’s Investors Service published an updated listing is also meant to draw attention to Cyprus’ semi-annual credit opinion on RCB, noting well-performing economy and the opportunities that the bank had a long-term deposit rating at offered by the Cyprus Stock Exchange. More re- B1 level with stable outlook – the highest rating cently, the bank sold its UK subsidiary to Cynergy among Cypriot banks. Consolidation and strategic new investment Capital, a group of British retail and property entrepreneurs, in a €117 million deal in 2018. The also came in 2017 with a group of internationdecision to sell the UK offshoot was in line with al investors led by Lebanese banker Maurice BoC’s strategy to principally focus on supporting Sehnaoui acquiring the majority stake of the Cyprus subsidiary of Greece’s largest lender the growth of the Cypriot economy. In late 2018, BoC reached an agreement to Piraeus Bank. Now rebranded AstroBank, the sell the Project Helix loan portfolio with a gross lender, who cites growth as a top priority in its book value of €2.8 billion to Apollo Global, the strategy, is set to grow even further with a deal US-based private equity firm, for €1.4 billion. The signed in January 2019, to acquire the operaHelix portfolio consists primarily of defaulted tions and staff of USB Bank for €40 million. The loans to companies and small businesses secured deal was financed by AstroBank’s own resources against property in Cyprus. Apollo intends to and supported by a capital raise primarily from finance the deal through a securitisation struc- its existing shareholders. The acquisition is said ture, which is increasingly common place for to increase the bank’s balance sheet by 55% and private equity firms when buying portfolios of total assets to €2 billion, including gross loans of €1.2 billion – and build up bad debt. The deal came in the wake of European banks New Lending in Cyprus (2018) its customer deposits to €1.9 billion and equity to €160 ramping up sales of bad loans million. The deal is expected due to ECB pressure. to contribute to the further In June 2019, BoC anconsolidation of the Cyprus nounced a new major sharebanking sector and highlight holder with London-based alpotential investment opportuternative investment manager nities in Cyprus. AstroBank’s Caius Capital LLP acquiring hunger for further growth and 3.09% of voting rights. The takeovers remains strong with move underlines the fund’s connegotiations also underway fidence that BoC’s shares will between AstroBank and the move upwards in the future. National Bank of Greece, to Caius Capital is an alternative acquire the latter’s subsidiary investment manager focusing in Cyprus. on distressed and special situ-

Total: €3.14 billion


€1.21 billion


Country Report CYPRUS 2019


€1.93 billion

Cyprus in 2018 achieved remarkably strong growth and we expect that this positive development will continue in 2019 driven by the significant increase of domestic demand and exports of services, as well as continuous flow of new investments (hotels, commercial and residential real estate, energy). The level of private sector indebtedness, including loans held by banks and non-banks, remains high. NPL resolution is still a high priority for our sector and the banks will continue efforts to improve operational efficiency. Kirill Zimarin CEO RCB Bank Ltd

Economic growth in the past couple of years has been driven mainly by foreign investment, tourism and construction. Even though this trend is likely to continue in 2019, there are also great growth prospects in areas such as shipping, education, medical tourism and technology. Other areas of potential growth for banking institutions could include retail, consumer and housing loans, asset management and custody banking. Overall, the public finances and economic conditions are improving and Ι am optimistic about 2019. I believe that there will be an increase in productivity and GDP growth in the coming years will exceed 4% despite the projections for lower rates. Constantinos Loizides Chairman, Executive Committee & Managing Director AstroBank Ltd

We help your business grow · Business Loans · Project Finance · Trade Finance · Merchant Acquiring · Digital Banking · Deposits

RCB Bank Ltd. Private Company. Registration number: 72376. Registered office: 2, Amathountos street, 3105 Limassol, Cyprus.

RCB branches are open Monday to Friday 9am to 5pm www.rcbcy.com

800 00 722

Sector Profile


Overcoming Challenges

this goal. Rebuilding a Sector

The banking sector of Cyprus has undergone substantial reforms and restructuring since the Cyprus has received much praise from its incrisis-laden years and today stands on stable ternational partners for taking firm steps to ground. However, challenges remain and banks strengthen its financial institutions and multiwill need to tread carefully ple assessments have proved a and adopt a more proactive – high level of compliance across Tier 1 capital ratio rather than reactive – approach the banking sector, with some (Dec 2018) in order to stay on track and statutory requirements even maintain competitiveness. more demanding than in other With global uncertainty, EU member states. The overall fluctuations in international economic growth is supporting markets, and external risks efforts to rebuild the banking Common Equity Tier 1 such as trade wars and changes sector with expectations of well (Dec 2018) in monetary policy, the banking over 3% growth in real GDP for sector must make provisions 2019, a rate significantly higher to ensure it has the ability to than the average forecast of respond to any new potential 1.8% for euro-area countries. crises. The new Governor of the Central Bank A burgeoning investment fund industry of Cyprus (CBC) has stressed that domestic is boosting activity in the banking sector, and banking institutions should base their manage- Brexit is also fostering new business for Cyprus ment planning on expected developments in the with UK-based companies seeking alternative eurozone, and forecasts and concerns related to operational and business locations within the EU. the markets, such as Brexit and emerging issues Current investment opportunities that can be of global trade protectionism. tapped into are distressed assets and loan portfoOne of the biggest remaining challenges for lios, mergers and acquisitions, private equity and Cyprus banks to overcome is the reduction of venture capital projects, as well as financing of NPLs. Granted, there has been significant prog- infrastructure projects, such as tourism developress with NPLs now at €11 billion from a peak of ment and oil and gas projects. €28 billion after the 2013 financial crisis – a drop A strong focus on going digital, implementwhich is proportionately the fastest in the EU. ing more innovative banking solutions and inteHowever, even though bank grated products will support the balance sheets are clearing up industry and enhance competithrough debt sales, loan retiveness, bringing fresh opporstructurings and debt-to-asset tunities to support sustainable swaps, it does not fully elimidevelopment in an era of stiff nate the burden of private debt competition and increasing in the wider economy. costs. The current transformaWith stricter ECB guidetion and increased European lines and regulation, it is crucial supervision have already proto find a balance where finanduced a more agile and futurecial stability can be safeguarded proof banking sector. If Cyprus without suppressing economic continues to display the same growth. Another challenge for level of resilience it has shown banks is to devote more reover the last five years and consources to meet ever-increasing tinues to efficiently restructure compliance demands, but at its institutions, it will be wellthe same time try to reduce equipped to overcome its chalthe adverse effects on legitimate business activi- lenges and emerge stronger as a true international ties. This issue is not unique to Cyprus banks, financial centre. n but a global challenge for financial institutions, and part of the solution is to invest in new tech to enhance efficiency, profitability and prospects. A well-functioning banking system is a precondition for the sustainable development of every economy and embracing a digital future with Discover more at cyprusprofile.com more transparency will certainly help to achieve

16.6% 15%

NPLs have been slashed to

€11 billion from a peak of

€28 billion a drop which is proportionately the fastest in the EU.


Country Report CYPRUS 2019

The economy is expected to continue to show signs of relatively strong growth coupled with a reduction in unemployment supported by sound fiscal policies, low interest rates and Cyprus’ investment grade standing. The benefits from the consequent recovery of property prices has started to trickle into the local banking sector. The challenge is to structure and promote products that complement traditional deposits, while being able to offer solutions to the corporate sector and individuals alike in a form that avoids repetition of past mistakes. Shipping, tertiary education, medical and valueadded tourist services appear to be areas of promise. Costas Argyrides CEO cdbbank

It is time to put an end to outdated perceptions of Cyprus as a haven for tax evasion and money laundering. Today, the small EU state has in fact some of the toughest AML measures in place on a global scale and is attracting serious business and FDI to support its economic growth. This new AML framework of Cyprus can reasonably class the island as a model amongst all other European jurisdictions.


part from its thriving tourism industry, Cyprus is probably best known as an international business centre. The expansion of this sector has largely been due to its advanced professional services sector, beneficial tax regime and legal framework based on English Common Law, as well as the island’s EU status and strategic geographical location. The importance of services has grown substantially in recent decades and the sector has become one of the major contributors to the economy. Prior to joining the European Union in 2004, the reputation of Cyprus suffered from allegations of money laundering and tax evasion and was branded a haven for Russian oligarchs. These rumours resurfaced in the wake of the country’s 2013 financial crisis and subsequent bailout and have lingered on until today. What has often been absent in these reports and contradict the sweeping claims of a lax anti-money laundering (AML) system, is that as an EU member state Cyprus’ regulatory and tax framework is fully vetted and approved by both the OECD and EU – and that some of the measures and thresholds the country currently applies are in fact stricter than those of its European peers. Cyprus is actually one of the few jurisdictions on the White List of Largely Compliant jurisdictions of the OECD. Financial crime occurs worldwide and a staggering US$26 billion in fines have been levied over the last decade for AML compliance breaches. Respected global banks have not been immune to regulator crack downs exposing serious violations, and financial institutions in for example Germany, the UK and US have seen multimillion fines, some even passing the US$1 billion mark. Just like every other country, Cyprus is also combating this type of illegal activity. To put things into perspective, the Basel AML Index – the respected and independent institute assessing money laundering and terrorist financing (ML/TF) country risk around the world – ranked Cyprus 80th out of 129 countries in 2019. In comparison, the US and Canada rated only slightly better at 82nd and 86th respectively, while jurisdictions such as Switzerland, Luxembourg and Hong Kong all scored a higher risk rating than Cyprus. Naturally, there is always room for improvement, but what has gone almost unnoticed on the international stage is the fact that today banks in Cyprus have adopted some of the toughest AML regulations in the world, and their procedures incorporate some of the most advanced banking compliance practices globally. According to US Department of Treasury Assistant Secretary Marshall Billingslea, the work done by Cyprus on the anti-money laundering front has been outstanding, with enormous progress and improvements made in laws, regulations and enforcement authorities. Cyprus’ AML measures have also been internationally assessed several times over the last years by the Council of Europe Committee Moneyval, with another evaluation being in progress since May 2019. Cyprus has also introduced a well-defined and clearly structured definition of shell company activity with

Sector Profile

Cyprus Anti-Money Laundering Measures guidance to Cypriot banks as to what constitutes legitimate shell company activity. Cyprus today leads the way in most European jurisdictions through its clear definition, sending a strong message that activity aiming to conceal the real nature of a company’s activities is well and truly over. In addition, tighter supervision and de-risking strategies have led to the closure of a significant number of accounts over the last few years. According to Moody’s, at their peak in April 2012 the volume of non-EU deposits reached €21.9 billion, exceeding the size of the domestic economy. Following a sharp decline in 2013 this figure dropped to around €7 billion in 2018. According to the Central Bank of Cyprus, for instance Russian deposits, which have been the root of much of the criticism, have declined by around €5 billion since 2015. This spectacular decrease is more evidently reflected on the market share of these Russian deposits, which dropped from 10% in 2014 to only 4.5% in 2018. To identify threats and vulnerabilities, Cypriot authorities cooperate with foreign supervisory authorities in compliance with the Financial Action Task Force (FATF) recommendations to ensure financial sector legislation and practices are aligned with international standards. The national AML law is fully aligned with the 4th EU Anti-Money Laundering Directive, and Cyprus is in full adherence with sanctions issued by the European Union, the United Nations, and even the US Treasury OFAC although Cyprus banks are not US persons. The transposition of the 5th EU AML Directive into Law is planned to take place in September 2019, whereas the full functionality of the Ultimate Beneficial Owner (UBO) registries will be available from March 2020. On their part, Cyprus banks have increased their investment in compliance by over tenfold since 2014, with resources increasing by more than 50% and with cumulative capital expenditure on financial crime monitoring systems exceeding €10 million. The country’s regulatory sphere is solid and has all the relevant measures in place, and what Cyprus needs to focus on more is in raising awareness of this fact and to heal the reputational damage that floating allegations have caused its image. What remains true today is that the jurisdiction continues to be an attractive location for international business and investment, and the reforms of past years have produced more corporate governance and an agile and secure banking sector to boost the economy. Cyprus has one of the largest budget surpluses in the EU and has seen robust economic growth in the past few years, leading to the return to an investment-grade rating. The increasing inflows of FDI and the number of international companies establishing regional headquarters and offices on the island are evidence of the country’s highly attractive proposition as an international business centre in today’s exceedingly competitive world. The credibility of Cyprus today is measured not only on its attractive characteristics as a highly competent jurisdiction, but on the robustness and effectiveness of its anti-financial crime framework. n Country Report CYPRUS 2019


Sector Profile

Capital Markets


Investment Gateway Cyprus aims to establish itself as a key listing jurisdiction for both the EU capital market and emerging regional markets. Although the Cyprus Stock Exchange is still small compared to many of its fellow EU exchanges, among its plans is to open new service lines to satisfy market demands and attract more participants.


Country Report CYPRUS 2019


eaching a healthy GDP growth of almost 4% in 2018, the Cyprus economy has seen some of the strongest growth rates in the EU over the last few years. Investment has been pouring into multiple sectors for the last five years with 2014-2016 recording €9.1 billion in FDI inflows, and the country’s official return to investment grade in 2018 has further boosted investor confidence in the small Eastern Mediterranean country. However, these positive economic effects are yet to filter into the securities market. Leveraging on its geostrategic position, EU membership and cost-effective operating environment, the Cyprus capital market’s landscape has seen progress over the last few years, supported by the country’s strong professional services sector and a growing investment funds industry. However, the 2013 financial crisis has no doubt left its mark with many market participants still recovering from the lean years and fighting their way back to sustainable growth. Nonetheless, the country’s appeal is steadily growing as a listing jurisdiction due to its cost-effectiveness, its investor-friendly and transparent tax framework, a European ‘passport’ for issuing, its euro currency, and the free transfer of funds and offer of securities. Cyprus’ offering is increasingly sought after by international businesses seeking a costconscious way to diversify their portfolios and tap into both the EU capital market as well as emerging regional and niche markets.

The Cyprus Stock Exchange

Catching the wave of economic growth in Cyprus, the Cyprus Stock Exchange (CSE) has set its sights on further development and growth. A key goal for the CSE in 2019 is to strengthen its role within the economy as a vital capital raising tool to help companies and institutions expand their activities. Equally important in this quest is to attract new companies to list on the CSE’s markets to provide new investment opportunities. The CSE has numerous strengths and offers multiple advantages. The Exchange provides all basic securities operations, such as listing, trading, clearing and settlement, as well as registry services. The Exchange also operates within an advanced legal and regulatory framework, complying with all EU Directives and internationally accepted securities practices. The Exchange currently operates a Regulated Market and a Multilateral Trading Facility – the Emerging Companies Market (ECM) – for shares and bonds, which operates under the Cyprus Securities and Stock Exchange Law and the Investment Services and Activities and Regulated Markets Law (MiFID). Shares, rights, warrants, corporate bonds, government bonds/ treasury bills, collective investment schemes and Global Depositary Receipts (GDRs) can be traded on the CSE, with the most popular being shares and bonds. Currently, CSE participants include 20 Broker Firms, 13 Custodians and 55 Nominated Advisors.


Cyprus Securities and Exchange Commission cysec.gov.cy Ministry of Finance mof.gov.cy Cyprus Stock Exchange cse.com.cy

New Initiatives

The Cyprus Stock Exchange provides fast and simple listing procedures and a competitive pricing policy

In an effort to expand its business, the CSE is focusing on sectors that are showing strong performance, such as funds, shipping, and energy. The aim is to ensure the securities market can provide the necessary tools and prospects to participants to achieve their targets, and also provide regional market participants and companies a convenient venue for listing and investing in a transparent, efficient and business-friendly environment. With regards to funds, the Cyprus Stock Exchange has several initiatives. It already operates two markets for listing funds, the Market for Tradable Collective Investment Schemes and the Market for Non-Tradable Collective Investment Schemes. Listing provides visibility and transparency to investors, and the Exchange provides fast and simple listing procedures and a competitive pricing policy. In addition, the CSE has recently launched a new service in order to offer registry services to fund managers, which means main-

taining the registry of unit holders of non-tradable funds in the CSE’s Central Depository and Central Registry in a dematerialised form, and handling redemptions and transfers of funds’ units. As for shipping, together with the Athens Exchange – with which it has a common trading platform – the CSE is examining the possibility of creating a new market for listing bonds by shipping companies. In the energy sector, the CSE now holds a 10% stake in the Hellenic Energy Exchange (HEnEx) – which was founded as part of the EU’s target model to create a single energy market and is expected to launch operations in mid-2019. Furthermore, based on CSE’s participation in HEnEx, the CSE Council has submitted a proposal to the Government of Cyprus, in order to serve the Cypriot Electricity Market, as an operator.

Sector Profile


The Main Market, Alternative Market, Corporate Bonds Market, Government Bonds Market, Collective Investment Schemes Market and the Depository Receipts are all segments of the Regulated Market, which currently lists 66 International Securities Identification Numbers (ISINs) for shares, 26 ISINs for bonds and 21 ISINs for funds. The ECM has segments for shares, bonds, shares whose registry is not kept by the Cyprus Central Securities Depository and Central Registry (CSD), and bonds whose registry is not kept by the Cyprus CSD – with 41 ISIN’s for shares and 29 for bonds listed in total. The ECM offers simplified listing criteria at a low cost and is successfully attracting companies both locally and internationally. It has evolved from being mainly focused on small domestic companies, to a growing international market offering opportunities to companies from around the world – and allows for a more personalised service at competitive fees, particularly to companies that are too small to list on a larger exchange or wish to gain their first experience of listing securities within the EU. The ECM has proved resilient and successful in the last years, despite the adverse economic climate and allows companies with an attractive commercial proposition to attract funds. Additionally, the Exchange also has the responsibility for the establishment and management of a Central Depository and Central Registry (CSD). The majority of the securities listed on the CSE are registered also in the CSD. Issuers of non-listed securities, that wish to have their registry maintained by the Cyprus Stock Exchange may assign this job to the Cyprus CSD.

Trading Volume

Due to the adverse financial conditions of past years on a large number of listed issuers, the value of shares, bonds and other instruments traded on the Exchange has remained relatively weak, despite moderate recent growth. For 2018 the turnover amounted to €132 million, which represents a year-on-year increase of 58.1%, compared to the turnover of €83 million in 2017. The daily average turnover for 2018 was €0.5 million in 2018, compared to €0.3 million in 2017. The financial sector was the largest economic sector with 58.12%, followed by the consumer services sector with 17.71% of the equity market capitalisation. However, the Exchange is growing and has already managed to attract companies from different sectors of the economy such as: basic materials, oil and gas, technology and telecommunications, consumer goods (food & beverage and personal & household goods), consumer services (retail, media, travel & leisure), from industry the construction and materials segment, and financial sector players such as banks, insurance firms and real estate companies. Supporting a Growing Funds Industry

Funds are a new and promising industry in Cyprus and much effort has been made by the authorities and market participants to attract both local and international funds for registration-licensing in Cyprus with the aim of promoting the country as a funds jurisdiction. A CSE listing provides a number of advantages for fund managers and investors. The CSE is an EU-regulated and recognised Exchange, which provides a transparent fund profile and credibility to investors. It has fast and simple listing procedures with minimum Country Report CYPRUS 2019


Sector Profile

Capital Markets

Favourable Tax regime

Financial Sector: 58%

Corporate and Government Bonds: 29.4%

Equity Market Capitalisation Consumer Services: 18%

Shares traded: 70.6%

Breakdown of Total Turnover

Other: 10%

Industrials: 14%

2018 Total Turnover

2018 Daily Average Turnover

€132 million

€60.5 million

(a year-on-year increase of 58.1%)

per trading day

2018 Total Market Capitalisation (incl. Bonds Market):

€6.1 billion

Corporate tax rate 12.5% No capital gains tax on securities’ transactions No fee (transfer levy on sale) imposed on securities’ transactions No withholding tax for dividends that are paid to non-tax residents of Cyprus Wide network of Double Tax Treaties

Top Shares in 2018 (most traded securities by value):


Demetra Investment Public Ltd


Bank of Cyprus Holdings Plc


Hellenic Bank Public Company Ltd


Salamis Tours (Holdings) Public Ltd


Vassiliko Cements Works Public Company Ltd

International Memberships WFE (World Federation of Exchanges) FESE (Federation of European Securities Exchanges) ANNA (Association of National Numbering Agencies) ECSDA (European Central Securities Depositories Association) FEAS (Federation of Euro-Asian Exchanges)


Country Report CYPRUS 2019

To expand its business, the CSE is focusing on sectors that are showing strong performance, such as funds, shipping, and energy

Marinos Christodoulides Chairman Cyprus Stock Exchange (CSE)

bureaucracy, advanced technology, infrastructure and effectiveness at a low cost. There is great potential for listing Collective Investment Schemes, of both UCITS and Alternative Investment Funds (AIFs) on the CSE, allowing fund promoters to attract greater interest from institutional investors. The favourable environment provided by Cyprus’ attractive tax regime, the legal framework which is harmonised with EU Directives, and the vast pool of skilled professionals provide the basic prerequisites for enabling the future growth of the funds industry. The Cyprus Stock Exchange has already accepted listings for 17 non-tradable Collective Investment Schemes – more specifically, two single scheme UCITS funds and 15 subfunds of one UCITS umbrella scheme – bringing the total assets under management of these listed funds to €52.9 million. Additionally, the CSE has also accepted the listing for two AIFs non-tradable Collective Investment Schemes, one single scheme and one umbrella scheme with two subfunds. With the sector gaining momentum, more funds are expected to follow. Regional Growth and Global Connections

A key strategy of the Cyprus Stock Exchange is one of regional growth and collaboration with neighbouring stock exchanges. The signing of memorandums with other Exchanges has provided the opportunity to collaborate on a wide spectrum of reciprocal issues of interest. The CSE offers fully computerised online trading, clearing and settlement. Investors have access to the Securities listed on the CSE Market as well as to the securities listed on the Athens Exchange Market (Athex Group) through the Common Trading Platform established between the two Exchanges. Through this platform, Greek market participants (members and custodians) have access to view and trade the securities listed on the CSE and vice versa. The CSE also provides a successful service to non-listed companies that wish to submit their registries for handling by the Cyprus Central Depository and Central Registry. Additionally, the Exchange also introduced a regulatory framework for the operation of the Depository Interests (DIs) to facilitate the clearing and settlement of cross-border trades between the CSE and London Stock Exchange (LSE) for dually listed companies. The CSE has also been appointed by the Cyprus Securities and Exchange Commission (CySEC) as the Officially Appointed Mechanism for the Storage of Regulated Information (OAM) for Cyprus, according to the provision of the Transparency Directive – a system that makes use of digital signatures. In addition, the CSE acts

as the auctioneer of Greenhouse Gas Emission Allowances (EUAs) in the Republic of Cyprus. The Exchange is responsible for the supply of allowances to be auctioned in the primary market on behalf of the Cyprus government. In 2016, the CSE introduced a service tailored for the issuance of Legal Entity Identifier Codes (LEI) to interested legal entities. This service is provided by the CSE in cooperation with the London Stock Exchange/Unavista, and the issuance of LEI codes is done through the Unavista platform. The CSE also continues to successfully provide the FISN, ISIN and CFI codes to interested market participants as the official national representative for Cyprus, as appointed by ANNA.

Sector Profile

Our key goal for 2019 is to play a vital role in the economy and business landscape of Cyprus. We are determined to attract new companies to list on CSE’s markets, so they may develop and expand their activities and also provide new investment opportunities to investors. We are also focusing on new alternative areas and sectors to enhance our markets, services and products. Economic sectors that could benefit from capital raising and increased visibility through the CSE are funds, renewables, research and innovation, education and the private healthcare sector.

Future Expectations

Although Cyprus is a small player in the European capital markets sphere, the country is taking bold steps to adapt to global trends and establish itself as a key regional player. In line with these aspirations, the Cyprus Stock Exchange is equally determined to become a more dynamic market, by tapping into its potential for further growth and expansion. To reach these targets, industry experts have also called for the introduction of more government-backed incentives to attract more international and strategic market participants to the country. These types of measures would certainly aid in repositioning the CSE as a tool for serious capital raising locally and provide more opportunities for investors. For example, with the right initiatives economic sectors that could benefit from fund raising and increased visibility through the CSE are renewables, research and innovation, education and the private healthcare sector. Cyprus is a country that continuously and systematically strives to offer a diverse and investorfriendly environment. The CSE as a recognised trading venue in the European Union, can act as a convenient gateway for investors in the region. The country’s comparative advantage of its geostrategic location combined with its strong professional services sector makes it an ideal link between a number of regional markets and the EU. And with the Cyprus Stock Exchange fully aligned with the country’s broader plans of economic growth and expansion, the next few years are set to also boost the capital markets landscape. n

Discover more at cyprusprofile.com Country Report CYPRUS 2019


Sector Profile

Construction & Real Estate

Mediterranean Pull Factor

Building on the success of the last few years, the Cyprus construction and real estate sector is continuing its upward trend right through 2019 and showing promise of a return to a healthy market. Property sales are booming and largely driven by foreign buyers, demand for luxury office space is increasing, and large-scale projects worth â‚Ź8 billion are seeking investors worldwide.


Country Report CYPRUS 2019

Sector Profile

Akamas Bay Villas


KEY contacts

Cyprus Land and Building Developers Association (LBDA) lbda.com.cy

he Cyprus construction and real estate market is currently laying solid foundations for future growth, evidence of this is the literal building boom and number of cranes across the skyline of its major cities. Glittering high-rises are being built along the coast and in city centres competing for the best views, luxury hotels are springing up, and new residential complexes with top-quality facilities are promising a care-free and cosmopolitan lifestyle on the third largest island in the Mediterranean. Confidence in the sector has been growing steadily as the market has shown strong performance over the last years. The number of new building permits have maintained their momentum, house prices are up, high-end residential property and grade A office space is in high demand, and 2018 sales have more than doubled since the 2013 financial crisis. These developments have also been supported by the country’s rapid return to a healthy economic growth of around 4% – almost twice the EU average – and the upgrade of its sovereign rating back to investment grade. Cyprus’ curb appeal remains strong amongst international investors and expats. Its EU member status, high quality of life and low crime coupled with its ideal Mediterranean climate and strategic location between three continents, have long attracted foreign house hunters. Its thriving international business centre and growing economy, with new prospects of world-class oil and gas business, has also spurred interest amongst the global business community seeking new headquartering locations. With the number of new developments being rolled out, buyers and investors are spoiled for choice to find their place in the sun. Country Report CYPRUS 2019


Sector Profile

Construction & Real Estate Foreigners Driving Sales

The upward trend in Cyprus real estate sales has been steadily rising since 2014, when property sales first picked up following the 2010 peak of the European sovereign debt crisis. Transaction volumes have been rising in double digits in almost all regions of the island, and the strongest driver for building permits has been investment in commercial projects. 2018 saw a vigorous 6% growth in the overall property market, with industry experts predicting that the value of property will follow the same healthy pattern – albeit prices being held down somewhat by the surge of new projects being developed simultaneously and repossessed properties returning to the market. Cyprus real estate prices rose by 3.5% in the fourth quarter of 2018, and by 1.6% year-onyear, compared to 4.2% in both the euro area and the EU. The driving force of the growth in this sector has been without a doubt foreign investors, and in particular those interested in the country’s citizenship schemes. In 2018, half of all properties

Real estate and construction sector contributed


to Cyprus Gross Value Added (GVA)

Pelagos Beachfront Residences


Country Report CYPRUS 2019

sold were purchased by foreigners, with Limassol and Paphos being by far the most popular locations and the districts with the largest share of luxury residential property transactions. Highend properties sold in 2018 are estimated to have generated more than €500 million. Most of the transactions in the high-end residential segment during 2018 were in the €2 million - €3 million price band, representing 60% of total high-end residential property transactions. In April 2019, Cyprus property sales reached its highest monthly figure recorded since September 2008, following a 61% surge according to official figures from the Department of Lands and Surveys. Sales in the first four months of 2019 rose 23% compared to the previous year. Domestic demand increased by 37%, while the overseas market rose by 9% compared to the corresponding period in 2018, with sales to EU nationals rising by 17% and sales to non-EU nationals increasing by 6%. Overall sales in Nicosia rose 35% and Famagusta by 26%, Paphos rose 33%, while Larnaca and Limassol increased by 21% and 17% respectively.

The potential for Cyprus real estate is great. This is based on Cyprus’ geography, climate, culture and living standards as well as the good economic situation, GDP growth, the geopolitical situation of surrounding countries, and the various tax and immigration incentives granted. The huge additional potential created by the recent gas finds, and the introduction to the market of modern innovative world-class projects add to the sector’s investment attractiveness and potential. Pantelis M. Leptos Deputy President Leptos Estates

CGI is indicative only

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For more information or to arrange a private appointment contact: T: +357 25 510 888 limassoldelmar.com

Sector Profile

Construction & Real Estate New Era for Construction

The last few years have been good to the local construction industry, signalling a new era of growth after a period of stagnation. The number of new building permits has maintained its momentum and saw a 9.1% increase in February 2019, with the total value of these permits rising by 64.7% compared to the previous year. This improved climate has been mainly driven by the country’s rapid post-crisis economic growth and increased FDI flows, the introduction of new and attractive property tax incentives, as well as increased demand from the domestic sector. In addition, the government’s plans to give incentives to developers in the framework of its new ‘affordable housing’ scheme are an encouraging sign for the future of the sector. Increasing the building coefficient in return for developers selling or renting out flats to vulnerable citizens will strengthen the construction industry and also help maintain healthy levels in prices and rents – which have skyrocketed in some areas of Cyprus due to the new real estate boom. However, concerns have been raised in some quarters over the surge of activity in the market, with fears of repeating past mistakes of oversupply forcing construction companies and devel-

opers to file for bankruptcy. However, industry experts maintain that today’s situation is not another bubble waiting to burst, but a new era in the sector. Another challenge, which has perhaps fuelled these concerns, are the local banks’ growing real estate portfolios acquired through repossessions and debt-for-asset swaps to restructure the burden of non-performing loans – another unfortunate legacy of the financial crisis. The question remains what effect the gradual unloading of these properties into the market will have on today’s fiercely competitive environment. Incentives and Safeguards

Changes to the law relating to title deeds have ramped up protection and peace of mind for prospective buyers, with additional legal safeguards streamlining processes and efficiency. These types of measures have also paved the way for increasing confidence to invest in Cyprus real estate. However, prospective buyers are advised to seek independent legal advice before purchasing real estate. The island has mainly been on the radar of British buyers, due to the countries’ historical ties, strong tourist market and attractive tax treatment – particularly for expats and retirees who pay just 5% tax on pensions, an incentive that may disap-

Real estate opportunities in Cyprus will continue to grow. The challenge is to create quality projects with international appeal and high standard service, for buyers from all corners of the globe. The Limassol property market is also proving to be a lucrative investment opportunity, prices are on the rise and the recent gas boom is pegged to bolster the country’s economy substantially. Add to the mix some of the region’s best private schools and hospitals, stylish marinas and designer shopping districts – this creates an exciting city with an international outlook. Michalis D. Zavos CEO D. Zavos Group

Ayia Napa Marina


Country Report CYPRUS 2019

A development by

Sector Profile

Construction & Real Estate

Sun City

pear with Brexit. The Immovable Property Tax (IPT), which was significantly reduced in 2016, has been abolished, while temporary reductions in property transfer fees introduced in 2015 have been made permanent. Purchases that include VAT incur no property transfer fees, while VATexempt purchases incur only 50% of the previous fees. In addition to the UK and Europe, interest from investors in China, Russia, the Middle East, and beyond has also grown. Focus on Luxury and Tourism

The seaside city of Limassol, a thriving business centre and international shipping hub, has seen the most dramatic change in the wake of the building boom. Skyscrapers of all shapes and sizes are starting to emerge along the seafront, promising to redefine the city’s skyline and rival the likes of Dubai. Branded as luxury developments, most of the buildings combine residential, commercial and much-needed high-end office space to meet the needs of new international business and expat professionals relocating to Cyprus – proving the country’s growing appeal as a headquartering location. Marina projects are also redefining luxury and the scope of real estate in Cyprus. Following the success of Limassol Marina, another project has broken ground up the coast in Ayia Napa. The €220 million project features twin skyscrapers and a yacht marina for 600 vessels. Backed by Egyptian business magnate Naguib Sawiris, and already marketed to investors in the United Arab Emirates, the project is set to transform the status and interest in the Ayia Napa region. Plans for marinas in Larnaca, Paralimni and Paphos are also in the pipeline. One of the most attractive investment opportunities in Cyprus continues to be tourismrelated real estate and infrastructure, evidence of this is the number of foreign investors closing multimillion-euro deals in the last five years – these include both new projects and acquisitions of existing assets such as five-star hotels, malls and luxury marinas. A serious game changer in 70

Country Report CYPRUS 2019

Cyprus’ tourism product will be the island’s firstever integrated luxury casino resort. The almost €600 million casino – which is being run by the consortium of Integrated Casino Resorts Cyprus (ICRC) which includes global gaming giant Melco Resorts & Entertainment Ltd – will have extensive facilities and exceed five-star status. The resort project is Hong Kong-based Melco’s first expansion outside of Asia and will be the biggest casino of its kind in Europe. The gaming area at the casino is set to span across 7,500 square metres, over 9,600 square metres will be for convention, meeting and event spaces, and a 1,200 square metre retail area will replicate the feel of the old Nicosia city centre. The resort is expected to contribute around €700 million annually to the economy. The project will also support the local construction industry as it is expected to create around 4,000 jobs each year during the construction period. In addition, it will contribute an estimated 6,500 direct and indirect full-time positions in Cyprus when fully operational in 2021.


of all properties sold in 2018 were to foreigners

Sector Profile

In April 2019 Cyprus property sales reached its highest monthly figure since September 2008

Limassol Del Mar


Country Report CYPRUS 2019


Construction & Real Estate

Sector Profile

The property market, particularly on the high end, is continuing to experience steady growth as Cyprus develops into a highly soughtafter destination with marinas, golf courses and a casino. We are optimistic about the ongoing momentum at our new development, Trilogy Limassol Seafront, which is also attracting high-end buyers. Cyprus needs to continue with the necessary reforms, reduce bureaucracy and facilitate foreign investments so that this growth can continue.

Limassol Marina

Investing in Cyprus

Cyprus has confidently forged ahead into the luxury market direction – a fact evident in the number of extravagant residential developments rapidly rising up along the coast and most exceeding the half million price tag. These range from apartments in architecturally unique highrises to exclusive villas in five-star complexes, golf course and seafront developments as well as boutique townhouses. This segment of real estate and construction has significantly benefitted from the Cyprus Investment Programme, which was introduced by the government to attract more high-net-worth individuals, investors and entrepreneurs to the island. The programme offers individuals EU citizenship with the opportunity to reside indefinitely in Cyprus if they own a permanent residence worth €500,000 and invest a minimum of €2 million in a business venture. Investment options include real estate, financial assets of Cypriot companies and/or organisations, investment in Alternative Investment Funds, and investment in the shipping sector, or a combination of these investments. If an applicant chooses to invest only in residential real estate, the purchase of another permanent residence in Cyprus is not required, provided at least one of the housing units is worth €500,000, plus VAT. New measures also require two donations of €75,000 each. One to the Cyprus Land Development Corporation to be used for affordable housing, and another to the Foundation for Research and Innovation to promote entrepreneurship in Cyprus. The scheme, which was originally launched to help 72

Country Report CYPRUS 2019

kickstart the economy in 2013, has to date generated around €6.6 billion of foreign investment to Cyprus. Despite the criticism and new measures, interest is far from waning. There has been some decline in Russian applications, but Cyprus is witnessing increasing interest from investors in China and the Middle East. Location, Location, Location

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. The growing appetite of foreign buyers and investors is raising confidence in the Cypriot market, which is expected to see the building frenzy continue for at least another five years. Renewed interest in large-scale projects in Cyprus has seen a rush of foreign investors looking into the acquisition of entire complexes and projects that are both in the planning stages and already under construction. Over 20 big projects valued at €8 billion are currently promoted as FDI targets that would enhance the business environment on the island. The formidable investments into real estate have certainly raised this sector to its former glory, with the success also filtering into and benefiting other economic sectors. The fact remains that Cyprus continues to be a top European destination for visitors and business, as well as a location of choice for second-home purchases. n

Discover more at cyprusprofile.com

Michalis Hadjipanayiotou CEO Cybarco Development Ltd

Based on our experience to date and the Land Registry statistics for the first five months, I’m certain that 2019 will be a very strong year for the construction industry. I’m happy to share that it has in fact been record-breaking for Pafilia. The key growth area is definitely high-quality, concept-oriented real estate which provides clients with a unique value-adding asset. It is important to consider the design and architecture, facilities, service and finish, as well as the city aesthetic, and enrichment of the community as a whole when designing such projects. Evangelia Eliadou Executive Director Pafilia Property Developers Ltd

Promotional Feature

Larnaka Airport

Building Emblematic Projects The Iacovou name has been at the forefront of the Cyprus development sector for six decades


ith a strong presence in construction for more than 60 years, the Iacovou Group has sealed its reputation with emblematic works in Cyprus, Greece, Britain and in the Middle East. The rich portfolio of the Group includes complex public works such as airports, bridges, motorways, harbours, dams and more. It also includes residential and commercial projects, and exhibitions, amongst others. The Iacovou Group of Companies, enjoys a major comparative advantage – it can autonomously offer comprehensive services to large and small scale projects, as it has the necessary technological equipment and expertise, its own Batching and Asphalt Plants controlling quality for the end product, as well as concrete and necessary raw materials from its own quarries and mines. The Icon: A New Project

Iacovou Group has proudly undertaken for Imperio the construction of the luxurious Icon tower in Limassol. Construction works have begun and will be completed in 24 months. The execution of the contract is expected to bring multiple benefits to the economy of the area, as it will create new jobs in both the construction and

Agios Athanasios Underpass - Limassol

service sectors. The luxurious Icon, located on the coastal road of the Municipality of Germasogeia, will reach as high as 125 metres and will be the fourth tallest building in Cyprus. It consists of 21 floors, 54 luxury apartments, all with unobstructed panoramic views of the city and the Limassol coastline, with luxurious amenities and services around the clock. “We are particularly pleased to have been commissioned by Imperio Group to carry out such an important project,” said George Iacovou, CEO. Just recently, Iacovou Group successfully completed a large part of the new Parklane Hotel in Limassol, a flagship project. “We are particularly proud because Iacovou Group is behind major development projects in Cyprus over the past decades, and it would not be an exaggeration to say that we have virtually contributed most to the country’s development since the early years of Cyprus’ independence,” underlines Mr Iacovou. “With these major projects as a reference, we step into the new era, investing in innovation, technology and human resources, literally creating the environment in which we live, move and operate.” The company Iacovou Constructions, which was founded more than 60 years ago, has the Group looking ahead with optimism. Its vision is to deliver high-quality projects to its customers, respecting the timetables and allocated budgets.

Some of the most important projects that have been built are: Larnaka International Airport: The company has been conducting works at Larnaka Airport since 1976 until now: Aircraft maintenance hub and offices, safety fencing, drains and other services, control tower, fire brigade and business buildings, runways, etc.


Country Report CYPRUS 2019

Pafos International Airport: Specialised concrete parking space, construction of taxiways, aircraft hangars and other operations. Electric Power Station in Dhekelia and Vasiliko: Civil engineering projects.

Dekhelia-Protaras Motorway: Pyla-Xylotympou section. Recruit Training Centre (KEN) - Paphos: Construction of the new training centre for new army recruits, including buildings and services.

Mesa Yeitonia Roundabout Upgrade: Construction of a 360-metre bridge over the existing roundabout including access roads and other works. New Government Offices in Paphos: The project includes the construction of five office buildings with a basement.

We are stepping into a new era by investing in innovation, technology and human resources, literally creating the environment in which we live, move and operate.

ICON Limassol

Strong Foundations Since 1953

Iacovou Group began work as a cooperative in 1953 but the company was registered under the name Iacovou Brothers (Constructions) Ltd in 1978 and in the process, it became one of the leading companies in the construction sector. The success of the company was evident from the initial stages of its operation. The secret of this successful journey was that it laid strong foundations both with the determination and dedication of its administration, and with the high quality of its work and experienced human talent. Over the years, the company has undertaken and successfully completed a wide range of construction works, the success of which is due to the pioneering methods that were used. The impressive portfolio of the company includes airport projects, highways, roads and bridges, dams, desalination plants, irrigation and watering systems, central sewer and sewage treatment systems, power stations, silos, air bases in Cyprus and elsewhere, industrial and commercial buildings, residential villas, hotels and tourist apartments.

New Larnaka International Airport & New Paphos International Airport: Terminal Buildings and external works. It is the biggest concession project in Cyprus and the first to be commissioned with the BOT method (Build, Operate, Transfer) with a duration of 25 Years and our company participates in Hermes Airports Ltd (the concession company). The Group participates in the management and maintenance of both airports. Eleftherios Venizelos International Airport, Athens: Construction of runways and taxiways and other infrastructure projects.

George Iacovou CEO

Certified Quality and Environmental Consciousness

Park Lane Hotel & Spa


ith its considerable experience and know-how combined with a high-level human talent, modern equipment of more than 1,000 machines, the company is always ready to compete for projects in Cyprus and abroad, meeting all the requirements of the contracts and achieving completion dates with tight deadlines, within budgets and respecting high-quality standards. Iacovou Brothers (Constructions) Ltd is sensitive to environmental issues during the construction of its projects. With a high environmental consciousness, we always pay attention to good practices so that we do not damage the environment when performing our works. Beyond quality in the projects, the company attaches great importance to the safety and health of its employees, but also to all people who work with us to handle the projects. The company is registered with the Committee of Registration and Control of Contractors in the ‘A’ category of construction and engineering works (unlimited). The company holds the quality certificate CYS EN ISO 9001:2008, health and safety OHSAS 18001:2007 and environmental management CYS ΕΝ rso 14001:2004 for the construction and maintenance of buildings and technical projects. The know-how and the strong infrastructure of the Group have been the basis for its expansion beyond Cyprus in countries like Greece, the United Kingdom and the Gulf (Iraq, Oman and Bahrain). The ability to find and create strategic alliances for risk development and dispersal has helped maximise the Group’s capabilities and maintain a high level of service delivery. Today, the Group does not rest on its laurels. With the knowledge and experiences of past successes as driving forces in a challenging and very competitive environment, the company looks at the facts, takes advantage of the opportunities presented and guides the organisation to new growth cycles. The development of a small partnership into one of the largest and most progressive groups in Cyprus is not a surprise, knowing that the management has consistently executed for all those years a common philosophy: commitment to excellence.

BUILDING EXCELLENCE SINCE 1953 Contact Details: Iacovou Group - Sokratous 2, 6036, Larnaca Tel: +357 24 257 777 • iacovougroup.com

Country Report CYPRUS 2019


Sector Profile




The education sector of Cyprus is booming with increasing numbers of foreigners flocking to the island’s universities, new degrees being introduced, and high-end facilities and accommodation being built to cater to the demands of a new generation and calibre of students.


yprus has identified education as a strategic sector to be promoted and developed, with the goal to establish the island as an international education and research centre of excellence – a decision that is certainly starting to bear fruit. The country’s universities are racing to outdo each other by introducing versatile curricula and programmes focused on meeting future market demands, building state-of-the-art facilities, attracting distinguished academics to their ranks, and developing partnerships with renowned universities and institutions around the world. Cyprus has always placed strong focus on educating its population, and although traditionally the island remains a net exporter of students, more and more Cypriots are now choosing to pursue higher education at home. In 2017, more than half of Cypriots aged 30-34 had completed tertiary education. At 55.8%, this was the second


Country Report CYPRUS 2019

University of Cyprus

highest percentage in the EU and significantly surpassed the EU set target of 46%. Investing in education and training remains high and at around 6% of GDP, Cyprus’ public spending on education remains well above the EU average of 4.7%. Measured as a share of total government spending, Cyprus spent 15.6% on education in 2016 – more than any other EU country, according to the European Commission. However, despite this high spending there is still room for improvement in the outcomes and efficiency in Cyprus. Cyprus’ universities have upgraded their programmes in the last few years with the help of foreign investors and have seen an increased inflow of foreign students. The sprawling university campuses are overlooked by building cranes erecting sparkling new additions of libraries and high-end accommodation to meet the demands of ever-increasing numbers of students.

KEY contacts

Ministry of Education and Culture moec.gov.cy Cyprus Higher Education (Ministry of Education and Culture) highereducation.ac.cy Cyprus Agency of Quality Assurance and Accreditation in Higher Education dipae.ac.cy

The island’s first university – the University of Cyprus (UCY) – was established as recently as 1989, yet even before that only the US and Canada had more graduates per capita as Cypriots sent their children to universities abroad. Today the landscape is vastly different with eight rapidly expanding universities, five of which are private, that have forged links and cooperative agreements with reputable universities across the globe. Cyprus has steadily established itself as a hub for quality higher education (HE). Over the last decade, the sector has grown by more than 80% in student numbers, exceeding 44,000 students during 2016-2017. In 2016 alone the education sector is estimated to have contributed around €900 million to the local economy and was responsible for approximately 9,500 jobs in HE and its supporting industries. Interestingly, HE has also contributed to the country’s export revenue, with international students constituting 47% of the total in the 2016-2017 intake. The number of overseas students at the island’s accredited universities soared from fewer than 400 in the 2004-2005 academic year to 17,601 in 2015-16, and exceeded 21,000 in 2017. Some 50% of overseas students were from Greece and the EU, but the range of countries that foreign students come from – including the US, UK and Canada – is rapidly expanding. A 2018 EY report estimated that if the current level of HE activity in Cyprus is sustained and complemented by a moderate growth in international students and research expenditure, the sector’s economic contribution could grow by a further €400 million by 2023. International Recognition

The academic reputation of Cyprus universities has also been growing, with institutions climbing up international rankings. UCY is currently among the world’s top 400 universities and the 64th best of institutions that are under 50 years old, according to the Times Higher Education World University Rankings, an influential data provider in Britain that assesses university performance globally. In 59th place is another public institution, the research-focused Cyprus University of Technology (CUT/Tepak), established in Limassol in 2004. CUT also climbed up five places from 16th to 11th best university in the world with fewer than 5,000 students in 2018. In addition, Cyprus claimed two of the top three spots on the ‘New Europe’ table of the best research-intensive universities within the 13 nations that have joined the EU since 2004, in which CUT ranked first for citation impact, while


s our reform efforts for the improvement and modernisation of Cyprus’ educational system intensify in 2019, one of our top priorities is the further increase of participation in public Vocational Education and Training (VET) programmes, by implementing a number of targeted initiatives and measures. These include the connection of VET with both the industry and the labour market, as well as launching informational and promotional campaigns related to the employment prospects opening up for VET programme participants. New specialisations and subject areas will be offered as of September 2019, whereas we are already working on establishing a new and highly modern Technical and Vocational School of Education and Training in the following years. Both measures will further facilitate access to VET and enhance the image of VET in Cypriot society. Kostas Champiaouris Minister of Education and Culture

UCY led on industry income and international outlook measures. The University of Nicosia (UNIC) is the first and only university in Cyprus to be ranked in the 2019 QS World University Rankings in the top 100 universities in the Emerging Europe and Central Asia (EECA) Region. The landmark ranking success of UNIC is noteworthy in a region characterised by dynamic growth in higher education, particularly when contrasted against the large number of universities counted in the broader EECA region, which includes 26 countries.

Sector Profile

Rapid Development

Future Proof

There is stiff competition for places at Cyprus’ public universities, which enjoy growing international prestige and levy no charge on undergraduates from EU countries and very competitive fees for postgraduates. However, many Cypriots continue to choose to study abroad, a trend that has long ensured fresh ideas are successfully imported back to Cyprus with returning local talent. This international outlook has been increasingly strengthened with the growing number of both international students and faculty at universities. The public universities, which mainly instruct in Greek, have persuaded the government to allow them to offer more courses in English to attract more foreign students. Unlike the private universities, which teach mostly in English, their aim is not to generate revenue through tuition fees but to ensure they become truly international. Meanwhile, underlining the state’s commitment to lifelong learning is the governmentfunded Open University (OU), founded in 2002 and which now has over 4,000 students. It has flexible, modular learning programmes that provide career and personal development opportunities for students already in the workplace. The OU developed 26 programmes of study for the 2018-2019 academic year. The official teaching language is Greek, but currently offers five Master programmes in English. All of Cyprus’ universities design programmes to meet current business trends and future employment needs. Many of these focus on the island’s status as one of the world’s leading shipping centres and the discovery of significant gas reserves in Cypriot waters. UCY’s new Larnaca-based Faculty of Marine Sciences and Technology began its first classes in 2018, all in English, and according to Lloyd’s Register, is set to provide the local and global maritime industry with high-quality human capital and research capabilities. In 2016, UNIC launched the Cyprus Maritime Academy, which Country Report CYPRUS 2019


Sector Profile

Education collaborates with renowned shipping companies and supports the local industry by providing qualified crew. UNIC also offers the island’s first BSc programme in energy, oil and gas management and was the first university in the world to accept Bitcoin for tuition payments and to offer a master’s degree course in digital currency, available in English both on campus and online. Online higher education is a significant and still relatively untapped opportunity for Cyprus, with the potential value of the market estimated anywhere between €1 billion to €4 billion, for which Cyprus will be competing against anglophone countries such as Australia, Singapore, and Ireland. The European University of Cyprus (EUC), a private institution also in Nicosia, offers a master’s degree in civil and environmental engineering, a course which incorporates the impact on construction of climate change and earthquake risk. Frederick University, based in Nicosia and Limassol, is also attempting to maximise the potential of Cyprus’ natural geographical advantages. Its existing course in maritime studies now offers a new combined MA/LLM master’s degree in maritime law and shipping business. Meanwhile, the University of Central Lancashire Cyprus (UCLan Cyprus) offers a degree in cyber security. A key aspect of the rapid development and recognition of Cyprus universities has been the strategic partnerships they have forged with top institutions around the world. For example, UCY’s successful collaboration with London’s Imperial College – ranked one of the 10 best universities in the world – is set to be expanded this year with a new MSc programme that will start in September 2019 to teach highly innovative and intelligent systems from emerging ICT to tackle challenges in monitoring, control and security in critical infrastructure systems. The collaboration of the two institutions in several research projects has already produced more than 900 joint publications over the last five years.

Cyprus’ public and private universities, all part of the Erasmus programme, have rapidly expanded their offering and continue to forge new links and collaborative agreements with renowned universities abroad. Distance learning is another growth area, with UNIC a pioneer in this field. Its medical schools offer busy working doctors worldwide the opportunity to take master’s degrees online in family medicine and in public health. Medical School Success

Medical schools are a new and growing aspect of the Cyprus educational sphere. In 10 years, Cyprus has gone from no medical schools to three offered by Cypriot universities. These are proving popular with both local and international students, as academic standards in Cyprus rival those of well-established British and American medical schools and students graduate with qualifications recognised across the EU and beyond. UNIC, which established the island’s first medical school in 2011, did so in partnership with London University and its prestigious teaching hospital, St George’s. It offers a four-year programme for graduate-level entry students, knowing this would appeal particularly to students from the US, which is the world’s biggest exporter of quality medical students, but also to regional markets such as Israel and Lebanon which have decent numbers of graduate-entry students. UNIC has since launched a second medical school, with a six-year programme for high school leavers. The approximately 650 students at UNIC’s two medical schools come from almost 60 countries, proving its international appeal. Following suit, EUC established a medical school four years ago with a six-year course that has attracted students from Israel, Germany, Iran, Austria, Greece and Cyprus, among others. In 2017, it also launched a dentistry school. The mostly state-funded UCY established its medical

Secondary Education The success of the island’s universities is matched by its secondary schools – at least those in the flourishing private sector, which mostly offer an English-language education and boast high academic standards. Many of their pupils win places at the best universities in Britain, the United States and other countries. The oldest of these is the English School in Nicosia, established in 1900 to provide English-speaking clerical staff for the British colonial administration. Today, many of its alumni hold senior positions in the government and private sector. There are numerous private schools across Cyprus following different curricula – British and American systems as well as International Baccalaureate – and offering education in various languages, such as Greek, English, Russian and French, to cater to the ever-expanding community of professional expatriates and their families on the island. In addition, although the generously-funded Greek-speaking public secondary schools have to date not performed as well, they are also now set to improve after a recent government overhaul of an outdated system for recruiting teachers.


Country Report CYPRUS 2019

I foresee an expansion and diversification in tertiary and professional education. Universities, colleges and institutions will become more specialised in their fields of study. New learning areas will be introduced. Current fields in AI, blockchain and data analytics will grow. Technology in education will be integrated further and more courses will be offered online. The cross-border education will be enhanced, making it easier to connect local institutions with international students. Marios Siathas General Manager European Institute of Management and Finance (EIMF)

Public Universities The University of Cyprus The Open University of Cyprus The Cyprus University of Technology Private Universities European University - Cyprus Frederick University - Cyprus Neapolis University - Cyprus University of Nicosia - Cyprus University of Central Lancashire - Cyprus

Foreign Attraction

uniHalls Premier


The number of foreign students choosing Cyprus for their studies has almost tripled in the last five years, representing over 60 different countries and supporting the growth of Cyprus into a true global educational centre. A major attraction for students from non-EU countries is that compared to many other countries, Cyprus offers a value-for-money education and qualifications recognised by EU members and validated by accreditation agencies of various countries. But more than affordability, it is the high academic standards that are attracting a growing number of students from prosperous countries such as the United States, Canada, Australia and even New Zealand. The island’s location as the EU’s easternmost outpost and bridge to Asia and Africa also gives Cyprus a natural advantage in attracting overseas students and investment from foreign universities. Keen to recruit more students from Russia, the Middle East and China, the aforementioned British UCLan chose Cyprus as the site for its very first overseas campus almost a decade ago, built near Larnaca at a cost of €53 million. The potential for further growth and foreign investment is reflected in the building boom currently underway at most universities as existing departments are expanded, new ones created, and further halls of residence constructed, some resembling luxury hotels. New student accom-

Sector Profile

school five years ago and will graduate its first students in the summer of 2019. It also offers parallel courses in English to cater to 100 students a year. Cyprus’ main competition for medical students comes from eastern and central European countries where tuition fees and living costs are often lower, and some of the universities have hundreds of years of heritage. However, many of these universities sign up overseas students knowing that after four years they cannot provide enough clinical training slots for all students to complete their courses. Whereas, according to UCY all the medical schools in Cyprus operate on the basis of having clinical training spots for all students right from the beginning.

modation is springing up to house increasing numbers of students and to provide more accommodation in cities where rents have been rising over the last years. The universities in Nicosia are building high-tech student residences with services and facilities unlike anything seen in Europe so far, featuring rooftop pools, restaurants, gyms and private gardens. For example, the UNIC residences are the result of a €60 million investment constituting the largest university infrastructure investment to date in Cyprus – and once completed claim to be one of the most complete and functional student hubs in Europe. In order to attract more foreign students and maintain growth in this area, Cyprus must however rethink its cumbersome visa application for non-EU nationals. Otherwise, the universities have few complaints and value the government’s assistance in forging new academic and research links and organising visits from international accreditation agencies. A Future in Education

Cyprus has always valued and invested heavily in education and today, more than ever, the innovative drive of Cyprus’ universities is enriching the island’s human capital and enhancing its attraction as an international centre for business and education. With expanding global links, spin-off projects and business ventures in multiple sectors, these institutions are bringing together a multinational and multidisciplinary community that is supporting the development of Cyprus into a veritable knowledge hub. The global market for anglophone higher education geared at internationally mobile students is estimated to be up to €50 billion, and it is growing at 5% per year. Cyprus is well placed to capitalise on this provided it continues to develop its educational offering. Part of this effort is the government’s dedication to support this sector along with its investment promotion agency, Invest Cyprus, who in cooperation with the Ministry of Education and Cypriot universities launched a new campaign in 2019 branded ‘Study in Cyprus’. The campaign is a concerted effort to promote Cyprus as an educational centre of excellence and provide information on studying, living and working in Cyprus. With these joint efforts, Cyprus is making its mark in the fast-changing global education scene and is on its way to secure a seat in this sector. n

Discover more at cyprusprofile.com Country Report CYPRUS 2019


Sector Profile

Energy: Oil & Gas



The energy sector of Cyprus is transforming thanks to new natural gas discoveries and more drilling planned for 2019. With multinational oil and gas companies investing heavily in the Eastern Mediterranean, the country is well poised to move from exploration to production and become a key energy hub in the region.


he rapidly developing oil and gas sector of Cyprus has become one of the biggest opportunities for foreign companies following the discovery of vast natural gas reserves in both the island’s Exclusive Economic Zone (EEZ) and in its immediate neighbourhood in recent years. In addition, Cyprus’ strategic location in the Eastern Mediterranean, at the southeast tip of the European Union and close to the Suez Canal, make it ideally suited not only as an important fuel hub and headquartering location, but also as an energy interconnection node, connecting the electricity grids of the Eastern Mediterranean and North Africa to those of Europe.


Country Report CYPRUS 2019

Major Players

The involvement of major international oil and gas companies in Cyprus’ EEZ has strengthened the island’s ambition to become an important hydrocarbons player in the Eastern Mediterranean. Cyprus has completed three successful offshore licensing rounds, awarding the majority of its offshore blocks in its formally declared EEZ to some of the world’s top international oil companies. Global energy giants such as Italian ENI, South Korean Kogas, French Total, American ExxonMobil, Qatar Petroleum, American Noble Energy, Israeli Delek Group and Royal Dutch Shell, have all secured exploration rights in Cypriot waters.

KEY contacts

Ministry of Energy, Commerce and Industry mcit.gov.cy Cyprus Energy Regulatory Authority (CERA) cera.org.cy Cyprus Energy Agency cea.org.cy Cyprus Hydrocarbons Company (CHC) chc.com.cy Natural Gas Public Company (DEFA) defa.com.cy

Exploitation Plans

The first natural gas discovery in Cyprus’ EEZ was made in 2011 by US firm Noble Energy and Delek Group in the Aphrodite gas-field in block 12, which is estimated to have 4.54 trillion cubic feet (tcf) of gas. Following successful appraisal drilling, Aphrodite was declared commercial in 2015. The next discovery was made in 2017 by Total and Eni at the Onesiphoros prospect in block 11 in September 2017. But it was small and non-commercial, with gas deposits of less than 0.5 tcf. This was followed in February 2018 by the discovery of the Calypso gas-field in block 6 by Italian ENI, possibly with similar quantities of gas to Aphrodite, to be confirmed following appraisal drilling expected to be carried out in 2020. The most recent success was the discovery in March 2019 of the Glaucus gas field in the promising block 10 by ExxonMobil and Qatar Petroleum, estimated to hold 5 to 8 tcf of gas. This was great news because Glaucus, Calypso and Onesiphoros were discovered in geological formations similar to the giant 30 tcf Zohr gas field discovered by ENI in 2015 in the Egyptian EEZ and adjacent to Cyprus’ block 11. These more recent discoveries confirm that the Zohr geologiocal model extends more widely in the Eastern Mediterranean region. These results bode well for Cyprus and the region, adding to its reputation as an emerging gas province. Combined with other discoveries, they are stirring interest amongst major players hoping to secure a piece of the action in the Eastern Mediterranean. ExxonMobil has already extended its interests with licenses for two blocks southwest of Crete and in Egypt, where it has secured block 3 during the recent licensing rounds. It is eyeing more prospects, including opportunities in Israel. Re-analysis of seismic survey data using the knowledge gained from these discoveries has shown good prospects for new, potential, discoveries also in Cyprus’ EEZ. As a result, ENI and Total plan to drill five more wells in their licensed blocks in 2020, including an appraisal well at Calypso. ExxonMobil is also planning to drill one more exploratory well and an appraisal well at Glaucus in block 10, likely in 2020. Any new discoveries would further strengthen potential exploitation of Cyprus’ gas resources.

The oil and gas sector is certainly set to become a key driver of economic growth, with Cyprus actively considering options to exploit its natural gas, hoping for high revenues in the future. Cyprus’ Energy Minister confirmed in March 2018 discussions with Shell to buy around 8 billion cubic metres (bcm) of gas per year, over a 10-year period, from Aphrodite for liquefaction at the Idku plant in Egypt and to export this to global markets. These discussions have since progressed, with the approval in 2019 of an intergovernmental agreement to build a subsea pipeline connecting Aphrodite to Egypt’s liquefaction plants, and a production-sharing deal in June 2019 with Noble Energy and its partners over the Aphrodite gas reservoir, which is set to bring Cyprus an estimated €9.3 billion over 18 years. The plan provides that the consortium will be responsible for the extraction platform at the site of the field. Analysts describe the deal as a redistribution of profit, increasing the share of the companies when oil prices are low, but conversely, when global oil prices rise, Cyprus’ share will increase. Based on the plan, the first gas is expected between 2024 and 2025, and according to the Energy Ministry it would be the biggest infrastructure project ever undertaken in the Republic of Cyprus. The recent discovery of Glaucus in block 10 by ExxonMobil could also become a game-changer. The company has repeatedly stated that should more discoveries be made, its preferred option is to build a gas liquefaction plant at Vassilikos for liquefied natural gas (LNG) exports to Europe and Asia. This would require total gas discoveries to approach 12-15 tcf and global gas prices to justify commercial viability. All eyes are on the results of the next drilling round expected in 2020. Such a development would completely transform Cyprus’ fortunes. Currently, Cyprus is reliant on heavy fuel oil and diesel imports for its electricity needs and spends over 8% of its GDP to cover the costs. An LNG plant at Vassilikos would not only tip the gas balance of the region, but would also come with major add-on benefits for Cyprus – not just profits from the sale of LNG, but advantages such as new employment, more support industries and service companies, the development of a downstream industry using cheap gas as feedstock, and low price gas to the Electricity Authority of Cyprus (EAC) bringing electricity prices down.

The recent gas discovery by ExxonMobil and Qatar Petroleum was an excellent development. We hope that more good news will follow as new exploration wells are drilled in the Exclusive Economic Zone (EEZ) of the Republic of Cyprus. To proceed with the exploitation of gas discoveries, infrastructure investments worth billions are needed, such as upstream facilities, pipelines, shorebase facilities and a liquefaction plant. We are now working towards expanding the industrial port at Vassilikos to better support offshore hydrocarbon activities and improving the coordination of governmental authorities to efficiently serve oil and gas companies in Cyprus. Equally important are our efforts to establish multilateral cooperation in the energy sector with other countries in the Eastern Mediterranean to enhance the region’s competitiveness and energy security. Yiorgos Lakkotrypis Minister of Energy, Commerce and Industry

Country Report CYPRUS 2019

Sector Profile

Hydrocarbon Discoveries


Sector Profile

Energy: Oil & Gas Port Facilities

In order to support the increase in offshore drilling activities resulting from the old and new licenses, a new support base has been set up in Limassol port to cater to the expanding needs of the international exploration companies. The government has also committed to establish a dedicated industrial port at the energy centre at Vassilikos, to become operational by 2023. The port will operate as a service centre for the oil and gas industry in Cyprus and the wider region, and it will cost around €250 million to set up. The decision to build the port was taken in response to increasing demands from oil and gas companies and those providing support services to the industry, not only in Cyprus, but also in neighbouring countries. It is an essential step to support Cyprus’ drive to become a regional centre providing support services to the Eastern Mediterranean oil and gas industry. East Med Gas Forum

Given the geopolitical challenges the region faces, respect of international law, and particularly the United Nations Convention on the Law of the Sea (UNCLOS), is crucial to the peaceful exploitation of hydrocarbons in the East Med. With this goal in mind, the energy ministers and representatives from Egypt, Cyprus, Greece, Israel, Italy, Jordan and the Palestinian Authority met in Cairo in January 2019 and set up the East Med Gas Forum (EMGF) – with European Commission

The offshore hydrocarbons sector in Cyprus is progressing well on three fronts. In exploration there are plans for further drilling to target prospects that have been identified by a number of licensees. From the licensees that have made recent discoveries, there will be progress with appraisal drilling to further determine the resources they have found. And in terms of exploitation, the most mature discovery – the Aphrodite field – will progress towards monetisation. Demetris Fessas Acting General Manager Cyprus Hydrocarbons Company Ltd


Country Report CYPRUS 2019

and World Bank representatives attending the meeting as observers. The Forum will be based in Cairo, with the aim to be an international organisation that respects the rights of members in regard to their natural resources in accordance with the principles of international law, and supports their efforts to benefit from their reserves and use of infrastructure. This also includes a commitment to pave the way for fruitful cooperation in the technical and economic fields, with a view to efficient exploitation of the gas potential in the region. East Med countries who agree with the Forum’s interests and objectives will have the right to join the founding members. It will be open to other countries or regional and international organisations as observers, and will work with non-members to help create dialogue, mutual understanding and mutual benefit. EMGF also underlines that the private sector has an important role to play in these efforts. EMGF could benefit regional gas development through dialogue on natural gas policies, including environmental considerations, leading to the development of a regional integrated market in a way that maximises the utilisation of gas resources and transport infrastructure in the region, and would contribute to further cooperation in the East Med. Gas export projects could benefit from such cooperation, especially with regards to ensuring a conducive regulatory environment, putting in place the required inter-governmental arrangements and removing political risk. Natural gas could make a crucial contribution to the future of East Med countries and any such

I see exciting times for the energy sector of Cyprus. Within 2019,  DEFA will award the contract for the Cyprus LNG import terminal with project completion expected in 2021. The arrival of natural gas will drive the entry of new independent electricity producers in the market, support bunkering, transportation and industrial users, and thus pave the way for the transformation of the Cyprus economy.  Symeon Kassianides Chairman Natural Gas Public Company (DEFA)

As a logistics organisation that provides services to the energy industry, we see natural gas as a growth opportunity. We will look into options to facilitate the import of natural gas to Cyprus for power generation and, to this respect, evaluate alternatives for transport, storage and small-scale liquefaction of natural gas in Cyprus. For 2019, I expect Cyprus’ economy to steadily grow above the EU average despite the geopolitical challenges it faces. George Papanastasiou Managing Director VTTV

The involvement of major international oil and gas companies in Cyprus’ EEZ has strengthened the island’s ambition to become a key energy player in the East Med The area offshore Cyprus is still largely unexplored and we expect increased exploration and appraisal activity in the next 24 months. If this activity results in additional hydrocarbon volumes to add to the ones already discovered, Cyprus can play an important role in meeting part of Europe’s gas demand. This overall activity provides increased opportunities for Cypriot companies to become regional players in the O&G support services by utilising geography, existing and potentially new infrastructure, business networks and skills. Varnavas Theodossiou Lead Country Manager & Exploration Venture Manager ExxonMobil Exploration and Production Cyprus (Offshore) Ltd.

Sector Profile

makes it the first terminal of its kind in the Eastern Mediterranean offering these services and connecting Europe and the Black Sea with markets in the Middle East and Asia. The industry has tremendous growth prospects with Cyprus’ determination to establish itself as a key energy hub and a stronghold of stability in the region. Power Corridors

Licenced Blocks

Recent discoveries confirm that the Zohr geologiocal model extends more widely in the Eastern Mediterranean region The future of hydrocarbon development in Cyprus looks good, despite regional geopolitical challenges. New discoveries and the plans for more drilling bode well. Prospects for more discoveries are excellent. Hopefully increasing gas reserves will bolster export viability, especially through a liquefaction plant at Vassilikos. With unit costs continuing to drop, including those of storage batteries, the potential to expand the development of renewables is strong and can bring Cyprus’ high electricity costs down. Charles Ellinas CEO E-C Cyprus Natural Hydrocarbons Company Ltd (e-CNHC)

Block Licensors Year 2 Eni, Kogas 2013 3 Eni, Kogas 2013 6 Eni, Total 2017 7* Eni, Total 2019* 8 Eni 2017 9 Eni, Kogas 2013 10 ExxonMobil, Qatar Petroleum 2017 11 Total, Eni 2013 12 Noble Energy, Delek Drilling, BG Cyprus Limited 2008 * Formal license approval still pending

initiatives that could promote its development can only be helpful. The large gas discoveries in the East Med could also have a major impact on energy security and economic development through the exploitation of the gas regionally. This could be in power generation, but also in downstream and petrochemical projects. Regional Fuel Hub

Cyprus is fast developing into a regional fuel hub for Europe, Asia and Africa, thanks mainly to the successful operation of the sophisticated oil storage terminal by Netherlands-based global oil terminal company VTTI. The company’s €300 million project in Vassilikos became operational in 2014, and was one of the biggest infrastructure projects constructed in Cyprus in recent years and put the island on the global energy map. The company uses Cyprus as a transhipment terminal, blending its raw materials and then exporting them to the rest of the world, but mainly to Lebanon and Israel. With large refineries operating and more being built in the Middle East, the international market expects more productvessel traffic through the Suez Canal, bound for the European and Mediterranean markets. These cargoes need to be resized or blended with other products to change specification and meet regional requirements. VTTV’s strategic location

Another important regional energy project is the EuroAsia Interconnector, which will link the power grids of Cyprus with Greece and Israel via an undersea cable. The 2,000-Megawatt (MW) interconnector, is the only North-South electricity interconnection in the Central Eastern and South Eastern Europe Priority Corridor. The permitting procedure started in 2019 and is expected to be completed by December 2020 for the construction of the first power ‘corridor’ with a capacity of 1,000 MW costing €3.5 billion. The link Crete-Attica is expected to commence in September 2022, and the links Cyprus-Crete and Cyprus-Israel in December 2023. The interconnector will end the energy isolation of Cyprus and contribute to achieving the EU Energy Union’s goals of connecting European energy networks, achieving the electricity interconnection target for 2030 of at least 15%. It will also contribute to the internal energy market integration, increase security of energy supply, and support sustainable development by integrating renewable energy sources across the EU. This has since been followed by a framework agreement to also set up an EuroAfrica Interconnector to link the power grids of Egypt, Cyprus and Greece through subsea high-voltage direct current (HVDC) cables with the capacity to transmit 2,000 MW. Expanding Opportunities

With increased regional cooperation and the unfolding discoveries in the Eastern Mediterranean, Cyprus is well positioned to further strengthen its role as a stable and attractive location in which to base energy infrastructure projects and headquarters for international companies servicing the region. With its EU status and beneficial business operating environment, the island has unique advantages to establish itself as a strategic player and facilitator in the EMEA energy market. The growing potential of the developing oil and gas sector offer expanding opportunities for investors, and has allowed Cyprus to delve into its energy future with confidence. n

Discover more at cyprusprofile.com Country Report CYPRUS 2019


Sector Profile

Energy: Renewables


Investment in renewable energy has gained more traction in Cyprus with a proactive government supporting green initiatives and international companies determined to harness the island’s 340 days of sunshine – boosting the diversification of the country’s energy landscape.


upporting the development of Renewable Energy Sources (RES) and creating a more energy-efficient future is high on the agenda for Cyprus. 2019 is certainly a critical year as far as the EU’s 2020 Renewable Energy goals are concerned, as the country aims to have 13% of its energy consumption coming from renewables by that deadline. In 2017, the percentage of renewables in the gross final energy consumption of Cyprus rose to around 10%, and although there has been some concern Cyprus will not be able to meet its targets, the government maintains it is confident that all the necessary support schemes are already in place to achieve this goal. Given Cyprus’ electricity isolation and in a bid to introduce more flexibility to its power system, the country aims to introduce new and disrup-


Country Report CYPRUS 2019

tive smart grid technologies, as well as state-ofthe-art control and storage methods to be used in parallel with new market approaches. Cyprus has the highest potential for solar power of any European Union country, and the island is already one of the highest users per capita in the world of solar water heaters in households, with over 90% of households equipped with solar water heaters and over 50% of hotels using large systems of this kind. A strong focus on research and innovation is also fuelling Cyprus’ drive to become more sustainable, with three projects winning significant funding from NER300 – a financing instrument managed jointly by the European Commission, European Investment Bank and member states. The Helios Power Project, EOS Green Energy Project and the Green+ Smart-Grid Project have garnered a combined €117.8 million to develop innovative renewable ventures in Cyprus.

To decrease dependence on heavy fuel oil for electricity generation and to diversify our energy mix we are investing in renewable energy sources and preparing the infrastructure for the use of natural gas. We also aim to meet national targets on clean, efficient energy and to upgrade technologies to decrease our carbon footprint. Our aim is to deliver a steady and secure supply of cleaner, greener, more affordable energy to the people of Cyprus.   Panayiotis Olympios  General Manager Electricity Authority of Cyprus (EAC)

Currently, Cyprus operates a scheme for the production of electricity from RES for own use, which includes installations of net-metering photovoltaic (PV) systems with capacity up to 10 kW for all consumers, net-billing RES systems (mainly PV and Biomass) with a capacity of 10 kW to 10 ΜW for commercial and industrial consumers, and off-grid RES systems with no limit in total capacity. For some of these, the government is offering subsidies to consumers, intended to encourage further RES installations by reducing the recuperation period of their investments. In addition, following a successful support scheme for the installation of RES systems that will operate in the competitive electricity market – approximately 100 MW PV systems, 2.3 MW Biomass systems and 12.5 MW from a wind park – have been approved, and a new scheme was announced for another 200 MW. The RES systems that enter these schemes are expected to be operational before the end of 2020. Cyprus’ energy policy has created financial support for RES projects, and a special fund was created aiming to support RES and energy saving investments in Cyprus, with revenue derived from consumers paying a ‘green tax’ levied on electricity bills (currently at €0.01 per kWh and €0.005 per kWh for vulnerable groups). The country’s national grid system needs upgrading as it has certain intrinsic and technical limitations affecting RES penetration and reliability. However, studies by the International Renewables Agency (IRENA) concluded that using the existing system, renewable energy and mostly solar, could provide 25% to 40% of Cyprus’ total electricity supply in 2030 and bring costs down significantly. This can be increased further by implementing RES installations with storage capability through competitive bidding. The country is also exploring ways to introduce smart grids in the national network and is on the look-out for projects that could facilitate energy storage, and ventures that have production on a 24-hour basis. In addition, the prospective EuroAsia and EuroAfrica Interconnectors could bring more solutions in their wake.

Cyprus is reliant on heavy fuel oil and diesel imports for its electricity needs and spends over 8% of its GDP to cover the costs. However, the country has embarked on a plan to import LNG for power generation by 2020 over a 10 to 20-year period so that it can reduce carbon emissions in line with EU targets, and until it can exploit its own gas reserves. The EU agreed in January 2018 to partially fund the cost to build infrastructure at Vassilikos for this purpose to the tune of €101.5 million, constituting about 40% of the eligible amount. The Natural Gas Public Company (DEFA), as the sole importer and distributor of natural gas on the island, announced tenders in 2018 for the construction of the required infrastructure at Vassilikos, with the award decision expected to be made later in 2019. This will be followed by a separate tender for the procurement of LNG. Progressively, the project will include the introduction and use of natural gas by the transport, industry and energy sectors in Cyprus.

Sector Profile

Subsidising Solutions

Solar Energy Boom

Solar energy is increasingly becoming a boom segment for Cyprus. 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%. Scandinavian Solar Parks, a Cyprus company with Swedish investors, has established nine solar power generation parks with a capacity of around 1,300 KW of energy. Local Cyfield runs a 3 MW PV park in Ayios Ioannis, while the Electricity Authority of Cyprus (EAC) operates its own PV park in Tseri with a nominal capacity of 3 MWp, generating some 5,000 MWh per year and avoiding 3,600 tonnes of carbon dioxide emissions per year. The state power company also has an ambitious project planned to self-finance and operate a 20 MW photovoltaic (PV) power station inside

Fossil Fuel Reliance

A key challenge for Cyprus is its high dependency on fossil fuels for energy – with the biggest share within the EU. This makes it crucial for the country to develop both its natural gas, the cleanest of the fossil fuels, and renewable energy sources. The potential of the latter is enormous, both in terms of clean energy and low electricity prices. Country Report CYPRUS 2019


Sector Profile

Energy: Renewables the Sovereign Base Area (SBA) of Akrotiri. In addition, a solar field on the island’s 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 (CyI), which is pioneering research in renewable energy systems. In addition, the EAC forged a deal with the country’s Archbishopric in July 2018 to develop two photovoltaic parks in Nicosia, producing around 66 MW. The project is set to be the largest PV system in Cyprus, contributing to the island’s national renewable energy sources targets. These are all positive developments, but there continues to be untapped potential in terms of renewable energy production, and international interest in developing the sector in Cyprus is expected to increase considerably in coming years. This investment is also crucial in order for Cyprus to achieve its targets – and further open up the field for companies with expertise in renewables. Focus on Research and Innovation

The University of Cyprus (UCY) is set to construct its second solar panel park ‘Apollon’ with assistance from the EAC to establish UCY as completely energy self-sufficient. Set to become the island’s first ‘green area’, the photovoltaic park will have a peak output of 10 MW coupled with battery storage of 2 MWh capacity, making it the island’s largest self-sufficient renewable energy facility. The University already covers around 15% of its electricity needs through photovoltaics with around 400 kWp already installed on a number of university buildings and the ‘Phaethon’ PV park made up of 1,645 solar panels with the capacity to produce 632,000 kWh of electric energy annually. Central to this flagship project is the work of the University’s FOSS Research Centre for Sustainable Energy, which carries out cuttingedge research in the field of renewable sources of energy, with emphasis on solar energy, smart grids, smart buildings, grid integration and enabling technologies. FOSS has been highly successful in competing for funds, so far securing €16 million from more than 50 EU, national and industrial-funded projects. Well-known international players in the field of energy such as Honeywell, Hanwa Q Cells, Gantner Instruments, IBM amongst other leading international brands are already collaborating with FOSS and are testing their products in Cyprus. FOSS strives to promote cooperation between academia, industry and business sectors, as well as contributing to the transfer of knowledge from 86

Country Report CYPRUS 2019

advanced European clusters to the region. A key aim is to make Cyprus a hub for solar innovation, technology transfer, industry start-ups and job creation where ideas can grow and achieve their full potential. More recently, Cyprus was a testing ground for an innovative community project delivered by a German electric utility company Autarsys, where 30 kW/50 kWh was connected to a conventional distribution substation in Nicosia. The project provided the opportunity to interact with real battery systems and gather knowledge about their operation, branding the efforts as a success. State-of-the-art high-voltage lithiumion batteries were used, and the battery system provided services to the distribution network, such as power balancing, network and frequency support, as well as services that stabilise and protect the seamless operation of the network and are considered essential for modern power networks. The project received funding from the European Union’s Interreg Mediterranean research and innovation programme under the project StoRES. Additionally, some of the most high-profile solar projects in Cyprus have received funding from NER300. The Helios Power Project in the

The electricity sector in Cyprus is being reformed in order to adopt the EU electricity market target model. This will allow more competition and open up the market for alternative producers and suppliers, and to integrate renewable energy sources into the electricity market. The relevant legal and regulatory framework has already been approved, what is remaining is the development of relevant software for the operation of the market. In the meantime, a transitory regulatory decision is in place for the activation of both alternative producers and suppliers. Andreas Poullikkas Chairman Cyprus Energy Regulatory Authority (CERA)

Lars Bergman Founding Partner Scandinavian Solar Parks

RES have the potential to create between 11,000 and 22,000 jobs in Cyprus by 2030.

Doros-Limnatis area in Limassol aims to use a concentrated solar power system plant whereby solar power is used to turn water into steam, which in turn is used to produce electricity. Also using steam is the EOS Green Energy project, a €175 million initiative which uses an innovative graphite-based system to store energy generated by concentrated solar power. Due to be operational by the summer of 2019, the 50 MW capacity EOS (green energy) plant is being developed by Paphos-based Alfa Mediterranean Enterprises Limited on 1.8 million square metres in the Alassa area of the Limassol district. The company secured €60.2 million funding from the European Investment Bank after winning a competition for innovative renewable energy technology held by the European Commission’s NER300 Scheme. The Concentrated Solar Thermal Power plant (CSP) system is innovative because it uses pure graphite to store solar-generated energy. The plant in Alassa will be the first of its size and type in the Mediterranean basin capable of storing solar-generated energy for 24 hours a day and operating for 365 days a year. It will supply about 5% of Cyprus’ electricity generation – enough for more than 65,000 households – with power on demand even after sunset. The CSP system works by having solar-heated water pumped through coils of stainless steel pipes in steel tanks containing high purity graphite blocks. The result will produce super-heated ‘dry’ steam which in turn will power a turbine to produce electricity. The main advantage of this system is that it is autonomous and can operate around the clock. The CSP technology, developed by Solastor PTY Ltd, an Australian company, has been tested in Australia and China, but the plant in Cyprus will be the first to proceed as a planned commercial venture. This technology is also environmentally friendly as the water that evaporates into steam is partly recirculated through the system, thus saving in water consumption. There are no greenhouse gas emissions involved and no chemicals or batteries are needed. Meanwhile, the Green+ project involves installing a smart grid in the Troodos mountains, tackling one of the main problems Cyprus faces with its grid system which is already restricted and cut off from interconnections to the transEuropean electricity networks – a challenge that is set to be overcome through the EuroAsia Interconnector, which will connect the electricity grids of Israel, Cyprus and Greece via Crete through a subsea DC cable. To further tackle the problem of distribution, the government aims to transform the current networks into smart grids, aiming to attract foreign investments.

Electricity Market Liberalisation

Currently, Cyprus is in a transitional step before full electricity market liberalisation, which is being spurred on by the publication of a binding timetable by the Cyprus Energy Regulatory Authority (CERA), to ensure that the electricity market in Cyprus is liberalised. CERA has worked towards the full opening up of the energy market and granting consumers the right to choose their own supplier. CERA’s proposition is a ‘net pool’ model, where the operations of the state power company, EAC, are unbundled and the production and supply operations separated. EAC production would then enter into bilateral agreements with suppliers for the sale of energy at regulated prices. CERA foresees establishing an electricity exchange where suppliers’ bids for quantities of electricity will be updated every half hour. The exchange will match supply and demand and fix the price for a contract. This will be operated by the Transmission System Operator (TSO).The target date to achieve electricity market liberalisation is December 2021, a move which will further open up the market for renewables, clean energy and lower prices.

Sector Profile

Cyprus is one of the sunniest places within the EU, making it a prime location to build solar parks. Solar technology is the most flexible and scalable source of renewable energy, as you can build both small and huge installations, all depending on the client’s needs. In addition to the great natural resource, the country offers cost-effective labour and significant advantages for international companies through its beneficial tax framework. The renewable energy landscape is still in its infancy and there are many solid opportunities for foreign investors to develop the industry. This, coupled with the country’s citizenship and residency schemes, offers multiple attractive incentives for both investors and international business

Energy-Efficient Future

Apart from the increasing foreign investment and a competitive energy market unfolding over the next few years, the EAC is contributing to the promotion of electric transport in Cyprus. This constitutes one of the cornerstones in the development of a zero-carbon economy, by installing electric vehicle charging stations on roads across the island by the end of 2019. Stakeholders envision having solar panels across all schools on the island and although the licences are still cumbersome to obtain, the EAC states it is ready and has the know-how to undertake the project. Estimates show that RES have the potential to create between 11,000 and 22,000 jobs in Cyprus by 2030. Without any setbacks, RES could provide up to 40% of Cyprus’ total electricity supply in 2030, where solar PV will be the dominant source providing 15% to 27% of the electricity supply. Cyprus already has the resource of the sun and with new investment and projects in the pipeline, along with a government determined to develop renewable solutions, the country can truly harness its natural potential and become far more energy efficient in the years to come. n

Discover more at cyprusprofile.com Country Report CYPRUS 2019


Film Production

Sector Profile

Lights, Camera, Action!

Cyprus is officially on the map as an up-andcoming film location with the launch of a new incentive scheme and Film Commission. With its rich historical and natural landscapes, local talent and some of the best incentives in Europe for both local and international producers, the island is ready for its close-up.

KEY contacts

Invest Cyprus investcyprus.org.cy Cyprus Film Commission filmincyprus.org.cy


Country Report CYPRUS 2019

Sector Profile


ilm producers and directors from around the world gathered in Cyprus in October 2018 for the official launch of its longawaited incentive framework aimed at establishing the island as a new Mediterranean film location branded ‘Olivewood’. Along with the local industry, over 120 top-tier international delegates were invited to the first-ever Cyprus Film Summit, which included key producers from Hollywood, Bollywood and many other European countries. The fiscal incentive scheme presents a new opportunity for Cyprus to promote itself as a top filming destination and to enter the international audiovisual market with an attractive proposition and package of perks. Although the official government-backed launch of its status as a film destination is a new development, Cyprus has long been on the radar of the international film community and hosts a solid local industry with international expertise to support the growth of this sector. Since the launch of the scheme last year, Cyprus has attracted significant interest from the global film community. Films shot and produced in Cyprus have also been screened at the Cannes and Venice Film Festivals, and have won awards and praise at the Tribeca, Quebec and Palm Springs Film Festivals. The perks have also attracted a major league movie with production costs estimated at close to €25 million and starring renowned Academy Award winner Nicolas Cage. The science fiction and martial arts film called ‘Jiu Jitsu’ is the first major international production to be filmed entirely in Cyprus since the scheme was rolled out. In addition, the Cyprus Film Commission has pre-approved two other Hollywood films to be shot in Cyprus. More details about these two feature films, including casting, will be announced over the course of 2019. By 2020, the audiovisual industry is expected to have a global turnover of more than €50 billion. Cyprus has set its sights on claiming a stake in this formidable industry by providing the right incentives to maximise its untapped potential as a filming location, along with the multitude of other competitive advantages it offers as an investment destination.

New Incentives

The new incentive scheme introduced by the government of Cyprus is aimed at encouraging more international productions to film on the island, to foster the local industry and further boost the economy. The package has a number of benefits aimed at both local and foreign producers that opt to film in Cyprus, one of which is a cash rebate or tax credit of up to 35% on qualifying production expenditures. Production houses can also benefit from tax allowances of up to 20% for investment in infrastructure and equipment, as well as Value Added Tax (VAT) returns on expenditure in scope. In January 2019, Cyprus further amended the scheme to make it even more attractive by abolishing the previously set maximum refund ceiling per production, and approved a maximum annual budget of €25 million for reimbursement purposes. Within the scheme, the qualifying production categories include feature films, television films, series and mini-series, creative documentaries, digital and analogue animation, television research programmes and natural history programmes. In addition, trans- and crossmedia productions and reality programmes that directly or indirectly promote the Republic of Cyprus can also apply. Productions will also score extra points if they satisfy a number of cultural criteria such as hiring local actors in leading roles, highlighting local or international cultural elements and using the local language. The new Cyprus Film Commission, which is chaired by the country’s investment promotion agency, Invest Cyprus, also consists of representatives of the Ministry of Finance, Ministry of Education and Culture and the Deputy Ministry of Tourism. The Commission is the responsible body for examining all applications, while the remit of Invest Cyprus is to promote the incentive scheme abroad, facilitate productions and foster connections with the local industry through an online platform branded Film in Cyprus. Interested parties can submit their applications for the scheme through the portal, which also provides more detailed information on qualifying criteria. In addition, continuous support will also be provided by Invest Cyprus in cooperation with the relevant ministries and governmental departments in matters such as permits, importing and exporting equipment and other necessary instructions. Country Report CYPRUS 2019


Sector Profile

Film Production Local Crew and Production Support

Although the local film industry is small in comparison to many countries, Cyprus has a strong pool of multilingual professionals working in the film and television sector with international training and experience. An added benefit is that English is almost universally spoken on the island. Production and post-production crew such as directors, producers, DPs, camera operators, sound technicians, editors, location managers, photographers, grips, gaffers, production assistants, fixers, as well as wardrobe, hair and make-up professionals can be found relatively easily. Cyprus also has production equipment rental companies with high-end and reliable kit to support foreign teams filming on the island, or to hire second unit crews. These companies have a strong track record in working with both local and international crews and networks on productions of all sizes, ranging from feature films and documentaries, to music videos and TV ads. Although the country does not yet have big studios or sound stages, there are a number of smaller studio owners that can cater to the needs of foreign producers. In fact, the government has identified this niche as a potential investment opportunity as the sector grows further. A Variety of Landscapes

Dubbed a natural film studio, Cyprus certainly has much to offer despite being a small island. It has a rich historical and cultural landscape featuring various historical periods, ranging from archaeological sites to quaint villages and modern cities. Cyprus offers endless opportu-


Country Report CYPRUS 2019

nities for film makers with its ruins of ancient city kingdoms with pillars and amphitheatres, Venetian bridges tucked away within the forest hills, ancient aqueducts, Byzantine art and architecture, as well as the unique 16th century Venetian city walls and heart-shaped bastions of Nicosia that protect the labyrinthine streets of the vibrant old city. The coastal city of Limassol is currently undergoing a Dubai-like transformation with multiple skyscrapers being built along its beachfront promenade offering a modern and more cosmopolitan city scape. The luxury Limassol Marina juts into the sea adjacent to the old town and the medieval Limassol Castle, where according to legend Richard the Lionheart married Berengaria of Navarre and crowned her Queen of England in 1191. Also near Limassol is the Kolossi Castle, which is a former Crusader stronghold of the Knights of the Order of St John of Jerusalem and was briefly taken over by the Knights Templar in 1306.

The film industry can have a powerful multiplier effect on the country’s economy, creating jobs, promoting culture and innovation, while acting as a driving force for the further development of other industries as well, such as the tourism industry. We are focusing our efforts in placing Cyprus in the spotlight of the global film and audiovisual industry, while working towards the continuous improvement of our scheme’s competitiveness and providing interested parties with all kinds of support, both informative and practical. Michalis P. Michael Chairman Invest Cyprus

Cyprus Filming Scheme Variety of tax incentives for corporates and individuals Attractive IP regime


Diverse landscapes never seen on screen Ideal weather conditions for year-round filming Short internal distances and good global air connectivity Modern infrastructure and advanced telecoms Centuries of history, art and culture Access to local talent pool

Cyprus provides much variety also in terms of its natural landscape. Its 648km of coastline presents rocky coves, stretches of beautiful pebble and sandy beaches, light houses, ports both big and small, as well as some of the cleanest beaches and waters in the Mediterranean Sea. In Nicosia, the flat plains look like a desert in the peak of summer, but are transformed to a lush green during winter months. In the centre of the island, the pine-clad Troodos mountains provide stunning hilltops, valleys, waterfalls and picturesque vineyards and traditional villages, with its peaks covered in snow in the winter. Larnaca offers cityscapes and salt lakes teeming with flamingos in the winter, while Paphos – the legendary birthplace of Aphrodite – has more historical sites, beautiful beaches and hills, the Akamas Nature Reserve and banana plantations scattered along its coast. Ideal Climate

A key advantage of Cyprus for film production is the predictability of its climate. With around 340 days of sunshine a year the island is a true yearround destination. The abundance of natural light is a key aspect of film production and it should be noted that Cyprus and Los Angeles are almost on the same latitude. The hot and dry summer is from May to October, and the mild and green winters with occasional rain are from December to February. There are clear distinctions between the two seasons, which are separated by a short autumn and spring when the island’s flora is in full bloom. Excellent Infrastructure

Cyprus’ advanced infrastructure is constantly being upgraded and offers road, air and sea transport solutions and services. The Republic of Cyprus has two multipurpose deep-sea ports and two international airports, Larnaca and Paphos, which are served by over 70 airlines, operating to 120 destinations in 40 countries. In 2018, the two airports saw a total of 11 million passengers and this figure is set to grow further in the next few years due to record-breaking numbers in tourism. Located at the crossroads of three continents, Cyprus is a short flight away from some of the most prominent transit hubs in the world. Direct flights are available to Cyprus from all the major cities of Western and Eastern Europe, as well as the Middle East and Gulf region. This is a key factor for productions with multiple locations in Europe and the Middle East. Due to its small size, internal distances are short between all cities, which are also all under 100 km from one of the two international air-

ports. For example, within an hour’s drive it is possible to go from a snow-capped mountain to a sunny beach. The island’s road network is well mapped and signposted in both Greek and English, and navigating across the country is easy and safe. There are multiple companies that rent a variety of vehicles on both a short- or longterm basis, and thanks to the island’s status as a popular holiday destination Cyprus offers every conceivable type of accommodation – ranging from low-budget hotels and a growing number of five-star luxury resorts, to villas and agritourism houses.

Sector Profile


Set for the Silver Screen

Despite being a newcomer of sorts as a European filming location, Cyprus has in fact attracted consistent attention and interest over the decades from big producers and directors worldwide. Unfortunately, many of these prospective projects never came to fruition due to a lack of incentives and official single body to represent the industry and aid in tackling bureaucracy and permits. So far, the most important coproduction countries for Cyprus have been Greece, Germany, the UK and Serbia. However, the country is keen to expand this list of cooperation countries and create more synergies with other European and global cinema professionals to boost the local industry. With the 2018 launch of an advantageous film regime, Cyprus has finally perfected its pitch and can go full steam ahead in developing the sector and tap into the full potential of growing interest from international producers. Over time, these developments are sure to filter a positive impact into the wider economy and also refine the knowhow and expertise available in Cyprus. Knock-on effects of fostering this sector will create new jobs, develop new infrastructure such as studios and equipment that will further support the industry, and indirectly also enhance complementary sectors such as tourism, professional services, land development and investment funds related to film. The island’s natural beauty, local talent, great climate, and versatile locations that could double-up as various destinations from virtually anywhere in the world offer boundless creativity and opportunities for film directors, with only the imagination setting the limits. Cyprus offers a truly cinematic environment and has set the scene for those with vision, now all that is left to do is shout: action. n

Discover more at cyprusprofile.com Country Report CYPRUS 2019


Sector Profile


world class medical services Cyprus is internationally renowned for its worldclass medical research and health professionals, and with a long-awaited national health system coming into play, 2019 will see the beginning of a transformation of the health sector.


yprus has long been synonymous with excellent healthcare thanks to its highly trained and internationally experienced professionals, specialised medical services and globally renowned research. The reasons behind this acclaim is that for decades healthcare in Cyprus has been heavily dominated by the private sector, with most medical professionals educated at reputable universities in the UK, Greece, Western Europe, the US and Russia. The return to Cyprus of this wealth of talent and specialisation was an influential factor in the development of the country’s formidable private sector, which now boasts an impressive 75 private hospitals and clinics, along with numerous smaller private practices. However, the status quo is set to undergo an immense transformation after the long wait for an integrated national health system (NHS) is drawing to a close. A true milestone for Cyprus will be achieved in 2019, as phase one of the NHS implementation was rolled out in June. The NHS is set to modernise and upgrade the health sector into a more streamlined, transparent and cost effective system, and finally bring Cyprus on par with its European peers in terms of efficient and affordable public healthcare.


Country Report CYPRUS 2019

The NHS Roll-Out

The first phase concerning outpatient care provided by GPs, specialist doctors, pharmacies and labs was introduced in June 2019, while phase two concerning inpatient care will be rolled out a year after that in June 2020. Two bodies have been set up in a bid to allow the NHS to materialise. The Health Insurance Organisation (HIO), which is tasked with reimbursing healthcare expenses including pharmaceuticals and the State Health Services Organisation (OKYY), which will be responsible for the management, control, supervision and development of public hospitals and primary healthcare centres. Cyprus already boasts high access to quality health services, ranking 26th out of 195 countries in the Healthcare Access and Quality Index (HAQ) – a study funded by the Bill & Melinda Gates Foundation. In the index Cyprus ranks higher than the US and Israel, which rank 29th and 35th respectively. With the new NHS, the aim is to offer the public equal access to a healthcare sector that boasts excellent professionals, technology and innovation. One of the many advantages the comprehensive NHS is set to bring once it comes into full

KEY contacts

Ministry of Health moh.gov.cy Cyprus Healthcare Tourism cyhealthservices.com

Investing in Public Health

Health services in the public sector are provided by five district hospitals and one paediatric/ gynaecological hospital, three small rural hospitals and 38 health centres, along with 230 sub-centres with a touring medical team. Additionally, the Ministry implements a sponsored patients’ abroad scheme under specific conditions and terms. Hospital autonomy will be the biggest step to the full NHS roll out. Among the overall objectives is improving the quality of service and access to services for patients and delivering the financial stability the health service needs. Eventually, OKYY will replace the Health Ministry in providing health services. The health system in Cyprus was exclusively financed by the state budget, with services provided through a network of hospitals and health centres directly controlled by the Ministry, but NHS contributions as a percentage of salary or pension started on 1 March 2019 and will initially cover only outpatient care. This is set at 1.70% for employees and pensioners, 1.85% for employers, 1.65% for the state, and 2.55% for the selfemployed. A year later the contributions will rise respectively to 2.65%, 2.90%, 4.70% and 4%, and cover both outpatient and inpatient care. Those eligible for the NHS are Cypriot and EU citizens, as well as third country nationals legally residing in Cyprus and refugees or persons with supplementary protection, legally residing in the Republic. Substantial investment in the state sector has meant that procedures such as kidney transplants and open-heart surgery, which once necessitated a journey overseas, are now routinely carried out within Cyprus. The private system is financed mostly by out-of-pocket payments and to some degree by voluntary health insurance (VHI). It largely consists of independent providers, and fa-

cilities are often physician-owned or private companies in which doctors are usually shareholders. Going Digital


he introduction of the first phase of NHS puts Cyprus’ healthcare system in a new era. Major challenges are ahead of us to smooth out the new state of things. After the enactment to law of the legislation for the cultivation and trade of medical cannabis and the ongoing processes for the establishment of the National Pharmaceutical Authority, the pharmaceutical sector will undergo considerable changes during 2019. The introduction of the NHS along with the changes in the pharmaceutical sector, as well as the adoption of the legislative framework for University Clinics, are only a few of the steps towards our goal to upgrade the country’s healthcare sector and establish Cyprus as a regional health centre. Constantinos Ioannou Minister of Health

The Health Ministry has also embarked on an ambitious programme to digitise medical provision and develop an integrated e-health monitoring system. This involves the introduction of digitised health records, the expansion of medical services to remote areas via telemedicine and robotics, and access to international medical data banks. The goal is the creation of Regional Health Networks (RHN) to exchange information in real time between all hospitals, health centres, regional clinics and private doctors. The RHN will enable healthcare providers to have access to the right information, any time they want for better and higher quality medical care. The expected timeline for project completion is August 2019. Technology will also be at the forefront of helping forecast the needs of medical, nursing and paramedical personnel. The number of graduates from the top-tier medical schools in Cyprus are also expected to provide more medical personnel in the sector and fill the gap of potential shortages in the coming years.

Sector Profile

force, is reduced waiting lists which have plagued the sector for years. The load on state hospitals has been slightly reduced over the past two years after agreements to refer patients to the private sector were made, however these came at a cost to the state. The passing of the NHS bills in 2017 was an enormous victory for the government of President Nicos Anastasiades, who has likened this major development in the health sector to the adoption and introduction of the social insurance system in the 1960s. In the meantime, as implementation will be gradual, healthcare is likely to remain highly centralised and most planning, organisation, administration and regulation will continue to be the responsibility of the Health Ministry.

Doctors Beyond Borders

The presence of numerous prestigious private healthcare facilities significantly enhances the island’s reputation as a centre for medical excellence and highlights the opportunities available to foreign investors. The island has also opened more opportunities for foreign doctors to carry out procedures in the country, a move that is fostering greater cooperation in the international medical field. Doctors from Israel, the United States and other non-EU member states are now allowed to provide services in Cyprus, under certain conditions, with procedures overcoming bureaucracy and delays. This decision not only promotes medical tourism and generates income mainly for private hospitals, but also promotes further training and knowledge exchange for Cypriot doctors, with a number of hospitals becoming centres of excellence for the Eastern Mediterranean region, the Middle East and Europe. Cyprus has also signed multiple Memoranda of Understanding (MoUs) with various countries to facilitate more cooperation in the medical field. For example, Cyprus and Israel have signed an MoU for cooperation in the field of kidney transplants. It will allow people who seek to donate kidneys to their loved ones to have a better opportunity to do so through paired donations, as Country Report CYPRUS 2019


Sector Profile



it creates a larger pool of potential donors and increases the chances for successful organ exchange between donor-recipient pairs. The memorandum was the result of a joint effort between the specialists in the area of transplantations from the two countries, as well as of the Transplant Centre of the State of Israel and the Transplant Council of Cyprus. In addition, Cyprus and Canada have signed an MoU on health cooperation that includes medicine, research and education, more specifically the Canadian Commercial Corporation (CCC) – a Crown Corporation of the Government of Canada – will work in collaboration with the University of Cyprus and the Health Ministry to develop a world-class university teaching hospital, an advanced learning institute and a medical education hub in Cyprus. In 2018, Cyprus and Jordan signed a number of bilateral agreements including one on public health and medical science, with a similar protocol also signed with Russia. Another important asset in the provision of high quality healthcare was the founding of the German Oncology Centre in Limassol in 2017. Established through private funding, the centre covers the whole spectrum of services from prevention and diagnosis, to treatment, rehabilitation and support for patients, offering modern radiotherapy techniques. Previously, the Bank of Cyprus Oncology Centre in the capital city of Nicosia was the sole provider of radiotherapy, but the new private radiology unit complementing state health services is a welcome addition catering to the needs of patients in both Limassol and Paphos regions. The German Oncology Centre, along with numerous other private hospitals, has announced their intentions to integrate their services with the new NHS.

in Cyprus, from basic check-ups and diagnostic tests to major surgery, kidney haemodialysis, transplants and cardiothoracic surgery procedures, orthopaedic, musculoskeletal surgery and many more. In early 2018, the President of Cyprus inaugurated the new heart centre at the Mediterranean Hospital in Limassol saying it would contribute to the greater goal of making the island a regional hub for medical services. The country’s ideal year-round climatic conditions make it an attractive destination, where patients can combine treatment with a holiday, and recovery with relaxation. The majority of medical tourists come from the UK, Germany, the Netherlands, Russia and the Middle East and most seek either dental or cosmetic procedures. However, increasing numbers now visit Cyprus for fertility treatment, while the island is gaining a reputation for other specialist procedures. Cyprus is also fast becoming a popular wellness destination with new luxury spa resorts and rural retreats springing up across the island, with holistic therapies and beauty treatments readily available. Fresh and saltwater pools, whirlpools, saunas, steam rooms and hammams, are all present in abundance in hotels around the island for the growing number of wellness orientated and health-conscious tourists. Investment in both medical and wellness tourism continues to be a serious opportunity for investors, as this sector has been earmarked by the government as one with immense development potential with growing demand from European tourists. According to the state’s strategic report, the development of wellness centres should be considered an integral element of future new resorts or added to existing assets in a bid to upgrade and enhance their value proposition.

Potential in Medical Tourism

Medical Research and Education Hub

Cyprus is credited as being one of the first entrants into the European medical tourism sector, and some years ago, the island established a national initiative to promote medical tourism. The global medical tourism market is expected to reach US$46.6 billion by 2021, with positive future growth prospects. Cyprus has excellent medical infrastructure, hospitals, laboratories and other diagnostic centres making it a prime destination for medical tourism. Services are affordable and easily accessible, and this coupled with its large pool of highly educated healthcare professionals and expert services, are positioning the island as a key centre for medical tourism in the Mediterranean region. A vast array of quality medical treatments for patients from all over the world are offered

The Cyprus education and research sector has seen formidable growth over the last few years, boasting a vast number of recognised researchers with tremendous contribution to medical science. More recently, the establishment of medical schools on the island has been a strategic move in the ongoing process of improving the sector, as well as fostering international research and innovation. Today, Cyprus has three medical schools – one public and two private – all of which are affiliated with hospitals throughout Cyprus and with prestigious international medical institutions, such as St George’s Hospital (University of London). Over the past three decades, Cyprus has made highly commendable achievements in the fields of medical research and innovation. Pioneering

Country Report CYPRUS 2019

MEDICAL TOURISM Popular treatments in Cyprus:

check-ups & diagnostic tests elective surgery dentistry cosmetic & plastic surgery fertility treatments eye surgery rehabilitation

Nitsa Kiliari President Cyprus Healthcare Tourism

research work has been undertaken at the Cyprus Institute of Neurology and Genetics, which developed a ground-breaking, non-invasive prenatal test for Down Syndrome. And in 2017, doctors at the Institute discovered a genetic mutation, which is common only in Cypriot families, that is responsible for most cases of hereditary breast and ovarian cancers on the island. Research in the biomedical field has also had a remarkable increase, especially in the field of genetic diseases, hereditary cancer and biotechnology. These ambitious research projects, funded by both local and foreign sources, but mostly through the EU, resulted in data and new knowledge benefitting both the local and international community. In 2017 a new strategy was also drawn up to deal with diabetes, another growing disease on the island. The strategy plans for the development of a central research body on health issues and a central research database connected with other European international centres. This kind of top-quality academic work in Cyprus is evidenced by important European funding, including 10 European Research Council (ERC) grants, hundreds of high-impact publications in international peer-reviewed journals and invitations to present their work at major medical conferences around the world.

Medical Cannabis

Another interesting initiative is the Health Ministry’s plan to introduce the cultivation and trade of medical cannabis. Apart from the benefits it would bring patients – a number-one priority – it can also boost the economic development of the island, as well as attract significant foreign investment for the entire production chain. In February 2019, Cyprus took a step forward and passed a law allowing for and regulating the cultivation and distribution of medical cannabis. Three licenses will be granted to private companies at a cost of €500,000 each for 15 years to grow medical cannabis and distribute it to pharmacies. The annual cost of renewing the license amounts to €30,000. The law regulates the import of cannabis seeds and plants, the cultivation, production, import and export of pharmaceutical cannabis and its use for research for medical purposes. Before the NHS comes into full force in 2020, medical cannabis will be available in state pharmacies, however, once the ball is rolling with the health system it will also be available for distribution by private companies. The move is expected to put Cyprus on par with many other states such as Israel and Germany, where medical cannabis has been legalised and offers patients more options for treatment, though the law stipulates the drug can only be offered after all other available options have been exhausted.

Sector Profile

In 2019 we expect medical tourism to continue its growth on the basis of the excellent services offered by our private medical hospitals and highly skilled doctors. In regard to other areas of healthcare tourism, such as wellness, rehabilitation and third-age tourism, the recent establishment of the Deputy Ministry of Tourism has boosted expectations that Cyprus will be promoted as an excellent destination for travellers seeking to enhance their health.

A New Vision

The implementation of the new Cyprus NHS is expected to enhance the efficiency and productivity of public hospitals, support digitisation, improve data collection, strengthen human resources strategy and ensure equal competition between private and public health providers. It is also seen as mitigating health inflation, drug overuse, and restrict unneeded medical examinations through a more cost-efficient referral framework fostered by the new e-health system. As with many other EU countries, challenges could arise from the worldwide health workforce shortage, but the rapid growth of the education sector in Cyprus and with fresh graduates being pumped out of its three new medical schools, the country has the tools to ensure the future success of its health sector. In addition, the Cyprus medical tourism sector is still relatively untapped providing investors with multiple opportunities to be the leaders in shaping Cyprus into a strong player in the health and medical field in the wider region. n

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Sector Profile


The Cyprus insurance sector has seen impressive growth over the last few years, with revenues surpassing even pre-crisis levels. The resilience of the industry has been proven in its ability to tackle challenges and adapt to increasing regulation, as well as in expanding its services and product offering.



he Cyprus insurance industry has regained its strength with healthy growth rates and fresh momentum to diversify and introduce new services to meet increasing market demands. Despite the fact that the global outlook for insurance companies remains relatively bleak with the introduction of new waves of costly regulation and challenges of implementing digital transformations, Cyprus seems to be bucking the trend at the moment with solid growth across the full spectrum of insurance classes. Although the domestic insurance market in Cyprus is small and has faced challenges, the sector has truly bounced back, and the country continues to offer international insurance firms many opportunities as a cost-effective and business-friendly base to launch and manage products, services and operations in both the local and international markets. A number of foreign insurance operators have been successfully operating in Cyprus for years, attracted by the island’s EU member status, its straightforward and transparent legal framework, ease of doing business and advantageous tax regulation. EU passporting has enticed major international industry players to the country, and Cyprus is particularly well positioned as a centre 96

Country Report CYPRUS 2019

for companies wishing to do business especially in the EU and the Middle East region. The 30 insurance companies operating on the island account for about 98% of the annual gross premiums written in the domestic market, with a handful of these companies dominating the landscape. The insurance industry also manages assets well over â‚Ź2.5 billion, making it one of the largest institutional investors in Cyprus. With increasingly specialised needs arising from clients, new opportunities are found in creating innovative services and products, forging new synergies and using the country as a gateway to expand business into new regional markets. These factors are set to support the future growth and diversification of the Cyprus insurance sector. Healthy Market Growth

The insurance sector has seen steady recovery following the 2013 financial crisis with both 2017 and 2018 registering strong growth, demonstrating that the industry has taken corrective actions to overcome challenges. Insurance was also the only major financial sector in Cyprus that managed to safeguard its employment numbers and contribution to the labour market.

KEY contacts

Ministry of Finance mof.gov.cy Office of the Superintendent of Insurance (Ministry of Finance) mof.gov.cy Insurance Association of Cyprus (IAC) iac.org.cy

British Industry Roots

30 Insurance


500+ European

insurance/ reinsurance undertakings operating under the freedom to provide services (FOS)

8.8% 2018 growth in life premiums

5.8% 2018 growth in non-life premiums

As a former British colony, insurance in Cyprus was traditionally provided by the large UK insurance houses, represented by agents in Cyprus. The companies themselves were registered in England under the English Insurance Law. It was not until the late 1960s that the island passed the Insurance Companies Law allowing the establishment of local insurance companies, which led to several of the agencies transforming into fullyfledged independent insurance companies. Developments since then have seen both the number of companies and the volume of business increase considerably. Today, the domestic insurance sector is considered to be highly competitive due to the large number of insurance suppliers on the island in relation to the size of the population. There are currently 30 insurance undertakings in Cyprus that are licensed and supervised by the Insurance Companies Control Service (ICCS), which is part of the Ministry of Finance. In addition, nine companies are operating under the freedom of establishment (FOE) and over 500 EU insurance companies have exercised their freedom to provide services (FOS) right by registering with ICCS to carry out business in Cyprus. Insurance experts estimate that this type of business will see further expansion in the coming years. Diversifying Products and Services

Cyprus is continuously upgrading its offering to stay on par with international insurance industry standards. Although perhaps moving at a slower pace than the rest of Europe due to its size, demand for more sophisticated products is rising. For example, products that were not widely promoted in the past, such as director and officer liability, are now offered and sought out and new products, such as cyber and drone insurance, are emerging as new tech rolls out into the market. As demand has been rising for these types of policies, the Cyprus insurance industry has been quick to meet the needs of their clients – thus also broadening the spectrum of services.

The industry is also experiencing significant momentum with respect to the provision of second pillar occupational pension products as a result of a change in the law that allows companies to offer these types of products. There has also been a resurgence in demand for insurance investment products. In addition, the wave of enhanced business technology, or fintech, coming into the market is diversifying insurance covers into products relating to for example telematics. The development of the sector in Cyprus is market driven and being a small step behind global insurance trends also offers the benefit of learning from the trials and errors of bigger and faster moving markets that lead the way in development. Furthermore, many of the Cypriot insurance firms are partnerships with international giants, enabling them to tap into the in-house expertise of these powerhouses and use it to develop products with their unique understanding of how the Cypriot market works.

Sector Profile

In 2018, growth continued to more dynamic levels, with premiums on the life side increasing an impressive 8.8%, compared to only 7.8% in 2017. On the general side (non-life), 2018 saw a 5.8% increase compared to the same period the previous year, according to figures released by the Insurance Association of Cyprus (IAC). Industry professionals maintain positive expectations that 2019 will continue on the same healthy track, providing there are no surprising macroeconomic shocks.

Solid Regulatory Framework

Cyprus is fully compliant with EU and OECD regulation and offers an efficient and transparent framework for business. However, increased pressure from new and complex regulation over the last few years has been very literally felt by the financial services industry around the world. Following the wave of regulatory changes such as Solvency II, MiFID II, GDPR and PRIIPS Regulation, one of the main challenges for 2018 was the Insurance Distribution Directive (IDD) – which aims to bolster consumer protection and ensure a level playing field across all participants selling products in the European insurance landscape. In 2019 insurance firms will be grappling with the immense task of the future implementation of IFRS17. With the already extended deadline looming in January 2022, implementation of IFRS17 will no doubt place serious pressure on firms in terms of time, cost and human resources. Although Cyprus is well equipped to transpose and implement new regulation and legislation to stay competitive in the EU market, the intense margin pressures and expense of regulatory burdens could give impetus to more consolidation in the market through mergers, acquisitions and strategic partnerships in the years ahead – especially due to the high number of companies competing in the Cypriot sector. Challenges and Opportunities

For some time now, Cyprus insurance experts have been calling for a more long-term vision from a government standpoint on how the sector should be developed in the future. This would Country Report CYPRUS 2019


Sector Profile



help the industry focus on building more niche segments that could attract further business and investment to Cyprus and facilitate sustainable development in the future. For example, Cyprus has not been able to develop a strong reinsurance business, because the legislative changes which are necessary to reform the market structure and make it more competitive and appealing for reinsurers – such as cell company formation – have not yet taken place. Cell company formation is a structure that is a building block for this type of business and should be introduced to attract reinsurers and captive companies to the island. Creating a reinsurance industry in Cyprus would have multiple positive outcomes for the economy since it would create jobs and keep within the country millions of euros that currently go abroad. With the world moving towards a digital future, traditional insurance companies have already completed or are in the process of digital transformation, as they face growing competition from online insurance providers. Similarly to other industries, traditional big firms are placing strong emphasis on streamlining processes and implementing more efficient systems in order to stay competitive in this cut-throat environment. Another challenge facing the industry in Cyprus is the current implementation of the new National Health System (NHS). The insurance industry supported the introduction of the NHS, but advocated for NHS that would also involve private insurers and take advantage of their rich experience and expertise in health insurance. However, the industry’s position was not accepted, and the legal framework voted through by Parliament is based on a single-payer system instead of the proposed hybrid multi-payer system. The implementation presents challenges to the existing health insurance business as group policies are an estimated 60% of total health business. Industry experts say it is likely that employers who currently pay for these policies may decide to terminate them once they are compelled to pay contributions to the NHS in a bid to avoid the double cost. However, despite these fears for the future, so far quite the contrary has occurred with the number of new private health insurance policies growing over the last year. Brexit remains a key issue, but does not directly affect Cyprus. The challenge lies more with UK companies operating outside their own market, which could provide opportunities for Cyprus. For example, the major global shipping insurer, London P&I Club, announced in July 2018 that it was setting up a ‘post-Brexit subsidiary’ in Cyprus. So far, the message from the EU has been clear that companies themselves have to find a way to continue servicing existing contracts Country Report CYPRUS 2019

and claims, and the IAC in cooperation with Insurance Europe is closely following developments to advise how the industry should adjust. Another development that will facilitate more opportunities, is the announcement from the Cyprus Ministry of Finance to reform the pension framework – a positive and welcome move. The reform includes a plan to unite the two separate authorities supervising insurance undertakings and pension funds under a single independent authority, which will operate on the model of the Cyprus Securities and Exchange Commission (CySEC). This will facilitate better supervision within these sectors and help reboot the pension fund market in Cyprus. These plans are still in their infancy and pending consultations and reviews, as well as parliamentary approval. EU Gateway

Although relatively saturated, Cyprus’ insurance landscape is an interesting area of the island’s diversified financial services industry, being equally attractive to EU and non-EU based insurance companies and managers. The country’s FDI regime allows up to 100% foreign participation in domestic insurance companies, and Cyprus is keen to become a centre for insurance management and reinsurance activities by encouraging companies looking to enter the EU and EMEA region to choose Cyprus as their regional headquarters. The country offers multiple benefits for international business, such as easy market access and the services of a vast pool of professionals in the insurance and financial services industry. Another attractive aspect is Cyprus’ tax system and its network of double tax agreements. Profits of insurance companies are liable to corporation tax similar to all other companies except in the case where the corporation tax payable on taxable profit of life insurance business is less than 1.5% of the gross premium. In this case the difference is paid as additional corporation tax. The country’s EU membership and strategic location offer great potential for companies seeking to expand into the EU and surrounding markets of the Mediterranean region, while simultaneously enjoying numerous fiscal advantages. With continuous future growth projected in the insurance sector, Cyprus is becoming a serious contender as a location of choice for cross-border insurance operations and as a launch pad into new markets. n

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We anticipate a solid expansion of the Insurance Industry in 2019 which is supported by the growth in the overall economy. Despite the introduction of the National Health System in June 2019 that might affect private health insurance, all sectors of the insurance industry are expected to grow with particular emphasis in savings and pension products and in general business products that support the economic activity. Andreas Stylianou Chairman Insurance Association of Cyprus (IAC) The Cyprus insurance sector is ripe for consolidation. Following the implementation of Solvency II, the regulatory authorities are finally waking up to the fact that there are far too many companies for the size of the market. The sector is no doubt important, contributing more than 4% to GDP, with €2.5bn in investment activities and 4,000 employees, but there must be further consolidation. Hellas Direct aims to play a leading role in this industry transformation. Alexis Pantazis Co-Founder & Executive Director HD Insurance Ltd – Hellas Direct

A NEXT GENERATION INSURANCE COMPANY OUR CAPITAL • Backed by the IFC (World Bank) and Portag3 (Power Corporation of Canada). • Largest investment into Cyprus insurance over the last 10 years. • €23,800,000 in equity raised. Strategic partner of Swiss Re and Revolut.

OUR PEOPLE • 92 people. Average age: 31 years old. • 42% women. More in key positions than any other insurance company. • 25 software engineers. Most of them in Cyprus.

OUR TECHNOLOGY • 501,086 insurance policies since launch. • 38,876 claims paid. • 720,000 lines of code.

Hellas Direct. Time to rethink? hellasdirect.com.cy Special voucher for Cyprus Country Report readers CP2019

Sector Profile

International Financial Services


Global Business Thanks to its advanced ecosystem of professional and financial services, Cyprus has established itself as a thriving EU service centre and a convenient business bridge between Europe, the Middle East, Africa and Asia.


he financial services sector of Cyprus has continued to Russia and Eastern Europe, Cyprus offers unique benefits that have expand in both size and expertise, and its proven resilience already attracted thousands of companies. Key activities include through fluctuating global economic trends and volatile international business structures such as holding and finance commarkets has underlined the country’s strength and status as panies, shipping companies, forex and investment firms, trusts and an important EU jurisdiction for top-quality services. investment funds. The country continues to offer one of the most There are several compelling features about Cyprus as pro-business, international and cost-effective environments in a business hub and service centre. The island is part of the EU, the Europe and with hydrocarbons exploration in its waters gaining moeurozone and the Commonwealth and is strategically positioned mentum and drawing significant foreign investment, Cyprus’ energy between three continents – Europe, Africa and Asia – with regular know-how and service base are also set to expand further. flight connections, multicultural business etiquette and a stable poThanks to its geostrategic location in the East Med and within the litical regime. It has an efficient and transparent tax system and its EU, the island is also establishing itself as a preferred headquartering legal system is based on English Common Law. Cyprus follows the location for international companies. Its stable EU environment and International Financial Reporting Standards (IFRS), has a manda- neutral political stance, coupled with one of the lowest corporate tax tory audit regime for all sizes and types of companies, and its legal rates in Europe at 12.5%, Cyprus has become one of the most attracsystem is fully compliant with the EU, the Financial Action Task tive international business centres in the region. Thanks to its locaForce on Money Laundering (FATF), OECD, FATCA, the Financial tion, Cyprus also enjoys business-friendly time zones, enabling interStability Forum laws and regulations and EU AML national companies to do business with the East in directives. Foreign businesses have long been atthe morning, Europe throughout the day and with tracted to Cyprus for its cost-effective services the West in the afternoon. The added convenience and preferential access to high-growth markets, of English as the business language and the intercontacts its highly educated and multilingual workforce, nationally trained service providers – mostly eduas well as its advanced telecoms and Double Tax cated in the UK or the US – have created a global Cyprus Securities and Treaties (DTTs) with 65 countries. outlook in the local industry to best serve their Exchange Commission Cyprus’ financial and professional services clients worldwide. cysec.gov.cy sector is a formidable contributor to the country’s Cyprus has proven itself a resilient and economy and has maintained its status as one of dynamic business centre, and although it is one Cyprus Bar Association the most consistently growing sectors – rising on of the smallest EU member states it has one of cyprusbarassociation.org average by 6.5% per year in 2016-18 and contribthe fastest growing economies in the European Institute of Certified Public uting 20% to Gross Value Added (GVA) in 2018. Union. Companies have long been attracted to Accountants of Cyprus (ICPAC) Already recognised internationally as a leading Cyprus for a number of factors, and not all are taxicpac.org.cy European provider of corporate structuring, inrelated. Cyprus has a high-quality of life, excellent ternational tax planning and other financial serinfrastructure and one of the lowest crime rates in Association of Cyprus Banks vices, Cyprus is determined to go from strength to Europe. Cyprus’ offering of specialised and interacb.com.cy strength. Evidence of this is the healthy capital and nationally recognised services, unrivalled access to Cyprus Fiduciary Association liquidity levels held by banks and the continuous key markets along with rewarding business opporcyfa.org.cy registration of new companies, funds and investtunities has proven attractive for decades and conment vehicles on the island. tinues to cater to the diverse needs of international Association of For companies and individuals requiring an companies and individuals – solidifying Cyprus’ Cyprus International ideal location to structure their investments into reputation as an international centre of business Investment Firms Europe, the Middle East and Africa, as well as excellence. n aciif.org



Country Report CYPRUS 2019

Demetra Kalogerou Chairperson Cyprus Securities and Exchange Commission (CySEC)

In the new world of transparency with FATCA, CRS, ATAD 1 & 2, DAC6, MLI, public UBO registers and all other current and prospective regulation, the fiduciary industry has to transform itself in order to remain relevant to the new and differentiated needs of the clients. CFA is convinced that a ‘Substance Model’ can address most of the issues and challenges that the industry is facing and create a sustainable future for the Cyprus professional sector. Christos Michael President Cyprus Fiduciary Association

Prospects for the professional services sector in Cyprus remain good as the economy is stabilising and international businesses continue to seek professional advice to establish real substance in Cyprus. Corporations are facing new challenges making professional services more relevant than ever, such as the disruptive forces of new tech and the digital revolution, and a stricter regulatory environment focused on transparency. Increased activity in oil & gas exploration will dominate economic developments, and we expect the tourism, real estate, shipping and the higher education industries to drive growth in our sector. Stavros Pantzaris Country Managing Partner EY Cyprus

Holding & Trading Companies

Cyprus continues to be one of the leading jurisdictions used by blue-chip corporations and corporate planners to establish holding, trading and investment companies to channel investments into key markets worldwide. The current double tax treaties include most major Western ‘high-tax’ countries, Russia, the majority of central and eastern European states, China, Iran and India. The popularity of the Cyprus Company has seen the jurisdiction grow and it has become a structuring tool uniquely used by local and foreign investors as a key pillar in their investment planning and tax strategies.

Sector Profile

The area of collective investment funds and asset management is one of our top priorities. The completion of the fund’s legal framework and the further maturity of the Cyprus fund management industry over the last three years has led to good growth of the sector. CySEC is committed to sustaining the momentum of Cyprus becoming a location of choice for the domiciliation and administration of investment funds, and the healthy growth of the funds and fund management sector is at the heart of this. We remain up-to-date with the latest European financial legislation, which, complemented by a comprehensive national supervisory framework, make Cyprus a safe, responsible and competitive place to do business globally.


2,700+ registered

Cyprus’ comparative advantages have strengthened the country’s status as an attractive headquartering location. Many multinationals already use Cyprus as an administration, sales and marketing centre to manage and launch their products or services into regional markets. Companies such as NCR, Kardex, amdocs, Bernhard Schulte Shipmanagement and Wargaming have all established headquarters on the island. An added benefit to the country’s offering are new tax incentives for high-net-worth individuals and high-earning expat executives, providing a 50% exemption on personal income tax for those earning more than €100,000. Evidence of Cyprus’ appeal as an HQ location is also the thriving forex industry and the strong shipping sector. The success of shipping, an industry which contributes approximately €1 billion each year to the economy, has also developed clusters and auxiliary services – a model that could be successfully replicated for the growing oil and gas sector.

lawyers and

160+ law firms provide a competitive market for legal services


The Cyprus banking sector is on solid ground, it has shrunk and reorganised, developed its capital strength and invested in corporate governance. All core banks in Cyprus have passed successive and rigorous European Central Bank (ECB) stress tests and the sector has seen further sustainable development over the last few years. Banks have successfully raised private capital and maintained strong capital positions, non-performing loans have been slashed in half, while fresh investment through acquisitions has reshaped the banking sector into a more consolidated and agile industry. A strong focus on going digital, and the implementation of more innovative banking solutions and integrated products are enhancing competitiveness in an era of increasing costs. Cyprus’ banking sector is comprised of two tiers: domestically-oriented banks and international banks. International banks have long been attracted to the island for its fiscal regime and to use the country as a launch pad into high-growth and emerging markets. The list of banks of foreign origin in Cyprus consists of over 30 institutions, which mainly carry out international banking business and have limited interaction with the domestic economy. Beyond the traditional deposit and lending services to households, corporations and SMEs, banks in Cyprus operate under the ‘universal banking model’ and offer a diverse range of products and services. The sector is introducing products and services to companies, start-ups and ventures with high growth potential, and at the same time keeping a clear focus to expand lending to key sectors such as shipping, tourism, real estate and professional services – which are substantial economic drivers for Cyprus.

Country Report CYPRUS 2019


Sector Profile

International Financial Services Our sector follows that of the economy in general. There are opportunities in the funds industry and in the attraction and servicing of international companies which would be willing to establish real substance and business infrastructure in Cyprus. New openings with countries like Kazakhstan, India and China are very important. We remain conservatively optimistic with the growth of the economy in 2019, provided the much-needed reforms and business facilitation measures are taken. Kyriakos Iordanou General Manager Institute of Certified Public Accountants of Cyprus (ICPAC)

The professional services sector has swiftly adapted to the changing economic environment. The emerging compliance requirements relating to our profession require increased control procedures and systems to monitor and improve the quality of services offered. We have seen a rapid increase in the demand for advisory and tax services, a trend that is expected to continue. In 2019, sectors such as digital innovation, data & analytics, cyber security and fintech will help the profession grow further. In addition, new service offerings such as wealth management, fund management and licensing will continue to grow. Christos Vasiliou Managing Director KPMG

Brexit related challenges and continuous changes in the regulatory environment, both at global and EU level, such as the adoption of the 5th EU AML Directive, render coordination and enhanced cooperation between advocates and competent regulatory authorities as a necessary step forward to establish Cyprus as a centre of regulatory excellence. The reform process currently under way includes the establishment in 2019 of a specialised Commercial Court, which will lead to the enhancement of administration of justice, providing the prerequisite assurances to international investors. Leandros Papaphilippou Managing Partner L Papaphilippou & Co LLC


Country Report CYPRUS 2019

Investment Funds

Business transactions, government services, banking and a wide range of day-to-day functions can be conducted in English

Recording formidable growth over the last few years, the country is strengthening its status as a convenient European gateway for investment funds. The volume of funds and assets under management have hit record highs proving that interest in Cyprus as a business and investment base runs strong, as assets under management (AuM) have more than tripled from €2.1 billion in 2012 to €6.7 billion in May 2019. Cyprus offers both EU-regulated Undertakings of Collective Investment in Transferable Securities (UCITS) and Alternative Investment Funds (AIFs), and the consistent upgrades of its regulatory framework have boosted investor interest and the image of the jurisdiction. Bearing similar characteristics to the regimes of Luxembourg and Ireland, the country’s legal framework is one of the most flexible in Europe while maintaining a high level of investor protection. Cyprus also offers one of the most attractive fund tax regimes in Europe – for the fund manager, investor, and the fund. There has been growing interest from funds around the world, but most notably from Europe, Asia and the Middle East. Cyprus’ offering of a European passport of quality and flexibility, its exceptional possibilities for cross-border and global fund distribution, as well as its long-standing investment links into and out of Europe all provide investors with preferential access and solid service expertise through its skilled professionals. In addition, its geostrategic location at the crossroads of Europe, the Middle East, Asia and Africa has positioned the country as a natural investment bridge into markets worldwide. Trust Regime

With an industry valued at more than €1 trillion globally, the importance of trusts in financial planning is undeniable. Cyprus has one of the most modern and favourable trust regimes in Europe and with an updated legal framework, the Cyprus Trust has become a popular instrument for many wealth advisors. The Cyprus Trust can be used in a range of international structures because it is flexible enough to accommodate the objectives of the most demanding client. These include: discretionary trusts, fixed trusts, trading trusts and purpose trusts. The main uses for Cyprus Trusts include asset protection, estate and tax planning, charitable/ purpose, confidentiality, wealth management/ investment, share ownership/pension fund, insurance and protection against exchange control. Cyprus has a liberal tax system, under which the income of an international trust is tax exempt as long as it is earned outside of Cyprus.

850+ accountancy

Wealth Solutions

firms including all major global firms

An increasing number of high-net-worth individuals are discovering the benefits of Cyprus, and the island has become a financial base for a large number of extremely wealthy individuals from Europe, the Middle East and Asia. The number of flexible and competitively priced structures combining investment flexibility with tax advantages has also attracted individuals wishing to relocate to the island and take advantage of favourable citizenship and residency schemes. With an extensive banking network and the availability of a variety of investment vehicles, a growing fund industry as well as no taxation on capital gains or succession, Cyprus is a natural hub for wealth management and family offices.

Savvas Shiatis Managing Director Oneworld Ltd

Intellectual Property

As one of the most valuable assets for businesses, choosing the right Intellectual Property (IP) regime is becoming increasingly vital. Along with the rest of the EU, Cyprus adopted a new IP Box Regime aligned with the OECD BEPS Action 5 and revised EU rules for the tax treatment of profit from intellectual property. In essence, the new Cyprus IP box regime offers a tax benefit of up to 80% on qualifying IP profit, reducing the corporate tax rate to an effective 2.5%. The revised law has excluded business names, brands, trademarks, image rights and other intellectual property rights used within the scope of marketing products and services and identifies a ‘qualifying intangible asset’ as an asset which was acquired, developed, or exploited by a person to carry out, enhance or initiate a business being a result of R&D activities. Cyprus’ efficient IP tax regime coupled with the protection offered by EU and all major IP treaties and protocols to which Cyprus is signatory, establishes the country as a highly attractive jurisdiction for the acquisition or development of IP assets.

Sector Profile

I am confident that in 2019 Cyprus’ future as a fund and asset management centre will see significant growth. In the past few years alone, Cyprus has seen a great inflation in numbers of new registered and licenced funds, becoming the location of choice for investment funds. Along with the efforts of CySEC to make the funds regulatory environment more attractive, Cyprus fund tax regime is proving its appeal to EU and international fund managers and investors, making the jurisdiction a great alternative to Luxemburg, the UK or the Netherlands.

Insurance Cyprus being an international financial centre is affected by international developments (AML 4th and 5th Directives, ATAD, DAC6, CRS, FATCA). These developments present challenges to the industry. At the same time they present an excellent opportunity to move to a new landscape and attract businesses and individuals who have business, commercial or other such good reasons to invest in or through Cyprus, set up presence or settle in Cyprus, and organise their personal affairs in the country. The Cyprus Government has taken and is taking steps to harmonise its legal and regulatory framework to attract these businesses and individuals.  Spyros Evangelou Chairman Society of Trust and Estate Practitioners (STEP)

Financial services related to shipping, energy, support services and infrastructure are a growth area with the East Med developing into an energy hub. Cyprus is also becoming a headquartering location and regional jurisdiction for funds and other financial services companies for the EMEA region. Technology and R&D offer real potential and are worth investing in, but we need to further enhance our IP regime so that it can be exploited around the world. Fintech and innovation will lead the way in the future. Elias Neocleous Managing Partner Elias Neocleous & Co LLC

The Cyprus insurance industry has regained its strength with healthy growth rates and fresh momentum to diversify and introduce new services to meet increasing market demands. Cyprus continues to offer international insurance firms many opportunities as a cost-effective and business-friendly base to launch and manage products, services and operations in both the domestic and in international market. A number of foreign insurance operators have been successfully operating in Cyprus for years, attracted by the island’s EU member status, its straightforward and transparent legal framework, ease of doing business and advantageous tax regulation. EU passporting has enticed major international industry players to the country, and Cyprus is particularly well positioned as a centre for companies wishing to do business in the EU and the Middle East region. With increasingly specialised needs arising from clients, new opportunities are found in creating innovative services and products, forging new synergies and using the country as a gateway to expand business into new regional markets. Products that were not widely promoted in the past, such as director and officer liability, are now offered and sought out and new products, such as cyber and drone insurance, are emerging as new tech rolls out into the market. As demand has been rising for these types of policies, the Cyprus insurance industry has been quick to meet the needs of their clients – thus also broadening the spectrum of services. The insurance companies operating on the island, totalling around 30, account for about 98% of the annual gross premiums written in the domestic market, with a handful of these companies dominating the landscape. The insurance industry also manages assets of well over €2.5 billion, making it one of the largest institutional investors in Cyprus. Foreign Exchange

For more than 20 years, Cyprus has been the jurisdiction of choice for Foreign Exchange (Forex) brokers and the country hosts a thriving industry and headquarters for many global giants in the field. The last decade has seen particular growth in the number of retail forex brokers locating their operations to Cyprus, thanks to low corporate tax rates and the country’s excellent infrastructure. Another key advantage is Cyprus’ efficient regulatory framework under the supervision of the Cyprus Securities and Exchange Commission (CySEC), which is fully aligned with EU directives and European MiFID regulations. Cyprus was the first in the EU to regulate the foreign exchange market and CySEC is credited with attracting foreign companies to set up Cyprus Investment Firms (CIFs). With years of expertise and advanced infrastructure in electronic platforms, Cyprus offers strategic advantages that have positioned it among the most attractive destinations for international forex business. n

Discover more at cyprusprofile.com Country Report CYPRUS 2019


Sector Profile

Investment Funds


RADAR Having recorded impressive growth over the past few years, the Cyprus funds sector is becoming a real economic driver of the future and a truly modern European fund hub.


Country Report CYPRUS 2019


he Cyprus fund management industry is fast becoming one of the most promising sectors of the economy. Recording formidable growth over the last few years, the country is strengthening its status as a convenient European gateway for investment funds. The volume of funds and assets under management have hit record highs proving that interest in Cyprus as a business and investment base runs strong, as assets under management (AuM) have more than tripled from €2.1 billion in 2012 to €6.7 billion in May 2019. And if current growth rates are sustained, AuM could reach €20 billion in the next five years. As an emerging EU funds jurisdiction, Cyprus is increasingly on the radar of market

players thanks to its cost-effectiveness and flexible legislation, its proximity to the Middle East and Africa, and longstanding preferential access to Eastern Europe, post-Soviet states and Russia. There has been growing interest from funds around the world, but most notably from Europe, Asia and the Middle East. In addition, Cyprus is attracting funds from countries that do not traditionally have strong economic ties with Cyprus, such as China, India and Japan, to establish a base on the island to access and invest in the wider European market. At the same time, the jurisdiction is a credible alternative for UK-based asset managers seeking to expand or relocate due to Brexit. A further boost of confidence in the sector was the 2018 announcement that Cyprus funds will be eligible to list on Clearstream’s Vestima

Upgraded and Flexible Regulation

KEY contacts

Cyprus Securities and Exchange Commission (CySEC) cysec.gov.cy Cyprus Investment Funds Association (CIFA) cifacyprus.org

Cyprus finished 2018 positively with an increase of 10% in total Assets under Management. 2019 can be looked at with confidence with opportunities for Cyprus within the global trends including China’s further opening up of its securities market, the private equity model’s long track-record is anticipated to continue. Further, with the changes in the global tax environment, Cyprus is poised to win some share of the offshore business moving into regulated onshore jurisdictions. Angelos Gregoriades President Cyprus Investment Funds Association (CIFA)

The consistent upgrades of Cyprus’ regulatory framework have boosted investor interest and the image of the jurisdiction. Bearing similar characteristics to the regimes of Luxembourg and Ireland, the country’s legal framework is one of the most flexible in Europe while maintaining a high level of investor protection – an important aspect for small and medium-sized fund managers that Cyprus is seeking to attract. It offers both EU-regulated Undertakings of Collective Investment in Transferable Securities (UCITS) and Alternative Investment Funds (AIFs). The number of AIFs has seen consistent growth, and foreign UCITS are also widely marketed in Cyprus, including ones promoted by international heavyweights such as JP Morgan, Merrill Lynch, UBS and Julius Baer. Many industry professionals expect UCITS to remain more of a niche market, while AIFs will continue to dominate fund business in Cyprus. Evidence of this is the 2018 establishment of the Hanseatic Fund in Cyprus – a new AIF established in Limassol, which is a leading global shipping hub. The fund was set up to specifically invest in maritime real assets, in particular merchant vessels in the container, dry bulk and tanker segments – providing an alternative investment opportunity compared to other asset classes available in Cyprus today. The industry has experienced a real growth spurt over the last five years with the transposition of the latest European regulatory frameworks – UCITS Directive, AIFMD and MiFID II – into national legislation. In July 2018, Cyprus further improved its Alternative Investment Funds (AIFs) framework, aligning it with international trends. The upgraded AIF framework offers a significantly more time- and cost-efficient means of establishing AIFs in Cyprus, as well as

more clarity about the tax treatment of funds. The most anticipated part of the new legislation was the introduction of Registered AIFs (RAIFs), which offer new benefits such as fast-tracking. These specialised funds are registered by already authorised alternative investment fund managers and do not require authorisation by the supervising Cyprus Securities and Exchange Commission (CySEC) to commence operations. As a result, instead of a three to four-month registration process, these investments can be brought to market in only two to three weeks, providing a faster turnaround at a substantially lower cost. RAIFs can also be converted into an AIF at a later stage for investors wanting a regulated vehicle. There is no minimum share capital requirement for a Cyprus RAIF, and there is legal form flexibility in terms of structuring, including the option to be open-ended or closed-ended. For many investors, including unregulated investor groups such as family offices, the Cyprus RAIF represents an attractive investment vehicle from a legal, regulatory and tax perspective. Investor protection is provided by the requirement to appoint an authorised and regulated AIFM that is responsible for ensuring AIFMD compliance. Another significant reform is the possibility to structure an AIF as a limited partnership (LP) with inherent legal personality, resulting in the AIF having a separate legal personality compared to the AIFs structured as traditional limited partnerships. The Cyprus LP has incorporated the best elements of the Anglo-Saxon LP, a vehicle that can be used to support private equity investments. Considering the popularity of these types of products in other EU jurisdictions, the industry expects these new structuring opportunities to attract significant interest thanks to cost and time savings. There are also upcoming provisions for fund administrators, as well as mini-managers who are allowed to operate below current AIF manager thresholds. Cyprus is now entering the global stage with other top fund domiciles thanks to its upgraded legal framework providing a winning combination of investor protection and freedom of operation for asset managers.

Sector Profile

fund processing platform – following the initial listing of more than 40 Cyprus-domiciled funds on the Thomson Reuters platform, which is visible to more than 20,000 global asset managers and fund professionals. International trends also underline the importance of the European funds sector. Total AuM in Europe increased by 10% in 2017 to €25.2 trillion, which shows consistent growth since 2008, while in Q1 2019 total net assets of European investment funds increased by 7.2% and reached €16.2 trillion. The local industry is set to develop and expand further making the island a serious contender in the international funds landscape with its continuously upgraded regulatory regime, vast pool of service providers, and attractive tax incentives for both funds and asset managers.

Investor-Friendly Tax Regime

The robust business infrastructure and competitive regulatory and legal framework has long made Cyprus an ideal environment for doing business. Part of this success has been its investor-friendly and advantageous tax regime, with double tax treaties with 65 countries. Today, Cyprus offers one of the most attractive fund tax regimes in Europe – for the fund manager, investor, and the fund. 2018 also saw the introduction of new provisions to further Country Report CYPRUS 2019


Sector Profile

Investment Funds enhance the already competitive tax regime for fund managers. One of the provisions is a taxation of carried interest or performance fee for AIF and UCITS fund managers. This essentially means that executives of investment fund management companies or internally managed investment funds may opt for a new mode of personal taxation. Single Regulator

All investment funds in Cyprus are regulated and supervised by the Cyprus Securities and Exchange Commission (CySEC). The watchdog regulates AIFs, UCITS funds, AIFMs and UCITS Management Companies, as well as MiFID regulated investment firms. CySEC has streamlined its operations to help make the application process faster and more efficient. To further enhance the landscape for financial services, in 2018 CySEC announced the establishment of an Innovation Hub to address and explore the rise of fintech and regtech developments. The Hub will be a place where both supervised and non-supervised entities in new industries will have ongoing access to the authority to better understand and implement their regulatory requirements. This is a welcome move that will support information and knowledge exchange on the risks and benefits of new investment products and platforms, as well as help develop new solutions for the financial services sector.

Competitive Tax Regime for Fund Managers Subject to conditions, the variable employment remuneration, which is effectively connected to the carried interest of the fund managing entity, may be subject to Cyprus tax at a rate of 8%, with a minimum tax liability of €10,000 per annum. The new mode of taxation is available for a period of 10 years in total, subject to the annual election of the individual. Also, according to the law, each compartment of an AIF or UCITS should be treated as a separate taxpayer. This further facilitates the effective operation of Cyprus investment funds via multiple compartments, in accordance with international fund industry norms.


Country Report CYPRUS 2019

Sterling Service

Whether in private equity, hedge funds or mutual funds, the strong talent pool and broad spectrum of services in Cyprus can help investors capitalise on opportunities and provide specialised knowledge and insight into a wide range of operational, technological and regulatory issues. Cyprus hosts a number of recognised fund service providers, ranging from global names to local independent operators servicing all types of funds at very competitive rates. Set-up costs for a fund in Cyprus are significantly lower than in the more mature fund centres, which is a tangible benefit for smaller players wanting to launch into the market. In addition, the ‘Big Four’ accounting firms are well-established on the island, as are fund administrators with global expertise, such as Alter Domus, IQ-EQ and Vistra. A number of law offices have cooperation agreements with renowned international law firms, instilling confidence that the local industry can grow and create an attractive environment for the establishment of funds, fund management and servicing companies. Funds operating in Cyprus will continue to require comprehensive banking, custody and depositary services, and the main local providers continue to invest and further improve their global custody and depositary business offering. Over the past few years, local banks have developed services to accommodate the demands of the growing industry through strategic relationships with renowned global custodians and international prime brokers in order to meet the needs of asset managers and funds. Opportunities and Challenges

Despite the positive developments and impressive growth witnessed in the last few years, a key challenge for Cyprus is attracting larger funds. Currently the jurisdiction is ideal for regional players, start-up funds, alternative funds, as well as larger entities looking to diversify into new asset classes with minimum risk and cost. Cyprus is also benefiting from de-offshorisation measures in other parts of the world and seeing increasing interest from those seeking new EU-regulated jurisdictions. For example, once highly popular domiciles such as the Cayman Islands and the British Virgin Islands have developed a controversial image in the wake of tightening compliance and transparency requirements – resulting in many asset managers moving to better regulated markets such as Europe to operate on a global scale. With a solid legislative framework, relatively low-cost operating environment, EU passporting capability, professional

Following the European elections in May 2019 and looking to the next five years, asset managers in Europe will deal with a dynamic regulatory agenda. Ensuring European investors, savers and pensioners are in the driving seat and maintaining a competitive role for the European asset management industry on a global scale are EFAMA’s key priorities. As an early supporter of the European Commission’s project for a stronger Capital Markets Union, we call policy makers in Europe to keep the momentum and offer savers additional opportunities to put their money to work. This means products and services that are adapted to their needs, including environmental, social and governance issues and are able to reap the benefits of new market and technological developments. In this challenging environment there are important opportunities for market players across the EU: greater use of passports for management companies along with access to a larger pool of fund providers enabled by technology can significantly diversify investment prospects. It is on those opportunities that Cyprus can continue leveraging and CIFA keep focusing on building a growing investment fund centre.    Agathi Pafili Senior Regulatory Policy Advisor EFAMA 

195 Management Companies and Funds

+63 new applications pending (April 2019)

Pioneers! New York 1924 In 1924 the MIT Massachusetts Investors Trust, the first Mutual Funds management company in the USA, founded the Massachusetts Investors Trust Fund, the first Mutual Fund in the world, and revolutionized the global investment industry!

Cyprus 2019 In 2013 GMM Global Money Managers, the first investment management company in Cyprus, founded SOL GMM BALANCED FUND, the first Cypriot Mutual Fund, and opened up new horizons for the investors in the Mediterranean! Nowadays, in 2019, GMM is the largest Mutual Funds management company in Cyprus and offers 20 Mutual Funds as well as an extensive range of special investment products (UCITS, AIF’s etc.) for every investor’s profile, for the small, medium and large portfolios of both private individuals and institutional investors. Winner of the most CYPRUS FUND MANAGERS’ AWARDS 2017 for the highest performance of Mutual Funds, GMM continues to innovate, while the experienced specialized executives aim primarily to safeguard the invested capitals and generate optimal yields.

Wall Street Manhattan (1924)

Information: Tel.: +357 22 205858 36 Stasinou Street, Strovolos, 2003 Nicosia, Cyprus W: www.global-mm.com, E: info@global-mm.com www.global-mm.com

For further information regarding the features of Mutual Funds and their risk profile, refer to the “Prospectus” and “KIID”, which are available on the website www.global-mm.com. GMM is a UCITS management company (License No 2/13) also licensed to create and manage other Collective Investment Undertakings. The Company is a member of ICMA and CIFA. Units of the Mutual Funds managed by GMM are distributed within Cyprus and Greece. GMM is authorized and regulated by the Cyprus Securities and Exchange Commission.


Investment Funds

Sector Profile

The funds industry in Cyprus is growing fast. The country is more and more being recognised as an emerging funds’ location. 2018 has been a year where the funds sector grew, and new legislation came in to effect, which is expected to further push this growth. For 2019, we believe that apart from Alternative Investment Funds (AIFs) that are well established, UCITS can also enjoy growth. The product is gradually becoming more recognised and visible, and we believe there is room for expansion.

service providers and efficient tax regime, Cyprus is an ideal domicile for these types of managers to find a firm foothold to expand their business. Following the 2013 financial crisis, Cyprus has created new and interesting opportunities for investors by transforming a debt-driven economy into an investment-driven one – and AIFs in particular pose a promising prospect to tap into the potential of this new economy. Investment opportunities in real estate, shipping, infrastructure, non-performing loans, oil and gas, renewable energy, start-ups and private equity projects can all be accommodated through Cyprus fund vehicles in an EU-compliant manner. In addition, the introduction of a new securitisation law in July 2018 has made it easier for banks to securitise or sell loans, allowing the creation of a secondary market which can ultimately help them reduce their stock of non-performing loans. The new legislation has simplified asset transfers to special-purpose entities. Also, plans to reform the pension funds framework by uniting the two authorities supervising insurance undertakings and pension funds under one independent supervisory authority, will help reboot the pension fund market in Cyprus. Innovation has become the buzz word for Cyprus over the last year and government backed initiatives will bring more opportunities into this arena. With increasing demand from start-up fintech companies, hedge funds and other financial services players, Cyprus is also making a name for itself in the cryptocurrency and blockchain arena. With a surge in the number of pioneering blockchain and crypto start-ups and a government supporting digital currency and infrastructure, the talent in this sector is positioning Cyprus as an ideal location for new initiatives in structuring crypto- and tech-focused investment funds. 108

Country Report CYPRUS 2019

Boom Industry

Cyprus has seen exceptional economic growth reaching just shy of 4% growth in 2018, making the country one of the fastest growing economies in the eurozone. A further driver has been the developing funds industry, and increasing inflows of FDI into multiple sectors. The industry has also ramped up its promotional efforts and is represented by the Cyprus Investment Funds Association (CIFA). CIFA is a full member of the European Fund and Asset Management Association (EFAMA) and an associate member of the International Capital Markets Association (ICMA). The status of the jurisdiction was further bolstered in 2019 when Cyprus was awarded full membership of the International Investment Funds Association (IIFA), underlining the fact that the country operates within a rigorous legal framework that promotes transparency and protects investors. Cyprus’ offering of a European passport of quality and flexibility, its exceptional possibilities for cross-border and global fund distribution, as well as its long-standing investment links into and out of Europe all provide investors with preferential access and solid service expertise through its skilled professionals. In addition, its geostrategic location at the crossroads of Europe, the Middle East, Asia and Africa has also positioned the country as a natural investment bridge into markets worldwide. The fact that fund managers are increasingly moving to Cyprus demonstrates the rapid development of the sector, and is testament of the country’s determination to capitalise on its full potential of becoming a key EU fund centre. n

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Alexios Kartalis General Manager GMM Global Money Managers

Cyprus has been gaining momentum among the European fund management hubs, through a competitive and attractive offering, as well as a constantly updated regulatory and legislative framework. We believe the country and the fund industry stakeholders are in a position to maintain this traction throughout 2019 and beyond, while fund structures can be the perfect vehicle to address the increasing complexities of wealth accumulation, investment management and succession planning. Yiannis Sykas Chief Executive Officer Hanseatic Fund Variable Capital Investment Company Plc

Assets under management:


billion (May 2019)



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A new player emerges in Cyprus’ growing fund industry Hanseatic Fund Variable Capital Investment Company Plc (‘Hanseatic Fund’) was established to offer investors an exciting investment opportunity in the Cyprus Alternative Investment Fund (AIF) sphere. Building on a heritage of a reputable ship owning company, Hanseatic Fund has what it takes to create value for its investors. The fund’s manager, Hanseatic Capital Management Ltd, is currently performing capital raising activities, targeting professional and well-informed investors only.


work which is complemented by indeanseatic Fund is a new Alternative pendent functions of depositary, fund adInvestment Fund established in ministrator and both internal and external Limassol, a leading global shipping hub and auditors. A majority of non-executive and the centre of Cyprus’ maritime industry. independent directors on the board also The fund was established to offer Cypriot ensures that the best interests of the invesand foreign investors an attractive alternators are well served. tive investment opportunity compared to The fund manager’s board of directors other asset classes available in Cyprus. The possesses a depth of experience in all phases fund was set up to specifically invest in relating to the execution of the investment maritime real assets, in particular merchant strategy, in areas such as deal sourcing, acvessels in the container, dry bulk and tanker quisition, ship management and operations, segments. and vessel disposal. Having received all regulatory approvThe units of the Fund qualify as an als and having met strict requirements, eligible investment for the Naturalisation the fund has appointed Hanseatic Capital “We are confident that Scheme for Investors and may be ideally Management Ltd (HCM) to be its dedithe combination of our suited for investors who are looking to cated manager. HCM is an affiliate of the well-balanced investment obtain Cypriot citizenship. Bernhard Schulte Group, a leading ship strategy, the strategic Hanseatic Fund’s CEO Yiannis Sykas owning and management company with a alliance with the Schulte commented on the launch: “The capital inhistory of more than 130 years in shipping. Group, our experienced tensive and cyclical nature of the shipping Therefore, it is no surprise that HCM is board of directors and industry provides for many investment oprooted in the heritage of Hanseatic Shipping the current positive portunities across different vessel segments. Co., Bernhard Schulte’s first company estabmarket conditions could We are confident that the combination of lished in Cyprus back in 1972 and now opercreate sustainable our well-balanced investment strategy, the ating as Bernhard Schulte Shipmanagement. value for investors.” strategic alliance with the Schulte Group, Being based in Limassol is a key advanYiannis Sykas – CEO, our experienced board of directors and the tage for the fund and HCM as this allows Hanseatic Fund VCIC Plc current positive market conditions could for achieving operational efficiency through close collaboration with key service providers. Operations in create sustainable value for investors.” In addition to the generation of shareholder value, the Cyprus also benefit from a qualified workforce and a favourfund also hopes to strengthen the maritime cluster as well as able tax system geared towards maritime investments. HCM will offer its investors greater transparency and the wider local economy in Cyprus by operating all assets out protection through operating in a modern regulatory frame- of Limassol.

For more information, please contact info@hanseatic-cm.com or visit www.hanseatic-cm.com

Sector Profile

Manufacturing & Industry


REVOLUTION To strengthen competitiveness and productivity, Cyprus is adopting an ambitious new strategy to better connect traditional industry and manufacturing with other sectors to transform the country into a more modern and tech-driven economy.

KEY contacts

Ministry of Energy, Commerce and Industry mcit.gov.cy Cyprus Chamber of Commerce and Industry ccci.org.cy Cyprus Employers and Industrialists Federation (OEB) oeb.org.cy Cyprus Association of Research and Development Pharmaceutical Companies (KEFEA) kefea.org.cy


n a bid to revolutionise its industrial sector and improve access to the world’s biggest markets, Cyprus has a new vision to create a robust, flexible and technologically advanced industry with services that will substantially contribute to the development of the Cypriot economy. This will be achieved through the gradual implementation of a new National Industrial Strategy Policy for 2019-2030. Its mission is to develop more high-value-added innovative products and services that will contribute to the competitiveness of Cyprus, and increase industrial produc-


Country Report CYPRUS 2019

tivity by strengthening the industrial ecosystem and investing in sustainability, innovation, digitalisation, infrastructure and skills. As the EU and eurozone’s most eastern member, Cyprus is an attractive option for producers in the Middle East, Africa and Asia to access the European Union’s 500 million consumers. The island is equally attractive to manufacturers in Europe and beyond, providing an affordable base with high connectivity to supply existing and emerging markets in the East. The island has one of the EU’s lowest corporate tax

Manufacturing accounts for

5.4% of Cyprus’ GDP

A New Strategy for Growth

With sectors such as tourism, professional services and construction booming, the government has now placed strong focus on further developing its manufacturing and industrial sector. Incentives are already in place for investments in fixed assets and industrial equipment, while innovation projects in the industry are supported by state funding to promote results-oriented research. Together with the private sector, the Ministry of Energy, Commerce and Industry (MECI) has finalised its new strategy, which echoes the EU’s renewed industrial policy that highlights digital transformation and envisions so-called smart factories increasingly powered by renewable energy churning out high value-added and ‘green’ products – a formula that has already been embraced by Cyprus’ leading manufacturers to compete globally. Access to finance and export markets will be improved, along with new tax and other incentives to attract foreign direct investment in high-tech and knowledge-based industries. A prime example of the sector’s significant potential for growth and foreign investment, was the €260 million acquisition of a leading Cypriot pharmaceuticals producer Remedica Ltd by South Africa’s Ascendis Health Ltd in 2016. The South African corporation wanted a strategic platform within the EU for expansion and growth in the generic pharmaceutical industry in both European and emerging markets. The alliance has given Remedica the funding to embark on a new phase of development and the benefit of synergies with Ascendis. Incentives to boost the sector include a fasttrack visa programme for start-up entrepreneurs from outside the EU to establish ventures with high growth potential, which will be in force until 2021. The expected establishment of an under-ministry for development will also accelerate procedures for foreign investment and help cut government bureaucracy. Key Products

Cyprus embraced industrial development in the decade after independence in 1960, transforming the largely agricultural country into one where manufacturing accounted for 20% of GDP by the 1980s. An early success came in 1967 when a Cypriot company, Photos Photiades Breweries, secured a licence to brew Carlsberg, which is now done at a fully-automated brewery in Nicosia.


n 2019 we are launching a new National Industrial Policy to 2030, with a vision to create a robust, flexible, intelligent and technologically advanced industry with relevant services, contributing substantially to the growth and competitiveness of the Cypriot economy and the well-being of its citizens. In this context, we are introducing two new grant schemes in 2019, aimed at helping small and medium sized enterprises create strategic clusters and engage in their digital transformation. Yiorgos Lakkotrypis Minister of Energy, Commerce and Industry

Industry accounts for

8.3% of Cyprus’

GDP (expected to increase to 15% by 2030)

It was the first time the Danish brewing giant allowed its famous beer to be produced outside Denmark. Further transformation produced an increasingly services-oriented economy. The once flourishing but protected textile, clothing and footwear industries faded after EU membership in 2004, giving rise to the manufacture of medium- and high-technology products and semi-customised small-batch products. The main growth areas have been in the ICT sector, manufacturing parts, instruments and electronics, as well as consumer products such as cosmetics. Production of pharmaceuticals, cement and fabricated metal items – all well-established export industries – is performing strongly. Record-breaking tourist arrivals are stimulating the food and beverages industry, which accounts for over 30% of total manufacturing production. Halloumi cheese is a stellar export performer. In 2018, Cyprus exported 30 million kilos worth €194 million to over 40 countries worldwide – and with more markets steadily being targeted and opened for exports, these figures are sure to grow further in the coming years. Industrial production contracted sharply during the recent recession, but the traditionally resilient sector recovered faster than the general economy, with production increasing 5.4% year on year in February 2019. Some 30,000 people – about 6% of the workforce – are employed in manufacturing and industry. The main destination for Cypriot manufactured exports is the European Union, which constitutes over 50% of the market, while exports to the Middle East make up around 15%.

Sector Profile

rates at 12.5%, double taxation treaties with over 60 countries across the globe, a highly educated workforce and a sophisticated transport and logistics infrastructure.

Supporting Innovative SMEs

The clear majority of Cyprus’ 5,300 manufacturers are small and medium-sized enterprises (SMEs), mostly family-owned and run. This makes the sector flexible and open to innovation, offsetting difficulties with economies of scale which will also be addressed by plans for clustering and improving the industrial infrastructure. The new national industrial strategy policy will encourage more private investment in research and innovation and capitalise on robust spending in this area by Cyprus’ public universities by improving synergies between academia and industry. Cyprus also ranks first per capita among EU members competing for funds from Europe’s largest research and innovation programme, Horizon 2020, securing almost €90 million so far to finance some 250 projects by academic and research centres and companies. Acquiring such funds has helped innovative Cypriot SMEs to become notable successes. One of these is Country Report CYPRUS 2019


Sector Profile

Manufacturing & Industry Vitatrace Nutrition Ltd (VTN), which employs some 40 people at its Nicosia offices and factory, producing vitamin pre-mixes and pharmaceuticals for animal nutrition for export, particularly to the Middle East and Europe. Founded in 1978 and owned and operated by two families, it has won funding in cooperation with several British universities for the EU’s largest-ever research programme on animal nutrition. A Badge of Quality

Quality and affordability are the hallmarks of Cypriot-made pharmaceuticals, which are sold in over 100 countries across the globe. The industry is led by Medochemie Ltd and the aforementioned Remedica, which invest heavily in research and innovation and spend significantly on continuously upskilling their workforces. Medochemie Ltd, founded in 1976, develops, manufactures and distributes mostly generic pharmaceuticals and invests up to 7% of its turnover in research and innovation. The company has 13 manufacturing plants and facilities, of which nine are in Cyprus, one in the Netherlands and three in Vietnam. With its multinational staff of 1,670, the company has expanded from its Cyprus base into promising markets across the world – to the Middle East and Africa, Far East and the Americas – and has 21 offices and operates in 107 countries. Cyprus’ ideal location enables these two award-winning companies in Limassol to distribute their products to markets in the region and far beyond. Their products bear ‘made in the EU’ labels – a badge of quality that assures consumers that what they are buying has met rigorous testing standards. Another major manufacturer and one of Cyprus’ biggest exporters is Vassiliko Cement Works, which boasts Europe’s largest single clinker production line and operates its own eponymous port. Founded in 1963, the company was floated on the Cyprus Stock Exchange (CSE) in 1996. A decade later, to satisfy growing demand, Vassiliko revamped its whole plant with an initial investment of €180 million. The company has an annual capacity of two million tons of cement, more than twice the island’s domestic needs. Its international customers are mostly Cyprus’ neighbours in the Eastern Mediterranean. Vassiliko has a variety of programmes to keep training and upgrading the skills of its 340-strong workforce, and a ‘talent academy’ that trains unemployed graduates for six months to a year, some of whom enter the workforce when vacancies arise. Cyprus has a 4,500-year-old history of copper mining, and today’s production methods are of the highest standard. Substantial investment 114

Country Report CYPRUS 2019

in research, innovation and the latest mining technology has enabled Hellenic Copper Mines (HCM) to commercially exploit ores depleted by millennia of extraction. HCM set a European first in 1996 by introducing hydrometallurgy, a cost-effective and environmentally friendly way of exploiting low-grade ores, and it is a pioneer in bio-leaching. The high price of gold has also made it worthwhile for HCM to begin processing ores bearing the precious metal that it amassed while mining copper and to extract new ones, along with silver-bearing ores. HCM employs just under 100 people, nearly a third of them university graduates, and some 50 contractors daily, providing welcome employment in the rural Solea district and contributing to the rehabilitation of remote areas. HCM exports 100% of its production to European destinations and its copper is classified among the top copper metal producers worldwide in terms of its purity (99.999% cu). Although currently the only operating mining company in Cyprus, some exploration companies are active because the island remains rich in low-grade mineral wealth. The mining of metals accounts for about 5% of Cyprus’ industrial exports, a figure which would be far higher if industrial minerals and cement were included. Given the island’s small domestic market, the government is encouraging manufacturers to be more international in outlook in order to grow. A good example of this is Elysée, which celebrates its 40th anniversary in 2019. The award-winning Nicosia-based company designs and develops irrigation and piping systems that are sold in 65 countries from Europe and the Middle East to South Africa, Japan, Australia and New Zealand. Equally ambitious and innovative is Limassolbased Muskita Aluminium Industries Ltd, which designs and manufactures aluminium products and systems that are used across the globe in sectors ranging from aviation to agriculture. With 350 highly trained staff, the over 60-year old company was a forerunner in the European aluminium industry and holds many design patents and pioneered the use of robotics in Cypriot industry, both in its warehousing and production, and prides itself on fostering green initiatives. Today, Muskita is one of the most technologically advanced firms in its industry worldwide and the largest, most progressive factory of its kind in Cyprus. The company’s systems have been tested and certified to withstand the severe rain and snow of Northern Europe, the pounding cyclones of the Indian Ocean and the searing heat of the Middle East. Its products are used internationally, a testament to the cutting-edge technology, engineering, quality and skilled workforce that have been paramount to the company’s current and future success.

6% of the workforce employed in manufacturing and industry

Demos Mouskis CEO Muskita Aluminium Industries Ltd

Main destination for Cypriot manufactured exports: European Union over 50% of the market, Middle East 15%

Opportunities and Challenges

The new industrial strategy policy is designed to maximise the opportunities and address the challenges inherent in a sector where most enterprises are SMEs largely dependent on imported raw materials from distant markets. A major strength of the strategy is that it was formulated after lengthy consultations between the government and stakeholders, primarily the private sector’s two main representative and lobbying bodies, the Cyprus Chamber of Commerce and Industry (CCCI) and the Cyprus Employers and Industrialists Federation (OEB). All stakeholders are working together to make the strategy work. Most SMEs are entrepreneurial and have the advantage of being agile, flexible and innovative, but face difficulty in keeping the cost of imported raw materials down by buying in bulk. Now plans for clustering units of similar producers that can join in bulk orders will reduce costs. Access to financing has been a concern for small manufacturers because financial institutions have set stricter lending conditions in the wake of the 2013 bailout. Although the economic climate has improved substantially, the financing environment remains difficult for SMEs which have limited collateral available and many companies also remain overindebted. In a bid to support SMEs, Cyprus is offering opportunities to make use of tax breaks for new export-oriented companies, access to training grants and soft loans, as well as funding opportunities for small start-up companies. State-guaranteed loans from the European Investment Bank (EIB) are also enabling banks to extend credit to SMEs, with more than €210 million disbursed in 2018, of which €127.6 million went towards SMEs, €39.4 million for innovation and €31.1 million for the environment while the remaining went for infrastructure.

In a bid to tackle climate change and to address the common complaint by manufacturers about the high cost of electricity, the strategy will incentivise greater use and development of renewable energy resources (RES). Installing new, clean energy-powered heating and cooling systems in factories will be a priority. With the government committed to meeting 13% of Cyprus’ energy needs with RES by 2020, the clean energy industry is ripe for foreign investment. The island aims to become a hub for solar innovation, technology transfer and start-ups. Photovoltaic parks are a growth area ready for more investment. The national strategy is also proceeding with a techno-economic study for industrial sustainable management of waste and assessing the capacity to generate electricity from better waste management in industrial zones. In addition, the study will examine the possibility of installing treatment plants for wastewater from food and wastewater industries. The results of the study will eventually create new grant schemes and other incentives to industries and SMEs to promote and make use of cyclical economy technologies, applications and standards. The future exploitation of significant natural gas reserves in Cyprus’ waters could also facilitate growth in the manufacturing sector, with prospects of using the island’s own energy supply to lower production costs in the future. On another front, the new national industrial strategy policy has plans to boost competitiveness and productivity by ensuring that the sector’s labour force is continuously trained to capitalise on rapidly evolving technologies. This, together with further investment in modern tech solutions, will enable manufacturers to keep their advantage over competition from lower-wage producers in Eastern Europe.

Sector Profile

Our future outlook is positive given Cyprus’ ongoing economic recovery, with growth substantiated by private business, government sector reforms and most importantly the upcoming natural gas exploitation, which will create remarkable opportunities for our country’s industrial sector which was underdeveloped due to high energy costs. The blessing of this resource, if used wisely, will encourage substantial new investments for long-term industrial growth in Cyprus, inevitably creating stable employment and significant new GDP contributions with all the benefits that follow.

Determined to Succeed

The foundations of a robust industrial base have long been in place in Cyprus. The island has a deep pool of well-educated human capital, a sophisticated infrastructure, and a strategic location with high connectivity that makes it the ideal springboard for European manufacturers keen to expand into the markets of the East and vice versa. It may take a few years to see concrete results from the new industrial strategy policy, but Cyprus’ manufacturing and industrial sector is determined to realise its true potential. SMEs are increasingly following the pioneering lead of several large, innovative and export-oriented companies, and with renewed support and incentives in place, Cyprus will certainly see a revolution in this arena in the coming years. n MUSKITA Aluminium Industries

Discover more at cyprusprofile.com Country Report CYPRUS 2019


Sector Profile

Maritime & Shipping

The Cyprus shipping sector is propelling towards a strong future thanks to the industry’s strategic focus on steering the key economic sector towards new levels of growth.



he Cyprus shipping industry has been a global success story for decades. Today its registry ranks as the third largest merchant fleet in Europe and the 11th largest in the world, the country is also the EU’s largest shipmanagement centre and amongst the top five in the world. The island has become a preferred base for global shipping operations. Companies present in Cyprus today are some of the largest of their kind in the world and manage around 20% of the world’s third-party managed fleet. For example, two of the industry’s most highly respected privately-owned shipmanagement companies, Columbia Shipmanagement and Marlow Navigation, both based in Cyprus, merged in 2017 to form Columbia Marlow, making it one of the world’s largest ship and crew-management companies. 116

Country Report CYPRUS 2019

In the last few years, the sector has seen a further boost reaching new levels in terms of its register’s tonnage capacity, in the number of companies basing operations on the island and in the number of people employed by the industry. Cyprus’ merchant fleet exceeds 23 million gross tonnage, the number of companies increased from 168 in 2018 to over 200 in February 2019, and the sector employs around 3% of Cyprus’ workforce. New interest in the Cyprus registry has been sparked in the wake of prolonged Brexit negotiations with many shipping-related companies seeking a safe EU harbour on the island to successfully continue their business.

KEY contacts

Shipping Deputy Ministry shipping.gov.cy Cyprus Shipping Chamber csc-cy.org Cyprus Union of Shipowners cus.com.cy

Sector Profile


ince the set-up of the Shipping Deputy Ministry in 2018, we have completed a full restructuring of our Maritime Administration using best practices, rebranded our identity and promotional material, relaunched our website with additional e-services and introduced new measures to enhance competitiveness. We also completed an intense promotional plan and took part in road shows and conferences around the world. In 2019, we will continue to diligently implement our National Shipping Strategy to further enhance Cyprus’ maritime cluster and Register of Ships and hope to continue the rapid growth of the cluster with more companies setting up and scaling in Cyprus. By fostering education and innovation, we plan to strengthen the expertise of our highly qualified human talent and the technological solutions available to the shipping industry worldwide.

Natasa Pilides Shipping Deputy Minister

International Maritime Centre

The vibrant and resilient shipping sector is the longest-serving generator of foreign direct investment and is now primed for further growth. Cyprus’ maritime industry contributes more than €1 billion to the economy annually, which translates to over 7% of GDP, a far higher figure than in other countries seriously engaged in merchant shipping. Of this figure, shipmanagement alone accounts for 5%. In the second half of 2018, industry revenues from shipmanagement companies reached €528 million, recording an increase of €22 million when compared with the first half of 2018. The main exporting destinations for the services of the shipmanagement industry include Germany, Switzerland, Singapore and Malta. The industry directly employs 55,000 seafarers from around the world and 9,000 personnel onshore, more than half of whom are Cypriot graduates, attracted to the sector because of its professionalism and high salaries. Notable for its independence, this formidable industry has flourished without any state investment, although it enjoys continuous and strong state support. Cyprus’ two dynamic shipping associations – the Cyprus Shipping Chamber (CSC) and the Cyprus Union of Shipowners (CUS) – work closely with the state to constantly upgrade the maritime administration and to build its competitive offering. The creation of a new and independent Shipping Deputy Ministry in 2018 made the sector even more efficient, autonomous and business-focused. The launch was well-timed to capitalise on new opportunities for the sector that arise from Cyprus’ emerging natural gas sector and Brexit, and the new Deputy Ministry fully focused on shipping, coupled with the country’s competitive tax incentives, has led to the relocation of a number of shipping companies to Limassol, the island’s maritime capital.

Country Report CYPRUS 2019


Sector Profile

Maritime & Shipping


Competitive Tonnage Tax

A famous seafaring nation since antiquity, Cyprus began building its modern shipping industry in the early 1960s when it established its shipping registry and introduced legislation providing ship managers and owners with a more tax-efficient business environment. Among the country’s other evident advantages were its strategic location at the crossroads of maritime transport lines between East and West, low operating costs, a highly educated, multilingual workforce and its sophisticated professional services industry. Cyprus is also signatory to numerous international maritime conventions and has bilateral cooperation agreements with 25 countries, among them leading suppliers of labour. Foreign shipmanagement executives enjoy the renowned holiday island’s pleasant lifestyle and are reassured by statistics that show it is one of the safest places in the world to raise a family. Limassol, where the vast majority of shipping companies are based, has undergone a major transformation in recent years. Bustling cafes and restaurants fill its revamped historic old town while its long coastal road is now flanked by cycle paths, pedestrian walkways and prestigious, high-rise residential developments. An added boost for shipping executives comes from new legislation providing tax incentives for high-earning expats. But the major driver of the sector’s success was put in place in 2010 when, after more than 10 years of negotiations with Brussels, Cyprus secured agreement for an upgraded and competitive EU-approved tonnage tax (TT) system. The main benefit of the TT regime is the certainty it provides companies on their annual tax obligations, enabling them to do their business planning accordingly. While other jurisdictions might have less expensive TT regimes, Cyprus’ incorporates all three types of maritime activities – ship owning, shipmanagement and chartering, making it unique in the EU where other jurisdictions might specialise in just one or two of these areas. In the past six years there has been an increase of more than 65% in the number of shipping companies that have registered with Cyprus’ specialised shipping taxation system, boosting the sector’s revenue by 25%. In 2019, the Shipping Deputy Ministry has plans to ramp up the global promotion of the TT system to attract more ships to its register and companies to its shores, and introduce new tax incentives and simplify shipping fees. The TT regime has ensured the country’s status as an attractive jurisdiction despite the Turkish embargo, which was unilaterally Country Report CYPRUS 2019

imposed in 1987 on Cyprus flag ships calling at Turkish ports. The Cyprus flag is also considered one of the highest quality EU flags available today and ranks at the top of various Port State Control Agreement ‘White Lists’ – including the Paris and Tokyo MOUs. Ensuring Competitiveness

The creation of an independent Shipping Deputy Ministry, whose head reports directly to the country’s President, was a major milestone in 2018 for the industry’s development, serving to further attract quality shipping companies and tonnage to Cyprus. Based in Limassol, the Deputy Ministry is the first ministry outside the capital city of Nicosia and as such is ideally located to work with the CSC – the voice of the resident industry – and the Cyprus Union of Shipowners. These influential associations have played a key role in developing the industry through their lobbying efforts and expert advice to the government, with which they cooperate closely. The expertise and proactive approach of maritime specialists in both the private and public sector have long been the driving force of the local maritime cluster, which has supported the development of Cyprus into the world-class maritime centre it is today. A year after its establishment, the Deputy Ministry has created a roadmap to ensure Cyprus maintains its competitive edge. The goal is to protect the stable and business-friendly framework provided to foreign investors in shipping by further expanding the island’s registry and maritime cluster, strengthening international relations, improving maritime safety and environmental protection, implementing a blueprint for blue development and to upgrade available services. Key to hitting all these targets is to secure Cyprus’ competitive tax policy, to reduce bureaucracy and to launch a single service centre for shipping companies. In addition, Cyprus has plans to expand its presence in leading ports around the world, and is looking at establishing a permanent representation in Asia due to the importance of China and Japan in world trade. The move would complement its current list of offices in Hamburg, Rotterdam, London, Piraeus, New York and its permanent representation in Brussels. Technology is also front and centre in efforts to upgrade services, with, for example, plans to implement more automation in the ship registration process. In addition, the Ministry and the shipping industry support innovation programmes that contribute to shipping-related tech solutions. The country’s start-up and innovation

Although Cyprus is already established as a significant international shipping centre, a number of factors such as: the lifting of the illegal Turkish embargo on Cyprus ships, the further promotion of the Cyprus taxation system, maritime education and ‘Blue Growth’, can significantly drive the growth of the Cyprus shipping industry, resulting to the further expansion of the Cyprus registry. Also, the recent discovery of natural gas in the Exclusive Economic Zone of Cyprus creates even greater prospects for Cyprus shipping and of course, the country as a whole. Thomas A. Kazakos Director General Cyprus Shipping Chamber

Cyprus has entered a new era. The era of shipping and hydrocarbons. The discovery of huge deposits of hydrocarbons comes as a huge endowment which together with the establishment of an international economic and shipping centre guarantee the success for Cyprus. If we seize the opportunity opening up from Brexit, Cypriots can once again become masters of trade and international business. Rarely such strong elements come together to support a country and its people to rise. Andreas Hadjiyiannis President Cyprus Union of Shipowners

Despina Panayiotou Theodosiou Joint CEO Tototheo Maritime

sector has been growing in recent years, with many companies in Cyprus launching new technologies that could be integrated in the shipping industry, according to the Ministry.

Chamber of Shipping (ICS) and the European Community Shipowners’ Association (ECSA).

On the World Stage

Cyprus boasts a thriving education and research sector that also contributes to tackling issues facing the shipping and maritime sector. There are a number of dedicated maritime institutes that promote research, technology, innovation, sustainability, and focus on training and educating those employed in the shipping industry. The Maritime Institute of Eastern Mediterranean (Mar.In.E.M.) is a Cyprusbased non-profit organisation founded in 2010 to promote research, training and technology. Cyprus also hosts a DNV GL Maritime Academy, while Bernhard Schulte Shipmanagement has its own specialised maritime training centre in Limassol.

The shipping industry is showcased internationally at the biennial ‘Maritime Cyprus’ in Limassol, which attracts hundreds of shipping executives and professionals from around the world. Growing in prestige since it was first held in 1989, the event now serves as a leading global forum that influences maritime policy, regulation and shipping trends. The resident industry’s voice is also heard abroad through Cyprus’ active participation in various shipping-related fora, such as the International Maritime Organisation (IMO), the International Labour Organisation (ILO) and the European Commission, the International

Navigating the Future

Sector Profile

Shipping, maritime and ocean businesses are taking real advantage of digitalisation to enhance collaborative networks and relationships with clients, suppliers and partners. For Cyprus, a key maritime nation renowned for its ship operations this is a time where we can begin to truly shine. Our reputation can only grow as a key cluster where skilled collaboration and modern expertise are tied with our traditional values of honesty and integrity.

In the past six years there has been an increase of more than 65% in the number of shipping companies that have registered with Cyprus’ specialised shipping taxation system, boosting the sector’s revenue by 25%.

5% of the world’s

fleet and around

20% of global

third-party shipmanagement activities are controlled from Cyprus

3rd largest

merchant fleet in Europe

11th largest

merchant fleet in the world

EU’s largest

shipmanagement centre

200+ shipping related

companies based in Cyprus

Shipping accounts for 7% of Cyprus’ GDP Cyprus employs over 55,000 seafarers from around the world and 9,000 personnel onshore

Country Report CYPRUS 2019


Sector Profile

Maritime & Shipping In 2016, the University of Nicosia, an independent institution, launched the country’s first Maritime Academy, which offers training in nautical science and marine engineering in collaboration with renowned shipping companies. The Academy’s aim is to support the industry in Cyprus and globally by providing qualified officers for vessels. In another landmark for the sector, classes began in 2018 at the new Faculty of Marine Sciences and Technology in Larnaca, which is part of the University of Cyprus, a prestigious Nicosiabased public institution. Instruction is in English and, according to Lloyd’s Register, the faculty is set to provide the local and global maritime industry with high-quality human capital and research capabilities. The private educational sector is also helping to build a workforce for an industry that is embracing rapid technological advances. Opportunities and Challenges

Although global shipping is still feeling the effects of the international financial crisis, with oversupply of vessels and banks tackling the weight of bad shipping debts with repossessions to cover losses, there is recovery on the horizon which also presents a silver lining for Cyprus. The flag is growing, and the country’s shipping industry is ideally placed to capitalise on the discovery of large natural gas fields in Cypriot, Egyptian and Israeli waters. There are six LNG carriers in the Cyprus fleet and plans to add many more under Cyprus’ new gas strategy which embraces the LNG market. A more immediate opportunity for the country’s maritime sector comes from Brexit. UKregulated ship insurers have identified Cyprus as an attractive jurisdiction for an outpost or base amidst fears that the EU-exit will hinder their access to the bloc’s financial market. For example, the major global shipping insurer, London P&I Club, announced in July 2018 that it was setting up a ‘post-Brexit subsidiary’ in Cyprus, while several Greek ship-owners previously based in London have already relocated to Cyprus. Prompted by uncertainty in the Greek economy, other Greek shipowners and shipmanagement companies have also transferred some of their operations to Cyprus. Another coup came in early 2019, when British shipping firm P&O Ferries decided to register its English Channel operating fleet under the Cyprus flag to take advantage of the benefits and security it provides. Growing ship financing possibilities available through local banks will support the future growth and diversification of Cyprus’ shipping sector. Although the banks’ portfolios are still comparatively small, this development will not only in120

Country Report CYPRUS 2019

crease the size and scope of the maritime cluster and create opportunities, but expand the expertise in this area within Cyprus’ financial services sector. The size of the world fleet has doubled over the last two decades, but currently the Cyprus industry is prevented from realising its true potential by the Turkish embargo on Cyprus-flagged vessels entering its ports. A settlement of the Cyprus problem would immediately resolve this and dramatically boost the size of the country’s commercial fleet. Pending a settlement, Cypriot officials will press for the lifting of the Turkish embargo to be included in any package of confidence-building measures in reunification talks. A Global Shipping Power

Thanks to its geostrategic position as a trading centre since antiquity, Cyprus has a long history in shipping. Its status as a hub for shipping activities has gone from strength to strength, expertly navigating through economic storms and market fluctuations – always staying at the top of its game. Although a small economy, Cyprus’ shipping sector punches above its weight. It is estimated that approximately 5% of the world’s fleet and around 20% of global third-party shipmanagement activities are controlled from Cyprus. Of the companies established in Cyprus, some 87% per cent are controlled by EU interests, including Cypriot. Recognised for its competence, safety and multiple advantages, Cyprus is capable of competing on a global scale. With its growing register, upgrades and reforms, new opportunities arising from Brexit and natural gas discoveries in the East Med, Cyprus shipping is set to grow in coming years. n

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The recent developments in Cyprus’ EEZ is one of the primary factors that will attract more business. New regulations, politics, digitalisation and the changing markets are forces that will bring challenges worldwide, but these immense changes always come with opportunities for new businesses and lead to innovative ideas. The future of Cyprus as a business hub is bright, especially with the government and the ministries working towards becoming highly efficient and supportive. Sunil Kapoor Director FML Ship Management

Sector Profile

Research & Development


POWERS AHEAD With unprecedented levels of EU funding, Cyprus is on track to develop three new centres of scientific excellence, drawing on a pool of world-class talent. 122

Country Report CYPRUS 2019

€400 million to R&D

infrastructure, matched by a corresponding injection of private finance


hese are exciting times to be working in research and development in Cyprus. There is greater recognition of the importance of applied research and its role as an engine of the economy than ever before. Unprecedented government investment in the sector, combined with an unparalleled per capita base of skills and expertise, mean that Cyprus is superbly placed to become a powerhouse of R&D in the Eastern Mediterranean. Pioneering research is being conducted in fields as diverse as the monitoring of climate change through atmospheric emissions, the genetics of hereditary kidney disease, and maritime and marine studies, where plans are in hand for the development of a research centre in Larnaca. Together, these ground-breaking projects are establishing this small island, not only as a leader in innovation and research in its own right, but also as a regional centre of excellence, one that provides valuable links between the established panEuropean research infrastructure and emerging hot spots of scientific and technical innovation in the Middle East and North Africa. Historically, Cyprus has been slightly behind the curve when it came to research and development across Europe. Its current spending on research – at only 0.56% of GDP – is well below the European average of 2%. This is partly because, despite having significant numbers of highly qualified scientists and researchers across a wide range of disciplines, the island has lacked a tradition of research and innovation, so talented individuals followed careers elsewhere. However, the tide is now turning with the government determined to at least double spending to boost this sector. Innovating Cyprus

KEY contacts

The Research and Innovation Foundation research.org.cy

The financial crisis of 2013 compelled the government to conduct a rigorous reassessment of its strategic economic priorities. It became clear that a flourishing culture of innovation and entrepreneurship would play a vital part in the development of a robust and stable economy capable of meeting the needs of future generations. After extensive consultation, the government unveiled a national strategy on research and innovation for 2019-2023. The cornerstone of that strategy has been the establishment of a National Council for Research and Innovation and the appointment of Cyprus’ first Chief Scientist. The goal is to bring academic research to the market in order to release its economic potential, a process that naturally involves building bridges between the worlds of academia and commerce.

Under the slogan ‘Innovate Cyprus’, a range of specific incentives is being introduced, including the expansion of a pilot programme offering Start-Up visas to third-country nationals who want to establish and develop innovative startups in Cyprus. In addition, the government has committed to doubling its expenditure on developing technology, promising to assign €400 million to R&D infrastructure, matched by a corresponding injection of private finance. More recently, the government has allocated annual revenue from its citizenship scheme, where, among other criteria, applicants must also contribute €75,000 into a National Research and Innovation Fund in order to acquire Cypriot citizenship. The fund, which currently totals €200 million, will also receive matched funding from the EU, the Cyprus government and the private sector. This is expected to bring the country’s total contribution to R&D up to 1.5% of GDP over the next five years – aligning it more closely with EU averages. One of the main pillars of the Innovate Cyprus strategy is to maintain existing rates of participation in Europe’s largest research and innovation programme, Horizon 2020. The island ranks first per capita among all EU members competing for funds from the programme and this year three Cypriot proposals for the establishment of new centres of scientific excellence were selected for funding, with a total budget of €90 million.

Sector Profile

Cyprus plans to double its expenditure on developing technology, pledging

Fighting Climate Change

The island’s pre-eminent institution of research and development is The Cyprus Institute, a truly international organisation with more than 100 research staff – of which about half are Cypriots and the rest from around 20 countries. Already an undisputed centre of excellence in scientific and technical research, the Institute was awarded €15 million by Horizon 2020, funding that will be equally matched by the Cyprus government. This will enable the institute to expand its vital work monitoring atmospheric pollution as an indicator of regional climate change and establish a Research Centre of Excellence for Eastern Mediterranean, Middle East Climate and Atmosphere (EMME-CARE). The EMME region has long been recognised as an area subject to rapid environmental change and increasing demand for dwindling resources such as water. The rate of temperature change in summer in the EMME for example, is more than twice the global average. The Institute is a world-class centre for drone development and will utilise a range of cuttingedge technology, including a fleet of unmanned aerial vehicles, unique in the region, in order to Country Report CYPRUS 2019


Sector Profile

Research & Development


conduct atmospheric and earth surface observations and collect samples. These will be analysed in an advanced laboratory facility equipped for trace gases and aerosol analyses, and the results used in conjunction with data from EMMECARE’s ground-based observatory at Agia Marina Xyliatou in the foothills of the Troodos Mountains. Through continuous, comprehensive measuring of levels of airborne atmospheric pollution, along with advanced computer modelling, EMME-CARE will build up a unique database. This, in turn, will enable the development of a portfolio of regional-specific strategies for climate change mitigation and adaptation that take account of the region’s societal challenges. In time, the research will reduce dependency on Western know-how, particularly on services that have generally not been devised for the region’s particular needs. Meanwhile the Institute’s Energy, Environment and Water Research Center (EEWRC), has carried out well-documented work in collaboration with the Massachusetts Institute of Technology (MIT) on the development of solar power and on monitoring climate change. The University of Cyprus (UCY) FOSS Research Centre for Sustainable Energy also carries out cutting-edge research in the field of renewable sources of energy, with emphasis on solar energy, smart grids, smart buildings, grid integration and enabling technologies. FOSS has been highly successful in competing for funds, so far securing €16 million from more than 50 EU, national and industrial-funded projects. Wellknown international players in the field of energy such as Honeywell, Hanwa Q Cells, Gantner Instruments and IBM amongst other leading international brands are already collaborating with FOSS and are testing their products in Cyprus. FOSS strives to promote cooperation between academia, industry and business sectors, as well as contribute to the transfer of knowledge from advanced European clusters to the region. A key aim is to make Cyprus a hub for solar innovation, technology transfer, industry start-ups and job creation where ideas can grow and achieve their full potential. In addition, Cyprus was a testing ground for an innovative community project delivered by a German electric utility company Autarsys, where 30 kW/50 kWh was connected to a conventional distribution substation in Nicosia. The project provided the opportunity to interact with real battery systems and gather knowledge about their operation, branding the efforts as a success. Stateof-the-art high-voltage lithium-ion batteries were used, and the battery system provided services to the distribution network, such as power balancCountry Report CYPRUS 2019

ing, network and frequency support, as well as services that stabilise and protect the seamless operation of the network and are considered essential for modern power networks. The project received funding from the European Union’s Interreg Mediterranean research and innovation programme under the project StoRES. Uncovering Mysteries of the Past

Perhaps one of the most satisfying applications of IT is when cutting-edge, futuristic technology is applied to help us make sense of the mysteries of the past. The Cyprus Institute’s Science and Technology in Archaeology and Culture Research Center (STARC) brings together researchers from a broad range of subjects, including art history and archaeology, computer science, chemistry and physics, to preserve and understand cultural heritage. More specifically, STARC employs bio-chemical-physical techniques to analyse works of art, ancient artefacts and archaeological discoveries. It has also led the way in the 3D documentation of heritage assets and the development of digital libraries. Earlier this year, a STARC team from Cyprus collaborated with the Antiquities Department of Israel on a 3D mapping project of the Cenacle in Jerusalem, the building that is believed to be the site of the Last Supper. The building is a popular tourist site but has worn and uneven surfaces, and poor illumination, making any detailed investigation of its construction and archaeological phases virtually impossible. Thanks to laser technology and advanced photographic techniques, the precise dimensions of the room and its architectural chronology could be carefully mapped, providing conservationists with invaluable insights into how the structure should be preserved. This technology, pioneered and developed in Cyprus, has the potential to be exported worldwide and map and record the dimensions of any number of global historical and cultural landmarks across the globe. Cyprus Marine and Maritime Institute

Cypriot history has largely been shaped by the fact it is an island nation, mid-way between Europe and Asia. Yet remarkably, despite a long maritime tradition, Cyprus has never had its own institute for the study of the sea. This too, like much else in the research and development sector, is about to change. Horizon 2020 funding has been secured for the development of the island’s first Marine and Maritime Institute, based in Larnaca. Driven by the needs of industry and society, the institute aims to support all aspects of the blue economy and act as a centre of research, innovation and

Cyprus has embarked on a new model for economic development and social prosperity, highlighting the importance of research, technological development and innovation, as strategic tools to broaden the economy’s productive base. A new governance structure and a renewed national strategy for research and innovation adopted in early 2019 are expected to significantly drive progress in the year ahead, complemented by considerable support secured through Cyprus’ exceptionally successful participation in Horizon 2020.   Kyriacos Kokkinos Chief Scientist for Research and Innovation Republic of Cyprus

Cyprus ranks

first per capita among all EU members competing for funds from Europe’s largest research and innovation programme Horizon 2020

➊ Marine and Maritime Research, Innovation and Technology Centre ➋ Eastern Mediterranean and Middle East - Climate and Atmosphere Research Centre ➌ Biobanking and the Cyprus Human Genome Project

entrepreneurship, as well as serving as a catalyst for societal and cultural transformation. It will promote international and inter-disciplinary partnerships, seeking to build alliances between academic and research institutes and business.

national biomedical resource on this scale, will in turn, attract a critical mass of medical scientists and experts, keen to utilise the biobank’s genetic material for the development of their own cutting-edge research and innovation.

A National Biobank for Cyprus


The third new centre of excellence to benefit from Horizon 2020 funding is the national biobank, a collection of medical records and biological material, including blood, DNA/RNA, plasma, serum, urine, tissue biopsies and genetic samples to support biomedical research. This builds on work begun in 2010 by the Molecular Medicine’s Research Centre (MMRC), under the auspices of the University of Cyprus, which established a small biobank of genetic material related to the study of hereditary kidney disease. Despite the fact that serious biomedical research only began in Cyprus 25 years ago, the MMRC has rapidly established a solid reputation for its work on kidney-related problems. The hope is that the expanded repository will ultimately accommodate a vast collection of genetic samples from hundreds of thousands of individuals, providing a reference point for research projects of the future. In time, this will enable the comprehensive study of the Cypriot genome and provide future generations of medical scientists with the resources necessary to locate genetic markers for a wider range of hereditary diseases, improving the prospects for diagnosis, prevention and therapy. Genetic researchers in Cyprus enjoy a unique advantage over their counterparts elsewhere in the world. The country’s size, combined with the fact that it is surrounded by sea, have meant that the population still maintains a high degree of genetic homogeneity. The existence of a unique

One of the island’s biggest ongoing research projects involves the University of Cyprus’ KIOS Research and Innovation Centre of Excellence. In collaboration with Imperial College, London, it conducts multidisciplinary work focusing on the monitoring, control, security and management of ‘critical infrastructure programmes’. In April 2019, the Centre was awarded three new EU-funded projects to address key research challenges related to cancer monitoring and therapy, security of health data, and border surveillance. New technology and pioneering methods will be developed and are expected to have significant economic and social impact in the region and globally. The first project, Gladiator, aims to develop a comprehensive theranostic (therapeutic and diagnostic) solution for brain malignancies by using life sciences, bionanotechnology, engineering and information communication technologies. The results should substantially improve patient prognosis and prolong survival. Gladiator, also funded by Horizon 2020, is a project that contributes to Future and Emerging Technologies (FET). This is the first FET scheme to be coordinated by Cyprus. The second project, also funded by EU Horizon 2020, is Curex (an approximate acronym for Secure and Private Health Data Exchange) and addresses the confidentiality and integrity of health data by producing a new awareness-oriented platform. This will enable patients’ privacy to be safeguarded, thus increasing their trust in the currently vulnerable critical healthcare information structures. The third project, Ceretab (Cooperation for Increased Situational Awareness Establishment) aims to improve border surveillance by enhancing cooperation between Greece and Cyprus. It will focus on technologies such as the use of unmanned aircraft systems that will facilitate information exchange. The methods developed here could potentially be adopted by other EU states to monitor cross-border movements of all kinds – providing yet another example of how Cyprus’ vision in R&D extends far beyond the shores of the island itself. Contemporary concerns that national infrastructure of all kinds is vulnerable to cyber-attacks underscores the global importance of KIOS’ work, producing advanced engineering and

The Cyprus Institute

Country Report CYPRUS 2019

Sector Profile

Three new Centres of Scientific Excellence in 2019


Sector Profile

Research & Development management tools that can be applied to solve real-life problems. To ensure that its research has maximal applicability and impact, KIOS collaborates with a large network of national and international academic, industrial, and governmental organisations. KIOS also has an innovation hub to promote technology transfer and liaisons with industry, as well as an entrepreneurship network to facilitate start-ups and venture capital investments. On the RISE

A new kind of highly accessible research centre that aims to have a permanent and pivotal presence in the research and innovation ecosystem of Cyprus was established in 2017. Situated in the centre of old Nicosia, RISE (Research into Interactive Media, Smart Systems and Emerging Technologies) is an incubator and accelerator for both start-ups and established companies, with common working spaces and laboratories where innovative ideas can be tested. It is also a place for students and academics to develop their research in a user-friendly direction. The project is a joint venture between Cyprus’ three public universities and the municipality of Nicosia, along with the German Max Planck Institute for Informatics in Saarbrucken and University College London. In effect, RISE builds creative partnerships between local government, commerce and academic scientific research. RISE has an initial team of academics from its partner institutions and is recruiting researchers with plans to have a staff of 120 within three years. The project has been very successful in competing for funds, so far securing €50 million, with €15 million from Horizon 2020 – a figure matched by the Cyprus government that will be scheduled over 15 years, and with PwC and Eurobank offering their services in kind. Achieving Commercial Success

A key challenge for Cyprus is to create better links between innovative academic research centres and businesses that excel in transforming ideas into commercially viable products and services. This is a target also set for the new National Research and Innovation Council. However, there are private R&D companies which are commercially driven. The flagship of these companies, and currently the country’s only certified Business Innovation Centre (BIC), is the Cyprus Research and Innovation Center (CyRIC). Its core areas are mechanical engineering design and prototyping, electrical and electronics engineering, robotics and wearables, biomedical engineering and information communication 126

Country Report CYPRUS 2019

technologies. As a certified BIC, CyRIC has a national role in propelling innovation and supporting the entrepreneurial ecosystem, providing high-quality services to start-ups and SMEs and anyone who has a bright idea for an innovative product or service. The centre can assist in validating an idea, drawing up a business plan, developing the IP, design and develop a prototype which it can then help take to investors and the market. CyRIC has been involved in more than 35 R&D projects – mostly funded by EU and industry – worth over €40 million. It also founded an international venture-building incubator branded Gravity, which focuses on developing start-ups from early-stage to mature ventures, by assisting them in all the necessary steps and being with them throughout their journey.

At The Cyprus Institute, we expect 2019 to be the year where innovation activities will emerge as a major component of our programme. Climate and environmental research, renewable energy and energy storage, high performance computing, big data and digitalisation in every field – including archaeology and culture – will continue to be our thematic research directions. We will to continue to prioritise European and regional excellence in both research and post-graduate education.

A Future of Innovation

Costas N. Papanicolas President The Cyprus Institute

With a multitude of innovative projects up and running, and three new centres of excellence soon to emerge, Cyprus is well on its way to achieving its ambition of becoming the leading regional innovation hub. Its talent, experience and stateof-the-art facilities will be attractive both to those wanting to invest in emerging technologies and to the brightest minds seeking opportunities in the sector. No EU country per capita is better at competing for EU R&D funds, while coordinated strategic planning by the government and private sector has already resulted in the launch of successful projects and products. Situated on the edge of both mainland Europe and the Middle East, Cyprus is the ideal location for research and innovation with the fruits of its endeavours being in easy reach millions of potential customers. n

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Sector Profile

Technology & Start-Ups


INNOVATION Cyprus’ technology landscape is set to see a transformation in the coming years with significant new state investment in innovation and tech development, incentives attracting growing numbers of start-ups and blockchain ventures, and global companies choosing the island for regional headquarters.


s an established hub for international business, Cyprus has long been home to a number of international tech companies running their regional headquarters from the island and servicing clients in Europe, the Middle East and North Africa. Innovative start-ups and blockchain businesses have also started to spring up and Cyprus is certainly being noticed outside its borders. The country has an advanced communications infrastructure in place to support business, and efforts to upgrade and expand high-end networks have gained momentum over the last few years. Promoting a digital economy, developing more secure and efficient global communications and launching incentives are high on the agenda for Cyprus to attract more tech business and investment into Information and Communications Technology (ICT).


Country Report CYPRUS 2019

Supporting Tech Development

With strong GDP growth over the past few years and recognising ICT as a catalyst to increase productivity and economic growth, Cyprus is ready to boost investment into innovation and technological development. In 2019, the government pledged to double expenditure on developing technology and increase private contribution as part of a 2019-2023 national strategy on Research and Innovation. The proposal – branded ‘Innovate Cyprus’ – envisions the future of the country as a dynamic and competitive economy with research, scientific excellence, innovation, technological development and entrepreneurship at its core. Part of these plans was to establish a national Council of Research and Innovation and a Deputy Ministry for Research, Innovation and Digital Governance, and provide €60 million in state funds to co-finance four new research centres of excellence.

KEY contacts

The Research and Innovation Foundation research.org.cy

Alex Mouradian Sales Director Hellas, Cyprus & Malta SAP Cyprus Ltd

Cyprus is certainly determined to up its game and focus more on long-term development outcomes. A recent roadmap for a 2030 vision was created by EPOQ Partners, a private consultancy firm newly established in Cyprus, which outlined the potential of Cyprus to harness growth with a technology-driven economy. To remain competitive depends on how Cyprus adapts to new realities like virtual banking, technology in agriculture, new and renewable energies, as well as smart cities. The report also identified significant potential in further developing medical and financial technology. Sparking new growth in sectors through technology would benefit the country and help diversify its economy. In the next five years, Artificial Intelligence (AI) is also set to significantly change the way companies conduct their business. Business success will depend on how new technological capabilities will be utilised. Education and retraining will be key to effectively harness technology and to adapt to new realities. Sector of Opportunity

29th Innovation Index 2018 INSEAD and the World Intellectual Property Organization (out of 126 countries)

The biggest spender by far on IT in Cyprus is the financial sector, followed by the telecoms providers and the public service. Support and training services form the largest primary market in Cyprus, followed by project and outsourcing services. There is currently big demand for support services and skills training in ICT, especially as communications are moving increasingly to 3rd Platform technologies, such as mobile, cloud and big data systems, and with businesses competing to stay ahead of the game. Cloud solutions are beginning to gain more traction in Cyprus with the main providers, Cyta, epic, Primetel and Cablenet all offering cloud services, which are primarily used by small to medium sized enterprises (SMEs). Services and software are expected to be the top-performing segments of the Cypriot IT market in the coming years, due to continuing demand for quality end-to-end solutions that focus on enhanced user experience. Innovation and specialisation will certainly be key elements to succeed in the Cypriot market, which is rapidly embracing the digital culture and mindset. ICT is a serious growth area for Cyprus and a sector that is seeing active support from the government and several local projects have secured EU financing from programmes such as Horizon 2020. The University of Cyprus’ KIOS Research and Innovation Centre of Excellence, in collaboration with Imperial College London, conducts multidisciplinary work that focuses on the monitoring, control, security and management of ‘critical infrastructure systems’. These include largescale, complex systems and networks such as

power, energy, water and transportation systems, telecommunication networks, and emergency management and response systems. Attracting Tech-Savvy Talent

Sector Profile

Cyprus-based companies need to invest in technical innovations in 2019, more so than ever before. Competition locally and internationally is on a continuous increase and companies are challenged to provide value. From an industry perspective and given the Cypriot economic conditions over the last two years I would expect to see financial services, wholesale distribution and the upper segment of the retail industry going through a significant investment cycle.

An increasing number of technology companies are also choosing to locate their operations in Cyprus because of its cost-effective services, favourable tax and business environment, as well as its skilled workforce. The island’s capital, Nicosia, has been identified as the future centre for ICT and research and development. The local universities provide excellent bachelor and masters programmes in computer sciences and technology, consistently producing tech-savvy candidates to join the ranks of some of the world’s leading ICT companies. For example, the University of Nicosia (UNIC) broke new ground in university adoption of blockchain technology and offers the first certified online blockchain course (MOOC) and the world’s first  master’s degree  for digital currencies. More than 25,000 students have taken the MOOC and over 500 students have enrolled in the MSc in digital currencies. Cyprus first made the news in 2013 with a small ‘bitcoin gold rush’, but the country has in fact long been a prime location for the fintech industry as it is home to hundreds of the world’s biggest Forex brokers and online-trading platforms. More recently, Cyprus has fully embraced blockchain technology. At the end of 2018, Cyprus along with six other EU states signed a declaration  to collaborate on the promotion of distributed ledger technologies and blockchain application. Also in 2018, the country’s investment promotion agency, Invest Cyprus, announced  a new collaboration with Singaporebased blockchain platform VeChain  and the American organisation CREAM, which provides advisory services for projects and investments in the blockchain area.  The objective is to create a new framework of cooperation, recommend policy reforms and establish the necessary legal framework to regulate the application of blockchain technology in Cyprus’ financial sector.  Another non-profit organisation supporting the research of blockchain technologies is called Cyprus Blockchain Technologies (CBT), which is a consortium including the University College London, the Bank of Cyprus and KPMG. With fresh incentives and the highly beneficial tax framework of Cyprus, it is no wonder the island is emerging as a hotspot for entrepreneurs around the world to kick-off new blockchain and cryptocurrency businesses. Several major international ICT companies have long operated regional headquarters in Cyprus, using the island as a hub for software deCountry Report CYPRUS 2019


Sector Profile

Technology & Start-Ups velopment, system integration, testing services, R&D activities, project management, marketing and sales. Among these are NCR, an Americabased world leader in consumer transaction solutions, including ATM teller machines, and amdocs, a leading multinational software and services provider to global communications and media companies. Others who have their global headquarters in Cyprus include Wargaming, a world-renowned video game developer, 3CX and Viber, the popular online communications platform. Viber’s success in Cyprus is a good advertisement for the island as it seeks to attract more tech entrepreneurs. Viber was started in 2010 by a team of foreign nationals who needed an EU base with favourable taxation, so they set up their headquarters in Limassol. Viber grew rapidly and in 2014 was bought by the Japanese e-commerce giant Rakuten for US$900 million. International giants such as Microsoft, SAP, Oracle and IBM have been on the ground, supporting Cyprus’ tech evolution for many years, but there is room for further development and growth in the sector. A new arrival in Cyprus is Whipper, a ‘chat and play’ gamified digital messaging platform aimed at millennials, which opened its headquarters in Limassol in June 2017. Its founding team includes executives, investors and advisors from Netflix, Riot Games, Amazon, Swiftkey, Expedia, and Viber. The number of fintech and regtech firms, such as Spotware Systems and Point Nine, is also growing and taking advantage of Cyprus as a gateway into and out of the EU for various corporate services. A recent development that could also potentially bring more tech business to Cyprus in the future, is Japanese tech giant SoftBank’s acquisition of a majority stake in Spanish group Altamira,

which manages the €6.3 billion non-performing loan (NPL) portfolio of the now defunct Cyprus Cooperative Bank. The SoftBank Group, which is ranked in the Forbes Global 2000 list as the 36th largest public company in the world, owns operations in for example broadband, fixed-line telecommunications, e-commerce, internet, technology services, finance, media and marketing. In addition, SoftBank’s US$100 billion Vision Fund is transforming Silicon Valley’s start-up economy. Creating a Start-Up Ecosystem

Cyprus’ focus has firmly shifted to provide better financial incentives for innovative SMEs and start-ups launching on the island. With the rise of business angels and venture capitalists looking to invest risk capital in exchange for equity in promising ideas and products with high market potential, Cyprus created a two-year pilot programme called the Start-Up Visa scheme in 2017. The aim was to attract more international talent from non-EU countries to launch innovative ventures in, and from, Cyprus. In 2019, the government decided to expand the programme until May 2021 and grant 150 new visas to third country nationals to establish, operate or develop a high-growth potential startup in Cyprus. The move is expected to further boost entrepreneurship with the goal to create new jobs, promote innovation and research, and diversify the country’s business ecosystem. Approved applicants will initially get the right to live and work in Cyprus for at least a year, and if successful in launching their start-up and creating jobs, the visas can be extended indefinitely. So far, most interest has come from the Middle East, and given Cyprus’ proximity to the area it

Cyprus has extended its Start-Up Visa programme until May 2021 for non-EU nationals to establish, operate or develop startups of high growth potential

The Cyprus Institute


Country Report CYPRUS 2019

Troubleshooting Challenges

Despite the recent strides Cyprus has taken in order to develop its tech landscape, the country still lags behind the rest of the EU in digital transformation and innovation. To bridge this gap, the National Research and Innovation Council and the Research and Innovation Foundation have been tasked to develop the sector for both companies and the state to make better use of innovative ideas and products. The challenge is to connect academic research centres and businesses to come up with ideas and products. For business to move forward with innovative products and services, cooperation with companies excelling in the sector is needed. Another area where Cyprus should focus on, and needs more stateled action, is in mitigating serious cybersecurity challenges, data leaks, and information security breaches. If given proper attention, Cyprus has a natural advantage due to its small size as it can easily direct bureaucracy towards boosting its cyberspace and create a more secure environment for various types of business. A new initiative to further enhance the landscape for financial services and e-solutions was launched in 2018 by regulating authority the Cyprus Securities and Exchange Commission (CySEC). The goal of establishing an Innovation Hub is to address and explore the rise of fintech and regtech developments. The aim of the Hub will be a place where both supervised and nonsupervised entities in innovative or new industries will have ongoing access to the authority in order to better understand and implement their regulatory requirements. This is a welcome move

that will support information and knowledge exchange in the industry as well as the development of new solutions for the financial services sector. Tech Innovation from Defence Projects

During the last year, we have successfully tackled problems and simplified procedures in the areas of defence and security. We have given emphasis to new digital technologies in the sector and are providing a sound base for research and innovation especially in regard to the development of SMEs in Cyprus. We have achieved substantial work in one of our main objectives, namely in the field of defence diplomacy. We purport that we will further upgrade and strengthen bilateral and trilateral relations so that the Republic of Cyprus becomes a pillar of stability and growth in the wider region of the Eastern Mediterranean. Savvas Angelides Minister of Defence

Sector Profile

makes the island an attractive option for innovators from the region to stay close to home while working in a competitive and business-friendly environment with access to EU markets. Start-up accelerators like the Cyprus Business Angels Network (CYBAN), Cypriot Enterprise Link, Chrysalis Leap and Repower Cyprus have all boosted the environment, along with events such as Hack Cyprus Hackathons, the Clean Launchpad Competition, as well as Startup Weekend and Startup Live. Home-grown talent and a burgeoning tech landscape are launching inspirational success stories, and a new research centre on interactive media, smart systems and emerging technologies (RISE) was inaugurated in Nicosia in 2017. The project is a joint venture between the three public universities – University of Cyprus, Cyprus University of Technology, and the Open University of Cyprus – the Municipality of Nicosia, and two international partners, the German Max Planck Institute for Informatics and University College London.

Expanded opportunities in tech development could come from a new initiative led by Greece and Cyprus to build a Joint EU Intelligence School (JEIS), with the aim to broaden defence cooperation between EU countries on land, air and sea. The project was approved in late 2018 by EU foreign and defence ministers and signed by all EU countries except Denmark, Malta and the UK. The school will be led by Greece and Cyprus – with the planned physical presence based in Cyprus – and will train intelligence agency staff from around the EU, in cooperation with national security agencies and NATO, as well as conduct work on developing new hardware, like drones and electronic warfare technology. The initiative is part of a list of 17 projects signed within the Permanent Structured Cooperation (PESCO) framework which is part of the EU’s security and foreign policy. The hardware and software projects are set to deepen technical innovation in the countries involved and could contribute substantially to national economies – and help strengthen EU-wide security. For example, Cyprus is working with France and Belgium on building new generation EU Beyond Line of Sight (BLOS) land battlefield missile systems, to conduct ground-to-ground and air-to-ground operations, and to provide integrated and autonomous target designation capabilities. Other projects include areas such as upgrading maritime surveillance, tackling cyber threats, crisis response and developing integrated unmanned ground systems (UGS). Building A Digital Future

With fresh commitment from government to launch incentives and invest in the country’s tech landscape, Cyprus could see substantial growth in this sector in the coming years. The country is renowned for its skilled workforce and universities, and research institutes are providing growing numbers of highly qualified graduates to meet the sector’s growing demand and carrying out several ground-breaking and technologically innovative projects. Modernising public administration, upgrading networks, and promoting entrepreneurship are key goals for Cyprus to strengthen its global competitiveness in a truly digital future. n

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Sector Profile

Telecoms & Satellite Communications

DIGITAL ISLAND New-generation products, highend networks and advanced satellite communications are paving the way for Cyprus to successfully build a dynamic digital future and to ensure its status as a convenient regional communications base of strategic importance.


Country Report CYPRUS 2019


s an international services hub and an attractive investment destination, Cyprus is keenly aware of the importance of keeping up with cuttingedge communications technology to support its thriving business environment. The island’s strategic geographical location, its established framework for technology and research initiatives, and skilled workforce are all part of the equation to upgrade its telecoms landscape in line with the EU 2020 Digital Agenda and to ensure Cyprus is prepared to face the future. The country and key players in the sector have been working hard to diversify beyond the traditional telco products and to explore more value-added services to help create alternative revenue streams by providing competitive, newgeneration products and modern integrated digital solutions. Today, Cyprus’ communication offering is being strengthened by high-end mobile networks, advanced satellite systems, fixed broadband via fibre connections and through the development of innovative digital services related to the Internet of Things (IoT). The island already has a fully digital network with reliable high-speed international connectivity via eight fibre-optic submarine cables, including the world’s longest optical submarine telecommunications cable, SEA-MEWE-3, which links di-

KEY contacts

Ministry of Transport, Communications and Works mcw.gov.cy

rectly with Southeast Asia, the Middle East and Western Europe. Cyprus also has dedicated fibre links to major international Points of Presence and Connectivity, ensuring all the right connections are in place. The New Frontier: Space

Cyprus’ climate and geographical location offer optimal conditions for satellite communications as well as access to the geostationary arc from the Atlantic to the Indian Ocean – and being in the most south-eastern part of Europe, Cyprus can also ‘see’ satellites located above Asia and Australia and gather data where other European ground stations have no communication. This has resulted in multimillion investments into Cyprus from satellite companies, which has supported the creation of an extensive and growing satellite network, as well as teleport sites and major satellite earth stations, to supplement the country’s efficient fibre-optic connections and provide integrated solutions for a reliable worldwide 24/7 connection. A key player in the fibre-optic cable and satellite networks is Cytaglobal, which is a semiautonomous Strategic Business Unit under stateowned operator Cyta and specialises in providing global electronic communication products and services. Through its global network, Cytaglobal

through the fees paid by companies taking advantage of Cyprus’ airspace and frequencies, and satellites like Hellas Sat 4 will have a supporting role to play in filling the gaps of the ground network once the country rolls out 5G technology.

Sector Profile

also provides a wide range of international telecommunications products. Another major player in satellite services is Greek-Cypriot consortium Hellas Sat, which was formed in 2001. This agreement helped put Cyprus on the global satellite map and was an important step in strengthening the country’s position as a successful regional satellite communications centre. In February 2019, the company successfully launched its third satellite into orbit, Hellas Sat 4, on board Arianespace’s first launch of the year from the Spaceport in French Guiana. The launch started a new chapter in the space history of Cyprus and Greece with its mission to provide innovative satellite services and expand the operations of Hellas Sat in Europe, the Middle East and Africa – which will bring further geopolitical, technological and commercial benefits to both countries. The new satellite will extend capacity and geographical reach to meet the growing demand for applications that include video, internet and mobile phone services, maritime connectivity, cellular backhaul, corporate networks and government services. It is also the most advanced commercial communications satellite ever built by Lockheed Martin and constitutes another milestone for Cyprus as the satellite is marked with the Cypriot flag and is positioned in airspace allocated to Cyprus and Greece by the International Telecommunications Union (ITU). Cyprus has been gaining ground in the field of space-tech services and has so far granted 10 licences to organisations to launch telecommunication satellites using space that Cyprus has secured through ITU. The number of licences is substantial, as many countries in the world have issued only one license. The country’s economic benefit from these services is expected to multiply as more satellites are launched. This type of activity also boosts the prestige of Cyprus as a country engaged in space technology services, and its strategic advantages are increasingly promoted in a bid to attract infrastructure to Cyprus from the European Space Agency. The growing sector has also inspired new endeavours on the academic front, such as the Eratothenis Excellence Centre, created by the Cyprus University of Technology in January 2018, to conduct research into space technologies. Its Excelsior project envisions the creation of some 200 new jobs and the placement of Cyprus on the international research and innovation map for space technologies – a move that will benefit the entire region. A Cyprus Astronomy and Space Academy was also inaugurated in 2017 in Nicosia, supported by the government, and boosting the country’s profile in the European space industry. The launch of more satellites into Cypriot airspace will benefit the country and its economy

Mobile and Broadband Coverage

The digital transformation of citizens, business, public service and the economy as a whole, as well as the development of high-speed networks, is a key priority for the government of Cyprus. We are fully supportive in terms of the adoption of emerging technologies and the creation of new innovative services. At the same time, Cyprus acts as the physical bridge between the Middle East, North Africa and Europe, with its state-of-the-art satellite and submarine cable infrastructure connecting the island with its neighbouring countries and the rest of the world. Vassiliki Anastassiadou Minister of Transport, Communications and Works

Major Players Cyta Cytaglobal epic Cablenet PrimeTel Hellas Sat

Cyprus’ mobile network currently covers around 97% of the population, which is also paving the way towards the implementation of the country’s 5G network. In terms of high-speed broadband coverage (Next Generation Access Coverage), Cyprus has been performing better than the EU average over the last few years, with high-speed broadband available to almost 90% of households. In addition, a total of 32 Cypriot communities have received EU funding to cover the cost of installing Wi-Fi hotspots in public spaces, including town halls, public libraries, museums, public parks or squares. The WiFi4EU initiative is part of the ambitious overhaul of EU telecoms rules, including new measures to meet Europeans’ growing connectivity needs and to boost Europe’s competitiveness. As part of the government’s Broadband Plan 2016-2020, the target is to reach 100% coverage and speeds of at least 100Mbps by 2020. Competition among various operators has resulted in a good offering of high-speed and cost-effective broadband access services throughout the island. However, according to a recent European Commission  study, prices for mobile broadband in Cyprus are more expensive than the EU average. This is a challenge Cyprus will have to tackle in order to remain competitive and attractive for relocating expats and companies looking to base regional headquarters on the island. State-owned operator Cyta continues to dominate the market offering a full range of telecommunications services. The second largest operator is MTN, now rebranded epic after it was bought by Monaco Telecom S.A. for €260 million in July 2018. Other key players with a prominent role in the telecoms landscape are Primetel and Cablenet. Rolling Out 5G

Currently, Cyprus mobile operators offer highspeed 4G broadband mobile access technology and are constantly updating and evolving their networks, as well as investing in new technologies. In addition, Cyprus has secured EU structural funds for the deployment of step-change technology, for the roll-out of Fibre-To-The-Home (FTTH) networks. By 2020, FTTH networks are expected to extend to every private residence. Preparations for official 5G licensing have begun and are expected to be completed in the Country Report CYPRUS 2019


Sector Profile

Telecoms & Satellite Communications

2019 Hellas Sat 4 launch

last quarter of 2019, with the entire process expected to finish by 2020, a goal set by the EU. Meanwhile, telecom companies Cyta, epic, and Primetel have been licensed to run pilot 5G programs. The 5G network is expected to have 10 to 100 times higher data transmission rates than today’s networks, 1,000 times more data volume, five times lower network delay, optimised battery life of connected devices and significantly improved geographical coverage. The government has launched a Broadband Subsidy Grant Scheme to encourage investment in high-speed networks. For companies to participate in the grant scheme, they must provide at least one product with a connection speed of at least 100Mbps. Strategic collaborations have also been a key element in the race to develop cutting-edge services in Cyprus. For example, epic and Chinese giant Huawei signed a cooperation agreement in 2019 to develop a 5G network in Cyprus – first through a joint research programme and future plans to offer a set of commercial services. This cooperation will help the company take a bold step into the advanced global 5G ecosystem and allow it to play a part in the national strategy to upgrade the country’s role and contribution to telecoms across the entire region. Commenting on the deal with the Cypriot operator, Huawei said it was clear that European markets are first and foremost focusing on the development of an advanced technology, aiming to meet the needs of the new era. However, some telecom experts have raised doubts whether the target 2020 deadline can be met citing that the market and providers are not ready for the upgraded mobile technology, as there is not sufficient infrastructure, standards or end-devices to support 5G. Another challenge could arise from the current controversy between Huawei and the US if it results in limitations on the Chinese firm’s product promotion, as this could delay 5G implementation in Cyprus and the rest of Europe. This could be a particular blow 134

Country Report CYPRUS 2019

for Cyprus, as at the moment more than 90% of local consumers in Cyprus are served in one way or another by Huawei products. The Chinese tech giant has a 10-year presence in Cyprus and has developed extensive partnerships with all telecom providers in the country to provide highlevel IT and communications services – and is the only company which produces equipment for all stages of implementing 5G technologies. A Digital Future

Cyprus has been on a stable path to economic growth over the last few years, a trend that is also visible in the government’s focus on creating a more efficient communications landscape. Developing digital policies that attract further investment are opening new doors to take advantage of the numerous economic opportunities provided by the dynamic digital era. Global demand for bandwidth is growing at an incredible pace, with key drivers being the rise in cloud computing, data transfer and storage, as well as the Internet of Things (IoT). Also, global data centre IP traffic is set to grow threefold over the next four years, as more companies begin utilising data centres to cut costs and streamline work flows. This in turn will increase the demand on networks to ensure seamless and secure transfers between data centres and business locations. With its infrastructure and talent pool, the country is well-placed to boost its competitiveness and realise its vision of a digital future if it stays on track and keeps up with the rapid evolution of the global communication and tech industry. Cyprus has already successfully capitalised on its location at the crossroads of Europe, Asia and Africa, and can continue to strengthen its role as a convenient regional communications base of strategic importance. n

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High-end mobile networks and fixed broadband fuelled by fibre are well underway, constituting a solid base for integrated communication offerings, both in technical and commercial terms. Our mobile network coverage is approaching 100% of the population thus paving the way towards the 5G network. There are significant economic opportunities made available by the digital era and it is of vital importance to diversify beyond traditional telco products and to develop digital policies that will be conducive to investment plans and greater innovation. Andreas Neocleous CEO Cyta

A full range of affordable, high-quality services and effective customer support are the crucial elements for delivering customer value in the overcrowded Cyprus telecom market. Cablenet is leveraging major investments to achieve this objective, with extensive rollout of FTTH for fixed broadband, a new nextgeneration TV system and acquisition of 4G spectrum for a mobile network. Combined with our premium sports, launching in July 2019, we expect to see a significant uplift in our subscriber numbers, both in fixed and mobile. Nicolas Shiacolas CEO Cablenet Communications Systems



cyprusprofile.com Country | Economy | Trade & Investment | Sectors | Doing Business | Who’s Who

Sector Profile



Cyprus Cyprus tourism has been on a winning streak for four consecutive years, breaking historic records in both arrivals and revenue. Millions have been invested in upgrading tourism-related infrastructure and hotels, and in promoting the island as a year-round destination. These efforts are attracting more interest from visitors and investors alike, but with stiff competition and source markets struggling with their own economies, Cyprus will have to step up its game in 2019. 136

Country Report CYPRUS 2019

KEY contacts

Deputy Ministry of Tourism visitcyprus.com Cyprus Sustainable Tourism Initiative (CSTI) csti-cyprus.org Cyprus Hotel Association (CHA) cyprushotelassociation.org Association of Cyprus Travel Enterprises (ACTE) acte.com.cy Association of Cyprus Travel Agents (ACTA) acta.org.cy

Big Plans

The implementation of the new national tourism strategy is the most comprehensive restructuring of the sector since 1960 and is geared towards opening new markets and further developing special interest tourism to tackle issues of seasonality. The ultimate goal is to double visitor arrivals, triple tourist revenue, create 47,000 better-paying jobs and attract €20 billion in new investment to Cyprus by 2030. It may sound like a tall order, but when you consider the target to reach 6 million tourists by 2030 and that the island already saw close to 4 million tourists last year with €2.7 billion in revenue, Cyprus could well reach its original target ahead of schedule. Tourism arrivals were up, and also revenue increased by 3.1%


yprus has seen record-breaking numbers of tourist arrivals in the last few years and has also increased visitor numbers during its winter season. Despite the challenges of this year, our target is to keep our arrivals at the same levels as last year. In 2020, our key priority will be the rebranding of our tourism image to better reflect the diversity of our offering and to promote special interest tourism, such as wellness, conference and rural tourism. Other key goals are the collaboration with more airlines, the development of new markets for the future and the finalisation of the Cyprus Tourism Strategy 2030. A strategic aspect of implementing our New Strategy is to attract more tourism-related foreign investment into the country. The new Deputy Ministry of Tourism is taking a more holistic approach in developing this vital sector to increase competitiveness and to expand our market base.

Savvas Perdios Deputy Minister of Tourism

in January 2019 compared to 2018, jump starting the year with heathy expectations. The hotel industry has seen large new investments across the island and many existing establishments have undergone upgrades and renovations to address the exacting demands of tourists from around the world. Luxury marinas, such as the Ayia Napa and Paralimni Marinas, with multi-use spaces and leisure facilities are being developed in coastal cities to rival the already successful Limassol Marina, and the addition of Cyprus’ first casino resort which will be operational in 2021 are set to boost visitor numbers. The €550million casino, developed by Hong Kong gaming and hospitality giant Melco, promises to be the standard of its Las Vegas counterparts and will broaden the scope of Cyprus’ tourism product. The resort branded ‘City of Dreams’ will be one of a kind not only in the region but in Europe, and is expected to contribute €700 million per year to the Cypriot economy. The casino gaming area will span across 7,500 square meters with about 1,200 gaming machines and 140 tables. Over 9,600 square metres will be for convention, meeting and event spaces and 1,200 square metres of retail area replicating the feel of the old Nicosia city centre. Connectivity is another key aspect of ensuring growth in this sector. Currently, 70 airlines fly from Cyprus to 40 countries and 120 destinations, with continuous efforts to open new routes. Passenger numbers in January-February 2019 increased by 7.6% compared to the corresponding period in 2018, while a record number of 11 million passengers were handled by the island’s two international airports in 2018. To expand connectivity, the government together with airport operator Hermes is looking at ways to lobby foreign airlines to start operating more flights to Cyprus through incentives schemes – and increased competition could also help cut air fares to attract more tourists to the island. Supporting these impressive plans and developments has been the country’s rapid return to a strong economic growth of almost 4%, partly thanks to tourism, and a renewed investor confidence that has resulted in significant FDI flowing into multiple sectors.

Sector Profile


he last four years have been a triumph for Cyprus tourism, with each year breaking past records. The 2018 figures for tourist arrivals – just shy of four million over the course of the year – were the highest ever recorded in the island’s history, and also represented a 7.8% increase compared to the previous year. The allure of the Mediterranean island as a top European holiday spot has remained strong, and the country’s strategy to diversify and continuously upgrade its offering has been a key priority to ensure the sector’s status as an economic outperformer. Work to extend Cyprus’ tourist season and transform its image from a beach hot spot to a year-round destination has been in full swing for some time now, and it is starting to pay dividends. Winter tourism has been on a steady rise over the last few years, and since 2013 arrivals have doubled. Along with its already popular coastal tourism, the promotion of niche segments such as sports and wellness tourism, as well as highlighting different regions like the island’s mountains and wine country, have all aided in boosting fresh interest in Cyprus. With this holistic approach and by tapping into the more ‘undiscovered’ assets of its tourism product, the sector is set to grow further. Income from tourism accounts for more that 15% of the country’s GDP, but according to latest estimates the sector has the longterm potential to contribute around 25% to the country’s economy. Establishing a junior ministry dedicated solely to tourism, and led by a new Deputy Minister, was an important step by the government in 2019 to ensure strong focus on further developing the sector. A key goal for the new ministry is to implement the 2030 National Strategy for Tourism and to launch a full rebranding of Cyprus as a destination in time for the Berlin 2020 tourism exhibition.

Opening New Markets

Although, the tourism sector has seen formidable development over the last years, there are challenges to overcome and Cyprus must diversify its target markets to reach its goals. The UK still constitutes the main source of tourism to Cyprus, with 1.33 million Brits visiting Cyprus in 2018, followed by Russia, Greece and Germany. March 2019 saw the first overall dip in arrivals since June Country Report CYPRUS 2019


Sector Profile

Tourism 2015, which highlighted the issue to local authorities, who cited Brexit uncertainty and a sluggish German market coupled with German airline Germania going bust in 2019, as reasons for the downturn. With key source markets facing problems on their home fronts, Cyprus officials are keenly aware that diversification is key to sustainability. Due to these issues and to attract the same number of visitors as last year, the prices of travel packages to Cyprus have also been slashed by up to 15%, with expectations that prices will drop further due to the Brexit extension – resulting in a drop in per capita spending as well. These factors will make 2019 a more challenging year for Cyprus tourism, and a trend that may well continue to 2020, at least where the UK market is concerned. This wake-up call has turned Cyprus’ focus to opening new markets, such as the Middle East and other central and northern European countries, to cover the shortfall. Another target is to attract visitors from long-distance destinations such as the US, Canada, Korea, Japan and China, who are likely to travel in the wider region visiting more than one country during their holiday.

3.9 million tourist arrivals in 2018, with €2.7 billion in revenue 138

Country Report CYPRUS 2019

The Mediterranean Pull-Factor

Despite efforts to rebrand its image, there is no doubt a key element of Cyprus’ winning package remains its ideal weather of 340 days of sunshine and its pristine beaches – which are consistently ranked as some of the best in Europe for their high environmental and quality standards. Cyprus has 65 Blue Flag beaches and one Blue Flag Marina, eco-labels awarded to beaches and marinas across the globe meeting certain standards. According to the European directive for the quality of bathing waters, Cyprus is also crowned amongst the countries with the cleanest bathing waters in Europe. The Mediterranean lifestyle has not lost its appeal in the global tourism market, and with Cyprus refining its visitor experience by developing special interest areas such gastronomy, cultural, nautical and rural tourism – alongside its more luxury offering – the island is set to strengthen its status as a destination of choice for travellers of all budgets to experience authentic island life. Cyprus also boasts world-renowned

Cyprus has great potential to become the sustainable tourism destination of the Mediterranean. Focusing on sustainable and more responsible tourism will ensure a promising future for Cyprus and the tourism sector. Sustainability is the trend in tourism and cannot be ignored. Major tour operators of the world expect destinations to become more sustainable. CSTI aims to demonstrate the environmental and socio-economic benefits that sustainable tourism can bring to the island. Phillippos Drousiotis Chairman Cyprus Sustainable Tourism Initiative

Sector Profile

Tourism accounts for over

15% of Cyprus’ GDP

Winter tourism arrivals have doubled since 2013 Country Report CYPRUS 2019


Sector Profile

Tourism archaeological sites, such as the ruins of the ancient city-kingdom of Kourion and the famous Paphos mosaics. In 2018, the Cyprus antiquities department announced that it would be collaborating with the Getty Conservation Institute in Los Angeles to look at better conservation management of the World Heritage sites of Nea Pafos and the Tombs of the Kings, and to find ways at improving the visitor experience at these sites – a move that has been welcomed by both tourism officials and tourists.

sail from Barbados to Limassol. Supporting this maritime tourism renaissance in Cyprus was the opening of a new passenger terminal in 2018 by Limassol Port operator DP World, who is determined to increase passenger traffic of the port by 35%. Another key goal of the operator is to make Limassol a home port and an attractive choice for cruise companies in a bid to help Cyprus regain a leading role in Mediterranean cruise tourism.

Cruising the Med

Cyprus has long been a popular winter training venue for international sports groups and athletes, as well as a destination for various sports events, ranging from rally to cycling and sailing. However, this niche area of tourism still has considerable growth potential if developed properly. The country’s new Deputy Tourism Ministry has identified sports as an integral part of Cyprus’ tourism product and is currently drafting new incentive schemes to attract more events, teams and athletes to the island. In 2018, Cyprus hosted 189 teams, with 4,500 athletes, totalling 40,000 overnight stays. The highest demand was recorded in the winter months between January and March. In 2019, Cyprus along with Greece, Lebanon, Egypt, Bulgaria and Portugal founded an International Sports and Tourism Organisation

Cyprus is keen to bring back its glory days of being a cruise ship port and destination from which to explore the Eastern Mediterranean region. Traditionally, cruises from Cyprus were dubbed ‘the trip to three continents’ as ships would visit Lebanon, Israel, Egypt and Turkey passing through the Greek islands. Cruise tourism is certainly headed towards a revival with British operator giant TUI announcing 13 new destinations leaving from Limassol Port for the winter season 2019-20, which are expected to bring around 19,000 tourists to the island. Although many of the cruises follow the familiar Mediterranean formula, more farflung routes have also been launched such as a

Sporting for Prosperity

Special interest tourism is high on the agenda of the newly formed Deputy Ministry of Tourism and is expected to receive a further boost considering the fact that more than 40 million Europeans choose thematic holidays for relaxation and entertainment. Since this type of tourism is growing by 20% every year, we are very optimistic that the targeted marketing activities of both the private and the public sector will attract to Cyprus more demanding tourists. George Michaelides President Cyprus Association of Cultural and Special Interest Tourism

1st luxury casino resort set to be the biggest in Europe

Venus Rock Golf Resort


Country Report CYPRUS 2019

Skylink Services Ltd is part of the Skylink Group of Companies. The company is well-established and provides ground handling services for General Aviation Aircraft in Cyprus. We began operations in 1992, filling the gap in the Executive Aircraft ground handling market, at both international airports of Cyprus, Larnaca and Pafos.

Larnaca International Airport P.O.Box 43012, CY 6650 Larnaca - Cyprus T: +357 24 84 09 00 • F: +357 24 66 58 05 24hr Operations T: +357 24 64 33 34 • F: +357 24 64 35 99

Sector Profile



days of sunshine

8,000+ international weddings a year

50,000 divers visit the island each year

TripAdvisor’s Travelers’ Choice top 25 beaches in Europe (2019) 8th Fig Tree Bay in Protaras 18th Nissi Beach in Ayia Napa 20th Konnos Bay in Ayia Napa


Blue Flag Beaches and one Blue Flag Marina (2018) Target to attract

€20 bn

in new investment to Cyprus by 2030


Country Report CYPRUS 2019

Haris Loizides President Cyprus Hotel Association

– which will be under the auspices of the World Tourism Organization of the United Nations – with the aim to promote global peace and prosperity through sports and tourism. Through this organisation Cyprus can also raise its image within these sectors through international cooperation. Diving tourism is another area where growth is confidently predicted. An estimated 50,000 divers visit the island each year, many attracted by the opportunity to explore one of the top five dive sites in the world, the Swedish cargo vessel Zenobia, which sank off the coast of Larnaca in 1980. Cyprus is also creating more artificial diving reefs off the coasts of major tourist areas across the island to attract more divers. Golf tourism is growing steadily thanks to the island’s four 18-hole international standard courses, with potentially more in the pipeline to establish the island as a year-round destination for golfers. Island of Love

Renowned as the mythical birthplace of Aphrodite, the goddess of love, Cyprus has become a popular destination for wedding tourism, which contributes over €100 million a year to the economy. The number of foreign marriages is around 8,000 per year, of which the majority are from the UK market, followed by neighbouring Israel and Lebanon. Russia and the UAE constitute growing markets and efforts are underway to also promote Cyprus as a wedding destination in the Indian, Chinese and Japanese markets. The growing appeal of tying the knot in Cyprus is largely due to the availability of civil marriages. Across much of the Arab world – and Israel – a marriage ceremony has to be conducted within the context of a religious ceremony if it is to be legally recognised. This makes Cyprus an attractive wedding venue for mixed-faith and secular couples. Through weddings, Cyprus is also looking at opening new inroads into honeymoon tourism – a global market worth billions. Medical and Wellness Tourism

Although still a budding sector, medical tourism is experiencing some growth due to Cyprus’ worldclass reputation for high-quality private healthcare in a technologically advanced environment. Cosmetic surgery, diagnostic tests and fertility treatment top the list as the most popular procedures for medical tourists from the UK, Germany, the Netherlands, Middle East and Russia. Health and wellbeing holidays are also on the rise, with the recent creation of several exclusive spa retreats to pamper the visitor, as well as a number of large-scale projects open for investment in the

Sector Profile

The key area of opportunity and growth for our tourism industry lies in further extending the tourist season, March to November inclusive, to gradually mitigate the seasonality challenge. Furthermore, we need to consolidate the gains of recent years, with our new upgraded and enriched hotel product, including both existing and new properties, thus reaching new records both in terms of our tourist arrivals and revenues from tourism, as well as providing more job opportunities especially to the younger generations.

fields of rehabilitation and other wellness services. In fact, the wellness segment has been identified as one of the key growth areas and FDI targets by the government, and the newly formed Tourism Ministry is placing strong focus on developing the segment further. These plans are perfectly aligned with global trends, as the wellness economy has seen tremendous growth of 6.4% annually. Now valued at US$4.2 trillion, wellness expenditure is now more than half of total global health expenditure, according to the Global Wellness Economy Monitor. The global wellness tourism market is worth over US$639 billion, while the European market accounts for US$211 billion. The Backbone of Future Growth

Tourism has consistently been one of the most resilient of Cyprus’ commercial sectors, and with further development of various niche areas, such as rural, health and wellbeing, maritime, cultural, conference, sports and wedding tourism, the country’s vision for this sector is set to become a reality. The new national strategy for tourism is certain to bring profound results to keep the sector on its growth course for the next decades. Tourism-related real estate and infrastructure continues to be one of the most attractive investment opportunities in Cyprus, with a number of foreign investors closing multimillion-euro deals in the last five years and an influx of new fivestar hotel projects set to materialise in the next few years. However, to achieve its aim to attract high-spending visitors Cyprus must also focus on creating a richer holiday experience, and one that emphasises culture, indigenous heritage and natural environmental features – all reinforced by a high-quality hospitality industry. To diversify, Cyprus is actively targeting new markets and reassessing existing ones, but what is evident is that tourist numbers are on the rise. While Cyprus is certainly not turning its back on the traditional ‘sun and sea’ model, it is definitely moving to reposition itself in the global holiday market to provide a more diversified and ultimately more sustainable product. n

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Sector Profile

Transport & Logistics

Cyprus was born lucky as far as its strategic location is concerned. But it has capitalised on that luck to turn itself into a key regional transport hub, with modernised port facilities and airports linking the island with all corners of the globe.




further stroke of luck for Cyprus has come in the form of natural gas discoveries in its Exclusive Economic Zone (EEZ) and elsewhere in the Eastern Mediterranean. Major global players like ExxonMobil, ENI, Shell and Total have chosen the island as the natural service centre for their regional operations. At the same time, investment at Limassol port by Dubai’s DP World and Germany’s Eurogate International has pushed Cyprus into the top league of destination ports for the biggest cargo and cruise ships. Meanwhile, the number of arrivals by air continues to rise, with the island’s two airports continuing to attract more airlines, offering greater and more convenient connections to the rest of the world. Cyprus’


Country Report CYPRUS 2019

potential as a transhipment hub is also becoming evident, as manufacturers and distributors realise that while the island itself may be small it is only an hour’s flying time from 200 million potential customers. Multipurpose Ports

Cyprus has a long and solid reputation as a maritime centre. It has built on that experience to develop Limassol port into a state-of-the art facility, equipped to compete with regional rivals such as Piraeus and Haifa. DP World Limasssol, in partnership with G.A.P. Vassilopoulos Ltd, operates three core areas of the port: oil and gas, the cruise sector and domestic cargo. DP World is heavily

KEY contacts

Minister of Transport, Communications and Works mcw.gov.cy Cyprus Ports Authority cpa.gov.cy Hermes Airports hermesairports.com

Sector Profile

covery of natural gas deposits in its waters and the expansion of the Suez Canal, which currently handles 7% of global maritime trade. The investment in expanding and modernising Limassol port has boosted competitiveness and will help generate around €2 billion for state coffers over the next 25 years. The Hydrocarbons Dividend

investing in all aspects of the port, including offshore oil and gas, multipurpose general cargo, roll-on and roll-off, and further development of the new cruise terminal. Operating the container port is Germany’s Eurogate International GmBH, in partnership with Interorient Navigation Company Ltd and East Med Holdings SA, who have invested millions in a high-spec information technology system to process information flow at high speed between customs, clearance and the customer. The operators of Limassol’s redeveloped multipurpose port have capitalised on the increased importance of the east Mediterranean in world shipping. This increase has resulted from enhanced trade, regional port expansions, the dis-

Over the last decades we have developed a wellfunctioning transport and communications infrastructure in order to support all sectors of the economy, our citizens and of course the millions of tourists visiting our island. Our primary vision is to establish Cyprus as a regional centre, providing modern and efficient infrastructure and services. In this respect, we intend to further develop the national transport and communications sectors as a prerequisite in order to convert Cyprus as a regional centre of excellence in business development and service provision. Vassiliki Anastassiadou Minister of Transport, Communications and Works

Cyprus’ transport and logistics sector has already seen big benefits from the discovery of natural gas in Cypriot, Israeli and Egyptian waters – even before all these resources have been extracted and monetised. Cyprus-based logistics companies have been able to capitalise on the island’s geographical advantages to offer specialised support to oil and gas companies such as ExxonMobil and ENI as they operate both in Cyprus’ own offshore gas fields and those of its regional neighbours. The operations of ENI in Egypt’s giant Zohr gas field for instance, have been underpinned by facilities provided by the newly privatised Limassol port. Gas pipelines destined for Zohr were stored at Limassol before being shipped to Egypt and the field’s pipelaying vessel was also mobilised from the port. As the search for offshore natural gas accelerates, Limassol port enjoys a strong competitive advantage as the logistics base for the increasing number of multinational oil and gas giants and service companies drawn to the island. International port operator DP World, which was awarded a 25-year operating concession in 2016, has already provided Cyprus with significant added muscle as the island strives to become the region’s pre-eminent energy services and trading hub. DP World Limassol has established a 100,000 square metre, environmentally compliant oil and gas logistics centre at the port with capacity to support as many as three offshore explorations

Country Report CYPRUS 2019


Sector Profile

Transport & Logistics at any one time in the Eastern Mediterranean. Its Limassol operations encompass both oil and gas exploration and production. It has a bulkhandling plant, a pipe storage plant and three covered bonded areas where goods can be stored in transit, and provides maintenance and service of supply vessels . In January 2019, the company acquired a range of state-of the-art vessel-loading equipment for the handling of general cargo and for use in its dedicated 430-metre oil and gas berth. Its new mobile harbour crane with heavy-lifting capabilities will speed up the process of loading and unloading, resulting in a significant reduction in vessel turnaround time. The new crane will help maximise the multipurpose port’s potential and will lead to a higher turnover at all its berths. New Energy Port

Occupancy at the DP World Limassol oil and gas area and dedicated berth is expected to increase sharply as exploration of the region’s offshore fields gains momentum, with energy giants ENI, Total and ExxonMobil all expanding operations in the area. In a bold move, intended to significantly expand the capacity of the island’s hydrocarbon service infrastructure, the Cypriot government has announced plans for the development of a new dedicated energy port at Vassilikos, midway between Larnaca and Limassol, at a cost of €250 million. Tenders will soon be invited on a design, build, finance, operate, transfer (DBFOT) basis. Sophisticated Distillation Terminal

The island’s reputation as a leading logistics and support provider for the oil and gas industry in the East Med is complemented by its emerging role as a centre for the processing, storage and re-export of fuel. This is largely due to the development of a sophisticated €300-million fuel distillation terminal at Vassilikos. It is operated by VTTV, the Cyprus subsidiary of Dutch multinational VTTI, and processes so-called ‘white’ or ‘clean’ products that have already been refined, such as diesel or middle distillates. These are shipped to Vassilikos from producers in the Gulf and the former Soviet Union and are then blended or modified to meet the specifications of the European market. VTTV is the first energy terminal of its kind in the Eastern Mediterranean which connects Europe and the Black Sea with markets in the Middle East and Asia. Product fuel oil from the Black Sea area heading to markets in Asia must first be transported in small ships because of shallow waters in the Bosporus. At Vassilikos, VTTV helps to ‘build bulk’ and processes the cargo to the correct specifications for it to be ex146

Country Report CYPRUS 2019

ported economically via much larger vessels to the more distant markets of Asia. The existing VTTV terminal consists of 28 tanks and has a capacity of 544,000 cubic metres, a 1.5km long deep-water marine jetty and four berths, capable of accommodating vessels from 5,000 to 160,000 DWT. These facilities mean that it is ideally placed to benefit from the growth in ship-to-ship cargo transfer operations in the region. Most transfers take place offshore, saving on port fees but this can be difficult and dangerous in bad weather and can lead to environmentally damaging oil spills. VTTV’s purpose-built jetty provides a safer, less environmentally hazardous alternative. The company anticipates that in 2019 up to 240 vessels will call at its Vassilikos jetty – an increase of 46% on the previous year – and the company is engaged in talks with the government about implementing flexible marine tariffs and port charges to make jetty transfers more commercially competitive. Further opportunities for growth are expected to arise from the implementation of the International Maritime Organisation’s sulphur cap on fuel content in January 2020, when an upper limit of 0.5% sulphur content will lead to demand for new blends for ship’s fuel.

Our strategy with Limassol port is to make the terminal more productive and sustainable which will provide better support to the local economy through job creation, better services for the wider Cypriot business community, and enable the community we operate in to prosper. For 2019 onwards, we have positioned our terminal into three core areas of oil and gas, cruise sector and domestic cargo, which will enable us to be amongst the most significant drivers of economic growth in Cyprus. Charles Meaby General Manager DP World Limassol

Streamlined Container Traffic

The rapid expansion of the transport and logistics sector is not exclusively connected to the hydrocarbons industry. Limassol port’s role as a multipurpose hub for regional maritime commerce was assured when the contract for its container handling operations was awarded to Eurogate International in 2016. Subsequent investments of €17.8 million in the latest operating systems are already yielding results. A new, state-of-the-art IT system, which processes information flow at high speed between customs, clearance and customer, enables the latter to locate a container at any time during the clearance process and take possession of it just 20 minutes after the ship carrying it has berthed. The acquisition of two bigger, super-postPanamax cranes, capable of servicing vessels 23 or more containers wide, has further enhanced the terminal’s efficiency, enabling it to attract the larger transhipment vessels now in use. In 2018, the terminal experienced 14% growth, handling almost 394,000 TEUs or standard containers per year, most of them from the ports of Thessaloniki and Piraeus and other parts of Europe. Growth forecasts for 2019 are around 7% and in anticipation of this, two more super-post-Panamax cranes will soon be installed, while the storage area will be expanded to maximum capacity, enabling it to handle 1.1 million containers per year.

Two international airports Pafos (PFO) and Larnaka (LCA)

11 million

passengers (2018)


airlines Connections to 120 destinations in 40 countries


OUR VISION IS TO BE THE AVIATION INDUSTRY’S MOST TRUSTED SINGLE-SOURCE GROUND SERVICES AND CARGO HANDLING PROVIDER. Swissport is a people-focused organisation – without our people we simply cannot meet our goals and achieve our vision. As such, we focus on the principles of sustainability and compliance, living by the “Three Ps”: People, Professionalism & Partnership. The ongoing professional development of the people within the Swissport family ensures that: • We show respect towards our people and their values • We do not compromise on safety and work with enthusiasm and enjoyment • We are pioneers; working constantly on achieving sustainable results, we creatively explore new options and improved solutions • Continually striving to exceed the expectations of our clients and our commitments, we deliver excellent service; in any place at any time

The World of Swissport: With a workforce of some 66,000, the world’s leading provider of ground and air cargo services, is active at over 300 airports in 50 countried on six continents. AMERICAS Argentina Aruba Brazil Canada Chile Costa Rica Dominican Republic

Dutch Caribbean Ecuador Honduras Mexico Peru Trinidad & Tobago United States of America Venezuela

cargo services

EUROPE • MIDDLE EAST • AFRICA Algeria Austria Belgium Bulgaria Cameroon Cyprus Denmark

Equatorial Guinea Finland France Germany Ghana Greece Ireland

Israel Kenya Morocco Netherlands Nigeria Oman Poland

ground handling

ASIA • PACIFIC Romania Saudi Arabia Spain Switzerland Tanzania United Kingdom

Australia China Japan New Zealand South Korea

executive aviation

For information about our services please contact: Michael Kokkinos • Phone: +357 24 008 781 • E: michael.kokkinos@swissport.com

Sector Profile

Transport & Logistics Cruise Destination

Another element in the development of this fast-growing multipurpose port has been an upgrade of cruise facilities. Cyprus’ status as a destination for cruise liners soared in May 2018 when President Nicos Anastasiades and Dubai’s DP World Group Chairman Sultan Ahmed bin Sulayem inaugurated the new Limassol cruise terminal. The facility is set to promote Cyprus tourism to a new level, as it will allow the biggest cruise ships, in excess of 400 metres length overall, to visit the island for the first time. The dedicated terminal provides safety, stability and reliability for cruise itineraries focused on the Eastern Mediterranean and further afield. A glance at the figures indicates the way forward. A total of 58 arrivals were recorded at Limassol port in 2018. Of these, 26 were ships using the port for transit calls and 32 for home port calls. An increase of 40% is estimated for 2019. Of the 90 ships arriving, 50 are expected to be in transit and 40 for boarding/disembarking. Even before the establishment of the new terminal, Cyprus was in a favourable position to act as a stop for cruise ships in the Eastern Mediterranean, being a single day’s sailing from such destinations as Rhodes, Crete, Alexandria and Port Said. DP World Limassol places high priority on the cruise industry and with the opening of the terminal aspires to put Limassol on the map as a new home port destination of choice for cruise lines. During 2019, DP World Limassol’s strategy is to make the

Limassol Port is equipped to compete with regional rivals and will boost state coffers by €2 billion in the next 25 years 148

Country Report CYPRUS 2019

terminal more productive and more sustainable, encouraging job creation and better services for the wider Cypriot business community. The opportunities for investing in the various and diverse spin-offs resulting from the opening of the cruise terminal are many. DP World Limassol is hoping that in order to capitalise on these opportunities, all stakeholders and partners, including government departments, will invest in improving the quality and reliability of their services. It also hopes the Cyprus government will introduce incentives for the cruise industry, as seen in other neighbouring destinations. Larnaca Port

Cyprus’ second-largest port is at Larnaca. Plans have been under discussion for some years to develop the port as part of a wider goal of boosting the town’s attraction as a tourist destination. Once the scheme moves from the drawing board into reality it will present excellent investment opportunities, combining commercial port and passenger activities with leisure and real estate development. A strong card in Larnaca’s hand is that the port lies just 2km from the town centre and 6km from the island’s largest airport. Today it is a multipurpose port covering an area of 445,000 square metres, handling a variety of loads – unpacked, conventional and oil products. Its 326-metres North Quay is equipped with a crane on rails, while the 340metre South Quay has a similar crane and a ramp suitable for ro-ro ships.

The key area of opportunity is to attract transhipment cargo. With the two new super-post-Panamax gantry cranes in operation, we are able to serve the larger container vessels and have the capacity to purchase an additional two. We are now in a position to attract transhipment containers provided we will manage to reduce the cost at a competitive level with adjacent ports. Giorgos Pouros COO Eurogate Limassol


increase in cruise line traffic estimated for 2019

DP World Limassol

Eleni Kaloyirou CEO Hermes Airports

Logistics companies are investing heavily in technology, equipment and warehousing, in response to growing demand for transhipment, processing and re-export services

Air Links Around the Globe

For Cyprus’ two international airports, the story is one of steady growth. More records were broken in 2018, with Larnaka (LCA) and Pafos (PFO) together handling close to 11 million passengers, up almost 1 million on the previous year. The increase in Larnaka was 4.3% (a total of 8.07 million passengers) while Pafos recorded a 14.1% rise (2.8 million). The two airports are host to 70 airlines from around the globe, connecting to 120 destinations in 40 countries – with further expansion of global connectivity expected in 2019. The smooth operation of these airports is a vital ingredient in the island’s economic prosperity, built on a thriving tourism industry and an expanding centre for international trade and global business. Through their operations Larnaka and Pafos contribute approximately 4% to the country’s GDP whilst it is estimated that over 18,000 jobs are sustained at the two airports and in the wider tourism industry of Cyprus. Hermes Airports offers an extensive package of incentives designed to support airlines that develop their business in Cyprus. The idea is to promote growth in the number of passengers travelling to and from the island – either from new or existing routes – and to encourage arrivals throughout the year and not just in the summer tourism season. The incentives have been very successful and, combined with other marketing initiatives, have brought in 80 new routes and 4 million passengers during the past five years. The key areas of growth are linked with efforts to establish Cyprus as a year-round attraction for visitors, and connect the island with destinations beyond Europe and the Middle East, in particular those in North America and Asia. Hermes’ focus is also on making the airport experience as pleasant and relaxed as possible. A number of major projects are being undertaken in 2019, including the re-design and reconstruction of the shops and restaurants in the two airports’ commercial areas, expanding the range and accessibility of the services on offer. At the same time, as part of efforts to safeguard the environment, a solar park will be established to generate 20-30% of the energy needs of the airports. Processing, Re-Exporting and Transhipment

The rapid modernisation and expansion witnessed at Cyprus’ main port at Limassol and its two airports, at Larnaca and Paphos, have coincided with growth of logistics services companies. They are investing heavily in technology, equipment and warehousing, in response to

growing demand for transhipment, processing and re-export services. A leading company in this field is Eurofreight Logistics. Around 40% of its focus is on consumer products logistics, providing warehousing and distribution services, with additional expertise in temperature-controlled and frozen food logistics. Pharma logistics account for around 20% of Eurofreight’s business. As well as facilitating trade between East and West, the company has clients in countries such as Germany, Switzerland and the United Kingdom that send pharmaceuticals and cosmetics to Cyprus for processing and then have them sent back home. Even with transportation costs, it is still cheaper for such companies to process their products in Cyprus, thanks to tax savings. Among other projects, Eurofreight helps a client in China to export its products to the Middle East in a fraction of the time it previously took. It used to take the Chinese firm 30 days to send its goods by ship. Now it flies these to Larnaca, where Eurofreight Logistics handles the order, paperwork and labelling before forwarding them to another aircraft. Delivery time has been slashed to less than a week. Another major transport and logistics concern is G.A.P. Vassilopoulos Group, which handles the multipurpose terminal at Limassol port with DP World, and marine services there with P&O Maritime. The group provides sea freight, air freight and land forwarding services through its representation of DB Schenker, as well as specialising in freight forwarding by air and land, warehousing and distribution.

Sector Profile

The key areas of growth are linked with the efforts to establish Cyprus as a year-round destination, as well as connecting the island with destinations beyond Europe and the Middle East, and more specifically with destinations in North American and Asia. The establishment of the Deputy Ministry of Tourism is a positive development and it is expected to provide the foundations for the further development of Cyprus’ tourism product.

East Med Transport Hub

As a focus for the East Med region’s burgeoning energy sector, a centre of global business and commerce and a magnet for tourists, Cyprus has leveraged its strategic location and built the infrastructure to become a major transport and logistics hub for sea and air traffic. The potential to expand this role is enormous. Cyprus has developed a business infrastructure which is modern and efficient, and can draw on a deep pool of highly qualified human talent. With a pro-business government committed to safeguarding the island’s attractive, EU-approved tax regime, Cyprus is opening doors to those committed to the expansion of the transport and logistics sector. n

Discover more at cyprusprofile.com Country Report CYPRUS 2019


Business Operating Environment

Business Operating Environment Cyprus’ business-friendly infrastructure and can-do attitude has brought it worldwide recognition as an international business centre. The country offers a winning package for both international entrepreneurs and investors with its sophisticated business environment, highly skilled workforce and cost-effective, yet high quality of life. Business Culture Respect, hospitality and personal trust are the cornerstones of the Cypriot business environment. An island nation with a long history of dealing with foreign traders and businesses, Cypriot businesspeople are international in their outlook and astute and knowledgeable in their negotiations. Punctuality is expected, business dress is formal for both men and women, especially at the beginning of a business relationship, and even in warm weather. Most Cypriots prefer face-to-face meetings to telephone conferences or written communications, which are regarded as too impersonal, and place great importance on building personal relationships with business partners or connections. Trust is the key to successful business dealings in Cyprus.

Language Greek and Turkish are the official languages of Cyprus. However, English, the legacy of the British who ruled Cyprus from 1878 to 1960, is widely spoken and is the language of business. Many Cypriots speak also French, German or Russian. Business Hours Office hours are generally 8.30am to 1.00pm and 2.00pm to 5.30pm, Monday to Friday. Although in summer some offices take a longer lunch break or finish early.

Business Costs An EU base within the eurozone, Cyprus remains one of the few international business centres offering low operational costs and a high standard of living. Office space and residential property in Nicosia, the capital and major business centre, is relatively inexpensive when compared to other European capitals. In terms of cost of living, Cyprus remains one of the most advantageous places to live, with cost of living lower than in most Western European countries. At the same time, residents of Cyprus enjoy a high standard of living and exceptional quality of life, as the balmy climate and low crime rate offer both comfort and peace of mind. Business Costs Labour (business sector) Telecommunications (Local) Telecommunications (overseas) Electricity (households) Electricity (non-households) *Source: Eurostat


Country Report CYPRUS 2019

Cyprus €16.30 €0.18 for a 10-minute local call €0.65 €0.1893/kWh €0.1445/kWh

EU28 Average €27.40 €0.41 €1.71 €0.2049/kWh €0.1297/kWh

Business Incentives The government has introduced a variety of incentives aimed at attracting investment in industries that will enhance the development of the economy. These incentives are intended to: encourage the development of new high-tech industries and skill-intensive products, reconstruct Cyprus’ traditional economic sectors, improve productivity and labour skills, and attract capital intensive foreign investment. The following incentives are available: • low taxation at 12.5% with zero tax on certain types of income • industrial free zone and exemption from customs and excise charges for operations in the industrial free zone • industrial training schemes • subsidised industrial estates • grants and other financial assistance to investors, particularly in the areas of energy, the environment, industrial development, technology, research and innovation, trade and services For more information, contact Invest Cyprus investcyprus.org.cy

Office Rent

Cyprus Residential Property Rent

Average Rent Per Monthly Rent Square Metre Cyprus €1,447 €7.24 Nicosia €2,521 €12.61 Limassol €1,710 €8.55 Larnaca €1,268 €6.34 Paphos €1,053 €5.27 Famagusta €685 €3.43

Average Rent per m2 Monthly Rent per month Apartments €450.76 €5.33 Houses €749.18 €3.00 Retail €1757.48 €15.06 Warehouse €4528.18 €2.26 Office €1789.90 €8.95

Business Operating Environment

Commercial and Residential Property Cyprus offers a full range of properties for both commercial and residential use situated in key locations across the island. While the exclusive, top-level market is currently the most sought after, the island has a good stock of properties available, from townhouses and apartments, to villas and sea-side bungalows in five-star gated developments. Nicosia and Limassol are the main business centres. Office space is available in purpose-built office blocks, in converted houses or flats. A number of business centres also offer ready-to-move into offices. They usually include fully equipped offices that are available on demand with flexible terms, meeting rooms and a receptionist service. Overall, rentals are around two-thirds of those charged for comparable commercial spaces in continental Europe, and offices, retail or other commercial space is widely available for purchase or for rent.

Nicosia Residential Average Rent Property Monthly per m2 Rent Monthly Apartments €506.80 €6.00 Houses €864.06 €3.46 Retail €2566.22 €22.00 Warehouse €5770.58 €2.89 Office 3327.09 16.64

Nicosia Famagusta Paralimni Larnaca Larnaca

Paphos Limassol Paphos Residential Average Rent Property Monthly per m2 Rent Monthly Apartments €346.30 €4.10 Houses €648.49 €2.59 Retail €1318.08 €11.30 Warehouse €3590.65 €1.80 Office €1158.03 €5.79

Limassol Residential Average Rent Property Monthly per m2 Rent Monthly Apartments €664.97 €7.87 Houses €938.18 €3.75 Retail €2521.58 €21.61 Warehouse €4885.86 €2.44 Office €2156.17 €10.78

Residential Average Rent Property Monthly per m2 Rent Monthly Apartments €390.28 €4.62 Houses €684.68 €2.74 Retail €1495.96 €12.82 Warehouse €4186.99 €2.09 Office €1552.46 €7.76

Famagusta - Paralimni Residential Average Rent Property Monthly per m2 Rent Monthly Apartments €345.43 €4.09 Houses €610.51 €2.44 Retail €885.57 €7.59 Warehouse €4206.82 €2.10 Office €755.77 €3.78 Source: RICS 2018 Q4

Country Report CYPRUS 2019


Business Operating Environment

Cyprus Job Positions: Annual Base Salary

(€) Low

(€) Mid






Executive Director








Financial Controller




Finance Manager/ Senior Accountant




Accountant (Qualified)




Accountant (Part Qualified or QBE)




Account Assistant




Head of HR/Group HRM




HR Manager




HR Executive




Head of Legal/ Group Legal Head




Legal Advisor (Qualified Lawyer)




Legal Assistant / Paralegal / None Qualified Lawyer




High Management

Finance Department

HR Department

Legal Department

Compliance, Anti-Money Laundering (AML), Counter-Terrorist Financing (CTF) Head of Compliance




Compliance/AML/CTF Manager




Compliance/AML/CTF Officer




Chief Dealer





28,000 36,000 45,000

Junior Dealer




Head of IT / CTO




IT Manager




Quality Assurance (QA) / Tester




IT Technician





25,000 45,000 55,000

Dealing Room

IT Department

Marketing Department Head of Marketing




Marketing Officer




Digital Marketing Specialist (Social, PPC/SEO)




Marketing Executive




Head of Sales




Accounts Manager




Sales Executive




Office Manager / Personal Assistant




Administrator / Receptionist




Corporate Administrator




Sales Department


Source: GRS Professional Recruitment Services Ltd. June 2019


Country Report CYPRUS 2019

Human Resources Well-trained and versatile, the Cypriot workforce is one of the island’s most valuable resources, offering high standards of productivity, technical expertise and professional excellence at reasonable costs to businesses. The island’s labour force numbers some 432,556 persons in the Republic of Cyprus, with some 81.2% working in the services sector, 16.8% in industry and only 2% in agriculture. Since Cyprus’ accession to the EU, the European Union’s legislation framework regarding labour regulations has been adopted. The Cypriot labour market has a tradition of social dialogue and a welldeveloped institution of free collective bargaining. Terms and conditions of employment are negotiated either directly between the employer and the employee or through collective bargaining between trade unions and employers’ organisations. Approximately 65-70% of the labour force is unionised and/ or is covered by collective agreements. Collective agreements regulate employment conditions such as remuneration, working hours, health and safety, annual holidays and contributions to the national retirement fund (provident fund). Various branches of industry are represented by registered employers’ associations, the purpose of which is to promote and safeguard the interests of their members. Most of these associations belong to the Cyprus Employers and Industrialists Federation (OEB), a body established to provide information to its members on labour, collective bargaining, and social and economic problems, as well as representing members and their viewpoints to the government, the trade unions and the public. The Cyprus Chamber of Commerce and Industry (CCCI) is a strong voice for the island’s business community, representing over 8,000 enterprises and their interests. With about 120 professional associations under their wing ranging from the services industry to education and business associations with other countries, the CCCI’s views are highly regarded by the government. ccci.org.cy oeb.org.cy

EU-Nationals: EU-Nationals are free to live in Cyprus. They can enter the Republic without a work contract and search for work for a period of three months. Non-EU Nationals: Non-EU nationals wishing to work in Cyprus require an employment visa, issued by the Immigration Office. Non-EU nationals employed at the top level of management by international companies with operations in Cyprus are generally granted employment visas with no problems, however professional and clerical staff are only granted employment visas if no suitably qualified Cypriot candidate is available.

Financial Support Services Cyprus has a sophisticated and advanced financial services sector, which is expanding year on year. Banking is the largest component of the sector and is regulated by the Central Bank of Cyprus. The banking system is fully harmonised with EU legislation and directives. Commercial banking arrangements and practices follow the British model and there are currently over 30 Cypriot and international banks operating in Cyprus. All banks maintain correspondent networks around the world and are able to carry out both traditional and specialised financial transactions. Short and long-term borrowing is available from the Cyprus banking system and from the other financial institutions. Companies locating in Cyprus typically find that the financial institutions offer a tailored package drawn from a wide range of basic financing products. For eligible companies, capital funding can also be raised through the Cyprus Stock Exchange (CSE). There are no restrictions on foreign investors’ access to financing in Cyprus and borrowing from foreign sources is not restricted. centralbank.gov.cy cse.com.cy

ICT and Communications Cyprus has invested heavily in state-of-the-art systems to serve the needs of international business. The country has a fully digital national network, along with reliable, highspeed connectivity to other modern economies via satellite and fibre optic submarine cable systems. With its advanced telecoms network and excellent regional and global connectivity, Cyprus is fast being recognised as a leading telecommunications hub in the Eastern Mediterranean.

Professional Services With around 80% of Cyprus’ economy based on the provision of services, this sector is one of the most important in the country. Professional services are a cornerstone of the economy and continue to show growth year on year. Manned by an experienced and highly qualified contingent of professionals, this sector underpins many of the most rapidly growing areas of Cypriot business, from company registration, to finance, insurance, investment funds, ship management and others. The expertise of the country’s lawyers, accountants, auditors and other specialists, often European or US trained, offer full and efficient services in all aspects of company law and tax planning, and the world’s leading accountancy and consultancy firms are all present on the island, as are all the leading insurance, ship management and trust companies. While professional services costs are generally lower than in Western European locations, the level and quality of service is not.

Business Operating Environment

Expat Employees and Immigration Cypriot laws on immigration have been amended to conform to the European Union’s acquis communautaire and thus visa obligations for foreign nationals reflect EU regulations and obligations. While Cyprus is a signatory to the Schengen agreement, it has not implemented the agreement yet and is not expected to do so before the Cyprus Problem has been resolved.

Market Access As an EU member state within the eurozone, Cyprus offers instant access to the EU’s internal market of over 500 million people. Following Cyprus’ accession to the European Union in 2004, Cypriot companies have been able to establish their business or provide their services in any of the other EEA states through the European Single Passport. In addition, the country’s strategic location, good relationships with neighbouring countries and the Middles East and its strong ties to Russia and the CIS countries make it an advantageous jurisdiction to work in or through. It also allows for neutral ground where businesses coming from complex political backgrounds, such as Israel and Lebanon, can work together regardless of religious or political positioning. The island’s pivotal position as the eastern-most country of the EU means it is naturally placed as a gateway between East and West, and it is rapidly emerging as one of the most important business centres in the region. Cyprus also has a vast network of double taxation treaties with 64 countries, which offers attractive tax planning opportunities. The country also lies in a convenient time zone for doing business across the world, two hours ahead of GMT, meaning office hours coincide with Asia in the morning, Europe throughout the day and the US in the afternoon. Cyprus’ ability to bridge the cultural and business divide between North Africa, the Middle East and Europe is helping to pave the way for the country’s future prosperity. The island has now become a key trading post for the EU in the eastern Mediterranean, acting as the ideal hub for goods and services exchange between Europe, Africa and Asia. A growing transhipment centre, Cyprus has become a key distribution point for goods travelling into and out of the EU.

Transport and Logistics Cyprus is well connected to the rest of the world through air and sea links. With two international airports, Larnaca and Paphos, served by over 75 international airlines, a wide network of air routes connects Cyprus with continental Europe, Africa, the Middle East and Asia. The island is an established international transit station for commercial air transportation with excellent connection with the entire region. Cyprus is also one of the leading maritime centres of the world. Three main ports, the multi-purpose ports of Limassol and Larnaca and the industrial port of Vassiliko, as well as three specialised oil terminals situated at Larnaca, Dhekelia and Moni, ensure that Cyprus is well connected via sea links to all five continents. Thousands of ships call at Cypriot ports every year, which are served by some 70 shipping lines. The country’s road network is also well maintained and sophisticated, making it easy to get around the island and ensuring commuting distances are relatively short and stress-free compared to mainland Europe. Country Report CYPRUS 2019


Business Operating Environment 154

Legal and Regulatory Framework Cyprus’ legal framework is particularly strong, due in part to mandatory compliance with European Union regulations. The legislation governing Cyprus’ financial services sector underpins the island’s ambition to become a leading international financial centre. As a former British colony, Cyprus law is based on English Common Law and was amended in recent years to meet European Union requirements. Offering foreign business a familiar and reliable framework within which to operate, the island’s legal and regulatory system is considered to be one of the most favourable in Europe, whilst at the same time being fully compliant with the EU, the Financial Action Task Force on Money Laundering (FATF), the Organization for Economic Co-operation and Development (OECD) and the Financial Stability Forum. Regulators and Authorities Financial institutions are regulated and supervised by three authorities in Cyprus: the Central Bank of Cyprus (CBC), which is responsible for the supervision of commercial banks and the cooperative credit institutions; the Superintendent for Insurance Control (SI); and the Cyprus Securities and Exchange Commission (CySEC). However, changes introduced by the EU’s Single Supervisory Mechanism (SSM) in 2014, saw the transfer of supervision of all the eurozone’s largest banks to the European Central Bank (ECB). For Cyprus, this meant that Bank of Cyprus, Hellenic Bank and RCB Bank were transferred from the supervision of the CBC to the ECB.

Anti-Money Laundering Cyprus has put in place all necessary mechanisms for the prevention and suppression of money laundering and terrorist financing activities. Cypriot authorities cooperate with foreign supervisory authorities in compliance with the Financial Action Task Force (FATF) recommendations to ensure financial sector legislation and practices are aligned with international standards. The national AML law is fully aligned with the 4th EU AntiMoney Laundering Directive, and Cyprus is in full adherence with sanctions issued by the European Union, the United Nations, and also the US Treasury OFAC. The transposition of the 5th EU AML Directive into Law will take place in September 2019, whereas the full functionality of the Ultimate Beneficial Owner (UBO) registries will be available from March 2020. All individuals and legal entities that perform financial and other business activities, are obliged to protect themselves, their companies and the financial system of Cyprus from money laundering by setting standard procedures and adhering to strict protocols for maintaining records.

Taxation Cyprus offers one of the most attractive tax regimes in Europe. A member of the European Union since 2004, Cyprus’ regulatory regime is in full compliance with the requirements of the EU and OECD. Cyprus has one of the lowest EU corporate tax rates at 12.5%. The island’s advantageous tax rate coupled with an extensive list of double tax treaties places it high on the list of preferred jurisdictions for international tax planners.

Corporation Tax Corporation Tax Rate: 12.5%

Country Report CYPRUS 2019

Basis of taxation All companies that are tax residents of Cyprus are taxed on their income accrued or derived from all sources in Cyprus and abroad. A non-Cyprus tax resident company is taxed on income accrued or derived from a business activity which is carried out through a permanent establishment in Cyprus and on certain income arising from sources in Cyprus. A company is resident of Cyprus if it is managed and controlled in Cyprus.

Special Types of Companies Shipping companies

The Merchant Shipping Legislation, fully approved by the EU, provides for exemption from all direct taxes and taxation under tonnage tax regime of qualifying shipowners, charterers and shipmanagers, from the operation of qualifying community ships (ships flying a flag of an EU member state or of a country in the European Economic Area) and foreign (non-community) ships (under conditions), in qualifying activities. The legislation allows non community vessels to enter the tonnage tax regime provided the fleet is composed by at least 60% community vessels. If this requirement is not met, then non community vessels can still qualify if certain criteria are met. The legislation includes an “all or nothing” rule, meaning that if a shipowner/ charterer/ shipmanager of a group elects to be taxed under the tonnage tax regime, all shipowners/ charterers/ shipmanagers of the group should elect the same. Exemption is also given in relation to the salaries of officers and crew aboard a Cyprus ship. Insurance companies

Profits of insurance companies are liable to corporation tax similar to all other companies except in the case where the corporation tax payable on taxable profit of life insurance business is less than 1.5% of the gross premium. In this case the difference is paid as additional corporation tax.

Personal Income Tax Basis of Taxation

Tax Year: The tax year is the calendar year. The accounts of a company may be closed on a date different from 31st of December, in which case taxable profits are apportioned on a time basis relevant to the tax years. Consolidated Returns: Taxation on a consolidated basis is not permitted and each company is required to submit a separate return. A setoff of group losses is possible provided there is a 75% parent subsidiary relationship, including subsidiaries under 75% control of a common parent company. Group loss relief is available only between resident companies, and EU-based companies on the proviso that they have exhausted all options to utilize the losses in their country of residence. Filing Requirements: Tax returns must be filed electronically by 31st of March, 15 months after the tax year end. following the accounting year end. Companies are required to pay provisional tax in two equal instalments on 1st of August, 30th of September and 31st of December. Any underpayment payable is due by 1st August of the following year. If the income declared for the payment of the provisional tax is lower than 75% of the income as finally determined, an additional amount equal to 10% of the difference between the final and provisional tax is payable.

All Cyprus tax residents are taxed on all income accrued or derived from all sources in Cyprus and abroad. Individuals who are not tax residents of Cyprus are taxed on income accrued or derived from sources in Cyprus. An individual is tax resident in Cyprus if he spends more than 183 days in any one calendar year in Cyprus. Moreover, a 60-day rule (subject to certain conditions) has recently been introduced to the tax legislation, however, in order for such individual to qualify he/she must not be present in another country for more than 183 days or considered to be tax resident in another country. Personal Tax Rates

The following income tax rates apply to individuals: Taxable Income 0-19,500

TaxRate (%)

Tax (€)

Business Operating Environment

Administration and Compliance

Cumulative Tax (€)




19,501- 28,000












60,001 and over


*Foreign pension is taxed at the rate of 5%. An annual exemption of €3,417 is granted.

Tax incentives for expatriate employees taking up employment in Cyprus:

50% exception of remuneration from any office or employment exercised in Cyprus that exceeds €100,000 per annum by an individual who was not tax resident of Cyprus prior to the commencement of employment (applicable for 10 years) 20% exception with a maximum of €8,550 of remuneration from any office or employment exercised in Cyprus by an individual who was resident outside Cyprus before the commencement of his employment (applicable for three years - for employment which commenced during 2012 or after 2012 this exemption applies for five years with the last year for which the exemption will be available being 2020)

Value Added Tax Imposition of Value Added Tax (VAT) is imposed on the supply of all goods and services in Cyprus, on the acquisition of goods from other Member States and on the importation of goods from third countries. The standard rate of 19% applies to the supplies of all goods and services in Cyprus which are not subject to the zero rate, the reduced rates (5% and 9%) or are not exempt. Cyprus constitutes an attractive EU VAT jurisdiction applying several options permissible by the EU Directive among others a flexible VAT Grouping. As long as the pre-requisite links are satisfied, and governmental revenues are not put into jeopardy, related entities can form a VAT group disregarding intra-group transactions and having a representative member submitting a single VAT return. Even such entities not incorporated in Cyprus can form a VAT Group in case they are tax resident or possessing an establishment in Cyprus. Special contribution for defence Special contribution for defence is imposed on income earned by Cyprus-domiciled tax residents. Non-tax Non Cypriot-domiciled residents are exempt from special contribution for defence. Submission of tax returns The tax year is the calendar year. Tax on employment income is withheld by the employer under the PAYE system and remitted to the tax authorities. Self-employed individuals pay tax through the provisional and self-assessment systems. Tax returns must be filed by 30th of April following the tax year for employees, 30th June for self-employed persons who are not required to file audited accounts and 31st of December for self-employed persons whose returns are accompanied by audited accounts – these deadlines are extended by three months in case of electronic submission. Sole proprietors with an annual turnover more than €70,000 are obliged to prepare audited financial statements.

Country Report CYPRUS 2019


Business Operating Environment

Key Features of the Cyprus Tax System w Simple, transparent and EU harmonised tax system following recommended OECD practices w Enjoys the tax benefits of EU Directives (Parent –Subsidiary Directive and Interest and Royalties Directive) w Extensive Tax Treaty network with 65 countries w A corporate income tax rate of 12.5%, one of the lowest within the EU with possibility to enjoy a much lower effective tax rate w Availability of a Notional Interest Deduction for companies receiving new equity funding. The tax deduction can reach up to 80% of the taxable income produced by employing the new equity funding. w IP Box regime based on the nexus approach which allows 80% deemed deduction on qualifying profits from the business use of IP w Attractive Tonnage Tax (TT) regime to ship owners, managers and charters w Capital gains exempt from tax (except for capital gains arising from disposing real estate situated in Cyprus) w Profits of a foreign Permanent Establishment exempt from tax w Gains from trading in securities (shares, bonds and a broad list of other financial instruments) exempt from tax w Unilateral credit relief for foreign taxes w No withholding tax on dividend, interest or royalty payments (for use of royalties outside of Cyprus) made to non-Cyprus tax residents or Cyprus tax residents non-domiciled individuals w No taxes on entry, reorganisations and exit w Most international transactions free of VAT w Carry forward of tax losses for five years w Tax incentives for expatriate employees taking up employment in Cyprus (up to 50% of employment income for individuals earning more than ₏100k per annum) w Dividend income and interest income exempt from tax for nondomiciled individuals taking up tax residency in Cyprus w Possibility to obtain Cyprus tax residency by spending only 60-days in Cyprus (subject to conditions) w No inheritance tax w No immovable property tax


Country Report CYPRUS 2019

Double Tax Treaties Cyprus has concluded Double Taxation Treaties (DTTs) with 65 countries, which provide important tax advantages. Andorra Armenia Austria Azerbaijan Barbados Belarus Belgium Bosnia Bulgaria Canada China Czech Republic Denmark Egypt Estonia Ethiopia Finland France Georgia Germany Greece Hungary Iceland India Iran Ireland Italy Jersey Kazakhstan Kingdom of Bahrain Kuwait Kyrgyzstan Latvia

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Cyprus: a robust and dynamic business centre

Travel & Living

CountryProfiler Essential Expat Guide Cyprus is a top tourist destination for all seasons, and one of Europe’s hot spots for expats thanks to its thriving economy and relaxed Mediterranean lifestyle.


Country Report CYPRUS 2019

Located in the Eastern Mediterranean at the crossroads of Europe, the Middle East, Asia and Africa, Cyprus’ strategic position has played a key role in shaping its history and in developing the island into a centre for trade and international business. Cyprus enjoys around 340 days of glorious sunshine a year and boasts a coastline teeming with endless stretches of golden sands, secluded bays and rocky coves. Surrounded by the crystal-clear waters of the Mediterranean Sea, the island is dotted with the fascinating remains of history from Neolithic settlements and ancient city-kingdoms to exquisite Byzantine art and magnificent Venetian architecture. Cyprus is known for its hospitality – filoxenia – a fact reflected in the Greek word xenos which is used for both guest and stranger. Life is meant to be enjoyed in Cyprus, where emphasis is put on working to live, as opposed to living for work. Café culture predominates, with both business and social meetings taking place over a leisurely iced coffee frappé in the numerous cafes in every town and city. History

Cyprus has been coveted, conquered and colonised numerous times during its 10,000-year history. The island attracted the interest of a succession of dominant powers in the region, which battled for it through the millennia. The first of these are believed to have been the Achaean Greeks who arrived in around 1200 BC introducing their language, religion and customs to the island. Cyprus was subsequently colonised by the Phoenicians, the Assyrians, the Egyptians and the Persians. In the 4th century BC Alexander the Great claimed the island, which remained part of the Greek-Egyptian kingdom until 30 BC, when the Romans arrived, and Cyprus became a senatorial province. It was during this period that Saint Paul was said to have visited the island and converted the Roman governor to Christianity. Cyprus remained a Roman possession until the empire began to disintegrate in 330AD, when it became part of the Eastern Roman or Byzantine Empire. In 1191, Cyprus was conquered by the English king, Richard the Lionheart, while on his way to take part in the Third Crusade. He later sold the island to the Knights Templar, who consequently sold it on to the Franks or Lusignans, a dynasty

which went on to rule Cyprus for almost 300 years, until the last of the Lusignans ceded the island to Venice in 1489. Despite building heavy fortifications around the island’s major cities of Famagusta and Nicosia, the Venetians were not able to withstand the invading Ottoman troops who conquered the island in 1571. Cyprus remained under Ottoman rule until the arrival of the British in 1878. The island’s long history offers visitors a journey of discovery paved with ancient archaeological treasures. The ancient city-kingdoms of Kourion and Amathus, and the Mosaics of Paphos, are considered among the finest mosaic floors in the Eastern Mediterranean. Other mustsee historic sites include the Neolithic settlements of Choirokoitia and Kalavasos-Tenta, the Tombs of the Kings and the famous Sanctuary of Aphrodite, the Goddess of Love, who legend claims was born on this island. In more recent times, Cyprus gained independence from Britain in 1960, however a Greek sponsored coup d’état in 1974 was swiftly followed by an invasion of Turkish forces which occupied the northern one-third of the island. Despite numerous efforts over the intervening decades, the island remains de facto divided, and the self-declared Turkish Republic of Northern Cyprus (TRNC) remains unrecognised by the international community. The Greek Cypriot and Turkish Cypriot leaders continue to look for a solution to end the division of the island, but while negotiations have been slow, some progress is being made. The capital city, Nicosia, is still split between the two sides, though visitors can access either side from checkpoints at Ledra Palace and Ledra Street, and today Nicosia is the last remaining divided capital city in the world.

Travel & Living



Cyprus enjoys a Mediterranean climate, with long, warm, dry summers from May to October and mild winters with occasional rain, lasting from December to February. Summer and winter in Cyprus are separated by short autumn and spring seasons. The average daytime temperatures during summer range from +21C to +34C, although in high summer temperatures can reach as high as +40C. During the cooler months, temperatures can range between +7C and +15C although even during the height of winter there are generally six hours of bright sunshine during the day. Country Report CYPRUS 2019


Travel & Living


Cypriots are highly educated and multilingual. The official languages of Cyprus are Greek and Turkish, however English is widely spoken and written and is the language of international business. German, French and Russian are also widely spoken in commerce, due both to the number of Cypriot graduates from overseas universities and the island’s commercial ties with the global business community. Getting There

Popular since the early 1980s with British and other European holidaymakers, Cyprus is well connected to Europe’s main cities, as well as to Asia and the Middle East. Flights from mainland Europe are quick, frequent and increasingly low cost. By air, Cyprus is 1.5hrs away from Athens, 4hrs from Frankfurt, 3.5hrs from Dubai and 5hrs from London. Hotels & Accommodation

When it comes to a place to stay, Cyprus offers every conceivable type of accommodation, from budget-priced two and three-star hotels to a large range of upmarket and boutique hotels with four and five-star status. Agritourism houses are available for rent all over the island, often in the most picturesque villages, and give the traveller a unique opportunity to experience authentic Cyprus village life. Culture & Entertainment

More than a place just for lounging in the sun, there are lots of things happening in Cyprus all year round. From music concerts and cultural performances with big name stars, sports events, religious festivals with all the pomp and circumstance of the Greek Orthodox Church, to informative conferences where you can meet like minds. The 160

Country Report CYPRUS 2019

Cyprus Rally has been held every year since 1970 and forms part of the World Rally Championship and the FIA Middle East Rally Championship, and attracts hordes of car enthusiasts, while the annual Historic Cyprus Rally draws crowds of vintage car enthusiasts. Cultural events such as the Pharos Chamber Music Festival, the Kypria International Festival, which comprises music, dance and performance arts, and the Thalassa International Festival, which includes photographic exhibitions, movie screenings and music performances, ensure there’s something to interest everyone on the annual calendar of events. The Pharos Arts Foundation has established a world-wide reputation for its commitment to excellence and for promoting classical music in Cyprus, having presented more than 500 concerts over the past 15 years. Outstanding musicians are hosted in the Pharos Arts Foundation’s Concert Series and the annual International Chamber Music Festival, with programmes ranging from ancient to contemporary. The Pharos Centre for Contemporary Art (PCCA) presents the work of major international artists. A variety of contemporary art forms are included in the Centre’s programme - visual, performance, photography, video - as well as lectures and discussions. Exhibitions are in many cases individually curated by internationally recognised curators from all over Europe. The Pafos Aphrodite Festival Cyprus organises and hosts an annual opera performance at the end of August or early September and has over the years invited a variety of internationally acclaimed companies and performances to the festival. Showcasing the rich viticulture of the island, Cyprus has created a wine trail project, offering six different organised routes for visitors to tour the island’s wine-producing regions. The reputation of the annual Limassol Wine Festival, launched in 1961, attracts over 100,000 visitors every August to the city’s municipal gardens to discover the wine portfolios of one of the oldest wine-producing countries in the world.

Travel & Living

Country Report CYPRUS 2019


Travel & Living 162



In Cyprus you can shop till you drop. The island is supplied with stores catering for all tastes and requirements. Most major British and European chains are represented on the island and there is a plethora of fashionable boutiques and big malls in Nicosia, Limassol and Paphos, selling designer brands including Louis Vuitton, Chanel, Dolce & Gabbana, Gucci, Roberto Cavalli, Calvin Klein, Kenzo, Gianfranco Ferre and many more. For those looking for something more unique, you can find traditional and handmade items that are quintessentially Cypriot in the old towns of the bigger cities, as well as in the many villages in the countryside.

It is of course impossible to talk about Cyprus without mentioning the food. As with most Mediterranean countries, food plays an important role and is to be enjoyed at a leisurely pace with friends and family. One of the first Greek phrases to learn in Cyprus is siga siga, which means ‘slowly’, and is a mantra one will hear almost daily. The fabulous Cypriot food is to be savoured unhurriedly, usually al fresco with friends and family. Even a cup of coffee can be a two hour past time. Cypriot food bears a distinct resemblance to Greek cooking, but also has Turkish and Lebanese influences. As in other Mediterranean countries, eating is an activity to be savoured and enjoyed and is certainly not to be rushed in any way. Which is a good job as a traditional Cypriot meze – a meal of small plates similar to tapas – can consist of up to 30 dishes. Cypriot cuisine features lots of fresh fish, meat, beans, pulses and vegetables flavoured with lemon, fresh herbs and spices. Cyprus is also one of the world’s oldest grape-growing and winemaking regions, with its fruits of the grape ranging from delicate whites and full-bodied reds to the rich sweet ambercoloured dessert nectar known as Commandaria. This is one of the oldest wines in the world, representing an ancient wine style documented in Cyprus back to 800 BC and has the distinction of being the world’s oldest named wine still in production, with the name Commandaria dating back to the crusades in the 12th century.

Sports & Outdoor Activities

Public Transport

Cyprus offers a host of energetic pursuits to engage the visitor. Becoming increasingly popular as a destination for golfers, Cyprus offers first-class facilities with four professional courses in magnificent locations, and the development of several new courses in the pipeline. Spectacular pine-clad mountains in the centre of the island offer walkers and cyclists welcome respite from the heat. Breathe in the bracing pine scented air, whilst admiring the series of Venetian stone bridges and waterfalls that pepper various hiking trails in scenery that looks as if it has been lifted from a book of fairy tales. In winter months, skiers can test the slopes on Troodos whilst the rest of the island wear short sleeves and bask in winter sun. The island provides excellent opportunities for water sports, such as windsurfing and kitesurfing. There are also excellent dive sites and facilities, with one of the best wreck dives in the world, the Zenobia, situated off Larnaca. Other popular dive sites include Ayia Napa, Paphos and the Akamas Peninsula, where divers are often able to see artefacts such as Roman pottery on the seabed.

Within urban areas, buses run on fixed routes roughly every half hour, with services ending in the evenings at about 18:00 Monday to Friday and earlier on Saturdays. Some routes have no service on Sundays. Hours are extended until midnight during the tourist season and some urban routes now offer a night bus service on Fridays and Saturdays. Timetables are available from tourist offices or directly from the bus companies. Rural buses connect towns and villages and make frequent stops. The service is infrequent with schedules limited to one or two routes per day. These buses can often be smaller mini-buses. There are also buses providing a service linking all major towns. These are generally very regular and all buses are modern and comply with European standards. A private company, Kapnos, provides a regular daily airport shuttle service between the major towns and cities and both of the island’s airports. There are no trains in Cyprus.

Country Report CYPRUS 2019

cyprusbybus.com intercity-buses.com kapnosairportshuttle.com

Travel & Living

Car Hire & Taxis

Business Hours

Car and motorcycle rental firms have offices in all towns, as well as at Larnaca and Paphos International Airports. Their rates vary according to the rental period, season of the year and extras. They usually offer unlimited mileage and their cars can be delivered and collected at the airports by prior arrangement. Rental cars and bikes are usually delivered to the customer with a full tank of fuel paid for by the customer. When the car is returned, the customer receives a refund for any remaining fuel, unless stated otherwise in the contract. Drivers under 25 years of age holding a driving license for less than three years must inform the car rental company so special insurance cover can be provided. Foreign visitors are strongly advised to read the rental agreement carefully and demand fulfilment of all their rights. Taxis are also very common, but before setting off on your journey discuss the pricing with the driver and ensure the meter is functioning. TravelExpress is another good option, as a private company, which provides a shared taxi service between cities in Cyprus. Taxi service app Taxify, which was created in Estonia, has also successfully launched in Cyprus operating in Nicosia and Limassol. The app allows users to set their location and see where the nearest partner taxi is and order it. The taxi can be tracked heading to the customer’s location and indicates how far away it is and how long it will take to arrive. Customers can also track their routes while inside the cab, preventing drivers from taking longer routes and overcharging for trips. Customers can also pay via their phones.

Office hours are generally 8:30am-1:00pm and 2:00pm-5:30pm, though in summer some offices take a long lunch break or finish early. Government offices are generally open from 7:30am-2:30pm, from Mondays to Fridays and until 6pm on Thursdays. Banks typically open at 8:30am and close at 1:30pm. International banks are open from 8:30am to 5:30pm. Shops are generally open from Mondays to Saturdays from 9am- 7pm, with larger supermarkets, malls and tourist areas open all day on Sundays as well.

travelexpress.com.cy taxify.eu


Roads are well maintained in and between the main towns, and there are four-lane motorways connecting Nicosia with Limassol and Larnaca. Driving is on the left in Cyprus and the maximum speed limit on motorways is 100 kph (60 mph). Cyprus accepts the driving licences of all EU Member States and any person with a valid licence may drive legally in Cyprus. According to EU rulings, driving licences issued before 1996 do not have to be exchanged for the new Community Model and remain valid until their expiration. Non-EU citizens may drive on valid foreign licences for a certain period (for those with a US licence the period is six months). Relevant Consular authorities can provide further information.


Country Report CYPRUS 2019

Buying & Renting Property

Cyprus offers a full range of properties for both commercial and residential use, situated in key locations across the island. While the exclusive, top-level market is currently the most sought after, the island has a good stock of properties available, from townhouses and apartments, to villas and sea-side bungalows in five-star developments. Nicosia and Limassol are the main business centres. Office space is available in purpose-built office blocks, in converted houses or flats. A number of business centres also offer ready-to-move into serviced offices. They usually include fully-equipped offices that are available on demand with flexible terms, meeting rooms and a receptionist service. Overall, rentals are around two-thirds of those charged for comparable commercial spaces in continental Europe, and offices, retail or other commercial space is widely available for purchase or for rent.

There is a wealth of excellent private schools on the island, the majority of which are English speaking, but there are also French, Russian and Greek-speaking private schools. Fees are generally less than for the equivalent education in the UK. Public schools are free, and teaching is conducted in Greek. Tertiary education is provided by the six universities in Cyprus as well as several other colleges that offer a variety of vocational and academic courses.


Cyprus has an efficient and reliable postal service as well as an excellent telecommunications network. Telecommunications costs are among the cheapest in Europe. Cyta, remains the main provider, offering a full range of telecommunications services. Other main providers are epic, Primetel and Cablenet. Cyprus’ network boasts 100% broadband coverage.

Travel & Living


Media and TV


Ranked by the World Health Organisation as one of the healthiest countries in the Mediterranean, Cyprus has an excellent healthcare system provided through both the private and public sector. In 2019, the first phase of a national health scheme was rolled out concerning outpatient care provided by GPs, specialist doctors, pharmacies and labs. Meanwhile, phase two providing inpatient care will be rolled out in June 2020. EU citizens who are visiting Cyprus can receive free outpatient or inpatient treatment with a European Health Card, which is issued by the health authority in their home country. However, this covers only essential treatment and not routine treatment. Non-EU visitors must pay for healthcare. Cyprus boasts internationally educated specialists with top-notch facilities and a plethora of medical insurance options available. gesy.org.cy


Religious freedom is written into the Cypriot constitution and Greek Orthodox, Muslims, Catholics, Jews, Armenians and Maronites coexist peacefully on the island. However, the overwhelming majority of Cypriots are members of the Greek Orthodox Church, an institution that plays an important role in both personal and public life on the island. Pets

Cyprus is a member of the Pet Travel Scheme which allows pets from any of the countries covered by the scheme to enter Cyprus without quarantine provided they meet specified antirabies, blood sampling and anti-worm/anti-tick hygiene requirements. The pet must be microchipped, vaccinated against rabies and blood tested, and can be brought into Cyprus only after six months have elapsed following a satisfactory blood test.

A number of daily and weekly newspapers are published in Cyprus, some of which are in the English language, including the Cyprus Mail. Many UK, European, Russian and Arabic newspapers can be bought in Cyprus a day or two after publication. Several terrestrial TV stations in Cyprus broadcasting locally produced programmes as well as international films, dramas and TV series. Cable and satellite television is widely available. Taxation

Cyprus offers one of the most attractive tax regimes in Europe. A member of the European Union since 2004, Cyprus’ regulatory regime is in full compliance with the requirements of the EU and OECD. Cyprus has one of the lowest corporate tax rates in the European Union at 12.5%, while the maximum personal tax rate is 35%, those earning less than €19,500 are tax exempt. Personal Financial Services

Cyprus has a well-developed banking system modelled on the British banking system. The Central Bank of Cyprus has the responsibility for monetary and credit policy. There are currently a number of domestic banks operating in Cyprus, including commercial banks and specialised financial institutions. Standard branch opening hours are usually from 8:30am-1:30pm Mondays to Fridays and from 3:15pm to 4:45pm on Monday afternoons only. International banks are open from 8:30am to 5:30pm. Home Help

Many expatriates find they can afford domestic help that they could not have afforded at home and often choose to employ a helper for cleaning, cooking, general household chores and child minding.

Country Report CYPRUS 2019


Travel & Living

Important Numbers Utilities

Visiting the Occupied Area

Electricity = 240V 50Hz, 5 amp or 13 amp square three-pin British-style plugs. Electricity is provided by the Electricity Authority of Cyprus (EAC) and water is provided by the water board of the nearest main town. Many properties have solar water heating systems. Cyprus has no piped gas, but bottled gas is widely available in supermarkets. Cyprus makes use of the BS 1363, British 3-pin, 13A, 240V, 50Hz earthed and fused plug. The BS 1363 plug, also known as a ‘13 amp plug’, is a large plug that has 3 rectangular prongs forming a triangle. Live and neutral are 4Χ6Χ18mm spaced 22mm apart. 9mm of insulation over the base of the pins prevents people from touching a bare connector while the plug is partly inserted. Earth is 4Χ8Χ23mm. On plugs for Class II appliances that do not require an earth, the pin is often plastic.

Following the Turkish occupation of the north of the island in 1974, the island has been divided. In 2003 checkpoints opened for the first time allowing both sides to cross over with a passport or valid ID. It is perfectly safe to visit and explore the area. If travelling by car, insurance has to be purchased at the checkpoint. Various policies are available covering vehicles from three days to a full year. Cigarettes and alcohol cannot be taken from the north to the Republic of Cyprus and there are restrictions on certain foodstuffs, such as meat and dairy produce. There is a maximum limit of €260 of goods per person allowed to be brought across the UN-controlled buffer zone.


Cyprus is the 5th safest country in the world, according to recent statistics, and one of the safest countries in the EU – and crime is virtually nonexistent. It is safe to walk around all towns and villages whether day or night. Few locations in the world can offer the same level of security and stability that Cyprus does. Visas & Embassies

Standard of Living

Other factors that contribute to the enviable lifestyle of Cyprus include a superb road system with signs in both Greek and English, a reliable and efficient postal service, a large choice of schools, clubs, restaurants, gyms, theatres, cinemas, museums and art galleries. The local infrastructure is ideally suited for business people who need to get things done. Thanks to its modern road network, extensive port facilities and two international airports, travel and transport in and beyond Cyprus is fast, efficient and economical. Large Expat Community

As a member of the EU, under community laws EU nationals have the right to enter the country with an identity card or valid passport and to seek work. For non-EU nationals, employment permits have to be obtained before entering Cyprus. The nationals of many non-EU countries do not require a visa to enter Cyprus for a stay not exceeding three months. Details of visaexempt countries and visa application procedures are available on the Ministry of Foreign Affairs website. mfa.gov.cy


Country Report CYPRUS 2019

A notable British presence remains to this day and Cyprus has become home to a large expat community. Today, Cyprus has the second highest percentage of foreign citizens in the European Union, with 13% of the total population from other EU member states, and around 7% from non-EU countries according to a survey of the EU’s statistical office. The biggest group of expats living in Cyprus consists of British nationals, but there are also large communities of Americans, Russians and other Eastern European nationals

Cyprus Dialling Code:


Emergency (medical, fire, police):


Emergency Air and Sea Rescue:


Hospital information:


Directory Enquiries:


Travel & Living

Cost of Living: Average Prices

Famagusta region Loaf of fresh white bread (500g)

Milk (1ltr)


Tomatoes (1 kg)


Bottle of midrange wine



consists of Ayia Napa, Protaras, and Paralimni, and has many of the best beaches on the island. Ayia Napa in particular is a reputable party town for twenty-somethings and prime site for nightlife. The area mostly attracts young people, couples and families.

Domestic Beer (0.5 l)

€1.04 €1.50

Imported Beer (0.33ltr)

Three-course meal for two in midrange restaurant


Average Rent Per Month (€) Apartment (1 bedroom) in City Centre


Apartment (1 bedroom) Outside of Centre


Apartment (3 bedrooms) in City Centre


Apartment (3 bedrooms) Outside of Centre


Average Buy Apartment Price (€/sqm) Apartment in City Centre


Apartment Outside of Centre


Source: Numbeo


Country Report CYPRUS 2019

Travel & Living



is the third largest city in Cyprus and is known for its palm-tree seafront promenade. It is home to the country’s primary airport, a seaport and a marina. It has a picturesque old town, salt lakes with flamingos in the winter, and a large marina. There is a wealth of historical interests around the town including the St Lazarus church, the Hala Sultan Tekke Muslim shrine, the historical Kiti church and the monastery of Stavrovouni. The city mostly attracts couples and families.

is the second largest city, situated between archaeological sites, the ancient kingdoms of Amathous, Kourion and Kolossi. The coastal town is also home to the famous Limassol Marina and the city’s geographical location provides easy access to mountainous villages and Troodos mountain. The city is a business centre attracting business executives, as well as couples, families and young people. It has developed significantly in recent years, emerging as a business hub as well as a party town with reputable beach bars, Carnival and Wine Festivals. Limassol has the largest port in Cyprus.



is the capital of Cyprus and the main commercial and business centre and the seat of government. It boasts a world-famous archaeological museum, a thriving old city surrounded by fortified Venetian walls and a labyrinth of traditional streets. It is also the last remaining divided capital city in the world following the fall of the Berlin Wall. Visitors are usually couples, families and business people.

is a popular coastal town. Visitors can enjoy spectacular scenery and some of Cyprus’ finest beaches, as well as ancient historical sites. Tourist attractions in Paphos include the Paphos mosaics, the Tombs of the Kings, which are UNESCO Heritage sites, the Venetian fortressed harbour and the Pillar of St Paul. The Akamas peninsula is one of the island’s residual unspoilt wildernesses and is home to endemic flora and fauna species. Paphos mostly attracts couples and families.

























Country Report CYPRUS 2019


Who’s Who - Cyprus Business Directory




The definitive guide to Cyprus’ leading companies, executives and professional advisers.


Country Report CYPRUS 2019



Auditing & Accounting Baker Tilly South East Europe 174 Deloitte 179 EY Cyprus 181 HLB Cyprus Limited 183 Joannides + Co. Ltd 184 KPMG 185 Nexia Poyiadjis Chartered Accountants 186 PwC Cyprus 187 ServPRO Accountants & Consultants 188 Automated Storage & Retrieval Systems Kardex Systems Ltd Banking Alpha Bank (Cyprus) Ltd AstroBank Ltd Bank of Cyprus cdbbank (The Cyprus Development Bank Public Company Ltd) EFG Bank (Luxembourg) S.A. - Cyprus Branch Eurobank Cyprus Ltd Jordan Kuwait Bank Plc, Cyprus Branch RCB Bank Ltd Societe General Bank – Cyprus Construction Iacovou Group


173 174 174 175 180 181 184 187 189


Consulting Axiom Consulting Ltd 174 Consultics 176 E-CNHC – E-C Natural Hydrocarbons Company Ltd 179 Facilitas Advisory 181

Corporate & Fiduciary Services Alter Domus (Cyprus) Ltd Bizserve Consultants Limited IQEQ (Cyprus) Ltd Oneworld Ltd Sovereign Trust (Cyprus) Limited Vistra (Cyprus) Ltd

173 175 184 187 189 191

Who’s Who - Cyprus Business Directory


Economic Analysis MEES 185 Sapienta Economics Ltd 188 Energy Cyprus Hydrocarbons Company (CHC) Electricity Authority of Cyprus Natural Gas Public Company (DEFA)

177 180 186

Executive Education European Institute of Management and Finance (EIMF)


Financial Advisory MAP S.Platis Group


Fund & Asset Management BAO Capital Partners Ltd BOC Asset Management Ltd (BOCAM) Wealth Fund Services Ltd GMM Global Money Managers Ltd

175 175 191 182

Insurance HD Insurance Ltd – Hellas Direct Royal Crown Insurance Co Ltd

183 188

Investment Funds Hanseatic Fund Variable Capital Investment Company Plc 182 Investment Promotion Agency Invest Cyprus

184 Country Report CYPRUS 2019


Who’s Who - Cyprus Business Directory




Investment Services CISCO 176 One Plus Capital Ltd 186 Windsor Brokers Ltd 191 Law Firms A.G. Paphitis & Co LLC Der Arakelian-Merheje LLC Eliades & Partners Elias Neocleous & Co LLC George Y. Yiangou LLC Haviaras & Philippou L.L.C L Papaphilippou & Co LLC Michael Kyprianou & Co LLC Patrikios Pavlou & Associates LLC Scordis, Papapetrou & Co LLC Stelios Americanos & Co LLC Stelios Ieronymides & Associates LLC Tassos Papadopoulos & Associates LLC Y. Georgiades & Associates LLC Professional Bodies & Industry Associations Association of Cyprus Banks Cyprus Chamber of Commerce and Industry Cyprus Employers & Industrialists Federation (OEB) Cyprus Fiduciary Association Cyprus Healthcare Tourism (CHT) Cyprus Hotel Association Cyprus International Businesses Association (CIBA) Cyprus Investment Funds Association (CIFA) Cyprus Oil & Gas Association (COGA) Cyprus Shipping Chamber Cyprus Union of Shipowners (CUS) Insurance Association of Cyprus Society of Trust and Estate Practitioners (STEP) The Institute of Certified Public Accountants of Cyprus (ICPAC)


Country Report CYPRUS 2019

173 179 180 180 182 182 185 186 187 188 190 190 190 191

174 176 176 177 177 177 177 178 178 178 178 183 189 191

Real Estate & Property Aphrodite Hills Resort Cyprus Aristo Developers Ltd Cybarco Development Ltd D. Zavos Group Leptos Estates Pafilia Property Developers Ltd

173 173 176 179 185 187

Recruitment CareerFinders Recruitment Services Limited GRS Professional Recruitment Services Ltd

175 182

Research Institutions The Cyprus Institute (CyI)


Shipping FML Ship Management Ltd. Shipping Deputy Ministry

181 189

Software & IT Services NETinfo Plc SAP Cyprus Ltd

186 188

Telecoms & Internet Cytaglobal 178 epic 180 Transport & Logistics DP World Limassol Hermes Airports SkyLink Services Ltd Swissport Cyprus Limited

179 183 189 190


ALPHA BANK CYPRUS LTD Alpha Bank Cyprus Ltd is part of the Alpha Bank Group one of Greece’s largest banking groups. Alpha Bank Cyprus Ltd was established in 1998 and offers a wide range of high quality products and services covering retail, SMEs, corporate and international banking, through a modern network of branches and points of service in all cities of Cyprus as well as via alternative electronic channels. Corporate Social Responsibility fulfils the Bank’s business activity. Through remarkable actions, Alpha Bank Cyprus Ltd supports environment, society and culture, aiming to contribute towards a better and more sustainable future. KONSTANTINOS D. KOUTENTAKIS MANAGING DIRECTOR

ALTER DOMUS (CYPRUS) LTD Alter Domus is a global fund and corporate services provider but more importantly, we’re experts in local business. Our 2,000 qualified accountants, corporate secretaries, consolidators and other professionals are expertly skilled in the intricacies of their jurisdictions. When working with a team which combines local knowledge with international best practices, you benefit from enhanced legal, financial and regulatory compliance for funds, SPVs, holding companies and corporate entities. With global reporting and a single point of contact across all 40 offices and desks, you get a world of expertise working with you to meet your goals. ALKIS KAILOS COUNTRY EXECUTIVE CYPRUS

APHRODITE HILLS RESORT CYPRUS Aphrodite Hills Resort is Europe’s multi-awarded golf, leisure and real estate development on a 2.3 million sqm plot, in Cyprus. Accommodation options consist of a 5-star Hotel and stunning holiday villas. The Resort is home to one of the best golf courses in the world, PGA National, which was recently awarded as the “European Golf Course of the Year 2018-2019” as well as “European Golf Resort of the Year 2018”. The unique set of amenities include supermarket, shops, restaurants, medical centre, pharmacy, chapel, championship tennis academy, Retreat Spa (27 therapy rooms), horse riding, soccer academy, gym, kids club and conference facilities. GEORGE MISIRLIS CHIEF EXECUTIVE OFFICER


ARISTO DEVELOPERS LTD Leading the Cyprus Property Market for 40 years: As a reputable property developer in Cyprus, Aristo Developers has been recognised for its highlevel, quality product by a plethora of local and international organisations. Aristo Developers has delivered infrastructure throughout Cyprus and Greece for over three decades, and is also the pioneering force behind golf resorts, educational institutions, theme parks and commercial developments. The Company’s success is supported by an extensive client base, and its ability to guarantee delivery dates and title deeds. Aristo Developers has over 300 island wide developments and 35 new developments currently in the Cyprus property market, suitable for the Cyprus Investment and Permanent Residency Programmes.

“AGP Chambers”, 84 Spyrou Kyprianou Avenue, 4004 Limassol - Cyprus Postal Address: P.O.Box 58419, 3734 Limassol - Cyprus T: (+357) 25 731 000 Contact: Angelos G. Paphitis - Managing Partner E: angelos.paphitis@agplaw.com W: www.agplaw.com

Who’s Who - Cyprus Business Directory

A.G.PAPHITIS & CO. LLC Established in 2006, AGP & Co is a highly reputable, dynamic, award winning and excellence driven Law Firm based in Cyprus with a strong international presence. It provides full service Legal, Corporate, FS Advisory & Regulatory Compliance/AML, Tax, Immigration and Real Estate services. AGP & Co consists of the following main departments: Dispute Resolution department; Corporate/ Commercial department; FS Advisory & Regulatory Compliance department; Real Estate & Immigration department; Tax-Accounting-Audit department. Though operating independently, all departments are interlinked, giving our clients the ability to receive all rounded services beyond the ordinary boundaries.

3, Lemesou Avenue, 2112 Aglantzia P.O.Box 21661, 1596 Nicosia - Cyprus T: (+357) 22 888 888 E: GeneralManagement@alphabank.com.cy W: www.alphabank.com.cy

11 Limassol Avenue, Galatariotis Building, 2112, PO Box 27282,1643 Nicosia - Cyprus T: (+357) 22 465 151 Contact: Alkis Kailos - Country Executive Cyprus E: alkis.kailos@alterdomus.com W: www.alterdomus.com

3, Aphrodite Avenue, Kouklia 8509 - Cyprus P.O. Box 62769 8072 Paphos - Cyprus T: (+357) 26 828 000 E: VSQ.Reception@aphroditehills.com W: www.aphroditehills.com

Aristo Centre, 8 Apriliou 1st Street, 8011 Pafos – Cyprus T: (+357) 26 841 841 Contact: Christakis Christodoulou – Inland Sales Manager E: info@aristodevelopers.com W: www.aristodevelopers.com

Country Report CYPRUS 2019


Who’s Who - Cyprus Business Directory

ASSOCIATION OF CYPRUS BANKS Through its representation of ten member banks that hold more than 90% market share, the Association of Cyprus Banks (ACB) is the voice of the local banking system. Its primary aim is to promote best practices for the interest of the banking sector and the local economy. The ACB is a non-profit organization through which common positions are formulated and promoted on banking and financial issues when local legislative and governmental policies are determined. Through its 50 years of history the ACB has gained the reputation of a prudent, reliable and consistent partner for various policy makers, organizations, journalists and institutions. DR. MICHAEL KAMMAS DIRECTOR GENERAL


ASTROBANK LTD AstroBank is a modern and flexible institution, offering high-quality comprehensive financial solutions. Comprised of a group of high-profile international shareholders and following the recent acquisition of USB Bank’s banking operations, AstroBank is one of the most dynamic and reliable banking alternatives for customers. The Bank’s operations are based on a four – pillar direction: Retail Banking, Business/Corporate Banking, Private Banking and International Business Banking. Through a network of more than 20 branches and business units across Cyprus, the Bank is well-established, holding a prominent position in the local market and offering a comprehensive package of fast, innovative and technologically advanced products and services, with the ability to execute complex transactions tailored to the needs of its local and international clientele.



AXIOM CONSULTING LTD Since 1998, Axiom helps organizations design and implement a profitable Customer Loyalty and Marketing Automation strategy. Our expertise covers indepth knowledge of loyalty marketing, with extensive experience in large-scale implementations for the banking, retail, petrol retail, telecommunications, travel and entertainment sectors. With clients in 14 countries, we have created innovative concepts in loyalty management, which are currently deployed in standalone and multi-merchant coalition programs. We have also created the award-winning Merit Loyalty Suite®, a comprehensive software platform for managing Multi-Channel Marketing Automation programs in a flexible, reliable and cost-effective way. Axiom offers a complete array of technologically advanced software solutions and services to help organizations take advantage of data in understanding their customers and turning them into profitable advocates. BAKER TILLY SOUTH EAST EUROPE Baker Tilly South East Europe a leading firm of auditors, accountants, tax consultants and business advisors, operates in Cyprus, Greece, Romania, Bulgaria and Moldova, within the framework of Baker Tilly International, one of the top 10 accounting networks in the world. Baker Tilly extends across 145 territories, employing 34,000 people within 746 offices. Baker Tilly South East Europe is under the proud management of 20 directors and more than 300 professionals offering services of the highest standards to businesses nationally and internationally, across all industries.




BANK OF CYPRUS Established in 1899, Bank of Cyprus is currently the leading banking and financial services Group in Cyprus, operating 108 branches. Since September 2014, high-quality institutional investors have become shareholders, strengthening the Group’s share capital. The Group is the only corporation in the region fully complying with the UK Corporate Governance Code, the Cyprus Stock Exchange Code, and the Central Bank of Cyprus Directive on governance and management arrangements in credit institutions. Since early 2014, the Bank has engaged in a very demanding and rigorous anti-financial crime remediation programme which has successfully been implemented since the end of 2015. The Bank is listed on the London Stock Exchange, which has the most demanding and strict corporate governance codes internationally.

Country Report CYPRUS 2019

15 Demetriou Karatasou Str, Office 401, P.O. Box 16113, 2086 Nicosia - Cyprus T: (+357) 22 664 293 Contact: Dr. Michael Kammas - Director General E: info@acb.com.cy W: www.acb.com.cy

1 Spyrou Kyprianou Ave., 1065 Nicosia - Cyprus T: (+357) 22 575 555 E: info@astrobank.com W: www.astrobank.com

21 Academias Avenue, 8th Floor, 2107, Aglantzia, Nicosia - Cyprus T: (+357) 22 878 900 Contact: Victor Efthimiades - Executive Director E: victor@axiomc.com W: www.axiomc.com

Corner C Hatzopoulou & 30 Griva Digheni Avenue, 1066 Nicosia, Cyprus P.O.Box 27783, 2433 Nicosia - Cyprus T: (+357) 22 458 500 Contact: Marios A. Klitou Chief Executive Officer E: info@bakertilly.com.cy W: www.bakertilly.com.cy

51 Stassinou, 2002 Strovolos, Nicosia - Cyprus T: (+357) 22 121 801 E: wealth@bankofcyprus.com W: www.bankofcyprus.com



BIZSERVE CONSULTANTS LIMITED Bizserve Consultants is a leading authorized administrative service provider, regulated by the Cyprus Securities and Exchange Commission. The Firm was established in 2002 but it had been operating since the early 1990’s under a different umbrella of companies, completing today three successful decades in the fiduciary services sector. Our main line of business focuses on incorporating and managing corporate structures as well as providing nominee and trustee services in Cyprus and other jurisdictions. At the same time we offer a vast number of professional services which integrate into practical bespoke solutions for effective and efficient tax planning. Our team consists of professionals with extensive experience in servicing international corporate and individual clients, able to respond and provide solutions to any enquiry.


BOC ASSET MANAGEMENT LTD BOC Asset Management Ltd (BOCAM) is a UCITS Management Company which is fully supervised by the Cyprus Securities and Exchange Commission and operating under licence number ΕΔ ΟΣΕΚΑ 5/78/2012. BOCAM is a 100% owned subsidiary of the Bank of Cyprus Group and the first Cyprus banking UCITS Asset Management Company. It offers a broad spectrum of investment products and services to private and institutional clients. The primary service offered by BOCAM is the management of UCITS funds. In addition, BOCAM offers a number of services catering to the current and future investment needs of clients in Cyprus such as Risk Management, Discretionary Portfolio Management, Investment Advice and Fund Administration Services.




CAREERFINDERS RECRUITMENT SERVICES LIMITED CareerFinders Recruitment Services Limited is one of Cyprus’ most wellrespected and established providers of tailor-made recruitment solutions to many of the largest and most well-known local and international companies operating across the Island. With offices in both Nicosia and Limassol, our highly experienced team of recruitment professionals have the knowledge and expertise to ensure that our clients receive the most suitable and well-qualified candidates to suit their recruitment needs. The industry sectors we service include Accounting/Audit, Legal, Corporate/Fiduciary, Information Technology, Shipping, Oil & Gas, Banking/Finance and many more. If you are a company seeking to recruit the very best talent in Cyprus, please contact us today.


CDBBANK (THE CYPRUS DEVELOPMENT BANK PUBLIC COMPANY LTD) Founded in 1963, cdbbank (formerly Cyprus Development Bank) is today one of the country’s leading niche financial institutions dedicated to satisfying the needs of domestic and international clients. cdbbank offers a wide range of specialised financial services and innovative products, designed to accommodate the sophisticated requirements of its clientele which consists of corporate and institutional clients and high net worth individuals. The Bank’s vision is to be the reference Bank for premier business. Relying on its long-term experience and high level of expertise, cdbbank aspires to establish a long-term relationship of trust with its clients, always delivering excellence and value. COSTAS ARGYRIDES CEO

4th Floor, Unit 406 Kermia Building, 4 Diagorou Street, Nicosia 1097 - Cyprus T: (+357) 22 021 606 Contact: George Chatzidimitriou Co-Managing Director E: info@baocapital.com W: www.baocapital.com

Who’s Who - Cyprus Business Directory


BAO CAPITAL PARTNERS LTD BAO Capital Partners Ltd is a licensed AIFM. It is focused on managing both its own funds as well as providing fund services to third-party managers. The Company currently manages the BAO Fund VCIC Ltd, an umbrella Alternative Investment Fund, and a Feeder Fund LP,. BAO Fund VCIC is composed of several sub-funds, each with its own investment objective and strategy, including, private equity, shipping, and real estate. The fund targets only professional and well informed investors. As part of our fund services, the Company offers fund management and administration services for new AIFs, RAIFs or compartments under the BAO VCIC where a sub-fund can be established in a short time to invest in new strategies. BAO is part of the broader BAO Financial Group that oversees investments exceeding US$500 million globally.

36 Georgiou Griva Digeni Ave., Paraskevaides Foundation Building, 6th Floor, 1066 Nicosia - Cyprus T: (+357) 22 375 504 Contact: Chris Koutouroushis - Managing Director E: info@bizserve.eu W: www.bizserve.eu

154, Lemesou Ave. 2025 Nicosia - Cyprus T: (+357) 22 12 1790 Contact: Christos Kalogeris General Manager BOCAM E: christos.kalogeris@bankofcyprus.com W: am.bankofcyprus.com.cy

Head Office: 6th Floor, Athlos Building, 28 Nikis Avenue, Nicosia 1086 - Cyprus T: (+357) 22 002 285 Contact: Sophie Aristodemou, Director E: jobs@careerfinders.com.cy W: www.careerfinders.com.cy

50 Arch. Makarios III Ave., 1065 Nicosia - Cyprus T: (+357) 22 846 500 Contact: Liza Philippou - Network Business and Communication Manager E: marketing@cdb.com.cy W: www.cdb.com.cy

Country Report CYPRUS 2019


Who’s Who - Cyprus Business Directory


CISCO Founded 37 years ago, The Cyprus Investment and Securities Corporation Limited (“CISCO”) is the oldest and one of the leading providers of investment services in Cyprus. It is regulated by CySEC (CIF License No. (003/03). CISCO is a wholly-owned subsidiary of Bank of Cyprus, the largest and oldest banking group in Cyprus. CISCO is a member of Cyprus Stock Exchange and remote member of the Securities Market of Athens Stock Exchange. With professionalism, discretion and complete dedication to providing excellent customer service, it offers a wide range of financial services including brokerage on the world’s biggest stock exchanges, and investment banking services including capital raising and arranging, M&A and restructuring advisory, valuations, structuring and registration services for funds and fund managers.


CONSULTICS Consultics focuses on helping companies diversify to the Middle East, advising on market needs and opportunities and providing assistance in setting up shop. With offices in London, Doha and Nicosia, Consultics also offers high caliber marketing and branding services for companies that wish to embrace growth and strengthen their brand name. By utilizing a variety of methods such as Six Sigma and Lean, Consultics delivers high intensity business transformation models to medium and small enterprises of any background, that wish to expand their business. Aided by consistent development, innovation and effective use of technology, Consultics is fast becoming a recognized name in driving business growth and maximizing revenue potential.



CYBARCO DEVELOPMENT LTD Cybarco is the leading luxury property developer in Cyprus. Part of the prestigious Lanitis Group, Cybarco is behind many of the island’s landmark projects, including the world-class Aphrodite Hills Golf Resort, Akamas Bay Villas, Sea Gallery Villas, The Oval and Limassol Marina, the first residential marina project in the whole of Cyprus. Cybarco is responsible for the upcoming development of Trilogy Limassol Seafront and the exclusive sales of its luxury properties. With over 70 years’ experience at the top of its industry, Cybarco has earned its reputation for outstanding quality and dedicated customer care by consistently delivering projects to the highest standards. MICHALIS HADJIPANAYIOTOU CEO


CYPRUS CHAMBER OF COMMERCE AND INDUSTRY The Cyprus Chamber of Commerce and Industry (CCCI) membership exceeds 8500 enterprises representing over 95% of the local business community. More than 140 Professional Associations are affiliated to the CCCI including 36 Bilateral Associations. Its wide range of services include advisory, provision of business information, foreign trade exhibitions, trade missions & business fora abroad, business training courses & seminars, advice on European Union issues, labour relations matters, issue of Certificates of Origin and ATA-CARNETS and participation in EU programmes. CCCI is a full member of Eurochambers, the International Chamber of Commerce, the European Association of Craft, Small and Medium Sized Enterprises, Eurocommerce, GS1 and many other international organisations. Follow us on twitter @ccci_cyprus  


CYPRUS EMPLOYERS AND INDUSTRIALISTS FEDERATION (OEB) The Cyprus Employers and Industrialists Federation (OEB) was founded in 1960. Today, its members are active in all sectors of the economy and employ more than 60% of the private sector’s workforce. OEB is a pancyprian independent organisation comprising of 65 of the main professional / sectoral Associations, as well as hundreds of companies from the Manufacturing, Services, Commercial, Construction and Agricultural Sectors. In total, OEB has more than 10.000 Members / Enterprises. OEB is established as a dynamic force in Cyprus’ socio - economic development and welfare and acts as the main advocate and representative of the business community. GEORGE PETROU CHAIRMAN


Country Report CYPRUS 2019

154, Lemesou Ave. 2025 Nicosia - Cyprus T: (+357) 22 121 700 Contact: Dr. Cleanthis Chandriotis - General Manager CISCO E: Athos.Chandriotis@bankofcyprus.com W: www.cisco-online.com.cy

6 Stavrou Avenue, Office 102, Karyatis Building, Strovolos, Nicosia - Cyprus T: (+357) 22 261 119 Contact: Angelos Agathangelou E: Angelos.agathangelou@consultics.co W: www.consultics.co

10 Tefkrou Anthia Street, Dali Industrial Zone, 2540 Nicosia - Cyprus T: (+357) 22 741 300 Contact: Michalis Hadjipanayiotou - CEO E: info@cybarco.com W: www.cybarco.com

38, Grivas Digenis Ave. & 3 Deligiorgis Str. Chamber Building - Cyprus T: (+357) 22 660 066 Contact: Marios Tsiakkis, Secretary General E: secgen@ccci.org.cy W: www.ccci.org.cy

2, Acropoleos Ave. & Glafkou, Strovolos, 2000 Nicosia / P.O.Box 21657, 1511 Nicosia - Cyprus T: (+357) 22 665 102 Contact: Michalis Antoniou - Director General E: info@oeb.org.cy W: www.oeb.org.cy


CYPRUS HEALTHCARE TOURISM (CHT) The Cyprus Healthcare Tourism (CHT) is a non-profit organization that was founded in November 2006 after an initiative taken by the Cyprus Chamber of Commerce and Industry (CCCI) aiming to develop and promote Cyprus as a Health Tourism destination. The CHΤ currently has more than 80 members who are actively involved in the Cyprus Health Tourism Industry. These vary from state-of-the-art hospitals and clinics to specialized travel agencies, wellness and rehabilitation centres as well as consulting firms. Most of the largest and best equipped hospitals are members of the CHΤ and they are all licensed by the Cyprus Government and comply with EU regulations. Some of them have moved a step ahead towards gaining international accreditations.




CYPRUS HOTEL ASSOCIATION The Cyprus Hotel Association is the Hoteliers National Trade Union. The history of its foundation goes back to the beginning of the 1930s. Today the vast majority of all hotel establishments and other licensed tourist accommodation units, all over Cyprus, are members of the Cyprus Hotel Association. The most important aims of the Association are as follows: The protection and promotion of the interests of the hoteliers as employers and as professionals, as well as of the interests of Cyprus in general; The promotion and upgrading of the Cyprus tourism development; The upgrading and development of the hotel establishments in Cyprus and the improvement of the professional level of the hoteliers; The solidarity between its members.


CYPRUS HYDROCARBONS COMPANY (CHC) CHC is the National Oil and Gas Company of Cyprus. As a state-owned company, CHC undertakes the commercial management of the ownership rights of the Republic of Cyprus that arise from the contracts with which it has entered into with oil and gas companies within its Exclusive Economic Zone. The vision of CHC is aligned with that of the Government of Cyprus, which is to ensure the sustainable development of hydrocarbon resources present in the Exclusive Economic Zone of the Republic of Cyprus, in order to maximize the benefits for Cypriot society and future generations. DEMETRIS C. FESSAS ACTING GENERAL MANAGER


CYPRUS INTERNATIONAL BUSINESSES ASSOCIATION CIBA is a non-governmental, fully independent association, financed by membership fees only. Its activities and initiatives are organised and carried out by its General Secretary and Executive Committee of (max.) 12 persons. CIBA represents and safeguards the interests of the international businesses, their shareholders, managers and staff. The authorities recognize that CIBA represents the whole of the international business community in Cyprus and that it is instrumental in finding compromises between the required EU-driven legislation and international business requirements. CIBA annually awards the prestigious CIBA Excellence award to a member company that fulfils the specific criteria as set out by the Association.

1, Menandrou Street, Frosia House, 4th floor, Office 401, 1066, Nicosia - Cyprus T: +357 22 256 263 E: info@cyfa.org.cy W: www.cyfa.org.cy

Who’s Who - Cyprus Business Directory


CYPRUS FIDUCIARY ASSOCIATION The Cyprus Fiduciary Association was established in November 2011 by the initiative of leading firms in Cyprus providing fiduciary, management and administration services to companies and other vehicles engaged in international business activities or involved in international business structures. The objective of the Association is to serve the Administrative Services Providers (ASPs) by promoting their interests, supporting their operations and educating their staff. The aim is to assist in creating a solid and strong fiduciary and a wider international business sector in Cyprus, operating on high professional standards and integrity. The Association is recognised as a representative body of ASPs in Cyprus before public and regulatory authorities, other associations and the business community in Cyprus and abroad.

38 Grivas Dighenis & 3 Deligiorgis Street, Nicosia - Cyprus T: (+357) 22 889 744 Contact: Polis Peratikos - Executive Secretary E: cyprushealth@ccci.org.cy W: www.cyhealthservices.com

Andrea Araouzos Str., No 12, Hesperides Building - Cyprus T: (+357) 22 452 820 Contact: Zacharias Ioannides - Director General E: cha@cyprushotelassociation.org W: www.cyprushotelassociation.org

53 Strovolou Avenue, Victory Building, 2018 Strovolos, Nicosia - Cyprus T: (+357) 22 203 880 Contact: Demetris Fessas – Acting General Manager E: d.fessas@chc.com.cy W: www.chc.com.cy

10 Pikionis Street, Highsight House 3075 Limassol - Cyprus T: (+357) 25 583 400 Contact: Andreas Pishias - General Secretary E: ciba@ciba-cy.org W: www.ciba-cy.org

Country Report CYPRUS 2019


Who’s Who - Cyprus Business Directory


CYPRUS INVESTMENT FUNDS ASSOCIATION (CIFA) CIFA is the Association of professionals, businesses and organizations involved in the Investment Funds and Asset Management Sector in Cyprus. CIFA addresses the broad range of needs and issues faced by service providers and businesses involved in the sector. The Mission of CIFA is to: Help its members capitalize on industry trends; Shape regulation; Enhance professionalism, integrity and quality and Promote the Cyprus Investments Fund Industry. The Board is comprised of highly reputable industry professionals experienced in all aspects of the industry, including fund management, advisory, banking, audit and legal. CIFA is a full member of the European Funds and Asset Management Association and the International Investment Funds Association). It is also an Associate member of International Capital Markets Association .

CYPRUS OIL AND GAS ASSOCIATION (COGA) The Cyprus Oil and Gas Association (COGA) was founded by a group of professionals under the auspices of the Cyprus Chamber of Commerce and Industry, with the aim of serving the interests of the companies and professionals in the oil and gas industry within the Cyprus Exclusive Economic Zone. Main Objectives: To protect and promote the interests of its members; to provide a forum for discussion on issues of common interests; to promote co-operation among members and create investment opportunities; to promote the use and development of local resources in the oil, gas and petrochemical industries. ANDY VAROSHIOTIS PRESIDENT


CYPRUS SHIPPING CHAMBER The Cyprus Shipping Chamber is the trade association of the Shipping Industry in Cyprus. The main purpose of the Chamber is to promote the interests of Cyprus Shipping and to further the reputation of the Cyprus flag. The Chamber also acts as a lobbying group for the promotion and safeguard of the legitimate interests of its Member-companies, at national and international level. On the local front, the Chamber co-operates very closely with the Government in all shipping related matters. Moreover, the Chamber operates as a roving ambassador of Cyprus Shipping through its membership and active participation at the International Chamber of Shipping (ICS) and the European Community Shipowners’ Associations (ECSA).



CYPRUS UNION OF SHIPOWNERS (CUS) CUS is the Representative Organization for Cyprus Vessels. Our paramount goal to establish Cyprus as a global Maritime Center has unified not only all the renowned Cypriot but also many European shipowners joined us in this effort. A profound Board of Directors in high level consultation with the Ministry of Finance and the Ministry of Shipping established an instrumental framework suitable for all the European Shipowners.This framework is serving as a catalyst for the establishment of a world class Maritime Centre. The constant efforts of the Union’s Executive Committee already bears fruits, and the relocation of the Headquarters of prominent shipping companies and UK based P&I Clubs in Cyprus has started.



CYTAGLOBAL Cyta, the primary telecommunications provider in Cyprus, covers the whole spectrum of electronic communications ranging from fixed and mobile voice and data communications, internet, IPTV and broadband services. Taking advantage of the island’s strategic geographical position, Cytaglobal, a strategic business unit of Cyta, has developed an extensive subsea fibre optic cable network, which connects Cyprus with its neighbouring countries and thereafter with the rest of the world. Cytaglobal also operates an extensive satellite network with three teleport sites, providing connectivity with major satellite systems. Through its global network, Cytaglobal provides a wide range of international telecommunications products, services and total solutions, making Cyprus a major telecommunications hub in the Eastern Mediterranean and an excellent international electronic communications centre.



Country Report CYPRUS 2019

Severis Building, 9 Makarios III Ave., 4th Floor, Lefkosia 1065 - Cyprus T: (+357) 22 441 133 Contact: Marios Tannousis Board Member & Secretary E: info@cifacyprus.org W: www.cifacyprus.org

38, Grivas Dhigenis Ave. & 3, Deligiorgis Street - Cyprus T: (+357) 22 889 744 Contact: Polis Peratikos - Officer E: polis@ccci.org.cy W: www.cyoilgas.org

City Chambers, 6 Regas Fereos Str. P.O.Box 56607, 3309, Limassol - Cyprus T: (+357) 25 360 717 Contact: Thomas A. Kazakos – Director General E: csc@csc-cy.org W: www.csc-cy.org

17, Gordonos Str., Suite 301, 3070 Limassol - Cyprus T: (+357) 25 818 161 Contact: Katerina Michael - Administration & Public Relations Officer E: cus@cus.com.cy W: www.cus.com.cy

Telecommunications Str, PO Box 24929, 1396 Nicosia - Cyprus T: (+357) 22 701 488 Contact: Christos Limnatitis, Manager National & International Wholesale Market E: global@cyta.com.cy W: www.cytaglobal.com


DELOITTE Deloitte is among the nation’s leading professional services firms in Cyprus with more than 680 professionals. Its services include audit & assurance, tax & legal, consulting, financial advisory, wealth advisory and a complete range of services to international business focusing on accounting and payroll, tax compliance and the formation and administration of companies, partnerships and trusts. As part of the Deloitte global network, with approximately 286,000 people in over 150 countries, it has the advantage of a global sharing of knowledge with a local adaptation and personal approach, built on the solid foundations of over 60 years of successful operation on the island. CHRISTIS M. CHRISTOFOROU CEO


DER ARAKELIAN-MERHEJE LLC Located in Nicosia, our boutique Law Firm was established in 1997 by Nairy Merheje (practicing since 1984) to provide legal and tax planning services to a wide portfolio of international clients. We pride ourselves in offering efficient, professional, personalized services with bespoke international legal assistance adapted to individual client needs. We relieve clients of time consuming searches when establishing international businesses through international networks of lawyers and tax consultants we work with and know personally. Our portfolio and experience includes worldwide cross border transactions, mergers and acquisitions, structuring holding companies with a wide span of activities. Practice: Company and Commercial Law, International Business Companies, Tax Planning, Employment Law, Shipping, Joint Ventures, Trusts and Estate planning, Wills and Succession.

DP WORLD LIMASSOL In April 2016 DP World Limassol was awarded a 25-year concession to exclusively operate the multi-purpose and Cruise terminal in Limassol commencing February 2017. The terminal’s activities, comprising of three multi-purpose quays, include break-bulk, general cargo, Ro-Ro, Oil & Gas services and the brand-new passenger terminal. DP World Limassol port is the main cruise port of the island located on the Southern coast of Cyprus and is the island’s principal logistics support base for the offshore energy sector.


1, Griva Digheni Ave., Zavos Kriel Court, 3035 Limassol - Cyprus T: (+357) 25 818 555 Contact: Roulla Tsangaridou – Marketing Operations Officer E: roulla.tsangaridou@zavos.com W: www.zavos.com

Who’s Who - Cyprus Business Directory

D. ZAVOS GROUP D. Zavos Group has been established in 1980 and created a revolutionary concept in the Cyprus property industry, offering a variety of cutting edge residential as well as commercial properties in prime locations all across Cyprus. Amongst the largest property developers on the island with more than 8.500 properties (130 completed projects of which 117 have been issued with separated titles deeds), D. Zavos Group supports their clients every step of the way, from that all-important decision of where to buy, straight through the legal and financial processes, and with a wealth of after-sales services. D. Zavos Group operates offices in Cyprus, UK, Russia, Jordan, Lebanon and Egypt.

24 Spyrou Kyprianou Avenue, CY 1075 Nicosia - Cyprus Other offices in Limassol T: (+357) 22 360 300 E: infonicosia@deloitte.com W: www.deloitte.com/cy

7D, Nikou Kranidioti Street, Tower 4, Suite 302, 3rd Floor, 2411 Engomi, Nicosia - Cyprus T: (+357) 22 313 339 Contact: Nairy Der Arakelian Merheje - Advocate E: Enlaw1@cytanet.com.cy W: www.nmerhejelaw.com

Old Passenger Terminal North Quay, Port of Limassol - Cyprus T: (+357) 25 858 700 Contact: Charles Meaby-General Manager E: info@dpworldlimassol.com W: www.dpworldlimassol.com

E-CNHC – E-C NATURAL HYDROCARBONS COMPANY LTD The company provides advisory, project management and consultancy services in the oil & gas and energy sectors and aims to contribute to the successful development of these Sectors for the future of Cyprus. The CEO has over 35-years international experience in promoting and developing oil & gas business and projects spanning Europe, Asia and Africa. We can assist our clients in developing their business in Cyprus, evaluating opportunities and providing in depth professional advice and support.


11 Tyrtaiou Street, 1087 Nicosia - Cyprus T: (+357) 97 705 060 Contact: Dr Charles Ellinas - CEO E: Charles.ellinas@yahoo.com W: www.e-cnhc.com

Country Report CYPRUS 2019


Who’s Who - Cyprus Business Directory


EFG BANK (LUXEMBOURG) S.A. - CYPRUS BRANCH EFG Bank (Luxembourg) S.A. - Cyprus Branch is part of EFG International, a global private banking and asset management group headquartered in Zurich, Switzerland, with operations in around 40 locations worldwide. EFG International’s registered shares (EFGN) are listed on the SIX Swiss Exchange and is currently rated by Moody’s with an A3 rating and by Fitch with an A rating. Our Cyprus based office is the gateway providing you access to all jurisdictions where EFG has presence including Zurich, London, Luxemburg, Monaco, Singapore, Hong Kong etc. In addition to private banking services the Cyprus Branch, by capitalizing on the experience, systems and processes of EFG Group, is licensed and offers AIFMD compliant Depositary services to Cyprus Alternative Investment Funds.


ELECTRICITY AUTHORITY OF CYPRUS The Electricity Authority of Cyprus is an independent, Public Corporate corporation established under the Electricity Development Law Cap.171 of 1952 to exercise and perform functions relating to the generation, transmission, distribution and supply of electric energy in Cyprus. The above definition is used in Cyprus for corporations which are independent, and established in accordance with the relevant Law, to render services in the utility field. In the case of the EAC, the government, through the Minister of Energy, Commerce, Industry and Tourism, is empowered to give directives to the Authority on matters appertaining to the general interest of the Republic. PANAYIOTIS OLYMPIOS GENERAL MANAGER


M. ELIADES & PARTNERS LLC At Eliades & Partners, trust is our company’s most valuable asset. It is the principle on which we establish our business relationships whose mutual benefits we reap well into the future. Our personal approach enables us to access our clients’ needs effectively and maintain a commercial approach which optimizes efficiency and implementation. We value others just as we value ourselves. Furthermore, we strive to put a meaningful purpose behind what people want to achieve. We will find the real problem and turn it into an opportunity. Meeting your goals is our primary aim. We are dedicated to our clients and their business; our experienced team of professionals will assist you navigate the complex world of international business.


ELIAS NEOCLEOUS & CO LLC As the largest law firm in Cyprus with over 140 fee-earners, the award-winning Elias Neocleous & Co LLC is recognized as one of the top 100 law firms in Europe with offices in Brussels, Budapest, Kiev and Prague. Investing in the best people and utilizing the latest digital technologies, Elias Neocleous & Co LLC aims to deliver its clients bespoke business solutions at ‘cheetah fast’ speed. With specialists in every practice area, and the resources and experience to handle the largest and most demanding cross-border assignments, Elias Neocleous and Co LLC is in the Vanguard of a new generation of legal practice. ELIAS NEOCLEOUS MANAGING PARTNER


EPIC Epic is one of the largest telecommunication providers in Cyprus. It provides integrated mobile and fixed telephony, internet and pay-TV services as well as specialized ICT solutions for businesses. At the same time, it operates 18 stores with tech products, accessories and telecommunication solutions. Epic combines a great network at great value. In 2019, it proceeds with the implementation of the biggest investment ever made for a super-fast network with 10 times more capacity compared to the past. Epic belongs to Monaco Telecom, the Principality of Monaco provider, and is a member of a dynamic European telecoms family which operates in France, Italy, Switzerland and Ireland.



Country Report CYPRUS 2019

Cyprus Branch, 23 Kennedy Avenue Globe House, 1075 Nicosia - Cyprus T: (+357) 22 025 903 Contact: Costas Stylianou - Director Business Development & Branch Manager E: cyprusbranch@efgbank.com W: www.efginternational.com

11 Amfipoleos Street, Strovolos 2025, Nicosia, Cyprus (+357) 22 201 000 Contact: Christina Papadopoulou - Press Officer E: eac@eac.com.cy W: www.eac.com.cy

4 Menandrou, Gala Tower, 2nd floor, office 201, 1066 Nicosia - Cyprus T: (+357) 22 667 730 Contact: Georgios Papadopoulos - Advocate E: gpapadopoulos@eliades.eu W: www.eliades.eu

Neocleous House, 195 Makarios Avenue, P O Box 50613, Limassol CY 3608 - Cyprus T: (+357) 25 110 110 Contact: Elias Neocleous - Managing Partner E: info@neo.law W: www.neo.law

87, Kennedy Avenue, 1077 Nicosia - Cyprus T: (+357) 96 222 222 W: www.epic.com.cy



EUROPEAN INSTITUTE OF MANAGEMENT AND FINANCE (EIMF) The European Institute of Management and Finance (EIMF) is an accredited and licensed training provider offering numerous Global Qualifications and partnering with International Professional Associations, including the CISI, ACAMS, AAT, CMI, IAPP, EXIN and the Frankfurt School of Finance and Business. EIMF offers specialised professional knowledge through classroom and eLearning, as well as tailored and executive learning solutions with a strong emphasis on management and finance, all delivered by established subject-matter experts. Its presence in London, Brussels, Frankfurt, Belgrade, Copenhagen, Cyprus and Tel Aviv, makes the EIMF one of the leading European Institutions in its fields of expertise.


EY CYPRUS EY is a global leader in assurance, tax, transactions and advisory services with about 270,000 people in over 150 countries. It is the most globally integrated professional services organisation, working with businesses, entrepreneurs and governments around the world to solve their most pressing challenges. EY distils everything it does down to a single, unified purpose: building a better working world. For over 80 years, the Cyprus practice has been a trusted business advisor and auditor to a broad range of clients and is ideally placed to cater to the needs of our clients in a wider geographic span. STAVROS PANTZARIS COUNTRY MANAGING PARTNER

FACILITAS ADVISORY Facilitas Advisory is a media communications and government relations advisory firm, advising large local and international clients on relations with policy-makers, media management and related issues. Our approach is unique, drawing on our decades of experience, our network of contacts and our deep understanding of the local culture and psyche. Lefteris Adilinis is a respected political analyst with over 25 years’ experience in international and local media including 10 years at the BBC. Fiona Mullen is an economist with over 20 years providing political and economic analysis to an international audience, including as UN economy consultant to the Cyprus negotiations. LEFTERIS ADILINIS DIRECTOR

FML SHIP MANAGEMENT LIMITED FML Ship Management provides a comprehensive range of ship management services to shipowners worldwide. The company has professional manpower at its disposal, both ashore and at sea, operating to internationally recognized quality management standards. It is currently responsible for the full technical management of 40 ships. FML Ship Management is part of Fleet Management Limited, headquartered in Hong Kong. Fleet Management Limited is one of the world’s largest independent third-party ship management firms with a 25-year history, over 20,000 qualified seafarers and close to 500 vessels under management spread across 22 offices worldwide. SUNIL KAPOOR DIRECTOR

41, Arch. Makarios Avenue, 1065 Nicosia - Cyprus T: (+357) 22 208 000 E: info@eurobank.com.cy W: www.eurobank.com.cy

Who’s Who - Cyprus Business Directory

EUROBANK CYPRUS LTD Eurobank Cyprus, has been operating in Cyprus since 2007. Focusing on the wholesale side of business, specifically in the areas of Corporate and Investment Banking, Wealth Management, International Business Banking, Affluent Banking and Treasury Sales, its operating model is distinct from the rest of the banking industry in Cyprus. Its strong capital base, substantial liquidity, and solid financial results allow Eurobank Cyprus to continue its dynamic growth and its ongoing support of the Cyprus economy. Eurobank Cyprus Ltd is a Cyprus registered company founded in 2007, operates autonomously and is subject to all laws and regulations of the Republic of Cyprus.

25 Megaron Street, 2032 Strovolos Nicosia - Cyprus T: (+357) 22 274 470 Contact: Marios Siathas - General Manager E: msiathas@eimf.eu W: www.eimf.eu

6 Stasinou Avenue, P.O.Box 21656, 1511, Nicosia - Cyprus T: +357 22 209 999 Contact: Stavros Pantzaris Country Managing Partner E: Stavros.Pantzaris@cy.ey.com W: www.ey.com/cy

Anastasia Souroulla 23 Ekgomi, 2416 Nicosia - Cyprus T: (+357) 99 532 094 Contact: Lefteris Adilinis - Director E: adilinis@gmail.com W: www.facilitasadvisory.com

601 Ghinis Building, 58-60 Dhigenis Akritas Avenue,1061 Nicosia - Cyprus T: (+357) 22 817 177 E: fmlcy@fleetship.com W: www.fleetship.com

Country Report CYPRUS 2019


Who’s Who - Cyprus Business Directory


GEORGE Y. YIANGOU LLC George Y. Yiangou LLC is one of the largest and most prominent law firms in Cyprus. Established in 1981 by Mr. George Yiangou, the firm has managed to grow its operations and is now offering a full range of legal and consulting services specialising in the areas of Corporate and Commercial Law, Banking and Finance as well as Litigation including International Litigation and International Commercial Arbitration. The Company is proud of its team of expert professionals with experience in working with Cyprus-based, European and International Clients and providing value added services. Throughout its 38 years of history, the firm has developed strong cooperation with international law firms and trusting relationships with its clients.



GMM GLOBAL MONEY MANAGERS LTD GMM Global Money Managers Ltd is the first Cyprus-based Fund Management Company, holding UCITS Manager License No.2/13. It operates in the financial sector, setting up, running and managing UCITS Mutual Funds as well as Alternative Investment Funds (AIFs) in line with the most recent EU directives. The Company through an extensive range of potential investment options, is seeking to provide effective geographical coverage and achieve diversification of investment risk in international money and capital markets. GMM’s management team and associates are well reputed with many years of experience and their primary aim is to safeguard invested capital and generate optimal yields for the small, medium and large portfolios of both private individuals and institutional investors.

GRS PROFESSIONAL RECRUITMENT SERVICES LTD GRS Global Recruitment Solutions is the leading international Recruitment and Payroll Consultancy specialising in the provision of human capital resourcing solutions. As Cyprus’ largest and most successful recruitment agency, GRS has more than 10 years of experience recruiting for jobs in Cyprus and Malta. The GRS team, possess in-depth knowledge and expertise of the market, as well as the networking skills required to source the most talented candidates. GRS, is renowned island-wide for its professional, precise recruitment and payroll services that deliver exceptional results. STEVE SLOCOMBE FOUNDER

HANSEATIC FUND VARIABLE CAPITAL INVESTMENT COMPANY PLC Hanseatic Fund VCIC Plc was established in Limassol in 2018 and is managed by Hanseatic Capital Management Ltd., an affiliate of the reputable ship owner and manager Bernhard Schulte Group (est. 1883). Hanseatic Fund is a specialised fund for maritime real assets, specifically merchant vessels in the dry bulk, container and tanker segments which is targeting professional and well-informed investors only. The company follows an active asset management strategy. The fund’s management team possesses a depth of experience in all phases relating to the execution of the investment strategy while protecting investors’ best interests. YIANNIS SYKAS CHIEF EXECUTIVE OFFICER

HAVIARAS & PHILIPPOU L.L.C. Haviaras & Philippou LLC is now 10 years old; young enough to evolve , absorb new ideas, and old enough to appreciate its clientele and put out its best to achieve the maximum. Team players, not only with our staff but also with our clients. Together; moving forward as times do, thriving with our results and offering each one of our clients, local or international the tailored made solution they need in many aspects of the Law. We combine experience and expertise. We are one of the leading firms in Cyprus which promises excellence and always delivers. ANDREAS HAVIARAS MANAGING DIRECTOR


Country Report CYPRUS 2019

12 Kennedy Avenue, 2nd Floor, 1087, Nicosia - Cyprus T: (+357) 22 653 333 Contact: Chris Yiangou - Partner, Head of the Corporate Department E: chris@yiangou.com.cy W: www.yiangou.com.cy

36 Stasinou Str., Strovolos 2003 Nicosia - Cyprus T: (+357) 22 205 858 Contact: Alexios Kartalis - General Manager E: info@global-mm.com W: www.global-mm.com




Head office: Agathangelou Business Centre, 101 Gladstonos Street, Limassol, 3032 - Cyprus T: (+357) 25 342 720 Contact: Steve Slocombe - Director E: jobs@grsrecruitment.com W: www.grsrecruitment.com

Hanseatic House, 111 Spyrou Araouzou St., 3036 Limassol - Cyprus Contact: Yiannis Sykas - Chief Executive Officer E: info@hanseatic-cm.com W: www.hanseatic-cm.com

Capital Chambers, 1 C. Skokou Street 6th Floor, 1061, Nicosia - Cyprus (+357) 22 764 001 Contact: Andreas Haviaras - Managing Director E: andreas.haviaras@hphlaw.eu W: www.haviarasphilippoullc.com



HERMES AIRPORTS Hermes Airports comprises of an international consortium of nine shareholders, managing and operating Larnaka and Pafos airports since 2006 under a 25-year BOT Concession Agreement with the Republic of Cyprus. Hermes Airports Ltd significantly contributes to the country’s tourism growth, through an active air service development strategy consisting of incentive schemes provision and joint marketing activities with airlines, as well as collaboration with the Government and tourism stakeholders for the expansion of tourism related opportunities. Hermes Airports through its operation contributes 4% to the country’s GDP every year. Over 18,000 jobs at Larnaka and Pafos Airports, and in the wider tourism industry, are sustained by the operation of the airports. 2018 ended with a historical record in traffic, recording 10.94 million passengers.

HLB CYPRUS LIMITED HLB Cyprus is among the largest accounting and financial consulting firms in Cyprus with specialized departments providing services in audit & assurance, accounting, financial advisory, transaction services, tax compliance and planning to a wide range of businesses from the small owner-managed business to multinational groups and listed companies. Our firm provides services to a diversity of clients in a wide range of operations, both locally and internationally. No matter the size of our client’s business, our professional staff provides the guidance needed for successful and well-considered decisions. COSTAS AFXENTIOU CEO


IACOVOU GROUP Iacovou Group is one of the leading building and civil engineering construction groups in Cyprus with a history of over 60 years in the construction sector. It has successfully completed projects in Cyprus, Greece, UK and the middle east and has gained specialization through innovative construction methods in airport works, bridge and highway construction and other complex civil engineering jobs. The Group is involved in all sectors of the construction industry, from concrete and asphalt production to high rise buildings next to the beach. In other sectors and in international markets such as Bahrain, Oman and Iraq, strategic alliances have been formed with local companies, maximising potential and delivering highly satisfactory results.



INSURANCE ASSOCIATION OF CYPRUS The Insurance Association of Cyprus is the accredited and representative body of the Cypriot insurance industry, with 29 member insurance companies operating in Cyprus, accounting for approximately 98% of total gross written premiums. As the leading and united voice of the Cyprus insurance market its mission is to promote the industry’s views and positions to policymakers and legislators. It is also particularly active with respect to work aiming at the modernization of the sector, the continuous improvement of the level and quality of service to the public, the enhancement of consumers’ trust and confidence in insurance products and their providers, and the strengthening of the institution of insurance.

Who’s Who - Cyprus Business Directory


HD INSURANCE LTD – HELLAS DIRECT Hellas Direct is a next-generation, full-stack insurance company, empowered by cutting-edge technology and artificial intelligence. The company is backed by a roster of all-star investors, including Portag3, the World Bank and select family offices. Modelling itself on Amazon, Hellas Direct aims to disrupt the insurance value chain by adopting an extreme focus on operational excellence. Hellas Direct has recently launched an innovative home-insurance offering in Cyprus, in partnership with Swiss Re, one of the world’s leading reinsurers, and Revolut, Europe’s fastest growing challenger bank. The three companies introduced a wide range of innovations, such as the ability to buy insurance by the day, instant claims settlement and the payback of daily micro-payments to consumers who have not had a claim.

8 Dasoupoleos Street, 2015, Nicosia - Cyprus T: (+357) 22 376 169 Contact: Michalis Christodoulou E: Michalis.christodoulou@hellasdirect.gr W: www.hellasdirect.com.cy

P.o Box 43027, 6650 Larnaka International Airport - Cyprus T: (+357) 24 742 164 Contact: Maria Kouroupi - Senior Manager Aviation Development, Marketing & Communication E: maria.kouroupi@hermesairports.com W: www.hermesairports.com

Palaceview House, Corner of Prodromos & Zinonos Kitieos 2, CY-2064 Nicosia - Cyprus T: (+357) 22 002 700 Contact: Costas Afxentiou – CEO E: nicosia@hlb.com.cy W: www.hlb.com.cy

2, Socratous Street, 6036, Larnaka - Cyprus T: (+357) 24 257 777 E: info@iacovougroup.com W: www.iacovougroup.com

23, Zenon Sozos str., 1st floor 1075 Nicosia - Cyprus T: (+357) 22 452 990 Contact: Andreas Athanasiades – Director General E: info@iac.org.cy W: www.iac.org.cy

Country Report CYPRUS 2019


Who’s Who - Cyprus Business Directory

INVEST CYPRUS Businesses and individuals considering investment into Cyprus have a partner on the ground at all stages of the investment cycle. Invest Cyprus is a non-profit national body and the government’s dedicated partner responsible for attracting and facilitating Foreign Direct Investment in key economic sectors. Being the lead agent in establishing Cyprus as a world-class investment destination, Invest Cyprus proactively promotes the enhancement of the country’s competitive environment, advocating reform and maximising FDI, for the economic and social benefit of Cyprus. In close collaboration with all government authorities, public institutions and the private sector, Invest Cyprus is the investor’s first point of contact. MICHALIS P. MICHAEL CHAIRMAN

IQEQ (CYPRUS) LTD We are IQ-EQ - we bring together that rare combination of technical expertise and a deep understanding of the needs of our clients. Our “know how” and “know you” allows us to provide a comprehensive range of compliance, administration, asset and advisory services to investment funds, global companies, family offices and private clients operating worldwide. We strongly believe in the power of duality and that valuing both IQ and EQ is essential for our people, our clients and our business. IQ-EQ brings together a rare combination of global expertise with a unique corporate culture that knows the importance of truly understanding the needs of our clients. CHRISTOS MICHAEL MANAGING DIRECTOR


JOANNIDES + CO. LTD Joannides + Co. Ltd is a leading firm of accountants and management consultants established in Cyprus for over 40 years providing audit and assurance, taxation, business support services and management consulting to international companies and private clients. The firm has offices in Nicosia, Limassol and Larnaca and is a member of AGN International Ltd, a worldwide association of independent accounting and consulting firms operating in 90 countries. Joannides + Co. Ltd is an approved training centre of the professional accounting institutes ICAEW and ACCA and in 2010 was awarded the quality award certification from the Institute of Certified Public Accountants of Cyprus.The firm’s stated objective is to add significant value to its clients’ business performance.



JORDAN KUWAIT BANK PLC, CYPRUS BRANCH In the Bank’s endeavor to facilitate the flow of trade between Jordan and other countries and aim to serve the needs of corporate and individual clients who have financial interests in the region, Jordan Kuwait Bank plc –Cyprus Branch was established in the Republic of Cyprus on 31 May 2001. One of the main objectives was to serve the Bank’s clients with regard to their foreign banking needs, as well as to serve international companies with regard to their commercial and trade relations with Jordan, Cyprus and the surrounding countries. Cyprus Branch currently offers commercial and retail banking services such as short and long term lending, deposit keeping and trade finance services, as well as placements and borrowing services provided to other Financial Institutions.


KARDEX SYSTEMS LTD KARDEX REMSTAR is one of the market leaders in Automated Storage / Retrieval Systems, Document Management and in Materials Handling Systems with manufacturing facilities in Germany, USA and Australia. KARDEX REMSTAR is an operating division of KARDEX AG which is based in Zurich, Switzerland, is listed on the Swiss SIX Stock Exchange since 1987 and employs around 2,200 people in more than 30 countries worldwide. KARDEX SYSTEMS LIMITED, a wholly owned subsidiary of the Group, is based in Cyprus and is the Kardex Remstar company responsible for sales, marketing and technical support for the entire product portfolio in the Middle East, Gulf, Africa, Balkans and Central Asia.




Country Report CYPRUS 2019

9 Makariou III Avenue, 4th Floor, 1065 Nicosia - Cyprus T: (+357) 22 441 133 E: info@investcyprus.org.cy W: www.investcyprus.org.cy

20 Spyrou Kyprianou, Chapo Central 3rd floor, 1075 Nicosia - Cyprus T: (+357) 22 749 000 Contact: Christos Michael - Managing Director E: christos.michael@iqeq.com W: www.iqeq.com

Head Office Address: 13, Agiou Prokopiou Str., 2406 Egkomi, Nicosia - Cyprus T: (+357) 22 556 556 Contact: Alexis Joannides – Director E: cy@joannides.com.cy W: www.joannides.com.cy

319, 28th October Street, Kanika Business Center, 7th Floor, 3105 Limassol - Cyprus P.O.Box 54887, 3728 Limassol - Cyprus T: (+357) 25 875 555 Contact: Ali Kilani - Country Manager E: cyprus@jkbank.com.jo W: www.jkb.com

Hyper Tower, Apostolou Andrea 11, 2nd Floor, Office 202, 4007 Limassol P. O. Box 53133, CY 3300, Limassol - Cyprus T: (+357) 25 875 600 Contact: Demetris Kouloundis Regional Sales Director (MEA) E: info.remstar.cy@kardex.com W: www.kardex.com


L PAPAPHILIPPOU & CO LLC L Papaphilippou & Co LLC was founded in 1963. Through constant and consistent work, it is now one of the leading and most respectable law firms in Cyprus. The firm quickly established strong presence in the fields of corporate and shipping law, litigation, banking and finance, wealth management, immigration and citizenship, thus achieving good cross-border reputation, which led to the development of a concrete international professional network and client base. Our list of clients includes regulatory bodies, local and international banking and financial institutions, insurance, shipping and listed companies, multinationals and high net worth individuals. LEANDROS PAPAPHILIPPOU MANAGING PARTNER



LEPTOS ESTATES Leptos Estates, a member of the Leptos Group, with over 59 years of history, has achieved a leading position through the professionalism and team effort of its employees, its international network of sales service in 75 countries, its vast prime land investment and an effective after-sales service support. Leptos Estates has successfully completed over 350 residential developments, with more than 25,000 happy home owners, developed, owns and manages hotel resorts, shopping centers, a University and a Hospital. The organization has an extensive land bank in prime locations in Cyprus and Greece. Leptos Estates offers clients a totally comprehensive service from land and property purchasing and architectural design through to construction and interior design. It also provides investment and immigration services in both Cyprus and Greece.

MAP S.PLATIS GROUP MAP S.Platis is a leading regulatory compliance consulting Group providing unique and tailored solutions in global licensing, regulatory compliance and risk management, internal audit, legal and corporate support, accounting, human resources, executive training, banking and payment services, regulatory technology and innovation consulting. Its portfolio of clients includes banks, investment firms, insurance companies, funds and fund managers and payment service providers. Through its regulatory compliance focus and expertise, vast experience with regulatory frameworks and in handling matters with regulators locally and abroad, deep understanding of matters relating to finance and investments, expert multidisciplinary teams with diverse backgrounds, unparalleled track record, global network of associates and depth of resources, the Group can support any client’s regulatory needs efficiently and effectively.

MEES MEES now in its 65 years of publishing has pivoted its models from primarily news to data-driven analysis for the oil & gas industry. Focusing on the OPEC and its members, MEES provides its institutional readership with forward outlook that is vital to energy security supplies. The organization has now opened offices in London in order to tap into talent that will propel the business into a consultancy and advisory for a region that remains fraught with geopolitical and economic risk.


14 Esperidon Street, 1087, Nicosia - Cyprus T: (+357) 22 209 000 Contact: Demetris S. Vakis - Board Member, Head of Sales and Markets E: demetris.vakis@kpmg.com.cy W: www.kpmg.com.cy

Who’s Who - Cyprus Business Directory

KPMG KPMG is a global network of professional service firms providing Audit, Tax and Advisory services, operating in 153 countries and territories and have 207.000 people working in member firms around the world. KPMG operates in Cyprus since 1948 employing more than 900 persons in 6 offices (Nicosia, Limassol, Larnaka, Paralimni, Pafos, Polis Chrysochous). By utilising the whole spectrum of KPMG International services and the deep knowledge and expertise in all major industries, it provides its clients with solutions which address their unique characteristics. KPMG offers its clients a consistent standard of service based on high order professional capabilities, industry insight and local knowledge.

17 Ifigenias Street, 2007 Strovolos, P.O.Box 28541, 2080 Nicosia - Cyprus T: (+357) 22 271 000 Contact: Leandros Papaphilippou - Managing Partner E: info@papaphilippou.eu W: www.papaphilippou.eu

111 Ap. Pavlou Ave., P.O.Box 60146, CY-8129, Paphos - Cyprus T: (+357) 26 880 120 Contact: Pantelis M. Leptos - Deputy President E: info@leptosestates.com W: www.leptosestates.com

74 Archiepiskopou Makariou C, 3rd Floor, Mesa Geitonia, 4003, Limassol - Cyprus T: (+357) 25 351 335 Contact: Sotos Constantinou – Head, Business Development E: info@mapsplatis.com W: www.mapsplatis.com

Alkeos 23, Office 502, Engomi 2404, Nicosia - Cyprus T: (+357) 22 675 479 Contact: Fadi Aboualfa - Managing Director E: faboualfa@mees.com W: www.mees.com

Country Report CYPRUS 2019


Who’s Who - Cyprus Business Directory

MICHAEL KYPRIANOU & CO LLC We aim to help you succeed and manage risk by providing pragmatic advice. Founded in 1991, we are one of the largest law firms in Cyprus with nine offices in six countries, offering legal support covering all aspects of Cypriot and international law, including dispute resolution, banking and finance, investment firms’ regulation, corporate, commercial, transport and energy, intellectual property, tax, real estate and immigration. We are trusted advisors to a large number of international organisations with operations in Cyprus and abroad and our teams are consistently recommended by all leading legal directories for the quality of the services we provide. MENELAOS KYPRIANOU MANAGING PARTNER

NATURAL GAS PUBLIC COMPANY (DEFA) DEFA will have the exclusive right to import and supply natural gas to all consumers in Cyprus. DEFA issued a tender for the LNG Import Terminal infrastructure (comprising an FSRU, Jetty, pipelines and onshore facilities, and Operations and Maintenance) on October 5, 2018. The award is within 2019. A special purpose subsidiary company ETYFA that will own and manage the LNG Import Terminal. DEFA will construct gas transmission lines to connect all Power plants (existing or planned) and any industrial customers who need gas. It will also support bunkering and provision of gas for transportation. DR. SYMEON KASSIANIDES CHAIRMAN DEFA BOARD OF DIRECTORS


NETINFO PLC NETinfo is a versatile and innovative technology company that has been enabling digital transformation strategies for banks and financial institutions since 2000. NETinfo’s flagship products, NETinfo Digital Banking Platform and NETinfo Mobile Financial Services (MFS), have successfully been part of the digital transformation process of banks and financial institutions, in 30 countries worldwide. NETinfo focuses on retail banking, corporate banking, wealth management, and insurance. We support banks and financial institutions of all sizes across all geographies, helping them to harness the latest technologies, and we fully embrace the needs of today’s digital consumers. Industry analysts recognise NETinfo as one of the global leaders for omnichannel design and delivery.


NEXIA POYIADJIS CHARTERED ACCOUNTANTS Founded in 1969, Nexia Poyiadjis is the exclusive member of Nexia International in Cyprus, a leading worldwide network of independent firms, providing clients with audit and assurance, tax, business advisory, outsourcing and turnaround services. Nexia Poyiadjis specializes in investment firms, e-money, payment institutions, alternative investment fund managers and regulated funds. The firm presently operates from prestigious offices located in Nicosia and Limassol.


ONE PLUS CAPITAL LTD One Plus Capital (OPC) is as a licensed boutique investment firm based in Nicosia. OPC is licensed by CySEC to offer the full spectrum of investment services. Its core services include portfolio management, investment advisory, global brokerage, corporate finance, custody and safekeeping. OPC is also a trading member of the Athens and Cyprus Stock Exchange (ASE, CSE). Over the past few years, OPC has weighed in on its expertise and years of presence in the industry to broaden the range of services offered. Specifically, OPC has been active in the field of fund management for a number of Cyprus licensed funds with multi-asset class strategies and compartments for both retail and professional investors. KIKIS LAGOS MANAGING DIRECTOR


Country Report CYPRUS 2019

2 Agias Elenis Street, 6th & 7th Floor 1060 Nicosia - Cyprus T: (+357) 22 447 777 Contact: Menelaos Kyprianou - Managing Partner E: Menelaos.Kyprianou@kyprianou.com W: www.kyprianou.com

13 Limassol Ave, Demetra Tower, 4th Floor, 2112 Nicosia | P. O. Box 24954, 1305 Nicosia - Cyprus T: (+357) 22 761 761 Contact: Maria Theocharidou Secretary/PA to the Executive Chairman E: info@defa.com.cy W: www.defa.com.cy

Aglantzia Avenue 23, 2108 Aglantzia - Cyprus T: (+357) 22 753 636 Contact: Ioanna Michaelidou – Executive Assistant / Administration Manager E: ioanna@netinfo.eu W: www.netinfo.eu

Sophouli 2 Str., The Chanteclair House, 8th floor, 1096 Nicosia - Cyprus T: (+357) 22 456 111 Contact: Susana Poyiadjis - Senior Partner E: susana.poyiadjis@nexia.com.cy W: www.nexia.com.cy

75 Prodromou Avenue, Oneworld Parkview House, 2063 Strovolos, Nicosia - Cyprus T: (+357) 22 873 760 Contact: Kikis Lagos - Managing Director E: info@onepluscapital.net W: www.onepluscapital.net


PAFILIA PROPERTY DEVELOPERS LTD Founded in 1977, Pafilia is the largest privately-owned residential developer in Cyprus, dedicated to delivering the best in concept, design, quality and service. The company offers an innovative and diverse portfolio of prime properties in enviable locations which provide excellent investment opportunities and ideal homes. Pafilia collaborates with internationally acclaimed architecture and engineering firms to achieve its groundbreaking developments, such as ONE – the tallest residential seafront tower in Europe and Minthis - the islands most exclusive golf, design and leisure resort. Our highly-qualified team offer professional personalised service and immigration expertise, while our global presence enables us to serve our clients wherever they may be.




PATRIKIOS PAVLOU & ASSOCIATES LLC Patrikios Pavlou & Associates LLC is a multi-awarded, leading law firm based in Cyprus. With more than 55 years of experience in the local and international legal market, the Firm has developed distinguished expertise in dispute resolution and ADR and a renowned legal consulting department. The legal teams are constantly involved in some of the largest cross-border banking, financial and corporate transactions and handle complex litigation, arbitration and mediation matters. In close cooperation with the associated Pagecorp Group, the Firm provides its clients with a comprehensive range of corporate and other related services. The Firm is highly recommended by prestigious legal directories worldwide for its distinctive legal services.


PwC CYPRUS We support you to create the value you are looking for by providing specialised solutions based on quality. Together we build relationships based on trust and we say things as they are, to assist you to deal with issues that tomorrow will prove important. We adapt the expertise of our almost 1000 professionals in Cyprus and the power of our global network of more than  250,000 experts in 158 countries to your specific needs, helping you make the difference.  In a demanding and challenging business environment, our diverse teams of experts are sharing deep knowledge and experience. We provide a broad range of services. EVGENIOS C EVGENIOU CEO, PwC CYPRUS

75 Prodromou Avenue, Oneworld House, POBox 25207, Nicosia 1307 - Cyprus T: (+357) 22 496 000 Contact: Savvas Shiatis - Managing Director E: SShiatis@oneworldweb.net W: www.oneworldweb.net

Who’s Who - Cyprus Business Directory


ONEWORLD LTD Oneworld ltd is one of the largest providers of business and fiduciary services in Cyprus with offices in Nicosia and Limassol. We provide company incorporation, management, banking, redomiciliation services as well as setting up and administering private funds and trusts. We advise on international tax planning, family succession, incorporate offshore companies in zero and low tax jurisdictions and provide other boutique services including licensing of various operations and structures. Our global residence team, in conjunction with associates worldwide, provide boutique services covering citizenship applications, tax immigration and citizenship law, international private law and estate structuring. We aim to provide each client with innovative solutions and fresh ideas upon which true success depends.

Pafilia House, 33 Nicodemou Mylona Street - Cyprus T: (+357) 26 848 800 Contact: Michelle Taliotou - Marketing Manager E: m.taliotou@pafilia.com W: www.pafilia.com

Patrician Chambers, 332 Agiou Andreou Street, 3035 Limassol - Cyprus T: (+357) 25 871 599 Contact: Stavros Pavlou - Senior and Managing Partner E: spavlou@pavlaw.com W: www.pavlaw.com

PricewaterhouseCoopers Ltd PwC Central, 43 Demostheni Severi Avenue, CY-1080 Nicosia - Cyprus T: (+357) 22 555 000 Contact: Konstantina Logotheti Director, Marketing & Communications E: konstantina.logotheti@pwc.com W: www.pwc.com.cy

RCB BANK LTD RCB Bank Ltd was established on August 1st 1995 and is one of the largest banks in Cyprus, among the European significant Banks, which are under the direct supervision of the European Central Bank through the SSM mechanism. The Bank operates branches in Nicosia, Limassol, Larnaca, Pafos and Luxembourg.


2, Amathountos Street, P.O. Box 56868, 3310 Limassol - Cyprus T: (+357) 25 837 300 E: rcb@rcbcy.com W: www.rcbcy.com

Country Report CYPRUS 2019


Who’s Who - Cyprus Business Directory

ROYAL CROWN INSURANCE CO LTD RCI is a non-life insurance company that has been active in the Cyprus market for more than forty years. Initially RCI was the local agent for Royal & SunAlliance, of which it is still part of the global network, and since 1999, RCI has been licensed as a purely Cypriot private insurance company. RCI’s mission has always been to operate on the principles of absolute integrity, transparency and to provide the best possible services to its clients. RCI’s practices and procedures have been awarded the quality certification ISO9001-2015 by Lloyd’s Register. Insurance, for RCI, is not a product to be sold, but a service provided and a commitment created. PHILIOS ZACHARIADES GENERAL MANAGER


SAP CYPRUS LTD As market leader in enterprise application software, SAP helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device – SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable more than 345,000 business and public-sector customers to operate profitably, adapt continuously, and grow sustainably. SAP Cyprus Ltd was founded in 1997 and has since been a trusted advisor for the local business community. Its clientele utilizes innovative solutions and technologies to achieve strategic objectives for growth and profitability.



SAPIENTA ECONOMICS LTD Sapienta Economics is a Nicosia-based economic consultancy producing top-level analysis primarily on Cyprus for a range of prestigious clients, including oil/gas majors, big four firms and over a dozen embassies. Our services include bespoke consultancy and the monthly Sapienta Country Analysis Cyprus. Each month we take an in-depth look at prospects for political stability, government effectiveness, a resolution of the Cyprus problem, structural policies including natural gas, fiscal performance, debt sustainability, banking sector stability and the latest economic trends. No other organization offers such breadth and depth of inter-related issues. Sapienta Economics and its Director Fiona Mullen are independent, with no political ties in Cyprus or abroad and no investment in Cyprus shares or bonds.


SCORDIS, PAPAPETROU & CO LLC SCORDIS, PAPAPETROU & CO LLC, is a full service Law Firm in Cyprus whose roots date from 1922, offering, together with its affiliates and subsidiaries (the “SPC Group”), a wide range of services such as International Litigation, Arbitration & Dispute Resolution, Corporate & Commercial, Mergers & Acquisitions, Estate & Tax Planning & Trusts, Company / Fund Formation and Administration, Fiduciary & Trustee Services, Accounting & Tax Advisory and Financial Services in addition to other traditional services of a law firm. The SPC Group currently has offices in Nicosia, Limassol, Athens, Moscow and Valletta. KYRIACOS SCORDIS MANAGING PARTNER


SERVPRO ACCOUNTANTS & CONSULTANTS ServPRO is a well established firm of accountants, advocates and business consultants having local and international expertise to provide clients with a comprehensive range of high quality services that exceed expectations. Our office offers a wide range of services such as International Tax Planning, Company Formation, Corporate & Legal, Formation of Trust & Trustee Services, Accounting & Financial Reporting, Auditing & Assurance, Industry Expert Advice, Advisory & Consulting, Information Technology, Citizenship & Residency, Immovable Property/Real Estate, Dispute Resolution/ Litigation. ServPRO is a member of ACCA and ICPAC, an Approved ACCA Employer and ISO 9001:2015 Certified company.



Country Report CYPRUS 2019

16-20 Mnasiadou Street P.O.Box: 24690 1302 Nicosia - Cyprus T: (+357) 22 885 555 Contact: Anthie Zachariadou – Executive Director E: info@royalcrowninsurance.com W: www.royalcrowninsurance.com

92 Ifigenias Str., Athena Building, Office 101, 2003 Nicosia - Cyprus T: (+357) 22 378 777 Contact: Alex Mouradian Sales Director Hellas, Cyprus, Malta E: info.cyprus@sap.com W: www.sap.com/cyprus

Tenedou 7, No 401, Lykavitos, CY1055 Nicosia - Cyprus T; (+357) 99 338 224 Contact: Fiona Mullen - Director E: fiona.mullen@sapientaeconomics.com W: www.sapientaeconomics.com

30, Karpenisi Street, P.O. Box 20533, 1660 Nicosia - Cyprus T: (+357) 22 843 000 Contact: Kyriacos Scordis - Managing Partner E: k.scordis@scordispapapetrou.com W: www.scordispapapetrou.com

1 Kinyra Street, Kinyras Tower, 3rd Floor, 1102 Nicosia - Cyprus T: (+357) 22 021 100 Contact: Petros Theodotou - Director & CEO E: info@servpro.com.cy W: www.servpro.com.cy



SKYLINK SERVICES LTD Skylink Services Ltd is a provider of ground handling services for Executive Aviation Aircraft in Cyprus. We began operations in 1998, filling the gap in the Executive Aircraft ground handling market at both International Airports of Cyprus, Larnaca and Paphos. Skylink Services now owns and operates the only FBO facility at Larnaka Airport offering around-the-clock professional VIP aircraft and passenger handling services. Currently representing over 400 companies that own or operate executive aircraft worldwide. Skylink Services also manages and operates the new Heads of State Lounge facility at Larnaka International Airport. This Lounge is used by all Heads of State visiting the Republic of Cyprus as well as a host of other visiting dignitaries.


SOCIETE GENERALE BANK - CYPRUS Societe General Bank – Cyprus (SGBCy) draws on thirty years of accumulated experience in global banking in Cyprus as well as all the advantages of being part of an international Group. The bank is present in the most important cities in Cyprus: Nicosia, Limassol, Larnaca and Paphos. SGBCy activities are organized around private banking, corporate banking and international businesses. Banking services encompass a wide range of diversified, standard and tailor-made services that are conceived to answer the broadest range of customers’ needs. The bank pursues long-term relationship with its high net worth and corporate customers. KHALIL LETAYF CEO



SOCIETY OF TRUST AND ESTATE PRACTITIONERS (STEP) STEP is the global professional association for practitioners who specialise in family inheritance and succession planning. STEP works to improve public understanding of the issues families face in this area and promotes education and high professional standards among its members. STEP members help families plan for their futures, from drafting a will to advising on issues concerning international families, protection of the vulnerable, family businesses and philanthropic giving. Today STEP has more than 20,000 members across 96 countries from a range of professions, including lawyers, accountants and other specialists. The Cyprus branch of STEP numbers over 185 experienced professionals from all over Cyprus, and is active in the spread of industry related knowledge, through regular conferences and presentations.

SOVEREIGN TRUST (CYPRUS) LIMITED Established in 1987, represented by over 400 employees, located in 26 offices globally, having acquired 33 licences from international recognised regulators - resulting in Sovereign Group being one of the world’s largest and independent professional Tax Planning and Corporate Services organisations. Head quartered in Hong Kong and with fully active subsidiaries in Abu Dhabi, Bahrain, Bahamas, BVI, China, Cyprus, Dubai, Gibraltar, Guernsey, Isle of Man, Malta, Mauritius, Portugal, Seychelles, Singapore, South Africa, Switzerland, TCI and the United Kingdom – Sovereign Group currently manages over 20,000 clients that include companies, entrepreneurs, private investors or high net worth individuals and their families – and have assets under administration in excess of US$10 billion.

1 Kyllinis street, Mesa Geitonia, 4007 Limassol - Cyprus T: (+357) 25 848 100 Contact: Permanent Secretary of the Shipping Deputy Ministry E: maritimeadmin@dms.gov.cy W: www.shipping.gov.cy

Who’s Who - Cyprus Business Directory

SHIPPING DEPUTY MINISTRY The Shipping Deputy Ministry was created on 1st March 2018 as an autonomous Deputy Ministry reporting directly to the President, dedicated entirely to the Cyprus Maritime Industry. It is responsible for the development and enlargement of the Cyprus maritime cluster. The Deputy Ministry is split into three main units, Registry, Competitiveness & Regulation, Flag State Control and Coastal, Seafarers & Port State Control. More than 160 maritime specialists provide top quality services to shipping companies on a 24/7 basis from the Deputy Ministry’s offices in Cyprus, London, New York, Athens, Rotterdam and Hamburg.

P.O. Box 43012, Larnaca Airport, 6650 Larnaca - Cyprus T: (+357) 24 840 900 Contact: George Mavros - Managing Director E: flightops@skylink.com.cy W: www.skylink.com.cy

88 Digenis Akritas, 1061 Nicosia - Cyprus T: (+357) 80 007 777 Contact: Hovik Arslanian – Assistant General Manager E: Hovik.arslanian@socgen.com W: www.sgcyprus.com

PO Box 22037, Nicosia, CY1516 - Cyprus T: (+357) 22 559 999 Contact: Spyros EvangelouSTEP Cyprus Chairman E: chairman@stepcyprus.com W: www.step.org

120 Gladstonos Street, Foloune House 4th Floor, Office D1, Limassol, Cyprus T: (+357) 25 733 440 Contact: George Ayiomamitis - Managing Director E: GAyiomamitis@SovereignGroup.com W: www.SovereignGroup.com

Country Report CYPRUS 2019


Who’s Who - Cyprus Business Directory



STELIOS AMERICANOS & CO LLC Stelios Americanos & Co LLC is a full services, highly innovative law firm with headquarters based in Nicosia, Cyprus and a branch in Athens, Greece. It specializes in corporate, commercial and banking law, corporate and commercial litigation, real estate, financial advisory & regulation and blockchain legal advisory. Stelios Americanos & Co LLC provides its services to governmental organizations, international banking institutions, public companies and multinational corporations. Moreover Stelios Americanos & Co LLC has created close relationships with reputable international legal and consulting firms and is, thus, able to assist clients with their cross-border transactions and needs. Today, Stelios Americanos & Co LLC is considered one of the leading law firms in Cyprus in the areas of its specialty.

STELIOS IERONYMIDES & ASSOCIATES LLC Stelios Ieronymides & Associates LLC is a Law Office, established over thirtythree years ago, in Cyprus. It is one of the largest service providers, offering among others, registration, fiduciary and trustee services, as well as legal assistance and representation at all levels, to local and foreign clientele including corporations, Banks, Airlines, Shipping companies, as well as prominent customers with focus on quality, professionalism, effectiveness and efficiency. The Law Office maintains a wide network of business associates and agents in Cyprus and abroad, for matters pertaining to company registration, trusts, tax planning, Cyprus citizenship, real estate and litigation. The Law Office also maintains a number of Business Centers, providing its clients with fully fletched offices in Cyprus, for their business needs and requirements.

SWISSPORT CYPRUS LIMITED Swissport has been present in Cyprus since January 2006 providing Passenger, Ramp, Ticketing, cargo, and executive aviation services at both the island’s airports. It is a subsidiary of Swissport International, the words largest Airport provider of ground and air cargo services, active at 315 airports in 50 countries across all five continents. With more than 850 client-companies, Swissport provides airport ground services for 265 million passengers, and 4.7 million tons of cargo at 133 warehouses world-wide per annum, with a workforce of 68,000. In Cyprus Swissport employs over 850 people, trained at the highest level and in line with industry standards and procedures. LOTHAR KILCHENMANN CHIEF EXECUTIVE OFFICER

TASSOS PAPADOPOULOS & ASSOCIATES LLC Tassos Papadopoulos & Associates LLC is one of the oldest and most reputable law firms established in Cyprus, providing legal services in all areas of the law. We have been providing bespoke support to HNWIs, both local and foreign, in their Cypriot ventures for many years, throughout legislative and regulatory changes. Equipped with experience, knowledge, sophistication and discretion we have gained the trust and confidence of our clients by providing multifaceted legal hands-on support in their activities in Cyprus and overseas.




THE CYPRUS INSTITUTE (CYI) The Cyprus Institute (CyI - www.cyi.ac.cy) is a research and educational organization, which supports the knowledge economy on the island. CyI is a science, technology and innovation hub for the Eastern Mediterranean, and a gateway between Europe and the Middle East. It has cutting-edge research infrastructures geared towards regional research challenges, based on the principles of open access, and recognized at the European level. CyI excels in the following research fields: Solar Thermal Energy/Energy Storage, Climate and Environmental Research, Technologies for Archaeology/Cultural Heritage, and High-Performance Computing, simulation and hyper-infrastructures. CyI offers Doctoral and Master’s programs in its areas of competence, designed for educating tomorrow’s scientific and technological leadership, in partnership with renowned international universities.

Country Report CYPRUS 2019

12, Demostheni Severi Av. Office 601, 6th Floor 1080 Nicosia - Cyprus T: (+357) 22 465 500 Contact: Stelios Americanos - Managing Partner E: stelios@americanoslaw.com W: www.americanoslaw.com

Stasinou 1, MITSI BUILDING 1, 1st Floor, Plateia Eleftherias, 1060, Nicosia - Cyprus, P.O. Box 21294, 1505, Nicosia - Cyprus T: (+357) 22 674 949 Contact: Stelios Ieronymides – Managing Director E: info@silaw.com.cy W: www.silaw.com.cy

Office 2, Larnaka International Airport T: (+357) 24 008 781 Contact: Michael Kokkinos Commercial Manager E: Michael.kokkinos@swissport.com W: www.swissport.com

10, Iasonos Street, Jason Building, 1082 Nicosia - Cyprus T: (+357) 22 889 999 Contact: Nicos Papaefstathiou – Managing Partner E: npapaefstathiou@tplaw.com.cy W: www.tplaw.com.cy

20 Konstantinou Kavafi 2121 Aglantzia - Cyprus T: (+357) 22 208 678 Contact: Dr. Nicolas Jarraud Assistant Vice-President for Institute Affairs E: international.relations@cyi.ac.cy W: www.cyi.ac.cy


VISTRA (CYPRUS) LIMITED Vistra is a market leading provider of corporate services globally. Our versatile group of professionals provide a uniquely broad range of services and solutions tailored to meet the unique requirements of each individual client. The Vistra brand has been in existence for over 20 years, but the companies it was formed from have been key players in the market for well over 40 years. Our capabilities span across international incorporations to trust, fiduciary, private client services, and fund administration services through our four business divisions: Alternative Investments; Company Formation; Corporate & Private Clients; International Expansion. NICK TERRY MANAGING DIRECTOR

WEALTH FUND SERVICES LTD Wealth Fund Services Ltd was established in 2016 as a UCITS management company based in Nicosia and licensed by CySEC. It offers a wide range of investment options like investments in funds under Wealth Fund Services umbrella, set-up of a personal Mutual Fund and set up and management of all types of AIFs. Apart from the core services of UCITS and AIF management, the company also provides Discretionary Asset Management and Advisory Services with High standards and personal customer care. Every investor shall receive tailor-made solutions based on proven fundamental and quantitative research. GEORGE W. SAMS CEO

WINDSOR BROKERS LTD Windsor Brokers was established in Limassol Cyprus with roots dating back to 1988. The Company was the first Cypriot Investment Firm of its type to be licensed and regulated by the Central Bank of Cyprus, and by 2004, it was regulated by the Cyprus Securities and Exchange Commission. Our company’s mission is to facilitate investors’ access to the global markets in a fair, efficient and safe manner. For three decades, we have remained committed to serving investors who place security, integrity, and reliability at the forefront of their investment goals. JOHNY ABUAITAH CEO


Y. GEORGIADES & ASSOCIATES LLC Y. Georgiades & Associates LLC was established in 1992 by Yiannos Georgiades. It has a firm foothold in the domestic market, providing a range of legal consultancy services to its Cypriot clients, to local councils and charitable organizations, and to multinational clientele. The firm has established a network of contacts and associates in countries around the world and focuses on providing a first-class service to its clients worldwide. The firm specialises in M&A, investments, trusts, intellectual property, corporate and commercial law, real estate, medical malpractice, dispute resolution and corporate litigation. The firm is a Nominated Advisor of the Cyprus Stock Exchange for the Emerging Companies Market.

11 Byron Avenue, CY-1096, Nicosia - Cyprus T: (+357) 22 870 030 Contact: Kyriakos Iordanou – General Manager E: info@icpac.org.cy W: www.icpac.org.cy

Who’s Who - Cyprus Business Directory


THE INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS OF CYPRUS (ICPAC) The Institute of Certified Public Accountants of Cyprus (ICPAC) is the competent authority for regulating the accounting profession and the sole recognised body of Auditors by the state in Cyprus. Established in 1961, ICPAC currently has more than 4.500 professional accountants as members and 4.000 students. ICPAC houses all professional accountants, supports and promotes the activities and interests of the accountancy profession, safeguards the reputation of the profession and adherence to the Code of Ethics, as well as provides for the continuous professional development and updating of members. In addition, ICPAC is also a competent authority under the Anti-Money Laundering law, the laws on the Regulation of Enterprises Providing Administrative Services and the Insolvency Practitioners Law.

2nd Floor Sotiri Tofini 4 Agios Athanasios, 4102 Limassol - Cyprus T: (+357) 25 817 411 Contact: Nick Terry - Managing Director E: Nick.Terry@vistra.com W: www.vistra.com

Kennedy 12-14, Kennedy Business Center Office 305, 1087, Nicosia - Cyprus T: (+357) 22 755 506-07 Contact: George Sams - CEO E: info@wealthfs.com.cy W: www.wealthfs.com.cy

Windsor Brokers Business Center, Spyrou Kyprianou 53, Mesa Geitonia 4003 Limassol, Cyprus T: (+357) 25 500 700 Contact: Jabra Serieh - Director of Marketing E: Jabra.Serieh@WindsorBrokers.eu W: www.windsorbrokers.eu

2, Ayios Pavlos & Kadmos Street Wisdom Tower, 3rd Floor, 1105, Nicosia - Cyprus T: (+357) 22 819 292 Contact: Yiannos Georgiades Managing Partner E: yiannos.georgiades@gmadvocates.com W: www.gmadvocates.com

Country Report CYPRUS 2019


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Profile for CountryProfiler Cyprus

2019 Cyprus Country Report  

The 2019 Cyprus Country Report features in-depth articles on the economy, foreign direct investment, international trade and headquartering...

2019 Cyprus Country Report  

The 2019 Cyprus Country Report features in-depth articles on the economy, foreign direct investment, international trade and headquartering...

Profile for cpernst