During a courtesy meeting with a delegation from Partit Laburista, Malta Chamber...
Cyprus is a Eurasian island country that lies in the Eastern Mediterranean area. It lies south of Turkey and due west of Syria and Lebanon. It is one of the most popular tourist destinations in the world, and holds the distinction of being the third largest island in the Mediterranean Sea, next to the Italian islands of Sicily and Sardinia.
The Republic of Cyprus was one of the founding members of the Non-Alignment Movement, until it had joined the European Union on May 1st, 2004. It has an advanced and high-income economy, and consequently a high Human Development Index, or HDI.
Cyprus has a prosperous economy that has grown by leaps and bounds in the recent years. As per the results of the studies conducted by the International Monetary Fund, or IMF, Cyprus’s per capita GDP is just higher than the average of the European Union at $28,381. In fact, Cyprus has been a popular centre for setting up offshore businesses because of its well developed infrastructure.
The economic policy of the government of Cyprus has, in recent years, paid attention to meeting the standards that are required to join the European Union. On January 1, 2008, the Cyprus government officially adopted the Euro as its national currency. Recently, oil reserves were discovered in the seabed between the Egypt and Cyprus and negotiations are currently being done between the governments of Egypt and Lebanon over the exploration of these reserves. The seabed that separates Lebanon and Cyprus is said to contain a significant amount of crude oil and natural gas. However, the Cypriot government stated that the Turkish Navy would not allow oil exploration in that region.
The economic trends in Cyprus have been very positive, especially in the recent year. In the year 2008, Cyprus was named by the IMF as one of the 32 most advanced economies in the world. The IMF further forecast that Cyprus would be the only developed economy that would record continuous growth rates through the 2009 financial crisis. The economy mainly indulges in the government service sector and the agriculture sector, with the tourism sector contributing to a major part of the economy.
The Cyprus government has set up an open, free market, service based economy that allows some light manufacturing. In the Mediterranean region, the Cypriots are found to be the most prosperous people. The positive economic trends of Cyprus have been reflected in its rapid grown, total employment of its population and external as well as internal stability. What was once an underdeveloped economy under British colonial rule in 1960 is now a modern economy with dynamic services, agricultural and industrial sectors as well as an advanced social and physical infrastructure.
The Cypriot economic market is dominated by its services sector that contributed to 78% of the GDP. After tourism, financial services and real estate services are the major economic activities in the country. Apart from these leading economic industries, there are also transport and communication services. The Industrial sector contributes to around 19% of the annual GDP of Cyprus. The key industries in this sector are ship refurbishment and repair, cement manufacturing, gypsum production, beverage processing, light chemicals manufacturing, metal products manufacturing and paper and wood manufacturing. Pharmaceuticals, clothing and cement are exported to Cyprus.
The Agricultural market contributed to around 3% of the GDP of Cyprus. The main agricultural products are citrus fruits, grapes, olives, vegetables and barley. Other agriculture based activities in Cyprus include meat processing, food processing and dairy products manufacturing. Cyprus is a trading partner with countries such as Greece, Germany, United Kingdom, France, Netherlands, Israel and China. The major imports for Cyprus are petroleum and petroleum products, transport equipment, machineries, intermediate products and consumer goods.
The Economy of Cyprus is measured through its parameters such as GDP and rate of growth. The GDP of Cyprus based on the purchasing power parity, or ppp, is US $21.4 billion. The GDP based on the official exchange rate is US $21.3 billion. The per capita GDP based on the purchasing power parity is US $27,100. Cyprus’s GDP real growth rate has been calculated at 4.4% annually, and the gross fixed investment is set at 20.8% of the GDP. Cyprus has clocked its revenue at an annual rate of US $9.996 billion and an annual expenditure of US $9.304 billion. The Export earnings are US $1.495 billion FOB, or Free On Board. The import expenditure is estimated at US $7.84 billion FOB. As of 2006, Cyprus consumed electricity up to 4.135 billion kWh and oil up to 56,000 billion barrels per day.
In the month of February in 1997, the Cypriot government revised its policy on foreign direct investment. In fact, it even permitted 100% foreign ownership in some cases. The regulations on the foreign portfolio investment in the Cyprus Stock Exchange have also been relaxed to an extent. In addition, the government of Cyprus passed a banking law in the July 1997 that allowed all the provisions and directives of the European Union, for the prudential supervision of the credit institutions.
Cyprus has fulfilled its treaties of double taxation with twenty six countries-which include the United States. The Cypriot government has also removed the exchange restrictions on international transactions. Non-residential businessmen and foreign investors could freely repatriate their proceeds from their investments in Cyprus. All these factors make the Cyprus economy a suitable economy for foreign investments.
Cyprus has relaxed its trade policies by eliminating import licenses and quotas, as well as by lowering their tariffs on many products as part of their new world trade agreement and Customs Union agreement with the European Union. Thus, US products have become very competitive in Cyprus and there are excellent prospects for the expansion of bilateral trade between these two countries.
The Government Web Portal for investing in Cyprus is a good location to find out detailed information on how to invest in Cyprus. It provides information related to the legal framework, taxation laws, operational procedures and resources and employment legislation of the Cypriot government.
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