Cyprus: Business and Pleasure Intertwined

The beauty, charm and warmth offered by this EU member state go hand in hand with modernity and very advantageous residence and investment benefits. Here, the contemporary world of designer labels from opulent boutiques co-exists with sun-kissed beaches on craggy coastline and stunning churches and monasteries.         

Snapshot

If you are new to the Republic of Cyprus and what it has to offer, then you are in for a very pleasant surprise. Located very conveniently between Africa, the Middle East and Asia, the largest island in the eastern Mediterranean has a population of around 1 million, though this figure is swelled by the huge numbers of tourists visiting its shores. In fact, arrivals hit record numbers in 2016. Most come for the sea and sand, others for the scenery and sites, while another category visits for business and investment. As for communicating, English is widely spoken due to the country’s colonial past, and Russian can be heard on every corner.  Greek is the national language.

After gaining independence in 1960 and adopting new laws that stimulated the growth of its shipping industry, Cyprus worked hard for membership of the European Union. That goal was realized in 2004, when Cyprus joined the EU and became a member of the Eurozone four years later. The country’s seafaring traditions, which date back centuries, were boosted by the legislation adopted in the early 1960s giving ship managers and owners a tax-efficient business environment. Shipping services are still a mainstay of the economy, bringing in over 7% of GDP and employing over 4,000 shore-based staff. Cyprus’s international ship register is the 11th largest globally. The sector is well placed to take advantage of recent natural gas finds in Egyptian and Israeli waters. But Cyprus is looking forward too. Maritime shipping has helped to develop yachting and the country is one of the top global destinations for divers and scuba divers. Limassol Marina stages a luxury boat show every year, and work is going ahead on constructing the ambitious Ayia Napa Marina, an integrated development which will include berths for yachts and luxury villas.

Permanent Residence and Citizenship Programs

Several factors led to the deep financial crisis that hit the country in 2012-2013. One of them was the Cypriot Government’s reluctance to restructure the troubled financial sector. A package of measures put together with international organizations helped move the country out of crisis. It toughened up anti-money laundering regulations too, and was rewarded by being rated number one for transparency in a Transparency International report issued in the summer of 2017. This restored the island’s reputation in the eyes of investors as an investment hub offering a range of opportunities.

The country has also introduced attractive packages to bring in foreign direct investment to boost the economy. It was 2013 when Cyprus launched its first residence-by-investment and Cyprus Investment Program, which have been amended over time. The residence-by-investment program was designed to boost the real estate market, as its main demand is the purchase of residential or commercial property (or both) to the tune of €300,000.  It has several standout advantages. It is valid for a lifetime and the applicant’s spouse and dependents are covered by the same application. The period for processing an application is a paltry eight weeks.

The Cyprus Investment Program is pricier, but provides a good balance of investment and benefits. The minimum sum of €2 million can be spread across real estate, land development or infrastructure projects. There is also the option of buying into Cypriot businesses or companies, or Alternative Investment Funds under certain conditions. Of course, the advantage of holding an EU passport enabling visa-free travel to more than 150 countries speaks for itself. EU citizens enjoy all the rights that EU member states possess, including freedom of movement, employment and study.

Everyone’s A Winner

Cyprus has turned the economic corner. The traditionally strong sectors of shipping and finance are in recovery mode. The energy sector is growing and real estate is on the up, thanks in part to the residence-by-investment and the Cyprus Investment Program. The strong ties between tourism and real estate are bringing new projects. One example is an integrated casino resort, with investment topping €500 million, which was recently approved for construction in Limassol.  The country has gas reserves in the Levant basin and is already the largest ship management centre in Europe.

These investment programs are catching the eye of non-EU citizens seeking both a safe haven and investment opportunities. The economy is already feeling the positive effects of over €7 billion that the programs have brought in. Tourist arrivals are at an all-time high, and niche sectors like sports, religion and well-being tourism are expanding beyond the well-known resorts and prompting more investment in infrastructure. These are pointers that suggest a win-win situation for investors, travelers and the local economy.

In case you are interested in discussing with us any investment opportunities in Cyprus, you may contact Mr. Angelos Paphitis directly or through the relevant section of this website or by sending an email at agp@agplaw.com.  Furthermore, for more information about the Cyprus Investment program you may visit the relevant insights of our firm.