The Republic of Cyprus is an eastern Mediterranean island strategically located at the crossroads of three continents; Europe, Asia, and Africa. A European Union member since May 1, 2004 and a member of the Euro-Zone since January 1, 2008 Cyprus also enjoys excellent business relations and flight connections with the Middle East. Cyprus enjoys a strong economy despite the recent worldwide economic downturn and its growth was less affected than most thanks to conservative government fiscal management and industry focus on financial services and tourism. The country enjoys low inflation and low unemployment rates when compared to the EU average and consumer purchasing power is high at an estimated per capita GDP of US$ 31,005 in 2009.
With the lowest corporate tax rate in the European Union (EU) at only 10%, the island is an ideal jurisdiction for Holding Companies. Moreover, it has over 40 bilateral tax treaties, including with the United States. Cyprus has no withholding tax imposed on dividend income, interest, or royalty payments effected to non-Cypriot beneficiaries. Profits from overseas permanent establishments are tax exempt. The World Bank Group's 2010 Doing Business Report ranks Cyprus 40th out of 183 nations in terms of overall ease of doing business.
The banking, accounting, legal, and financial services are extremely efficient and one of the strong points of the economy. The labor force is largely multilingual and highly qualified and the labor costs are low compared to the EU average. Cyprus has an advanced telecommunications network and infrastructure, as well as, a wide network of air-routes offering excellent connections with Europe, Africa, and Asia, as well as modern ports and first-rate sea connectivity.
Cyprus ranks among the 10 leading maritime nations in the world and is a highly reputable international shipping center with a merchant fleet exceeding 21 million gross tonnage (accounting for 16% of the EU fleet) and nearly 2000 vessels. It constitutes one of the largest ship-management centers in the world with around 50 ship-management companies and marine-related foreign enterprises that conduct their international activities in the country. Cyprus has also developed into a transshipment center for Asia Pacific trade with Europe and with shipping markets situated along the coasts of the Levant and Black Sea, or the North Adriatic. The island is a natural hub for other main-line deep sea trades passing through the Mediterranean, to North Africa and the Middle East.
(Note: various points in this country profile were taken from the website of the Cyprus Investment Promotion Agency: http://www.cipa.org.cy)
| DEMOGRAPHIC DATA |
| Area (Square kilometers) |
9,241 |
| Population (thousand) |
799,000 |
| Population Growth (%) |
1.04 |
| Population Under 15 Years (%) |
19.1 |
| Population Below Poverty Line (%) |
N/A |
| Agricultural Workers (% of the population) |
7.5 |
| Industrial Workers (% of the population) |
20.4 |
| Service Workers (% of the population) |
72.1 |
| Labor Force (thousand) |
400,000 |
|
ECONOMIC DATA |
| GDP (PPP, $bn) |
23.0 |
| GDP Real Growth (%) |
1.7 |
| Per Capita GDP ($) |
31,005 |
| Prime Lending Rate (%) (Note 1) |
5.0 |
| Inflation Rate (%) |
0.9 |
| Unemployment (%) |
5.3 |
| Foreign Direct Investment ($bn) |
6.1 |
| Debt – External ($bn) |
56.2 |
| Exports ($bn) |
1.4 |
| Imports ($bn) |
8.2 |
|
CULTURAL & OTHER DATA |
| Capital |
Nicosia |
| Other Large Cities |
Limassol, Paphos, Larnaca |
| Primary Language |
Greek |
| Urban Population (%) |
70.0 |
| Urban Growth (%) |
1.3 |
| Literacy (% of the population) |
97.6 |
| Education Spending (as a % of the GDP) |
6.3 |
| CPI Score (1 – 10) (Note 2) |
6.4 |
| Corporate Income Tax (%) (Note 3) |
10 – 23.5 |
| Ease of Doing Business Ranking (Note 4) |
40 |
NOTES:
- Each bank is free to set its own rates; this is simply an indicative, prevailing rate in November 2009 for non-housing loans.
- CPI Score is published by Transparency International and relates to the perceptions of the degree of corruption as seen by business people and country analysts and ranges between 10 (highly clean) and 0 (highly corrupt).
- Depending on shareholder residency status
- Ease of Doing Business Ranking is determined by the World Bank Group and is ranked out of a total of 183 countries. For additional information, please refer to: http://www.doingbusiness.org/EconomyRankings/
For more information on Cyprus' business environment, please check our latest Country Commercial Guide: http://www.buyusa.gov/cyprus/en/research.html
The official Cyprus Tourism Organization (CTO) website can provide information for tourist and other attractions on the island: http://www.visitcyprus.com
The Cyprus Investment Promotion Agency (CIPA) is a non-profit, private limited company (solely owned by the Government of Cyprus), which will contribute dynamically and with flexibility to the effective promotion of Cyprus as an international investment and business center. For more information, please visit: http://www.cipa.org.cy
The Cyprus Chamber of Commerce and Industry (CCCI) is a private law organization, which is financially independent. A union of Cypriot businesspeople, it conveys and promotes the interests and views of the business community: http://www.ccci.org.cy. |
