20 th june 2014 charis papacharalambous director general cyprus investment promotion agency (cipa)...

20th June 2014

Charis PapacharalambousDirector General

Cyprus Investment Promotion Agency (CIPA)

Investing in Cyprus, an ideal gateway to Europe for the Arab world

Cyprus FactsLocation: 35 N and 33 E

Total area: 9,251 km2

Population: 866,000 (2012)Time Zone: GMT+2

Currency: EuroCapital: Nicosia

Languages: Greek, Turkish, English for businessPolitical System: Presidential Democratic Republic

Cyprus Investment Promotion Agency (CIPA)

Promote Cyprus as an attractive international investment and business centre in key priority economic sectors

Provide investor facilitation and support to new and existing investors

Advocate reforms in order to improve the regulatory and business environment and infrastructure

Recent facts about the Cyprus economy

• All four TROIKA assessments - “Program is on track” - ECB, IMF, EC

• Resilient economy: Contraction of 5.4% v initial est. of 8.7%

• Return to growth by 2015 - European Commission’s forecast

Economic Indicators

Source : Cyprus Ministry of Finance * estimated forecast

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

-8

-6

-4

-2

0

2

4

6 5.1

3.6

-1.9

1.30.4

-2.4 -5,4 -4.80.9

1.9

GDP Growth (% change)

*

**

Economic Indicators

Source : Cyprus Ministry of Finance * estimated forecast

• All four TROIKA assessments - “Program is on track” - ECB, IMF, EC

• Resilient economy: Contraction of 5.4% v initial est. of 8.7%

• Return to growth by 2015 - European Commission’s forecast

• Fiscal deficit is much lower than originally expected

• Private consumption decline was less than originally expected

• 40% of Foreign Investors planning to expand investments within the next 3-5 years - CIPA survey Dec 2013

• Cyprus successfully returned to the markets 18 months before forecasted

Recent facts about the Cyprus economy

• In November 2013, Standard & Poor’s first upgrade for Cyprus• On 22nd March 2014, Moody’s has upgraded Cyprus’ Government and

financial institutions credit worthiness from negative to positive, citing the Cyprus stronger-than-expected fiscal and economic performances in 2013 and the authorities’ track record of meeting conditions under the Troika funding program.

• On 25th April 2014, Standard & Poor's raised the long-term foreign and local currency sovereign credit ratings on Cyprus to 'B' from 'B-'.

• S&P affirmed the short-term foreign and local sovereign credit ratings at 'B'. The outlook remains positive.

Ratings

Cyprus 10- Year Government Bond Yield

Source: Ministry of Finance

Economic Sentiment Indicator (ESI)

Source: Eurostat last update: 28/05/2014

39th out of 189 countries Ease of Doing Business

32nd out of 161 countries Best Countries for Business

31st out of 176 countries Corruptions Perceptions Index

29th out of 140 countries The Travel & Tourism Competitiveness Report

27th out of 145 countries Best Countries for Business

27th out of 142 countries The Global Innovation Index

21st out of 140 countries Best Travel & Tourism Environment & Infrastructure

1st out of EU28 Bathing Water Quality

11

2013 Global Competitiveness

Cyprus, the Gateway into Europe and beyond!

Strategic Location: Cyprus has been an important trading hub since antiquity!

Cyprus

Cyprus, the Gateway into Europe and beyond!

Strategic Location: Cyprus has been an important trading hub since antiquity!

Ease of Doing Business: Introduction of numerous structural reforms

EU and Eurozone: Full harmonization of EU legislation and Directives

Tax System: Possibly the most attractive tax systems in Europe - Double Taxation Treaties

Cyprus: Attractive Tax SystemExempt from tax:

Dividend income Profits from overseas

permanent establishments Profits from the sale of securities

No withholding tax on:

DividendsInterest

Royalties paid from Cyprus

Most international transactions are exempt from VAT

Double Tax Treaties with 50 countries Intellectual Property (IP) regime with

an effective tax of less than 2%

Cyprus, the Gateway into Europe and beyond!

Strategic Location: Cyprus has been an important trading hub since antiquity!

Ease of Doing Business: Introduction of numerous structural reforms

EU and Eurozone: Full harmonization of EU legislation and Directives

Tax System: Possibly the most attractive tax systems in Europe - Double Taxation Treaties

Robust Legal & Regulatory Framework: Based on English Common Law Principles

Cyprus: Legal System

• Based on the English Common Law Principles

• Transparent

• Fully harmonized with international standards

• High quality legal services

• Collaboration with international law firms

• Application of EU Directives

Cyprus, the Gateway into Europe and beyond!

Incentives: Wide range of investment incentives for foreign companies

Infrastructure: Well advanced and modern Infrastructure

Value for Money Services: “Centre of Excellence” – First country in the world to train

“UK Chartered Accountants and “CIMA Accountants” outside the UK

Human Talent: Highest tertiary education percentage in the EU

Quality of Life: Weather, History & Culture, Gastronomy, International schools - More than

85% of existing foreign investors value the high quality of life in Cyprus - source: CIPA survey Dec.

2013

Cyprus ranks 5th best country to relocate

Source: www.knightfrank.com

Key Economy drivers

• Professional Services Market has created opportunities

• Banking & Financial Services Niche sectors like ship financing, energy project financing

• Tourism Well developed infrastructure. World’s most Blue flags per coastline km & cleanest waters in the EU (100% success)

• Research & Development Innovation in Medical Research projects

• Renewable Energy 2 projects awarded the EU funding NER300 program and over 20 new licenses

• The ONLY EU approved tonnage tax regimewith benefits for ship-owning, ship-management

and crew management

• Largest Ship Management Centre in EU

• 2nd largest Ship Management Centre globally

• 3rd largest merchant fleet in EU

• 10th largest fleet worldwide

More than 1,022 registered vessels with 21 million gross tonnage are registered under the Cyprus flag

More than 140 ship owning and ship management related companies are operating from Cyprus

International Shipping Center

Key Economy drivers

Large ScaleDevelopment Projects

Potential Opportunities:

Luxury Real Estate Developments

Marinas

Leisure & Theme Parks

Luxury Resorts & Golf Courses

Health & Wellness Tourism Projects

Education & Universities

Key Economy drivers

Upcoming opportunitiesin Privatizations

Ports

Energy

Telecommunications

Key Economy drivers

Hydrocarbons in Cyprus

Note: 60 tcf NG would fully cover Cyprus’ domestic energy needs for approximately 6,000 years- There are also indications for the existence of oil

Key Economy drivers

Existing Foreign Investor survey by CIPA – Dec. 2013

2014 2015 2016 2017 2018 2019 20200

1

2

3

4

Confidence Index Outlook on Cyprus’ Economy

Sentiment

Tel: +357-22-441133 info@investcyprus.org.cy

www.investcyprus.org.cy

Thank You!