Cyprus is the third largest island in the Mediterranean Sea, situated at the most eastern corner of the European Union. Cyprus has a robust, market-driven economy supported by a stable democracy and driven by a diverse, well-educated, skilled workforce, along with an excellent telecommunications and infrastructure system and the lowest tax regime in the EU.
The Cyprus economy has performed remarkably well for most of the fifty years period since its independence in 1960. It has weathered significant external shocks and has taken advantage of a number of different opportunities. A key driving force has been the openness and the responsiveness to international markets and a successful partnership between the private and public sectors. The government invested in infrastructure essential for growth, and the private sector exploited exogenous opportunities such as the crisis in Lebanon, and the expanding markets in the Arab World, Eastern Europe and Russia. Economic policies have been overall appropriate, though sometimes uneven, providing a supportive framework of exchange rate and financial stability and expansionary fiscal policy when appropriate, all these resulting in reasonable price stability, strong employment growth and rising living standards. Major events, such as the prospect of entering the World Trade Organisation (WTO), the European Customs Union, the EU and the Eurozone were intelligently used to anchor important and long-debated reforms. Good industrial relations and economic migration underpinned a relatively manageable wage growth, and when wage growth outpaced productivity the transformation to a service economy accelerated. For the Cyprus economy, the years between 1999 and 2004, signalled a period of harmonisation and the abolition of several distortions for the efficient functioning of the markets, such as interest rate and capital movements liberalisation and the opening of the market in the utilities sectors to competition. On May 1st, 2004, Cyprus became a full member of the European Union. In May 2005, the Cyprus pound joined ERM II, and on 10th July 2007 the EU Council of Finance Ministers approved Cyprus adoption of the euro as from 1 January 2008 and decided that the Cyprus pound exchange rate vis-a-vis the euro will be fixed at the central parity of €1=CY£ 0,585274. Hence, Cyprus became a member of the Eurozone on 1st January 2008. The onset of the global financial crisis in 2008, reversed the growth path, affecting mostly the construction and tourism sectors. The Government followed expansionary fiscal policy in order to mitigate the impact of the crisis, focusing on the affected sectors. The continued difficult global economic situation, with the second wave of crisis, led to a deterioration of public finances, which in connection with the previous expansion, led to excessively high fiscal deficits and unsustainable public finances.
Last Updated on Thursday, 06 December 2012 10:36
There are many elements that contribute to making Cyprus an attractive environment for doing business. These include the strategic location, the sophisticated infrastructure, the highly-educated workforce, the favourable tax system, and the modern banking and insurance networks. All these, coupled with the comparatively low operating costs, the high standard of living and the countless other lifestyle advantages on offer, make Cyprus the perfect place for today’s investors and businesspeople.
Last Updated on Tuesday, 15 January 2013 13:38
The Government of Cyprus acknowledging the importance of research, development, and innovation, is strongly committed in enhancing the scientific basis in Cyprus. The Research Promotion Foundation of Cyprus funded over €25 million worth of research projects and supporting activities, and the budget is expected to grow in the coming years according to the following five strategic categories:
The highly educated work force in Cyprus and the high level of scientific personnel can be engaged in both research and business innovation and entrepreneurship, taking advantage of the Government research incentives. Thus, several opportunities exist for foreign investors to invest in the growth of R&D&Innovation in Cyprus.
Last Updated on Thursday, 06 December 2012 11:30