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.
Cyprus offers one of the lowest set up and operating costs within the EU. As it regards labour costs, an average annual starting salary for a young graduate with a Bachelor Degree is €22,800. The employee will contribute €1,500 for social security; will pay €4,560 income tax. The employer will contribute €1500 to social security, for an average total labour cost, for such talent, of €24,300 per year.
The local infrastructure is ideal for business. Thanks to its modern road network, extensive port facilities and two new international airports, travel and transport in and beyond Cyprus is fast, efficient and economical.
The coastal resorts of Larnaca and Paphos each operate international airports serving flights to and from both Europe and the Middle East. Larnaca is the larger of the two airports, while the construction of an all new facility is set to begin soon. Limassol and Larnaca are both bustling ports and work around the clock to serve the island’s considerable import and export markets. Limassol is the largest port, although considerable infrastructure is in place to provide for easy and efficient operations at each coastal facility. Considerable investment has been made into transforming the island into a major telecommunications hub in the region. By building upon its technologically advanced infrastructure, Cyprus has established an extensive telecommunications network, both in terms of cable and satellite, which ranks amongst the best in the world.
Cyprus has a young, well-educated talent pool. The country is committed to education and is focusing on reforms to achieve sustainable growth. Since 2004, Cyprus has consistently allocated over 6% of GDP of public expenditure on Education. In 1996, Cyprus established the Cyprus Council for the Recognition of Higher Education Qualifications (www.kysats. ac.cy) which oversees the implementation of standards in higher education in the three public, including one Open University, and four private Universities. Cyprus has more than 30 colleges and 200 accredited study programs. With accession to the EU in 2004, to ensure the highest standards of quality in education, the Ministry of Education and Culture has harmonized the educational system of Cyprus with the European standards & guidelines. Cypriot educational institutes actively participate in EU programs, like the Eurydice Network and the ERASMUS program. Of all secondary students 88% speak English, 38% speak French.
According to Eurostat’s data in 2011, 33.6% of the population in Cyprus in the 15-64 age bracket had tertiary education (held a Bachelor, Masters, or PhD degree) compared to EU27 (23.6%), thus making Cyprus having the highest percentage among the EU27 nations in that age bracket.
Cyprus is ranked 31st in the world out of 187 countries according to the 2011 Human Development Report, with a Human Development Index (HDI) value of 0.840. The Human Development Index (HDI) focuses on three measurable dimensions of human development: living a long and healthy life, being educated and having a decent standard of living. Thus, it combines measures of life expectancy, school enrolment, literacy and income to allow a broader view of a country development than income alone.
A significant number of multinational companies and international banking units are already operating in Cyprus, further enhancing the productive and positive nature of the national economy. There are currently approximately 33 foreign banks and over 1200 International Business Companies (IBCs) with fully-fledged offices in Cyprus. The successful integration of the latest technology into the economy, the constant improvement of the island’s infrastructure and the high quality of the Cypriot labour force, have turned Cyprus into a centre of international business, contributing significantly to the economic growth of the broader region. IBCs have played a central role in the development of Cyprus as a world class business centre. The international business community has long maintained its confidence in Cyprus, building a strong presence in the country’s economy. The community’s interests are represented by the Cyprus International Businesses Association (CIBA).
Major international accounting companies and various local ones are represented by partners with in-depth knowledge of the local tax and accounting environment. Various law firms specialise in international work and assist foreign investors with both setup and contractual formalities. For any business to succeed, it needs the support and assistance of local professionals.
Cyprus’s economic freedom score is 71.8, making its economy the 20th freest in the Heritage Foundation 2012 Index.
The Index of Economic Freedom is a series of 10 economic measurements created by the Heritage Foundation and Wall Street Journal. The 2012 Index of Economic Freedom covers 184 countries around the world, ranking 179 of them with an economic freedom score based on 10 measures of economic freedom that evaluate the rule of law, the intrusiveness of (limited) government, regulatory efficiency and the openness of markets. The Index’s stated objective is to measure the degree of economic freedom in the world. Cyprus’s economic freedom score is 71.8%, making its economy the World’s 20th freest in the 2012 Index. Its overall score is down by 1.5 points from last year. Specifically, in 2011, Cyprus’ economic freedom average score was 73.3%, making the World’s 18th most liberated economy. In 2012, Cyprus is ranked 9th out of 43 countries in the Europe region.
|Cyprus’ Ten Economic Freedoms||2012||2011|
|Freedom of Corruption||63.0||66.0|
Source: The Heritage Foundation
Cyprus has improved in the areas of fiscal and business freedom. Conversely, it has regressed significantly in property rights, freedom from corruption, public finance management as well as in trade, monetary and labour freedom.
- Cyprus is ranked among the High Potential-High Performers for FDI growth for 2007-2010.
-In 2012-2013, Cyprus ranks 58th among 144 eonomies compared to the previous year, where ranked 47th among 142 economies.
-According to the index of economic freedom, the economy of Cyprus is 71.8 percent free, which makes it the world’s 20th freest economy.
-Cyprus ranks number 31st in the world on the quality of life index out of 187 countries.