International Trade in Cyprus

News Related to International Trade in Cyprus

• Eurozone Ministers Set to Agree Bailout Payment for Cyprus and Greece - May 14, 2013

  (MENAFN - Qatar News Agency) Eurozone finance minsters are due to meet in Brussels later to agree bailout payments for Cyprus and Greece. Cyprus is expected to get approval for the first 3 billion ...

  Source: Menafn.com

• EU bailout fund releases Cyprus aid payment - May 14, 2013

  (MENAFN - AFP) The EU on Monday handed over the first two billion euros of loans agreed under the controversial Cyprus aid deal, the bloc's European Stability Mechanism said in a statement.The euro ...

  Source: Menafn.com

• Cyprus receives first EU loans - May 14, 2013

  Loans begin flowing in wake of controversial banking reforms.

  Source: Business Spectator

• Russian ammonia giant ToAZ sues minority shareholder in Cyprus for disruptive attacks - May 10, 2013

  Russian ammonia giant ToAZ sues minority shareholder in Cyprus for disruptive attacks

  Source: Chemical News

• Iran envoy to Cyprus recalled after extradition to U.S. - May 10, 2013

  WASHINGTON (Reuters) - Iran has recalled its ambassador to Cyprus for consultations after an Iranian national was recently extradited from the island to the United States on suspicion of violating U.N. arms sanctions, Cyprus's foreign minister said on Thursday.Related StoriesUp to 3,000 African peacekeepers killed in Somalia since 2007 - U.N.Colombia demands ELN release hostages before any peace talksAngola sending aid to 300,000 at risk from droughtGuatemala's Rios Montt tells court - I never ordered genocideBrazil's big government seen as good for politics, bad for economy

  Source: Reuters

• Cyprus to increase tax on business - May 08, 2013

  Cyprus has confirmed it will raise the corporate tax rate as part of a package of measures tied to a ?10 billion ($13 billion) bailout package.

  Source: International Tax Review

• Cyprus refuses bailout conditions - May 02, 2013

  The Cypriot Government has turned down the savings tax, part of theconditions attached to the Eurozone rescue packageread more

  Source: Abbey news business

• Cyprus Euro 10 Bn Bailout Panic - May 02, 2013

  The terms of the eurobozone 10 bn bailout has caused panic to savers in Cyprus trying to withdraw their cash before deadline read more

  Source: Abbey news business

• Cyprus deal agreed - May 02, 2013

  Cyprus has found a solution that Eurozone officials are content with that allows bailout funds to be releasedread more

  Source: Abbey news business

• Cyprus approves USD13.10b EU, IMF bailout deal - May 02, 2013

  (MENAFN) The Cypriot parliament approved the USD13.10-billion bailout agreement with the Eurogroup and the International Monetary Fund (IMF), reported Xinhua News. The failure to endorse the deal ...

  Source: Menafn.com

• Cyprus Parliament Approves Bailout Deal - May 02, 2013

  Cyprus’ parliament has narrowly approved conditions set by the Troika for a EUR10bn bailout loan, passing legislation which will see the introduction of a "bail-in" on uninsured bank deposits of more than EUR100,000 in the country’s two largest banks, as well as a property tax increase.

  Source: Tax-News.com

Business outline for Cyprus

Main Industry Sectors

In the past two decades, Cyprus' economy has shifted from agriculture to light manufacturing and services.

The agricultural and mining sectors contribute around 5% to the GDP and employ around 5% of the active population. The main crops are wine grapes, potatoes, cotton and fruits. Mineral resources are limited, they are  mainly copper, pyrites, chrome, asbestos, and gypsum.

The manufacturing industry (mainly industrial food-processing, paper, chemical products, textiles, metal products, and petroleum refining) accounts for 10% of the GDP, but its competitiveness is declining mainly due to high-cost labor.

The tertiary sector contributes to about two-thirds of the GDP and employs 70% of the active population. Tourism and maritime transportation are considered to be the two pillars of the Cypriot economy. Offshore activities are led by foreign-capital companies based in Cyprus, whose commercial activities are executed exclusively outside Cyprus, giving them substantial tax benefits. Cyprus has the sixth largest shipping fleet in the world.

Currently, the sectors of tourism, real estate and financial services are the main industries in Cyprus and they have allowed the country to acquire a rapid economic growth.

Economic Overview

Cyprus has an open free-market economy, which is based on services. Cyprus became a full member of the EU on May 1, 2004, which has been an important milestone in its economic development. For several years, the growth rate of its GDP has been stagnant. The Cypriots are among the most prosperous people in the Mediterranean region with a GDP per capita of around USD 21,000. The unemployment rate remains under 5% and the inflation rate is under control, at around 2%.

The global economic crisis has affected Cyprus, particularly in the tourism sector, with a drop in European tourist in-flow and in the real estate sector, which also depends on foreign sales. A global economic slowdown took place in 2009 and the country entered into recession during the third quarter of the year.  In order to help the banking sector and the Cypriot SMEs, the European Investment Bank (EIB) granted a loan for a total amount of EUR 228 million to the three most important banks of the island. In 2010, the economy of Cyprus became stable and came out from the recession.

Some measures, such as a hiring freeze and salary freeze for public employees, re-organization of social benefits and the hunt for tax evaders will allow the country to recover in 2011and to revive with a modest growth.  Despite this, Cyprus remains highly dependent of the economic condition of its neighbors.

FDI in Figures

The FDI in-flow for 2006 was established at USD 1.4 billion, a continuous progress for the third consecutive year. Cyprus is among the list of primary destinations in terms of attractiveness for foreign direct investment. The country gradually dismantled most investment restrictions during its candidacy for accession to the European Union.  However, investments decreased in 2008 and most of all in 2009, mainly due to the fall in real estate investment, which remains one of the main sectors of the economy. Tourism, wellness activities, medical services, natural resources (oil and gas) development projects, research and technology are the most promising sectors for future investments. The almost complete liberalization of foreign direct investment has allowed the country to become very attractive to foreign investment and will continue to do so.

FDI Government Measures

The Cypriot government has created a positive environment for business. The government's liberal policy has promoted investment development. Some measures constitute the key points of the country's appeal:
- The possibility of 100% foreign shareholding in almost all sectors of the economy;
- One of the lowest corporate tax rates of the European Union;
- An attractive tax environment. Cyprus has signed the double-taxation treaties with more than 40 countries; and
- Particularly competitive corporate establishment and operational.

Country Strong Points

The country's strong points are:
- Its European Union membership and use of the Euro currency;
- A corporate tax rate among the lowest in Europe;
- A strategic geographical location at the crossroads of three continents and in particular giving access to Middle-Eastern markets;
- A prosperous and stable economy;
- a skilled, multilingual and low-cost workforce; and
- High quality infrastructures, especially in the harbor sector.

Country Weak Points

The country's main weaknesses are:
- The division of the island since 1974 and the difficulties in reaching an agremeent between the Turkish and Greek Cypriots. This could have a negative impact on the country's appeal in the long term.
- The limited size of the domestic market should also be taken into account. Indeed, the population is not over 1 million inhabitants.

Foreign Trade Overview

The geographical location of Cyprus (the country being a bridge between West and East), along with its good airline and telecommunication infrastructures, have enabled the country to turn itself into an important regional and international business center.

More than 50% of its trade is done with the EU. Cyprus' three main export partners are France, the United Kingdom and Greece. The main export commodities are electric & electronic equipment, fuels & oil, vehicles and pharmaceutical products. The three main import partners are: Greece, Italy and the United Kingdom. Cyprus mainly imports hydrocarbons, vehicles, machinery, iron and steel.

Cyprus' trade balance is traditionally in deficit, because the country has to import extensively in order to satisfy domestic demand. Cyprus also depends on imports for its energy supplies.  Cyprus' main exports are manufacturing products and within the context of foreign trade with France, pharmaceutical products are in first position regarding exports.

Exports are vital for the country's economy.  As a fact, the Cyprus territory is not too extensive and the international trade market is very important.