The island of Cyprus evokes images of sunny days and the sparkling Mediterranean Sea. Global business investors find the business opportunities as bright as the days are sunny.
By William Bell

Cyprus has several distinctions. It is the third largest island in the Mediterranean, has over 300 sunny days a year, and is a natural magnet for global tourists. For global investors, a major attraction of this modern island is that it is a commercial hub, sitting at the crossroads of Asia, Europe and Africa.

A stable government, updated infrastructure, business-friendly regulatory and tax system, prosperous economy, skilled workforce, and European Union membership make Cyprus shine for global investors and exporters. Though the population is small at approximately 1.2 million people, the country has a large international reach.

Small Domestic Market but Sights Set on Large Goals
Cyprus, like most countries, has had its financial troubles that were initially triggered by the collapse of the financial markets in 2008 that became an economic crisis in 2013. Thanks to a remarkable and aggressive effort on the part of the government, the economy is now growing again and financially stable.

The population may be small, but the country's international economic activity is large. Cyprus has bilateral agreements with 10 countries plus the trade agreements that came with its 2004 membership in the European Union. The one area of difficulty that Cyprus must resolve is the fact two-thirds of the country, home to Greek Cypriots, is at odds with the remaining one-third, consisting of Turkish Cypriots. The U.S. is assisting with negotiations to resolve the division.

The small domestic market has not stopped Cyprus from becoming an international economic force. Foreign Direct Investment (FDI) is growing at a fast pace for two primary reasons. One, the government of Cyprus is encouraging foreign investors to join its efforts to continue expanding its infrastructure, assist with an emerging energy sector, and significantly grow its tourism and technology industries. Cyprus is also an excellent location for exporters to establish a home base for exporting to Africa, Europe and the Middle East.

Everyone is Welcomed
Despite a still recovering economy and as the government continues to pay back the European Union for a 2013 bank bailout, Cyprus expects to experience almost 3 percent GDP growth this year. The tourism industry has played a big role as foreign investors participated in major infrastructure projects that include a luxury marina, casino resort and hotels. Cyprus has set a goal of doubling the tourism industry and attracting €20 billion in new investments by the year 2030. Should the government meet its goals, tourism will account for approximately 30 percent of GDP by the end of the same year.

With most days sunny and pleasant, Cyprus believes the investments can create a tourism base that spends up to 600 percent more per day than it spends now. Luxury hotels, yachts, glittering beaches, a growing medical and wellness tourism sector, and an integrated casino resort due to open in 2021 will all provide opportunities for foreign investors during development and after by meeting a need for supplies and services.

Per the U.S. Embassy, there are many investment opportunities for entrepreneurs and businesses in other industries besides tourism. They include professional services, and energy and related services. The energy sector has become a key sector with the discovery of deep-water natural gas reserves in the Cyprus economic zone. Additional thriving sectors include banking and finance, large developments like a large technology center, banking and financial services, shipping, and information and communications technology. The 10th largest merchant fleet in the world is in Cyprus, benefitting exporters to the EU and other locations.

Help is Readily Available
In addition, business startup financial assistance is available from the Cyprus government's Industrial Development Services of the Ministry of Energy, Commerce, Industry & Tourism. The Cyprus Investment Promotion Agency is a government-funded nonprofit established to promote Cyprus investments and to support investors.

The Cyprus government has a sophisticated network of funding opportunities to encourage foreign investments. One of the interesting aspects of Cyprus is that it has a variety of indirect tax and VAT incentives designed to induce investors to consider Cyprus offerings like a Cyprus Holding Company, aircraft importations, purchases of residential buildings, and more.

Setting up a business requires working through the Department of the Registrar of Companies and Official Receiver. The country has a generous tax system designed to attract investors. There are no capital gains taxes, except in the case of real estate disposal, a dividend participation exemption, and other liberal aspects. There is a low corporate tax rate of 12.5 percent on worldwide income, and all tax regime requirements comply with international, OECD, and EU laws and regulations. Cyprus also has an Intellectual Property rights box regime which offers generous tax deductions for research and development expenses.

There are equally liberal employment taxes to encourage businesses to hire people and to bring needed workers to the country. The official languages are Greek and English, making it easy for Americans to communicate with locals and government officials.

Geographically Beautiful and Beautifully Transparent
Of importance to foreign investors is the transparency the government has put in place to ensure corporations operate legally. One requirement is an annual audit. Another is a requirement to prepare consolidated financial statements.

Cyprus also reformed its investment laws so they are fully compliant with EU requirements. The investment legislation is as generous as all the other incentives. There is no restriction on investment types and no tax on most investment income amounts, to name just two incentives for investment.

Cyprus is geographically stunning, and its people are friendly. If this makes Cyprus sound like a perfect place to live and invest in, then it is easy to understand why this small country has been so successful at building a strong economy despite severe challenges.

Cyprus does have an embassy in Washington, D.C., and there is a Cyprus Chamber of Commerce and Industry. It is easy to obtain information about doing business in Cyprus, and that is exactly what the country has worked hard to achieve.

Cyprus is beautiful, sunny and open for international business.