The Cyprus economy is based on the free enterprise system. The private sector is the backbone of economic activity, with the Government’s role being limited to monitoring the economy and the provision of public utilities.
The per capita income of Cyprus, is today one of the highest in the Mediterranean. The services sector has become increasingly important as indicated by its almost 70% contribution to GDP and its share in employment, while the importance of agriculture and manufacturing is declining steadily. Services include tourism, financial and legal services, wholesale and retail trade, hotels and restaurants, financial intermediation and real estate operations.
International trade is of considerable importance to the Cyprus economy due to the lack of raw materials, energy resources and heavy industry on the Island.
Cyprus imports large quantities of durable consumer goods, capital equipment and raw materials mainly from the European Union and oil from the neighboring Middle East countries in order to satisfy its growing domestic market and industrial needs.
The European Union and the neighboring Middle East countries absorb the majority of Cyprus’ exports.
Due to its position and the most up to date facilities offered by its seaports, Cyprus is now an important shipping centre in the region.
The major ports are those of Limassol and Larnaca situated on the south coast of the Island. They are multi-purpose ports, serving both containerised and breakbulk cargo.
The strategic location of the Island, its excellent climate, the well developed infrastructure and the plentiful supply of high quality, well trained labour are some of the advantages Cyprus has to offer. In addition to these, the favourable tax regime makes Cyprus an ideal location for manufacturers, especially those with Middle East/North African export activities.
The official Government policy is welcoming to foreign investment provided that this does not have adverse environmental effects.
Direct Investment from European Union countries
Investors from the European Union wishing to acquire shares in a company registered in Cyprus are allowed 100% equity participation in any enterprise, without a minimum level of capital investment.
Investors who are citisens of EU member states may acquire up to 100% of the share capital of Cypriot companies listed on the Cyprus Stock Exchange. In the banking sector, the maximum foreign equity participation is 50%.
Direct Investment from non-European Union countries
Direct investments by non-EU residents are allowed after obtaining the relevant permission pursuant to laws, such as immigration Laws for taking up employment in Cyprus or the acquisition of immovable property Law.