In the mid seventies Cyprus introduced tax legislation with appropriate incentives aimed at attracting international business companies to set up in Cyprus.
The success of Cyprus was phenomenal. It became one of the most successful financial centres in Europe. It was particularly attractive to invest in Russia, the CIS and Central and Eastern Europe. This success was founded on an attractive tax system and the wide network of favourable tax treaties.
The entry of Cyprus in the EU is enhancing the already significant influence the country has as an international financial centre.
It is well known that Cyprus is one of the most successful, highly reputable international financial centers. Its importance increased dramatically with the collapse of the communist economic system in Central and Eastern Europe and Russia.
The conversion of the Central and Eastern Europe and Russia into free economies attracted significant foreign investment in these countries.
Cyprus traditionally had good political and economic relations with all these countries. Above all it had an attractive tax system and double tax treaties with all these countries. As a result a significant portion of the investment into Central and Eastern Europe and Russia is channelled through Cyprus.