Investment Climate Statements for 2016 - Cyprus

Executive Summary

Republic of Cyprus

The business and investment climate in Cyprus is steadily improving following the financial crisis of 2013. After almost four years of recession, the Cypriot economy registered a positive growth rate of 1.6 percent in 2015 and is expected to grow to 2 percent in 2016. The gradual economic recovery has helped improve domestic economic sentiment, but other challenges remain. The banking sector continues to struggle with exceptionally high levels of impaired loans – among the highest in Europe; new lending is low as households and banks deleverage high levels of debt; and the unemployment rate, while decreasing, remains high at 15 percent. At the same time, access to market financing has improved, as reflected in the successful government debt issuance on international capital markets in 2015. Liquidity and solvency in the banking system have improved and the pace of debt restructuring has accelerated. Cyprus graduated from a three-year economic adjustment program at the end of March. The program was tied to policy reforms, including restructuring the banking sector, reforming the civil service, and reducing government spending, and privatizing state-owned enterprises (SOEs).

Strategically located at the crossroads of Europe, Asia, and Africa, Cyprus offers significant promise and opportunity to U.S. investors. Sectors that provide the greatest opportunity for investment are in energy, shipping, services, and technology. Smaller, niche investment opportunities exist in food processing and franchises. Investors may also be interested in new opportunities in renewable energy and tourism infrastructure. Cyprus offers a low tax business environment, skilled and English-speaking professionals, and excellent infrastructure for doing business in the Eastern Mediterranean. U.S. citizens traveling with a U.S. passport may enter Cyprus without a visa for up to 90 days.

Area Administered by Turkish Cypriots

Since 1974, the southern two-thirds of Cyprus has been under the control of the government of the Republic of Cyprus (ROC), while the remaining area in the north has been administered by Turkish Cypriots (TCs). In 1983, the TC-administered area declared itself the "Turkish Republic of Northern Cyprus" (“TRNC"), but this has not been recognized by any country other than Turkey. While the unresolved conflict has implications for all potential investment on the island, companies considering investments in the TC-administered area should be particularly aware of complications that arise from the lack of international recognition and the absence of a comprehensive political settlement in Cyprus. TC businesses are interested in working with American companies in the fields of agriculture, renewable energy, and franchises. The accession of the ROC to the European Union (EU) in 2004 also had important consequences for the northern part of Cyprus. Although the EU suspended implementation of the acquis communautaire (AC) in the area administered by TCs, EU-funded technical programs are being used to bring TC goods and services into compliance with EU standards and norms.

The single greatest catalyst for island-wide Cypriot economic growth and prosperity lies in the efforts of both communities to achieve a political settlement. According to some analysts, prospects for a settlement hold the promise of significantly increasing the island’s GDP.

Table 1



Index or Rank

Website Address

TI Corruption Perceptions index


32 of 168

World Bank’s Doing Business Report “Ease of Doing Business”


47 of 189

Global Innovation Index


34 of 141

U.S. FDI in partner country ($M USD, stock positions)



World Bank GNI per capita


USD 26,370

1. Openness To, and Restrictions Upon, Foreign Investment

Attitude Toward Foreign Direct Investment

Republic of Cyprus

The ROC has a favorable attitude towards foreign direct investment (FDI), putting to good advantage its strategic geographic location, low corporate and personal tax rates, 59 double taxation avoidance treaties (including with the United States), and transportation infrastructure, and an educated and mostly English-speaking labor force. The 2013 financial crisis brought to the surface several underlying structural and institutional obstacles to investment, ranging from delays in obtaining building permits and court judgments, to difficulties in starting a business, and limited access to financing. In the aftermath of the crisis, ROC authorities have addressed these challenges in an effort to make Cyprus attractive to foreign investors. Key sectors that hold potential for future investment include tourism-related infrastructure, casinos, ports, banks, real estate, and hydrocarbons/energy-related support services. Foreign investors may establish a business in Cyprus with the same benefits as local investors in most sectors with a few well-defined and transparent limitations for non-EU investors in certain sectors (see limits on Foreign Control, below).

For more information:

One-Stop-Shop & Point of Single Contact
Ministry of Commerce, Industry and Tourism (MECIT)
13-15 Andreas Araouzos
1421 Nicosia, Cyprus
Tel. +357 22 409318 or 321
Fax: +357 22 409432

Area Administered by Turkish Cypriots

TCs welcome FDI and are eager to attract investments, particularly those that will lead to the transfer of advanced technology and technical skills. Priority is also given to investments in export-oriented industries. The “Turkish Cypriot Investment Development Agency” (“YAGA”) is a one-stop shop for all investors.

Other Investment Policy Reviews

Republic of Cyprus

Cyprus has been a member of World Trade Organization (WTO) since July 30, 1995. As of May 1, 2004 it is a member State of the EU. Cyprus has not undergone investment policy reviews by the Organization for Economic Cooperation and Development (OECD) or United Nations Committee on Trade and Development (UNCTAD). The WTO published a Trade Policy Review on the EU28, including Cyprus, in July 2015. The text is available at:

Area Administered by Turkish Cypriots

TC “officials” have not conducted policy reviews on investment.

Laws/Regulations on Foreign Direct Investment

Republic of Cyprus

Below are links to laws affecting incoming foreign investment:

Area Administered by Turkish Cypriots

Business Registration

Republic of Cyprus

Domestic and foreign investors may establish any of the following legal entities or businesses in the ROC:

  • Companies (private or public);
  • General or limited partnerships;
  • Business/trade name;
  • European Company (SE); and
  • Branches of overseas companies.

The registration process takes approximately two working days and involves completing an application for approval/change of name, followed by the steps outlined in the following link:

The Ministry of Energy, Commerce, Industry, and Tourism’s (MECIT’s) One-Stop-Shop offers assistance with the logistics of registering a business in Cyprus to all investors, regardless of origin and size.

In addition to registering a business, foreign investors, like domestic business owners, are required to obtain all permits that may be necessary under Cypriot law. At a minimum, they must obtain residence and employment permits, register for social insurance, and register with the tax authorities for both income tax and Valued Added Tax (VAT). In order to use any building or premises for business, including commerce, industry, or any other income-earning activity, one also needs to obtain a municipal license. Additionally, town planning or building permits are required for building new offices, or converting existing buildings. There are also many sector-specific procedures. Information on all of the above procedures is available online at:

The World Bank’s 2015 Doing Business report ( ranked Cyprus 47 out of 189 countries for ease of doing business, although starting a new business in Cyprus was ranked less favorably at 64 out of 189.

Cyprus follows the EU definition on micro, small and medium-sized enterprises (MSMEs), as follows:

Company category

Staff headcount



Balance sheet total


< 250

≤ EUR 50 m

≤ EUR 43 m


< 50

≤ EUR 10 m

≤ EUR 10 m


< 10

≤ EUR 2 m

≤ EUR 2 m

Foreign-owned MSMEs are free to take advantage of programs in Cyprus designed to help such companies, including the following:

Foreign investors can take advantage of the services and expertise of the Cyprus Investment Promotion Agency (CIPA), a non-profit agency aimed at helping investors stand-up businesses in Cyprus. CIPA is mainly geared towards larger investors, investing in the country more than approximately EUR 500,000, although this not a fixed minimum requirement. Even smaller investors should not hesitate to contact CIPA for assistance:

9A Makarios III Ave
Severis Bldg., 4th Flr.
1065 Nicosia
Tel. +357-22-441133
Fax: +357-22-441134

Area Administered by Turkish Cypriots

The “Registrar of Companies’” website is available only in Turkish: . An online registration process for domestic or foreign companies does not exist and registration needs to be completed in person.

“YAGA” was established by TC authorities with the aim of it becoming a one-stop-shop for both local and foreign investors who are interested in investing in the area administered by TCs. Their website provides explanations and guides in English on how to register a company in the area administrated by Turkish Cypriots.

As of March 2015, the "Registrar of Companies Office" statistics indicated there were 18,798 registered companies, of which 18,070 were TC majority-owned limited liability companies; 354 foreign companies; and 374 offshore companies.

The area administered by TCs defines MSMEs as entities having less than 250 employees. There are several grant programs financed through Turkish aid and EU aid targeting MSMEs.

The TC Chamber of Commerce (KTTO) publishes an annual Competitiveness Report on the TC economy, based on the World Economic Forum’s methodology. KTTO’s 2015-2016 report ranked northern Cyprus 121st among 144 economies, dropping seven places from its 114th ranking in 2015.

For more information and requirements on establishing a company, obtaining licenses, and doing business visit:

“Turkish Cypriot Development Agency” (“YAGA”)
Tel: +90 392 - 22 82317
Turkish Cypriot Chamber of Commerce (KTTO)
Tel: +90 392 - 228 37 60 / 228 36 45
Fax: +90 392 - 227 07 82

Industrial Promotion

Republic of Cyprus

In the aftermath of the financial crisis, the ROC is pursuing an economic strategy known as the “Growth Action Plan” to reform the economy and address investment climate challenges, focusing on reducing bureaucracy and increasing transparency in public administration. The ambitious plan seeks to reform the regulatory framework to boost investment, particularly in key sectors such as tourism, shipping, green energy, and generic pharmaceuticals. Details of this plan are available at:$file/GROWTH%20ACTION%20PLAN%20(REVISED%2010%202%202015).pdf

Additional information on key sectors is available from:

Area Administered by Turkish Cypriots

According to “YAGA”, the primary sectors in the area administrated by TCs that may be attractive to foreign investors include tourism (specialized, non-seasonal or off-seasonal), the construction of university dormitories, specialized niche investment, high value-added agriculture and food processing, software development, and telecommunications.

Limits on Foreign Control and Right to Private Ownership and Establishment

Republic of Cyprus

The following restrictions apply to investing in the ROC:

Non-EU entities (persons and companies) may purchase only two real estate properties for private use (two holiday homes or a holiday home and a shop or office). This restriction does not apply if the investment property is purchased through a domestic company or as a corporation elsewhere in the EU.

  • Non-EU entities also cannot invest in the production, transfer, and provision of electrical energy. Additionally, the Council of Ministers may refuse granting a license for investment in hydrocarbons prospecting, exploration, and exploitation to a third-country national or company if that third country does not provide similar treatment to Cyprus or other EU member states.
  • Individual non-EU investors may not own more than five percent of a local television or radio station, and total non-EU ownership of a local TV or radio station is restricted to a maximum of 25 percent.
  • The right to register as a building contractor in Cyprus is reserved for citizens of EU member states. Non-EU entities are not allowed to own a majority stake in a local construction company. Non-EU physical persons or legal entities may bid on specific construction projects but only after obtaining a special license by the Council of Ministers.
  • Non-EU entities cannot invest in private tertiary education institutions.
  • Provision of healthcare services on the island is also subject to certain restrictions, applying equally to all non-residents.
  • Finally, the Central Bank of Cyprus’ prior approval is necessary before any individual person or entity, whether Cypriot or foreign, can acquire over 9.99 percent of a bank incorporated in Cyprus.

Area Administered by Turkish Cypriots

According to the “Registrar of Companies Office,” foreign ownership of construction companies is restricted to 49 percent. Currently the travel agency sector is closed to foreign investment. Registered foreign investors may buy property for investment purposes. Foreign natural persons also have the option of forming private liability companies, and foreign investors can form mutual partnership with one or more foreign or domestic investors.

Privatization Program

Republic of Cyprus

Under the provisions of its adjustment program with international creditors, the ROC agreed to undertake a privatization program aimed at raising EUR 1.4 billion (USD 1.5 billion) by 2018.

An independent Privatizations Unit, established March 2014, oversees the privatizations program. Below are recent developments concerning specific organizations included in the privatizations plan:

  • Electricity Authority of Cyprus (EAC): In December 2015, under threat of strikes, the government reversed earlier plans to privatize the EAC. The government intends to push ahead with unbundling the EAC’s generation and transmission operations into separate legal entities by the end of 2017.
  • Cyprus Telecommunications Authority (CyTA): In February 2016, the House of Representatives initiated discussion of draft legislation for CyTA's corporatization, a “prior action” required for disbursement of the last tranche of bailout funding, although most political parties currently oppose the bill.
  • Limassol Port commercial activities: This is the only privatization that has taken place. In February 2016, the government selected three pre-qualified bidders to run the port’s three main operations (container terminal, marine services, and a multi-purpose terminal). The House of Representatives approved the transaction March 24, 2016. The winners include two consortiums headed by prominent port operating firms Dubai Ports (DP) World Ltd. and Eurogate International GmbH. The Cyprus Ports Authority will remain the regulator of Cypriot ports, but management of Limassol port’s commercial activities will be transferred to the private sector, a public-private partnership model already implemented for Larnaca port.
  • Other Privatizations: There are plans for other, smaller privatizations, including selling parts of the national lottery, the logo of the now-defunct Cyprus Airways, and 30 pieces of government land, some in prime locations across the island.

For more information, please see text on privatization goals contained in the 7th review of the Cyprus program by international creditors:

Area Administered by Turkish Cypriots

In the TC-administered area, the below-listed institutions are known as "public economic enterprises" (POEs), "semi-public enterprises" and “public institutions,” which aim to provide common utilities and essential services.

Some of these organizations include:

  • Turkish Cypriot Electricity Board (KIBTEK)
  • RTK - State Television and Radio Broadcasting Corporation
  • Cyprus Turkish News Agency
  • Turkish Cypriot Milk Industry
  • Cypruvex Ltd. - Citrus Facility
  • EMU - Eastern Mediterranean Foundation Board
  • Agricultural Products Corporation
  • Turkish Cypriot Tobacco Products Corporation
  • Turkish Cypriot Alcoholic Products LTD
  • Coastal Safety and Salvage Services LTD
  • TC Development Bank

The airport at Ercan and K-Pet Petroleum Corporation have been converted into public-private partnerships, the concept of privatization continues to be controversial in the TC community.

In March 2015, TC authorities signed a public-private partnership agreement with Turkey regarding the management and operation of the water obtained from an underwater pipeline funded by Turkey.

Within the area administrated by TCs, there has also been discussion about privatizing the electricity authority “KIBTEK” and the TC telecommunications operations.

Screening of Foreign Direct Investment

Republic of Cyprus

The ROC does not pre-screen foreign investment, and has a welcoming attitude towards investors, subject to certain transparent limitations in certain sectors such as property (see Limits on Foreign Control).

Area Administered by Turkish Cypriots

There are no pre-screening requirements.

Competition Law

Republic of Cyprus

The oversight agency for competition is the Commission for the Protection of Competition:

Area Administered by Turkish Cypriots

The relevant “agency” for competition is the “Competition Board”. More information can be found here:

2. Conversion and Transfer Policies

Foreign Exchange

Republic of Cyprus

As a member of the Eurozone, the ROC uses the euro as its currency. The Eurozone has no restrictions on the transfer or conversion of its currency, and the exchange rate is freely determined in the foreign exchange market. There is no difficulty in obtaining foreign exchange. Since the 2008 financial crisis, the European Commission, has pursued several initiatives aimed at creating a safer and more sound financial sector, known as the Banking Union. These initiatives, which include stronger prudential requirements for banks, improved depositor protection and rules for managing failing banks, form a single rulebook for all financial actors in the 28 Member States of the EU. The single rule book is the foundation of the Banking Union. For more info, please refer to:

Area Administered by Turkish Cypriots

The northern part of Cyprus has a separate financial system. As a result, the financial crisis in the ROC government-controlled area has had little impact on capital transfer policies in the area administered by TCs. The financial system in the area administered by TCs is linked closely with that of Turkey. The Turkish Lira (TL) is the main currency in use, although the Euro, U.S. dollar, and British Pound are commonly accepted. The vast majority of business borrowing is derived from domestic and Turkish sources.

Devaluations of the TL against foreign exchange rates (or the opposite), has an effect on the economy of the area administered by Turkish Cypriots. Wages across sectors are generally paid in TL, and almost all real estate, electronic white goods, vehicles, and other products are sold in foreign currencies. Banks in the Turkish Cypriot administered areas provide low interest rate loans to customers who seek foreign exchange loans in Euros or British Pounds, but interest rates are higher in TL. Foreign investors are authorized to repatriate all proceeds from their investments and business.

Remittance Policies

Republic of Cyprus

There are no restrictions or delays on investment remittances or the inflow or outflow of profits.

Cyprus is a member of the Select Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), a FATF-style regional body. Its most recent mutual evaluation report can be found at:

The U.S. Department of State’s Bureau of International Narcotics and Law Enforcement lists Cyprus among the countries of Primary Concern from a money laundering perspective in the 2015 International Narcotics Control Strategy Report (INCSR). The full report can be accessed at:

Area Administered by Turkish Cypriots

Remittance policies do not differ from general conversion and transfer policies.

3. Expropriation and Compensation

Republic of Cyprus

Private property may, in exceptional instances, be expropriated for public purposes, in a non-discriminatory manner, and in accordance with established principles of international law. The expropriation process entitles investors to proper compensation, whether through mutual agreement, arbitration, or the local courts. Foreign investors may claim damages resulting from an act of illegal expropriation by means other than litigation. Investors and lenders to expropriated entities receive compensation in the currency in which the investment was made. In the event of any delay in the payment of compensation, the Government is also liable for the payment of interest based on the prevailing six-month LIBOR for the relevant currency.

Area Administered by Turkish Cypriots

Private property may be expropriated for public purposes. The expropriation process entitles investors to proper compensation. Foreign investors may claim damages resulting from an act of illegal expropriation by means other than litigation.

In the cases involving private owners, these are notified, the property is then inspected, and if an agreement is reached regarding the amount, then the owner is compensated. In cases where the owner declines the compensation package, the case is turned over to local “courts" to make a final decision.

4. Dispute Settlement

Legal System, Specialized Courts, Judicial Independence, Judgments of Foreign Courts

Republic of Cyprus

Cyprus is a common law jurisdiction and its legal system is based on English Common Law, in both substantive and procedural matters. Cyprus inherited many elements of its legal system from the United Kingdom, including the presumption of innocence, the right to due process, the right to appeal, and the right to a fair public trial. Courts in Cyprus possess the necessary powers to enforce compliance by parties who fail to obey judgments and orders made against them. There is a high level of public confidence in the Cypriot legal system.

International disputes are resolved through litigation in Cypriot courts or by alternative dispute resolution methods such as mediation or arbitration. Businesses often complain of court gridlock and judgments on cases generally taking years to be issued, and even more for claims involving property foreclosure. In the aftermath of the financial crisis, the number of non-performing loans has grown to around 45 percent of the national portfolio, prompting authorities to introduce new foreclosure and insolvency laws to deal with this problem more efficiently.

Area Administered by Turkish Cypriots

Foreign investors can make use of all the rights guaranteed to TCs. Alternative dispute resolution mechanisms are not available in the TC-administered area. The resolution of commercial or investment disputes through the "judicial system" takes can take several years.


Republic of Cyprus

In April 2015, the ROC parliament approved a new package of insolvency laws to overhaul the existing system and help resolve very high levels of non-performing loans. Bankruptcy procedures can be initiated by a creditor through compulsory liquidation or by the debtor through voluntary liquidation. The court can impose debt rescheduling, in cases where aggregate liabilities do not exceed EUR 350,000 (USD 385,000) and individuals with minimal assets and income may apply to the court via the Insolvency Service for a debt relief order of up to EUR 25,000 (USD 27,500). Discharge from bankruptcy is automatic after three years, provided all debtor assets are sold and the proceeds distributed to creditors. Fraudulent alienation of assets prior to bankruptcy and non-disclosure of assets draws criminal sanctions under the new legislation. There are concerns the new insolvency framework might be open to abuse by creditors and that it might tend to cause even longer delays for the already congested Cypriot courts. For these reasons, Cypriot authorities are monitoring very closely progress in implementing the new insolvency framework, in order to ensure it supports the objective of helping rehabilitate the real economy.

Area Administered by Turkish Cypriots

In 2013, the TCs passed a debt restructuring “law” aimed at providing incentives to restructure debts.

Investment Disputes

Republic of Cyprus

The bail-in of depositors (converting deposits to equity) in March 2013 and other related actions sparked a flurry of legal disputes against the ROC, most of which are ongoing. Additionally, ROC authorities are currently finalizing an official investigation into the reasons behind the collapse of the economy, which may have legal implications for high-profile economic actors domestically and abroad.

International Arbitration

Republic of Cyprus

Cyprus honors the enforcement of foreign court judgments and foreign arbitration awards. Domestic legislation on binding international arbitration is modeled after internationally-accepted regulations, such as the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration, which Cyprus adopted in 1985. Cyprus’ bilateral investment treaties with several countries also include dispute settlement provisions (see Section 14, Bilateral Investment Agreements).

In 2015, the ROC' Financial Ombudsman began offering mediation and arbitration services between banks and their customers. Under the Arbitration Law of Cyprus, if the parties are unable to reach a settlement an arbitrator can be appointed. Arbitration rulings are fully enforceable and the court may enforce an arbitral award in the same way as a judgment. Mediation is not fully enforceable.

ICSID Convention and New York Convention

Republic of Cyprus

Cyprus is a member state to the International Centre for the Settlement of Investment Disputes (ICSID Convention). Cyprus is also a signatory to the convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention)

Duration of Dispute Resolution – Local Courts

Republic of Cyprus

Cyprus’ judicial system is seen as independent but businesses often complain judgments generally take too long – between three and five years for most cases. Enforcing court judgments on property foreclosure used to be particularly time-consuming, and it remains to be seen how the new foreclosures legislation will address this problem in practice.

Area Administered by Turkish Cypriots

Investors can make use of all the rights guaranteed to TCs. Alternative dispute resolution mechanisms are not available in the TC-administered area. There is no fixed duration for dispute settlement related cases. The resolution of commercial or investment disputes through the "judicial system" can take several years.

5. Performance Requirements and Investment Incentives


Republic of Cyprus

The ROC has not notified the WTO of any measures that are not in compliance with its Trade-related Investment Measures (TRIMs) obligations.

Investment Incentives

Republic of Cyprus

In the aftermath of the 2013 financial crisis, the ROC stepped up efforts to promote Cyprus as an investment destination. Cyprus offers investors one of the lowest corporate tax rates in the EU at 12.5 percent. Other tax advantages include:

  • One of the EU’s lowest top statutory personal income tax rates at 30 percent;
  • An extensive double tax treaties network with 59 countries, enabling lower withholding tax rates on dividend or other income received from the subsidiaries abroad;
  • No withholding tax on dividend income received from subsidiary companies abroad under certain conditions;
  • No withholding tax on dividends received from EU subsidiaries; and
  • Low Tonnage Tax for shipping.

Additionally, Cyprus offers the option of fast-tracking investments (soon to be enhanced through dedicated legislation) and obtaining Cypriot citizenship through investment. Recently, Cyprus harmonized and enhanced all its regulations regarding investment funds, becoming a more attractive jurisdiction for managing and home-basing investment funds.

Area Administrated by Turkish Cypriots

There are incentives in various forms for tourism and industrial-related investments, including

100 to 200 percent investment allowance on the initial fixed capital investment expenditure for certain regions and sectors; exemption from “corporate tax” and “income tax” until the above-mentioned allowance percentages are met; exemption from “custom duties” when importing machinery and equipment the projects; and exemption from construction license fees.

Research and Development

Republic of Cyprus

The Embassy is not aware of any restrictions against U.S. and other foreign firms participating in government-financed and/or subsidized research and development programs.

Performance Requirements

Republic of Cyprus

There are no requirements for local sourcing, ownership, or employment. Hiring Cypriot and EU staff is quite easy, particularly with current high rates of unemployment. However, securing work permits for non-EU staff can be difficult, particularly in sectors where there is abundant local labor readily available. In order to overcome this problem, a foreign investor must explain to the satisfaction of ROC authorities why the non-EU staff in question is essential to the business. As with other such matters, CIPA can offer invaluable assistance to investors overcoming hiring problems (see Section 1, Business Registration).

Area Administered by Turkish Cypriots

There are no performance requirements on investments.

Data Storage

Cyprus does not follow a “forced localization” policy, and does not require foreign IT providers to turn over source code or provide access to surveillance for encryption. The EU Data Protection Directive (95/46/EC) has been transposed into domestic legislation since 2003, designating the Commissioner for Personal Data Protection ( as the competent authority for handling data storage issues.

6. Protection of Property Rights

Real Property

Republic of Cyprus

EU nationals and companies domiciled in any EU country are not subject to any restrictions when buying property in the ROC. By contrast, Cypriot law imposes significant restrictions on the foreign ownership of real estate by non-EU residents. Non-EU persons and entities may purchase a maximum of two real estate properties for private use (defined as a holiday home built on land of up to 4,014 square meters; plus a second home or office of up to 250 square meters, or shop of up to 100 square meters). Exceptions can be made for projects requiring larger plots of land but are difficult to obtain and rarely granted. This restriction applies to non-EU citizens or non-EU companies. A legal entity is deemed to be controlled by non-EU citizens if it meets any of the conditions listed below:

  • 50 percent or more of its board members are non-EU citizens;
  • 50 percent or more of its share capital belongs to non-EU citizens;
  • Control (50 percent or more) belongs to non-EU citizens;
    • Either the company's Memorandum or Articles of Association provides authority to a non-EU citizen securing the company’s activities are conducted based on his/her will during the real estate acquisition period. In the case that the authority is provided to two or more persons, a legal entity is considered to be controlled by non-EU citizens if 50 percent or more of the people granted such authority are non-EU citizens.

For additional information and application forms for the acquisition of property by non-EU residents, please refer to the Ministry of Interior website:

Legal requirements and procedures for acquiring and disposing of property in Cyprus are complex, but professional help from real estate agents and developers can ease the burden of complying with government requirements. The ROC Department of Lands and Surveys keeps excellent records and follows internationally-accepted procedures. Non-residents are allowed to sell their property and transfer abroad the amount originally paid, plus interest or profits, without restriction.

Purchasing property in the area administered by Turkish Cypriots is a contentious issue in Cyprus, as per the following warning posted on the Ministry of Foreign Affairs website:

The UK government website also offers useful information on buying property in Cyprus:

Additionally, there are restrictions on investing in TC property located in the ROC. The Turkish Cypriot Property Management Service (TCPMS), established in 1991, administers properties of TC who are not ordinarily residents of the government-controlled area. This service acts as the temporary custodian for such properties until a comprehensive political settlement is reached. The TCPMS is mandated to administer properties under its custodianship "in the manner most beneficial for the owner." Ownership of TC properties cannot change (except for inheritance purposes) except in exceptional cases when this is deemed beneficial for the owner or necessary for the public interest.

Area Administered by Turkish Cypriots

Special Note: Investors are advised to consider the risks associated with investing in immovable property in the area administered by TCs. Potential investors are strongly advised to obtain independent legal advice prior to purchasing or leasing property there.

For property in the TC-administered areas, only pre-1974 title deeds are uncontested. In response to the European Court of Human Rights’ (ECHR) 2005 ruling in the Xenides Arestis case that Turkey's "subordinate local authorities" in Cyprus had not provided an adequate local remedy for property disputes, Turkish Cypriot authorities established an Immovable Property Commission (IPC) to handle property claimed by Greek Cypriots. In a March 2010 ruling, the ECHR recognized the IPC as a domestic remedy. As of March 4, 2016, the IPC had received 6,276 applications, of which 731 have been concluded through friendly settlements, and 21 through formal hearings. The ROC does not consider the IPC to be a legitimate body. For more info on IPC please visit

On January 19, 2010, the UK Court of Appeal enforced an earlier court decision taken in the Republic of Cyprus in support of a Greek Cypriot person's trespassing claim (the Orams case - and, effectively voiding the transfers of GC property in the TC-administered areas. This landmark decision also establishes precedent in cases where foreign investors purchasing disputed properties outside of the government-controlled area can be found liable for damages.

Intellectual Property Rights

Republic of Cyprus

On the whole, IPR protection in the ROC is strong and getting stronger over time. Cyprus has not appeared in the Special 301 report in recent years, and was last mentioned in 2006 due to a citation by the International Intellectual Property Alliance (IIPA).

In 2012, the ROC improved its IPR legislation further by passing Law 207(I) (2012), placing the burden of proof on the defendant in cases of intellectual property right infringement. This law also allows the police to assess samples of pirated articles in lieu of the whole shipment and introduces the alternative for out-of-court settlement in some cases. Other important IPR laws include Law 103 (2007) on unfair commercial practices and Law 133(I) (2006) strengthening earlier legislation targeting copyright infringement. In 2015, the Department of Customs confiscated 56,302 counterfeit items, in 427 separate cases, while the Police confiscated another 5,164 pirated CDs and DVDs, along with equipment used for illegal duplication.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at:

Resources for Rights Holders

Embassy point of contact:

George F. Demetriou
Economic Specialist
U.S. Embassy, Nicosia
Tel: +357-22-393361
Local attorneys listed with Embassy:
AmCham Cyprus:

Area Administered by Turkish Cypriots

Intellectual property rights are not adequately protected in the area administered by TC. The "laws" in this area are inadequate, antiquated, and lack enforcement. Infringing goods imported from Turkey are a significant concern. The 2015 Out-of-Cycle Review of Notorious Markets by the United States Representative (at: notes that online “cyberlocker” site is reportedly based in the British Virgin Islands and hosted in Cyprus (although it is not clear whether this is in the ROC or the area administered by TCs). For information, please contact the same sources listed above.

7. Transparency of the Regulatory System

Republic of Cyprus

U.S. companies competing for ROC government tenders have noted concerns about opaque rules and possible bias by technical committees responsible for preparing specifications and reviewing tender submissions. Overall, however, procedures and regulations are transparent and applied in practice by the government without bias towards foreign investors. The ROC actively promotes good governance and transparency as part of its Growth Action Plan:$file/GROWTH%20ACTION%20PLAN%20(REVISED%2010%202%202015).pdf

In line with the above plan and EU requirements, the ROC launched in 2016 the National Open Data Portal ( to increase transparency in government services. Government agencies are now required to post on this portal publicly-available information, data, records, on the entire spectrum of their activities, for use, including commercial use, by the public. The number of data sets available through this portal has been growing rapidly in recent months.

Several agencies and NGO’s share competence on fostering competition and transparency, including the ROC Commission for the Protection of Competition (, the Competition and Consumer Protection Service (under the MECIT), and the Cyprus Securities and Exchange Commission (, the Cyprus Consumers Association (

Most laws and regulations are published only in Greek and obtaining official English translations can be difficult. When passing new legislation or regulations, Cypriot authorities follow the EU acquis communautaire. A formal public notice and comment procedure is not required in Cyprus, except for specific types of laws. In general the ROC will seek stakeholder feedback directly. Draft legislation must be published in the Official Gazette before it is debated in the House to allow stakeholders an opportunity to submit comments. The ROC House of Representatives also typically invites specific stakeholders to offer their feedback when debating bills. Draft regulations, on the other hand, do not have to be published in the Official Gazette prior to being approved.

In an effort to contribute to global tax transparency, the ROC has adopted the Standard of Automatic Exchange of Information developed by the Organization for Economic Co-Operation and Development (OECD) known as Common Reporting Standard (CRS). Starting January 1, 2016, the ROC Tax Department requires all financial institutions to confirm their clients’ jurisdiction(s) of Tax Residence and Respective Tax Identification Number, if applicable. Additionally, the ROC has signed the U.S. Foreign Account Tax Compliance Act (FATCA), allowing Cypriot tax authorities to share information with U.S. counterparts.

Area Administered by Turkish Cypriots

The level of transparency for “lawmaking” and adoption of “regulations” in the area administered by TCs does not meet U.S. or EU standards.”

8. Efficient Capital Markets and Portfolio Investment

Republic of Cyprus

The ROC Stock Exchange (CSE), launched in 1996, is one of the EU’s smallest stock exchanges, with a capitalization of just under EUR 2.5 billion (USD 2.7 billion) as of March 2016. The CSE and the Athens Stock Exchange (ASE) have operated from a joint trading platform since 2006, allowing capital to move more freely from one exchange to the other, even though both exchanges retain their autonomy and independence. The joint platform has increased capital available to Cypriot firms and improved the CSE’s liquidity, although its small size remains a constraint. The private sector has access to a variety of credit instruments, which has been enhanced through the operation of private venture capital firms. Credit is allocated on market terms to foreign and local investors alike. Foreign investors may acquire up to 100 percent of the share capital of Cypriot companies listed on the CSE with the notable exception of companies in the banking sector.

Area Administered by Turkish Cypriots

There is no stock exchange in the Turkish Cypriot-administered area.

Money and Banking System, Hostile Takeovers

Republic of Cyprus

The ROC banking sector is still in a process of healing and restructuring, following the March 2013 haircut of uninsured deposits. Depositor confidence is gradually returning, aided by the mild economic recovery and the lifting of all capital controls, but the banks’ asset quality remains a source of concern. Non-performing Loans (NPLs) are currently at 45 percent but the introduction of new legislation on foreclosures and other measures are gradually helping to address this problem. After raising additional capital in 2014, Cypriot banks are now adequately funded.

In order to open a new bank account, a foreigner must establish residency status and provide information on employment status.

Area Administered by Turkish Cypriots

The “Central Bank” oversees and regulates local, foreign, and private banks. Out of 22 banks, there are 14 TC-owned banks, seven international branch banks, and one development bank. Banks are required to follow “know- your-customer” (KYC) and AML “laws,” which are regulated by the “Ministry of Economy,” and supervised by the “Central Bank.” Due to non-recognition issues, TC banks encounter practical difficulties as a result of not qualifying for an international SWIFT number (SWIFT code is a standard format of Bank Identifier Codes (BIC). Therefore, TC and foreigners making international transfers depend on Turkish banks for assistance as local banks access international markets via Turkey. The total number of deposits, which includes bank, “public,” individual and other was approximately USD 4.83 billion as of December 2015. More information is available at the “Central Bank” website:

9. Competition from State-Owned Enterprises

Republic of Cyprus

The ROC maintains exclusive or majority-owned stakes in more than 40 SOEs, and is making slow progress towards privatizing some of them (see sections on Privatization and OECD Guidelines on Corporate Governance of SOEs). These SOEs operate in a competitive environment (domestically and internationally) and are increasingly responsive to market conditions. The state-owned EAC monopoly on electricity generation and distribution ended in 2014, although competition still remains difficult given the small market size. As an EU member state, Cyprus is a party to the WTO Government Procurement Agreement (GPA).

Area Administered by Turkish Cypriots

In the area administrated by TCs, there are several "state-owned enterprises" and "semi-state-owned enterprises," which common utilities and essential services.

OECD Guidelines on Corporate Governance of SOEs

Republic of Cyprus

OECD Guidelines on Corporate Governance are not mandatory for ROC SOEs, although some of the larger SOEs have started adopting elements of corporate governance best practices in their operating procedures. Each of the 40-plus SOEs is subject to dedicated legislation. Most are governed by a board of directors, typically appointed by the government at the start of its term, and for the duration of its term in office. SOE board chairs are typically technocrats, affiliated with the ruling party. Representatives of labor unions and minority shareholders contribute to decision making. Although they enjoy a fair amount of independence, they report to the relevant minister. SOEs are required by law to publish annual reports and submit their books to the Auditor General.

Sovereign Wealth Funds

Republic of Cyprus

The ROC has not yet established a sovereign wealth fund but is in the process of establishing one. The Fiscal Responsibility and Budget Systems Law (Law 20(I) of 2014), reforms Public Financial Management in line with best international practices. This law (available in Greek from the Official Gazette at: introduces greater fiscal discipline and sets out the legal framework for the National Investment Fund (NIF), the Cypriot equivalent of a sovereign wealth fund will handle hydrocarbons revenue.

Additionally, the Auditor General, an independent officer, prepares a lengthy Annual Report every year auditing the central government, public organizations, SOEs, local authorities and other public bodies and funds. The lengthy report catalogues instances of corruption, mismanagement, and other shortcomings in the broad public sector, including State-Owned Enterprises (SOEs) for the preceding year. The 2014 report, for example, like the ones before it, catalogs hundreds of instances of corruption, inefficiency, political interventions, accountability, illegality, tax evasion, and lack of planning. Auditor General Reports are sometimes used to follow up and tackle identified problems. These reports are submitted to the President of the Republic, the House of Representatives, and then made public on the Auditor General’s website (the reports used to be translated into English up until 2008 but budget-cutting measures have resulted in them being available only in Greek since then):

Area Administered by Turkish Cypriots

There is no established sovereign wealth fund.

10. Responsible Business Conduct

Republic of Cyprus

In recent years, responsible business conduct (RBC) awareness among both producers and consumers is growing in Cyprus. Leading foreign and domestic enterprises tend to follow generally-accepted RBC principles, and firms pursuing these practices tend to be viewed more favorably by the public. The Cyprus Stock Exchange is among the entities imposing a responsible code of conduct among listed companies: Most professional associations also promote ethical business conduct among their members, including the Cyprus Bar Association, and the Institute of Certified Public Accountants of Cyprus.

The ROC does not specifically adhere to OECD Guidelines for Multinational Enterprises; however, it is expected multinationals follow generally-accepted RBC principles. ROC authorities are currently in contact with the Extractive Industries Transparency Initiative (EITI –, making initial soundings towards possible membership.

Area Administered by Turkish Cypriots

RBC awareness has grown among both producers and consumers. Firms pursing these practices tend to be viewed favorably by the public.

11. Political Violence

Republic of Cyprus

There have been no incidents of politically-motivated damage to foreign projects and or installations since 1974. U.S. companies have not been the target of violence. There were numerous relatively peaceful protests against the ROC government following the financial crisis of March 2013 and in response to the forced conversion of deposits into equity. Since then, protests against additional austerity measures have been fairly calm. Several of these demonstrations resulted in minor scuffles with police but most passed without incident.

Area Administered by Turkish Cypriots

There have been no incidents of politically-motivated damage to foreign projects and or installations since 1974. U.S. companies have not been the target of violence

12. Corruption

Republic of Cyprus

High-profile scandals on the island in the aftermath of the financial crisis have called into question Cyprus’ anti-corruption reputation. A January 2016 survey found 65 percent of local CEOs listed bribery and corruption as the top threat to their companies’ ability to conduct business. In response to increasing public pressure, the government’s New Growth Strategy aims to reduce excessive and complex bureaucracy.

Corruption, both in the public and private sectors, constitutes a criminal offense. Under Cyprus' Constitution, the Auditor General controls all government disbursements and receipts and has the right to inspect all accounts on behalf of the Republic. Private sector concerns focus on the inertia in the system, as reflected in the Auditor General’s annual reports, listing hundreds of alleged incidents of corruption and mismanagement in public administration that usually remain unpunished or unrectified.

Cyprus cooperates closely with EU and other international authorities to fight corruption and provide mutual assistance in criminal investigations. Cyprus ratified the European Convention on Mutual Assistance in Criminal Matters. Cyprus also uses the foreign Tribunal Evidence Law, Chapter 12, to execute requests from other countries for obtaining evidence in Cyprus in criminal matters. Additionally, Cyprus is an active participant in the Council of Europe's Multidisciplinary Group on Corruption. Cyprus signed and ratified the Criminal Law Convention on Corruption and has joined the Group of States against Corruption in the Council of Europe.

Area Administered by Turkish Cypriots

Corruption, both in the public and private sectors, constitutes a criminal offense. The "Audit Office" controls all disbursements and receipts and has the right to inspect all accounts. In its annual report, this office identifies specific instances of mismanagement or deviation from proper procedures and anecdotal evidence suggests corruption and patronage continue to be a factor in the economy.

UN Anticorruption Convention, OECD Convention on Combatting Bribery

Cyprus is a member of the UN Anticorruption Convention ( but it is not a member of the OECD Convention on Combatting Bribery (

Resources to Report Corruption

Republic of Cyprus

Government agencies responsible for combating corruption:

Financial Crime Unit
Cyprus Police Headquarters
1478 Nicosia
Tel. +357-22-808080

Unit for Combating Money Laundering (MOKAS)
7 Pericleous Str.
2020 Strovolos
Tel. +357-22-446004

Auditor General of the Republic
6 Deligiorgi Str.
1406 Nicosia
Tel. +357-22-401300

Anti-corruption NGO:

Transparency International (TI) Cyprus
27 Michalacopoulou Street
City Business Centre
Office FF08
1075 Nicosia
T. +357 22 025772
F. +357 22 025773TI Cyprus Hot Line for Reporting Corruption: 70070011

13. Bilateral Investment Agreements

Republic of Cyprus

Cyprus is a party to 28 bilateral investment treaties (BITs) listed here:

The ROC does not have a full-fledged BIT with the United States, but it does have a more general bilateral agreement relating to Investments Guarantees, which came into force in 1963 through the exchange of notes. This agreement is listed as item 16 in the ROC’s list of bilateral treaties between the ROC and the United States:$file/UNITED%20STATES.pdf?openelement.

For additional reference on bilateral agreements in effect, please refer to the Department of State’s Treaties in Force:

Bilateral Taxation Treaties

Republic of Cyprus

The United States and Cyprus entered into a Tax Convention in 1985, which remains in force today as per:

Under this treaty, residents or citizens of the United States are taxed at a reduced rate, or are exempt from foreign taxes, on certain items of income they receive from sources within Cyprus. This income tax treaty contains what is known as a saving clause, this prevents a citizen or resident of the United States from using the provisions of a tax treaty in order to avoid taxation of U.S. source income.

Additionally, Cyprus has signed bilateral double tax treaties with 59 countries:

14. OPIC and Other Investment Insurance Programs

The Overseas Private Investment Corporation (OPIC) is not active in Cyprus, but OPIC finance and insurance programs are open and may be useful when bidding on build, operate, and transfer (BOT) contracts in the government-controlled areas:

Likewise, U.S. exporters should avail themselves of Export-Import Bank financing whenever possible. Please see:

Cyprus is a member of the Multilateral Investment Guarantee Agency (MIGA) and of the multilateral Convention on the Settlement of Investment Disputes between States. A full list of ROC multilateral agreements currently in effect is available from the ROC Office of the Law Commissioner website:

15. Labor

Republic of Cyprus

The unemployment rate in the ROC fell to 15 percent in 2015, still well above the EU28 average of 9.4 percent. Cyprus has a high per capita rate of college graduates, including many U.S. university graduates and offers an abundant supply of English-speaking staff. Cyprus’ total labor force is estimated at 358,178 persons. The breakdown is: services, 79.5 percent; industry and construction, 17.7 percent; and agriculture, 2.8 percent. More women are joining the labor force and their percentage participation has risen from 33.4 percent in 1980 to 49 percent today. For information about hiring local employees, contact the Ministry of Labor and Social Insurance:

Cypriot labor differentiates between layoffs and firing on redundancy grounds. In order to be eligible for redundancy pay, an employee must have worked in the same position for more than two years, and must be laid off either due to: (a) budget constraints leading the employer to abolish the position, or (b) inability on the part of the employee to keep up with technological advances. Employees made redundant by their employer are entitled to a redundancy payment depending on their length of service. Redundancy payments are equivalent to between two and four weeks of pay per year of service depending on length of service for up to 25 years, with a maximum of 75 weeks of pay or EUR 55,000 (USD 60,500) per employee, whichever is greater. Redundancy payments are made out of a government fund, supported with employer and employee contributions. In addition to redundancy pay, a handful of employers, including banks and SOEs, offer severance pay to their employees, although this is not common in the private sector.

Worsening labor conditions and rising unemployment over the past three years have encouraged some employers to resort increasingly to hiring temporary workers or employ staff on personal contract to avoid hiring unionized labor, often offering less than the going rate under collective agreements. Some employers hire employees for a year in order to benefit from a wage subsidy of EUR 500 (USD 550) per month by the Human Development Authority and then dismiss them as soon as the subsidy expires.

International companies are not required by law to hire union labor. Investors should be aware Cyprus tends to have strong unions is several sectors health care sectors. As of March 2016, the percentage of the labor force belonging to unions was unofficially estimated at approximately 55 percent, compared to the EU average of approximately 35 percent. The unions have been vocal opponents of the Troika’s reforms of the civil service, privatizations, and general austerity measures.

As an EU country, Cyprus also has robust labor standards, safeguarding the freedom of association and the right to organize and bargain collectively. The Department of Labor Inspection and other bodies effectively guard against forced labor, child labor, employment discrimination, and secure acceptable working conditions with respect to minimum wage, occupational safety and health, and hours of work. There are several social safety net programs, including unemployment insurance.

For additional information on Cypriot labor legislation, please refer to the International Labor Organization (ILO) website:

Cyprus imposes a minimum wage for certain professions as follows (as of March 2016):

  • Clerks/secretaries, sales assistants, paramedical, live-in maids/domestic helpers, school assistants/child-caregivers: EUR 870 (USD 957) per month, rising to EUR 924 (USD 1,016) after six months' employment.
  • Security guards: EUR 4.90 (USD 5.39) per hour, rising to EUR 5.20 (USD 5.72) after six months' employment.
  • Cleaning personnel: EUR 4.55 (USD 5.00) per hour, rising to EUR 4.84 (USD 5.32) after six months' employment. Non-EU, live-in domestic servants have a separate minimum wage, set at EUR 460 (USD 506) per month, plus their room and board.

For all other professions, there is no minimum wage and wages are set by the employer and employee. Collective bargaining agreements between trade unions and employers cover most sectors of the economy. Wages set in these agreements are typically significantly higher than the legislated minimum wage.

Under the single market of the EU, EU citizens benefit from the right to free movement of workers. New incentives added to the investment for visa/residency scheme can be found here: Employers are required to seek work visas for third-country nationals from the Civil Registry and Migration Department. The following directive provides specific guidance: The ROC caps the number of third country nationals a company may employ. Some companies have noted seeking visas for their third country national staff can be lengthy and cumbersome.

Area Administered by Turkish Cypriots

Reliable labor statistics are often difficult to obtain. The "State Planning Office" ("SPO") estimated the total labor force in 2015 was 115,168. The labor force in the area administered by TCs has a high per capita rate of college graduates, including many from U.S. and European universities and offers an abundant supply of white-collar workers. As of December 2015, estimated unemployment was approximately 8.2 percent. As of the most recent statistics available in 2015, women accounted for roughly 30 percent of the labor force. Around 10 percent of private sector workers and more than 65 percent of "semi-public" and "public sector" workers belong to labor unions. Workers are allowed to form and become members of unions. As of September 2015, the minimum wage was TL 1,730 per month (USD 620).

Foreign persons are required to obtain work permits through their employer. Foreign entities may import their key personnel from abroad and are also permitted to hire trainees and part-time workers. A full-time work week is 40 hours for “public sector” employees.

16. Foreign Trade Zones/Free Ports/Trade Facilitation

Republic of Cyprus

The lead government agency handling areas subject to a special customs regime is the Department of Customs and Excise. Specific rules for the two main types of such areas, namely Customs Warehouses and Free Zones, are listed below and are fully harmonized with equivalent EU norms:

There are two types of Free Zones:

  • Control Type I Free Zone, in which controls are principally based on the existence of a fence; and
  • Control Type II Free Zone, in which controls are principally based on the formalities carried out in accordance with the requirements of the customs warehousing procedure.

Cyprus has two Control Type II Free Zones (FZs) located in the main seaports of Limassol and Larnaca, which are used for transit trade. These areas are treated as being outside normal EU customs territory. Consequently, non-EU goods placed in FZs are not subject to import duties, VAT, or excise tax. FZs are governed under the provisions of relevant EU and ROC legislation. The Department of Customs has jurisdiction over both normal zones and FZs and can impose restrictions or prohibitions on certain activities, depending on the nature of the goods. Additionally, the MECIT has management oversight over the Larnaca FZ.

A Customs Warehouse can be set up anywhere in the ROC, provided the right criteria are met and with the approval of the Department of Customs. For more information, interested parties may contact:

Department of Customs and Excise
Michali Karaoli Str.
1096 Nicosia
Tel. +357-22-601754 or 55
Fax: +357-22-302018

When larger projects are involved, potential investors interested in establishing their own customs warehouse or seeking to engage existing customs warehouses may also contact the One Stop Shop ( for guidance on identifying suitable locations.

Additional information on the Limassol and Larnaca FZs can be obtained from:

Cyprus Ports Authority
P.O.Box 22007
1516 Nicosia
23 Kritis Street
1061 Nicosia
Tel. +357-22-817200, X-0
Fax: +357-22-762050

Area Administered by Turkish Cypriots

Famagusta has a "free port and zone," which is regulated by the Free-Ports and Free Zones “Law.”

Operations and activities permitted there include:

  • Engaging in all kinds of industry, manufacturing, and production;
  • Storage and export of goods imported to the "Free Port and Zone";
  • Assembly and repair of goods imported to the "Free Port and Zone";
  • Building, repair and assembly of ships; and
  • Banking and insurance services.

Information about incentives provided to businesses established there can be accessed at:

17. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy


Host Country Statistical source*

USG or international statistical source

USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other

Economic Data






Host Country Gross Domestic Product (GDP) ($B USD)





Foreign Direct Investment

Host Country Statistical source*

USG or international statistical source

USG or international Source of data:
BEA; IMF; Eurostat; UNCTAD, Other

U.S. FDI in partner country ($M USD, stock positions)





Host country’s FDI in the United States ($M USD, stock positions)





Total inbound stock of FDI as % host GDP





(*) Source: Central Bank of Cyprus

Table 3: Sources and Destination of FDI

Republic of Cyprus

Despite its small size, the ROC attracts considerable investment flows, particularly businesses whose real operations are elsewhere, known as "brass plate" companies. Following is a link to the United Nations Conference on Trade and Development (UNCTAD) "2015 World Investment Report":

The U.S. Bureau of Economic Analysis (BEA) does not provide data on bilateral investment with Cyprus (it is folded under “other” in the following link:

Eurostat reports the total flow of FDI into Cyprus from all countries was -5.1 percent of GDP in 2014, although it does not provide a breakdown by country. ( ). GDP in 2014 was EUR 17.4 billion (USD 23.1 billion).

In 2014, according to the Central Bank of Cyprus, the net inflow of FDI (including “brass plate” companies) reached EUR 232 million (USD 309 million), while the net outflow from Cyprus reached EUR 954 million (USD 1,269 million). Economists estimate over 60 percent of the net inflow in 2014 came from the Russian Federation. In 2014, the stock of FDI in Cyprus reached EUR 123 billion (USD 164 billion), while the stock of Cypriot investment abroad reached EUR 115 billion (USD 153 billion). [Note: In line with revised IMF reporting standards (BPM 6), the Central Bank of Cyprus includes “brass-plate” company activities as of 2013, whereas the previous standard (BPM 5) did not fully capture this activity.]

Cyprus' liberal investment climate and potential offshore energy reserves have made it an attractive destination for U.S. investors. In 2014, the stock of U.S. FDI on the island reached USD 4.7 billion compared to USD 4.1 billion in 2012 (no figures exist for 2013, due to Central Bank of Cyprus confidentiality rules). The net inflow of U.S. investment into Cyprus was USD 249 million in 2014, compared to USD 110 million in 2012 (again, no figures available for 2013). In 2014, a consortium led by a U.S. investor bought USD 532 million worth of Cyprus’ largest bank, marking the largest investment in the island in recent years. Other projects involving U.S. investment in recent years have focused on services, such as finance and insurance (including re-insurance); management consulting; real estate; professional, scientific and technology/IT consulting; and wholesale trade. Over the next few years, Cyprus is poised to attract additional investment in the fields of offshore energy exploration and infrastructure, tourism infrastructure, and the gaming industry. For more info on Cyprus’ FDI position, please refer to following links:

Area Administered by Turkish Cypriots

No detailed statistics on investment in the area administered by TCs are available. However, most foreign direct investment in the TC-administered area since 1974 has come from Turkey. The sectors that have attracted the most FDI are tourism and real estate.

Table 4: Sources of Portfolio Investment

Portfolio Investment Assets

Top Five Partners (Millions, US Dollars), 2014


Equity Securities

Total Debt Securities

All Countries



All Countries



All Countries



Russian Fed.



Russian Fed.






























Russian Fed.












Note: The IMF’s Coordinated Portfolio Investment Survey (CPIS) site ( does not provide any information on Cyprus, so the above information is sourced from the Central Bank of Cyprus. Additional information on portfolio investment in Cyprus is available from the Central Bank’s website:

18. Contact For More Information

George F. Demetriou
Economic Specialist
U.S. Embassy
Metochiou & Ploutarchou Streets
2407 Engomi
Nicosia, Cyprus
Tel: +357-22-393361
Fax: +357-22-780944

Additional Web Resources

Republic of Cyprus

American Embassy in Nicosia:

Republic of Cyprus ROC Government Portal:

Ministry of Foreign Affairs:

Point of Single Contact (Ministry of Energy, Commerce, Industry and Tourism):

Cyprus Investment Promotion Agency:

Ministry of Interior:

Ministry of Finance:

Central Bank of Cyprus:

Department of Merchant Shipping:

Cyprus Bar Association:

Green Line Regulation:

Commission for the Protection of Competition:

The following ROC website provides additional information on the risks of investing in the Turkish Cypriot-administered areas:

Area Administered by Turkish Cypriots

"TRNC State Planning Organization":

Turkish Cypriot Chamber of Commerce:

“North Cyprus Investment Development Agency:”