With Cyprus finally back on its feet and on the road to recovery following a major banking crisis that crippled the country’s economy, the eastern mediterranean island is brimming with possibility once again, characterised by a nascent funds industry and new opportunities posed by possible reunification.
The old saying that even the severest crisis brings opportunity has become the new reality in Cyprus, a country that has weathered major upheavals and is now in the process of reinventing itself. That statement is just short of being literally true, given the geopolitical game changers in play. After four decades of stagnation between the Greek and Turkish Cypriot communities, real progress has been made towards reuniting the divided island. It is even estimated that reunification of the island could double per capita income within 20 years, and that Cyprus could become a major investment centre in the region. At the same time, discovery of what appears to be a very significant deposit of natural gas in its territorial waters suggests that unprecedented prosperity might well accompany political convergence.
Meanwhile, the island is making great progress in its two service-sector standbys, tourism and financial services. Investment firms are now being closely monitored and supervised by the Government, as are the listed companies on the Nicosia stock exchange.
The modernisation of Cyprus’ regulatory framework for investment funds is also strengthening the island’s profile as an emerging European funds and asset management domicile. Showing potential to develop into a multi-billion-euro industry, Cyprus’ efforts have already begun to bear fruit, having seen increasing interest and appetite from investors and fund service providers looking for EU-regulated jurisdictions. Offering both Undertakings of Collective Investment in Transferable Securities (UCITS) and Alternative Investment Funds (AIFs), and with the Cyprus Securities and Exchange Commission (CySEC) taking steps to increase the island’s appeal as a fund domicile, Cyprus is confident that it will make significant progress in attracting fund managers in the foreseeable future, with a long term vision of developing a world-class funds sector.
In addition to its proximity to major markets, Cyprus also scores high on connectivity. The country is linked through its two international airports with major cities in Europe and key destinations in North Africa and the Middle East, and also has long-established links with Eastern European countries. A good many Cypriot professionals have in-depth knowledge of these markets, and often act as business facilitators.
Corporate giants such as Weatherford, Buena Vista Hospitality Group, NCR, Bernard Shultz Ship Management, Kardex, Wargaming and AMDOCS are just some of the companies that have based their operational or corporate management functions on the island. Cyprus is also one of the most influential global hubs for ship ownership and nautical management services.
The bottom line is that in Cyprus “the fundamental things apply.” The former British colony still has its strategic location in the eastern Mediterranean, an EU-compliant tax code and legal environment, an educated, English-speaking workforce, excellent telecommunications and transportation infrastructure, and that is to say nothing of its living standards.
A long-established free trade zone near Larnaca routes customs-free goods to Europe, Africa and the Middle East, while plans are being drawn up for a modern Science and Technology Park.
Did someone mention the lowest crime rate in the EU, a superb Mediterranean climate, competitive personal tax rates, as well as excellent educational and healthcare systems? Cyprus is an easy sell for expatriate executives, particularly those with families. •