Foreign Investment

Attracting foreign capital has always been among the primary objectives of the country's development policy, as it contributes to, among other things, the introduction of modern technology and increased export prospects.

Cyprus offers a number of advantages and incentives to the foreign visitor. 

The constitution guarantees the right of private property, and does not discriminate between Cypriots and non-Cypriots. Nationalization has never been part of government policy, nor is it contemplated in the future.

Administrative procedures are simple and, in most cases, foreign participation of up to 100 percent is permitted. There are no complicated criteria other than the rejection of applications for projects which may create environmental problems or may appear detrimental to the country's economy or national security.

Applications for investments in the wholesale and retail sector are considered by the Central Bank of Cyprus alone, if the foreign participation is up to 49 percent. For foreign participation above 49 percent or when the investment exceeds CYP 750.000 (approx. USD 1.5 million), applications are considered jointly by the Central Bank and the Ministry of Commerce, Industry and Tourism.

In the case of industrial projects, the Central Bank handles the applications if the foreign participation does not exceed 49 percent. As with wholesale and retail trade, if a higher percentage is required or if the investment exceeds CYP 750.000, applications are considered jointly by the Central Bank and the Ministry of Commerce, Industry and Tourism.

As far as the services sector is concerned, up to 100 percent foreign ownership is permitted and the Central Bank has the sole responsibility for approving applications. Over 70 types of services have been divided into two categories so that, depending on the service involved, the minimum capital of each company to be formed will be either CYP 50.000 or CYP 100.000

Investors in the tourist sector are subject to the tourist policy applicable at the time. The current policy, which was introduced in 1995, provides for up to 49 percent maximum foreign participation in hotels, tourist villages, villas etc. However, up to 100 percent may be allowed for projects which enrich the tourist product such as golf courses, theme parks, etc. In the case of portfolio investment important liberalisations came into effect in June 1996.

Specifically for:

- Public companies outside the banking sector: normally up to 49 percent of the issued capital may be owned by non-residents. The maximum allowable individual shareholding by a non-resident individual or corporation is restricted to 5 percent of a company's issued capita

- Public companies in the banking sector: normally up to 15 percent of the issued capital may be owned by non-residents. Of this, 6 percent may be owned by foreign non-residents and the other 9 percent by Cypriot non-residents. The maximum allowable individual shareholding by a non-resident individual or corporation is restricted to 0.5 percent of a company's issued capital.

All the percentages mentioned above may be exceeded in worthy cases.

For a small number of business activities e.g. establishment of new banks, insurance and financial services companies, publication of newspapers and magazines and the establishment of new airline companies, applications will be considered on a case-by-case basis with the extent of allowable foreign participation to be decided on the merits of each individual case.

The list of saturated activities, where no foreign participation is allowed, includes, land development, tertiary education and public utility services such as electricity production, postal services, etc.

For further information please apply to the:

CENTRAL BANK OF CYPRUS
P.O. Box 25529, CY 1395 Lefkosia (Nicosia)-Cyprus
Tel: 357-22-379800, Telexes: 2424, 2228
SWIFT address CBCYCY2N, Fax: 357-22-378153, 22378164
E-MAIL: mailto:CBCINFO@centralbank.gov.cy
Website: http://www.centralbank.gov.cy/