The Cypriot Republic is a renowned international financial business center. Cyprus offers a great investment environment for companies. It has created attractive opportunities for foreign investments thanks to its EU harmonized legislation, a very good tax regime but also excellent services. Cyprus offers a combination of low corporate tax system with a large network of double tax treaties that will facilitate tax optimization and maximize tax returns on investors.
To attract investment and upraise the economy of the country the Cypriot government liberalized foreign investment for EU and non-EU members established a Foreign Investors Service Centre to offer support to potential investors when it comes to dealing with authorities.
There is no limit on EU member states investors other than those for specific sectors like banking or financial services where a “fit and proper” test is applied.
Cypriot foreign direct investment means the involvement of more than 10 % of the share capital on a long-term interest in a company situated in a different country than the direct investor’s country. There are sectors where licenses may be requested for specific activities.
When it comes to the portfolio investment in Cyprus the whole 100 % share capital of a company can be acquired at the Cyprus Stock Exchange. As mentioned above the only exceptions are the banking and the media sectors.
Foreign direct investment is protected through legal mechanisms. When it comes to protection Cyprus is submitted to its own laws, EU laws and also international laws. It encompasses multilateral investment treaties, bilateral investment treaties, investment contracts, domestic investment legislation.
There are also restricted investments for EU and non-EU members in sectors like real estate, education, public utilities where every application is taken into account separately.
All Cypriot investment treaties protect parties directly investing in Cyprus by ensuring protection from expropriation without compensation, most favored nation provisions, national treatment provisions, fair and equitable treatment, full protection and security, and free transfer of investments and returns.
Cyprus has signed the most important Multilateral Treaties (MIT) regarding foreign investment: The Energy Charter Treaty (ECT), The Multilateral Investment Guarantee Agency (MIGA) and The International Center for Settlement of Investment Disputes (ICSID).
Cyprus has also signed a great number of Bilateral Investment Treaties (BIT) and developed a wide network of Double Tax Treaties (DTT) with over 45 states, ensuring that the same income is not levied in more than a country.
Our lawyers in Cyprus can provide you with all the information about the Cypriot laws on foreign direct investment.
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