Cyprus – The Centre for International Business
Cyprus may be considered as the South-eastern outpost of the European Union, situated in the Eastern Mediterranean at the crossroads of three continents – Europe, Asia and Africa – and close to the busy trade routes linking Western Europe with the Arab World and the Far East. Cyprus has established itself since the ancient times as a European business centre, focusing on commercial relations with the broader region. The geographical position of the country and the entrepreneurial spirit of Cypriots contributed significantly to this end. Throughout the centuries, the people of Cyprus exhibited co-operative attitudes towards overseas people and managed to establish their country as a hub of trade and sea communications. Cyprus reached high levels of growth in the recent decades as a result of its use by both local and overseas businesspeople as a base for activity or as a springboard for expansion in the broader East Mediterranean.
The island prides itself today as having developed into a major, modern and flexible business and services centre in the Mediterranean and South-east Europe and this is largely due to the co-operation between the public and the private sector.
This role of Cyprus has now been reaffirmed to the highest possible degree following its accession to the European Union in the enlargement of 2004. EU membership has consolidated the position of Cyprus as the bridge linking Europe with the Middle East and North Africa and beyond.
At the same time, Cyprus aims to constitute the main axis in the triangle European Union, East European countries and the Middle East and is relentlessly working towards the materialisation of this aim. This is facilitated by the excellent relations that Cyprus has with key countries in each area such as Russia in Eastern Europe and the Arab countries and Israel in the Middle East. Overseas businesspeople are urged to consider all these very carefully and are invited to grasp the opportunities that are presented for their enterprises either by using Cyprus as a base for their business activities or as a gateway for expanding their relevant activities further.
Throughout the years, the economic structure of Cyprus has changed from an economy based on agriculture to an economy based on services and the opportunities provided to EU but also other partners are now broadened. Its services sector has recorded spectacular growth opening up new fields of activity to local and overseas businesspeople. Today the sector of services accounts for 77% of the Gross Domestic Product of the country, with tourism, shipping, finance, insurance, business and professional services being the main contributors.
With the decision of the Government of Cyprus to join the European and Monetary Union and adopt the Euro on 1 January 2008, the country entered the Euro-zone and espoused the monetary policy dictated by the European Central Bank. The irrevocable fixed exchange rate of CY£ 0,585274 per € 1,00 was set..
The admission of Cyprus into the Euro-zone and consequently the substitution of the Cyprus pound with the Euro, opens up additional possibilities for businesspeople and creates an extremely favourable environment for business activity, particularly with the rest of the countries that belong to the Euro-zone and account for most of the economic activity in Europe.
The small size of the local market makes penetration in foreign markets imperative and of vital importance to the economy of Cyprus.
Exports represent more than 8% of the country’s GDP while re-exports are a significant share of total exports, approaching 65%. Cyprus’ main export categories are potatoes, dairy products, citrus fruit, wines, pharmaceutical products, cigarettes, cement, clothing, paper and plastic products, furniture and light machinery. As far as imports are concerned, total imports represent about 37% of the country’s GDP. Intermediate goods, raw materials, consumer and capital goods, transport equipment and fuel constitute the country’s main import categories.
The EU constitutes Cyprus’ main trading partner accounting for more than 60% of the country’s trade. Furthermore, more than 75% of tourists visiting the island originate from EU member-states. The stability of the economy has attracted higher investments in recent years boosting the growth potential of the country further.