Attracting– and Celebrating – FDI in Cyprus
COVID-19 meant that the 2020 ceremony at the Presidential Palace had to be cancelled but the next one is due to take place later this year. George Campanellas, CEO of Invest Cyprus, underlines the importance of foreign investment to Cyprus and explains what Invest Cyprus is doing to make the country an even more attractive destination for companies that decide to relocate or set up operations here.
By Antigoni Markitani
How did the pandemic affect Foreign Direct Investment? Did the demands and expectations of foreign investors change during this period?
According to UNCTAD, global Foreign Direct Investment (FDI) collapsed in 2020, plummeting by 42%, while in 2021 UNCTAD forecasts a further decline of 5%, with a projected recovery in 2022. This situation has created intense international competition for the attraction of FDI. The demands and expectations of foreign investors are much higher. Attracting Foreign Direct Investment is critical for Cyprus to achieve economic growth and stability and, despite the pandemic, the results of our efforts in the main pillars of our strategy are positive and very promising for the second half of 2021. The ICT cluster is increasing through the scaling up of operations of existing companies and new arrivals to the market, the promotion of Cyprus as an EU fund jurisdiction is clearly delivering results, while the flow of FDI into projects in the hospitality, healthcare and renewables sectors is evident.
Many investors seek projects in strategic areas of the economy, with prospects of high growth in the medium and long-term. We are also witnessing an increased interest in sustainable investments with ESG criteria. Invest Cyprus works closely with foreign investors to understand their objectives and to make them happen. For example, we have created a Project Bank acting as a bridge to connect investors with projects looking for FDI.
How will Cyprus attract more Foreign Direct Investment? What are the most difficult challenges?
Cyprus is well positioned to cater for the needs of international companies looking for a European location in which to base their global operations. We need to continuously monitor the competition, examine our FDI framework and quickly adopt new incentives so as to remain on the front line and attract more international business and foreign investment. At the same time, we need to invest more financial and human resources in international promotion activities and business development and to seek ways to establish and maintain a more active presence in major financial hubs and target markets.
How has the role of Invest Cyprus evolved over the years? What do you consider its most notable achievements?
As the state entity promoting the country’s business and investment policy abroad, our aim is clear: to establish Cyprus as a world-class destination for international business and investments. Achieving this goal will add value to the economy and guide the country’s transformation into an international business centre.
As part of our advocacy role, Invest Cyprus works closely with the relevant Ministries and other government bodies, proposing reforms and new incentives. New relocation and immigration incentives for non-EU professionals specialising mainly in the ICT sector have already been adopted, while the outcome of the comprehensive sectoral study prepared by EY is being utilized in the drafting of a holistic plan to further support the reshaping of the operating framework for international ICT companies. Throughout this process, members of the Cyprus Tech Association have shared their experiences and market know-how for addressing the challenges faced by the international ICT community.
At the same, Invest Cyprus, has collaborated with the international tourism and hospitality advisory group THR on the preparation of a sectoral study to identify market gaps and investment pain points and shape a comprehensive strategy to make Cyprus a more attractive investment destination for projects in the tourism and hospitality sector.
How does Invest Cyprus support international ICT companies here?
It is now clearer than ever that the establishment of ICT companies in Cyprus can only benefit the island. Tech companies offer multiple advantages to our country, as they contribute horizontally across all sectors by creating new jobs, adding value to the economy and increasing the tax base. Enabling more international companies to move their regional or international headquarters to Cyprus is the spearhead of our organisation’s five-year strategic plan. Invest Cyprus has played an instrumental role in supporting the arrival of several international companies on the island. The recent announcement by the French software development giant Murex to add a physical presence in Cyprus, as well as the decision of Brain Rocket to establish a development unit on the island, both reflect the potential of Cyprus to become a growing tech centre.
What is the importance of the Invest Cyprus International Investment Awards and how do they support your aftercare mandate?
As part of our mandate, apart from promotion and reform advocacy, we act as a single point of contact, offering facilitation and aftercare services. Since 2012, in collaboration with GOLD magazine, we have organised the Invest Cyprus International Investment Awards to express our appreciation to those international investors – individuals and companies – that have chosen Cyprus as their investment destination. We are delighted to announce that this year’s event is scheduled to take place at the Presidential Palace in September.
Our aim is clear: to establish Cyprus as a world-class destination for international
Business and investments