Invest Cyprus: In Constant Motion
Invest Cyprus in Constant Motion
Since its establishment in 2007, the Government’s national investment authority – Invest Cyprus – has been promoting the country as an ideal business and investment destination, with the goal of attracting and facilitating more Foreign Direct Investment. Here, the CEO of Invest Cyprus, Marios Tannousis, speaks about the organisation’s current strategy and tells GOLD how he views the prospect of investment in new sectors of the economy.
By Artemis Constantinidou
Photo by TASPHO
How does Invest Cyprus assist potential investors or international companies wishing to set up in Cyprus?
Setting up a new company, expanding regional operations or relocating is often a daunting prospect. It can be hard to know where to start but Invest Cyprus is able to ease the concerns of foreign investors. Invest Cyprus offers holistic and comprehensive assistance to potential investors and international companies. More specifically, it not only promotes Cyprus abroad but works with foreign investors, holds subsequent meetings with them, so that they can have a clear roadmap of their investment plans in Cyprus, facilitates all the necessary procedures for the implementation of their investment, while also providing support with any problems and difficulties that might arise in the process, and advises on relocation and operational matters. Ιn other words, Invest Cyprus is active, from the expression of interest to the completion of an investment and even later, by remaining in contact with investors and providing solutions to any challenges. We deliver value and impact to international project owners and investors, multinational organisations and private enterprises from different countries and economic sectors, by providing them with full support as they establish or expand their operations in or through Cyprus to other high-growth markets.
What is the organisation’s current strategy for boosting foreign direct investment (FDI)?
Our strategy focuses on three priority pillars: First, attracting highly specialised companies and talent in priority industries such as technology and tech-related companies, including research and innovation. Second, greenfield investments in renewable energy, digital infrastructure, healthcare, education and tourism. And third, the regulated financial services sector, with a main focus on financial services, asset management, fintech and investment funds. These pillars are aligned with the Government’s long-term economic strategy (Vision 2035) which aims to transform Cyprus into a model country to live, work and do business in. At Invest Cyprus, we are proud that Cyprus has maintained its position as one of the ‘leading overachievers’ in the 2023 Greenfield FDI Performance Index, ranking 4th in Emerging Europe and 11th globally, as announced recently by fDi Intelligence, the leading global foreign direct investment publication, providing an up-to-date review of global investment activity. Internationally, FDI is a very competitive market and, in Cyprus, we should be intensifying our efforts to attract new businesses and investments that will create additional jobs and add value to the economy. In this effort, adequate financial and human resources are vital, in view of the intense international competition.
What are some of the main activities that Invest Cyprus has engaged in recently?
Our flagship event, of course, is the annual International Investment Awards ceremony, which took place in July under the aegis of the President of the Republic, honouring and rewarding foreign investors that have contributed to the economy. Another important event is the Foreign Investors Round Table with the Government, which provides a platform to further expedite and facilitate foreign investment matters. Invest Cyprus has also been actively involved in a plethora of initiatives. Earlier this year, we participated in the Delphi Forum and the Cyprus Tech Summit, while we held targeted Round Tables with Investors in Jordan, Egypt, Lebanon, Luxembourg, Finland and the UK. We worked on and supported the MoU between Saudi Arabia’s Ministry of Investments and our own Ministry of Finance. We also worked on and supported the MoU for investments between Jordan and Cyprus. We participated in the Economist events in London and New York, while successfully hosting the AGM of the EuroMed Investment Network ANIMA in Cyprus, where it was announced that EuroMed iHouse will be established in Cyprus. Last month, we took part in nine major events in Cyprus and abroad that aimed at promoting Cyprus and specific economic sectors, such as the Cyprus Fintech Summit, the Sigma Balkans/CIS Summit, the WN Cyprus conference, the Ireland Roundtable, the World Trade Center Conference, the IDEEA Hospitality Investment Forum, France Digitale, Reflect Cyprus and iFX Expo International. At all these events, we highlighted the advantages of investing in Cyprus and we worked hard to attract participants’ interest in choosing Cyprus for their business activities. We also presented the advantages of investing in Cyprus to members of the Cypriot Diaspora.
October and the rest of the year will be equally busy, with Invest Cyprus organising targeted Roundtables in Israel and Saudi Arabia, participating in the 8th UNCTAD World Investment Forum by WAIPA, the International Investment Funds Summit and the International Investment Funds Association event in Cyprus, among others.
As you can see, Invest Cyprus is in constant motion as it strives to achieve its challenging mission in the very competitive world of international investment.
Based on your experience, which benefits offered by Cyprus appear to be the most attractive to international companies and investors?
Our experience has shown that foreign investors and their consultants study the benefits package of a destination country as a whole before taking any decision. They compare, they assess the benefits and drawbacks of a destination country based on economic stability, regulations, tax and other financial criteria, and the ease of doing business; they evaluate the local economy’s potential and then decide, based on all these factors. As far as Cyprus is concerned, our competitive advantages are our strategic geographic location, our membership of the EU and the eurozone, the efficient tax & legal system, our modern infrastructure, the high level of professional services, stability, security and predictability in a democratic environment, complemented by an attractive incentives package.
We believe that Cyprus offers a generous package, which makes the island an attractive investment destination for foreign investors. When we speak to investors and new businesses that have settled in Cyprus – and we do this every day – we are always interested in finding out which factors have influenced them and how Cyprus has lived up to their expectations. People tell us that, in addition to the pro-business and investment environment and the related incentives, they also appreciate the high-quality lifestyle that Cyprus offers, as well as our year-round sunshine and the warm hospitality that makes it an attractive place for families to live, work and do business in.
What are the main challenges facing international companies in Cyprus?
International companies that operate in Cyprus face a number of challenges, which are often related to their operations and the adaptability of their relocated employees. Based on the feedback we received from foreign companies at our recent Round Table of the Government with Investors, some are concerned about the high cost of certain services in Cyprus, such as electricity, and delays in obtaining permits from some regulatory authorities. Some employees face difficulties in finding English-language schools for their children, while others are concerned about the enactment of the expected new Fund Administration Law and the Partnership Law.
At Invest Cyprus, we do our best to provide solutions to these challenges and support foreign investors. I would say that the challenges facing foreign companies in Cyprus are, in most cases, manageable.
How do you assess current government initiatives for third country nationals? Are there any other policies that you believe should be implemented make the country’s investment landscape more attractive?
There has already been a significant and positive change: Cyprus has introduced an effective strategy for attracting foreign companies and skilled talent to Cyprus. The strategy mainly focuses on tech or high-tech, shipping, pharmaceutical, innovation and research & development companies. This has been very successful. Through coordinated actions with the private sector, we have managed as a country to create a new technology cluster. Beyond this, the focus is on investments in renewable energy, digital infrastructure, healthcare, education, tourism and the regulated financial services sector, with a priority focus on asset management, fintech and investment funds. In terms of markets, we focus on Europe, Israel, the UK, the USA, the Middle East and the GCC countries as well as Asia.
We believe that the Government’s initiatives are steps in the right direction. Cyprus has excellent political and financial relations with third countries and, through bilateral state agreements, our economic prospects are widening, opening new paths for development. Cyprus is a free market which constantly seeks productive relations with all countries. It is a fact that there is still room for improvement in strengthening relations even further, and in achieving new agreements (e.g. double taxation avoidance) and we are here to detect such needs and work on them. We also work as Team Cyprus with other government departments, such as the Business Facilitation Unit of the Ministry of Energy, Commerce & Industry.
To approach foreign businesses effectively, cooperation between the public and private sectors is essential. By joining forces, we become more effective in our overall effort. Improving our country’s competitiveness, reputation and brand is vitally important and we are constantly monitoring global competition, reviewing our FDI framework and adopting effective incentives. The implementation of relevant reforms is equally important, including those in the Cyprus Recovery and Resilience Plan. We are working closely with all government departments that deal with investors – primarily the Business Facilitation Unit of the Ministry of Energy, Commerce & Industry and the Civil Registry and Migration Department of the Ministry of Interior, monitoring and regulatory bodies such as the Cyprus Securities & Exchange Commission (CySEC) and the Central Bank of Cyprus – as well as with other local government and municipal bodies. We also maintain excellent relations and collaborate with the Cyprus Chamber of Commerce & Industry (CCCI), the Employers and Industrialists Federation (OEB) and professional organisations such as the Institute of Certified Public Accountants of Cyprus (ICPAC), the Cyprus Bar Association (CBA) and the Cyprus Investment Funds Association (CIFA), among others. At an international level, Invest Cyprus is a full member the World Association of Investment Promotion Agencies (WAIPA) and is represented on the Board, as well as of the Euro Mediterranean Investment Network (ANIMA), and we recently became a full member of the World Association of Private Public Partnerships (WAPPP). All the above excellent relations and representations help us offer our services and best practices to foreign investors in an efficient manner.
Which sectors of the Cyprus economy have the biggest growth potential and should be on the radar of investors?
We believe that, apart from the traditional sectors, technology, research, innovation, digital entertainment, energy and healthcare have significant potential and are already attracting investors’ interest, due to the large growth of the digital economy. A recent independent report estimates the total impact – direct and indirect – of the new technology sector on the economy of Cyprus (as of the end of 2022) at more than €4.6 billion, making it the highest sector in terms of contribution to the country’s GDP. Also, the total number of jobs – direct and indirect – created in the sector exceeds 36,000. This is a result of the implementation of the national strategy for attracting highly specialized companies and talent. Beyond the contribution to GDP and job creation, the establishment of new business clusters drives diversification and enhances the resilience of the economy, facilitating knowledge transfer to the country. These sectors lie at the heart of our strategy and promotion activities, as we believe that they are fields that can attract both established foreign companies and startups.
Are there any new company relocations or foreign investments in the pipeline that you can announce?
There are certainly projects and companies in the pipeline that have not yet been announced but we only make them public once the investment has been made and with the consent of the investor. What I can tell you is that most of the next investments that you will hear about are in the tech or tech-related sector, while there are also investments in the energy, education, healthcare and shipping sectors in the pipeline.