Re-establishing foreign investor confidence in Cyprus

PUBLICATIONS / Articles / 2017 / Re-establishing foreign investor confidence in Cyprus
At the Invest in Cyprus Forum in New York, President Nicos Anastasiades stated that Cyprus is re-establishing full confidence by the international investor community. The event was attended by business people and investors from Cyprus, Greece, the US and other countries. Mr Anastasiades emphasised the importance of extending the relations with the US, investment opportunities, economic growth and leaving Cyprus issue in the past. He also emphasised the importance of regional relations and Cyprus role in the region. The government’s strong commitment is to keep the island on the way to sustainable growth and to facilitate investment and economic opportunities.
 

President welcomed the presence of American companies – Noble and Exxon-Mobil – in Cyprus’ Exclusive Economic Zone, working in partnership with the Cyprus government for the use of hydrocarbon reserves. He said that cooperation in this field could be the guiding doctrine for the resolution of the region’s political problems, contributing to conditions of peace and security.

Currently, the vision is to transform the Eastern Mediterranean into an energy hub that would contribute towards the region’s stability, through, among others, the diversification of energy sources and routes. He also assured the business community of the United States that Cyprus would remain a reliable partner, retaining its position as a significant international business hub and investment destination. “We are vigorously working on building more tangible economic and investment relations” between Cyprus and the US, noting that “a bilateral US-Cyprus dialogue is in progress, to address a range of issues of economic cooperation, particularly US investments in Cyprus. During the last few years, we have seen significant US investments in Cyprus, and our aim is to facilitate even more of them,” he added.

“Being fully aware of the strict regulatory framework of the United States and the need for transparency and accountability in all investment and business transactions, I am pleased to note that recently our two countries have signed the intergovernmental Foreign Account Tax Compliance Act (FACTA),” he added.

With regards to the Cyprus problem, he stressed that despite the difficulties being faced, the Greek Cypriot side and he personally remains wholly dedicated to working tirelessly and with determination towards reaching a functional, viable and lasting settlement for the benefit of all Cypriots.  President assured that the United States – recognising the benefits that a settlement of the Cyprus problem would deliver not only for Cyprus but also for the region and the international community- will continue exercising its influence towards Turkey to deliver concretely on its verbal commitment to positively contribute to the negotiating process.

Referring to the Cyprus economy, he noted that the deep recession and the severe financial crisis are “behind us”, adding that Cyprus is now one of the fastest growing economies of the EU, currently just short of 3% of the GDP. He also stressed the significance of the presence of foreign investors in the banking sector, including important investor presence from the US. He continued with the positive economic developments underlined by the successive upgrades of the sovereign rating by international agencies of Cyprus’ economy and investment potential, the last one only taking place last week, which placed Cyprus, for the time-being, just one notch below investment grade.

Mr Anastasiades emphasised that “taking into account that even before I assumed office our economy was 12 notches below investment grade and at a junk rating, I can proudly declare, without, of course, neglecting the need to stay clear on our path, that we are on our way towards the full re-establishment of confidence towards Cyprus by the international investor community.” President said that this achievement should be attributed to the government and the relevant minister of finance for the prudent macroeconomic management, the political parties’ constructive support, which defied political expediencies, and, above all, to the people of Cyprus for their sacrifices and hard work.

To continue with positive changes, Cyprus has undertaken a series of relevant measures, such as: providing corporate tax incentives; reducing the time framework for issuing planning permission; broadening the range of permitted land development for large projects, including golf courses; increasing building coefficients; and facilitating joint tourist developments, such as condo hotels.

“We recognise the importance of maintaining sound public finances. We are committed to the maintenance of a stable and competitive tax regime. We shall continue to invest in human capital, supporting higher education and research. And we shall continue to stand by the local and foreign business community,” Mr Anastasiades said.

“We are in the final stages of strengthening the legal framework for the investment funds sector, which is expected to enrich the financial services industry in Cyprus and the growth of the economy,” he said.

Furthermore, he stated that “at a regional level, we have been pioneers in establishing trilateral regional cooperation mechanisms between Cyprus – Egypt – Greece and between Cyprus – Greece – Israel, aiming to further develop both our countries’ economic, energy, maritime, tourism ties and our overall diplomatic coordination on common challenges.”

At the same time, tripartite dialogues have already been initiated between Nicosia – Beirut – Athens and Nicosia – Amman – Athens and soon meetings at the level of Heads of governments are expected to take place, Anastasiades said.

Resolving the Cyprus problem would strengthen the role in the region and would positively reinforce Cyprus’s ability to contribute positively and reliably to the collective efforts of addressing the multiple challenges of the region.

 

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