Cyprus has a record of successful economic performance, reflected in rapid growth, full employment conditions, external and internal stability, almost throughout the post-independence period.
The economy has been transformed into not only a major tourist destination but also into a modern economy offering dynamic services with advanced physical and social infrastructure. Specifically, industrial, agricultural as well as banking and shipping sectors have been rapidly developed.
In terms of per capita income, estimated at around €15,000, Cyprus is classified by the World Bank among the high-income countries. The average annual rate of growth in the past five years was about 3,6%, while averaging inflation rate stood at 2,9% and average unemployment at 3,4% over that period.
In addition, Cyprus was ranked 25th in the United Nations 2003 Index of Human development. Considering other socio-economic indicators such as the excellent housing conditions, pollution free environment, and low crime rate, one may conclude that the quality of life, standard of living and economic performance, position Cyprus favourably among the rest of the European Union member states.
The success of Cyprus in the economic sphere is attributed, among other factors, to the adoption of a market-oriented economic system, the pursuance of sound macroeconomic policies by the government, as well as the existence of a dynamic and flexible entrepreneurial community and a highly educated labour force. Moreover, the economy has benefited from the close cooperation between the public sector and the social partners.
The basic characteristics of the Cyprus economy are the dominant role of the private sector in production, the small size of the domestic market, the small size of most business units, as well as its open character. Cyprus’s major imports are raw materials, consumer and capital goods, transport equipment and fuel, while major exports are pharmaceutical products, clothing, cement, cigarettes, paper products, plastic products, potatoes, citrus fruit, wines and furniture.
The tertiary sector of services is considered as the backbone of the Cyprus economy (accounting for about 76.3% of GDP); reflecting the gradual evolution of the economy from an exporter of minerals (mainly copper and asbestos) and agricultural products (citrus) during 1963-73, an exporter of manufacturing products (mainly clothing) at the end of the 1970’s, to an international business and service centre in the 1980’s – today.
Currently, approximately 30 foreign banks have established presence and over 1,200 International Business Corporations currently maintain fully fledged offices in Cyprus. Moreover, Cyprus ranks as the sixth leading maritime nation in the world with a merchant fleet exceeding 26 million gross tonnage.
The services sector is comprised mainly of tourism, finance, insurance and business services, trade, restaurants and hotels, transport and communication, manufacturing, accounting, social and governmental services, real estate, education, and shipping.
Cyprus’s competitive advantages derive from its strategic geographical location, the favourable business climate and fiscal regime, stable macroeconomic environment, the high educational level of the labour force, in conjunction with the comparatively low level of graduates’ remuneration, the excellent infrastructural facilities, the advanced telecommunications’ network, and the widespread knowledge of English.
Source: Ministry of Commerce, Industry and Tourism
Economic reasons for investing in Cyprus:
- One of the fastest growing property markets in Europe
- Full European Union member
- Property prices increasing at a stable rate
- A recent report from the International Chamber of Commerce has shown that property prices in Cyprus have not been affected by the downturn of the world economy
- Booming holiday rental market with huge increase in tourism
- Low property taxes
- Highly developed infrastructure, excellent telecommunications and transport
- Very strong, growing tourist industry
- Legal system according to UK standards
- Stable Economy
- Low cost of living
- Free market Economy
- Low legal fees