- Perfect Timing
While the precise consequences of the pandemic to the Cyprus economy remain unknown, the vast majority of experts agree that a recession may be inevitable. A recession however is always followed by a recovery; and the best time to invest in order to maximise returns, is usually during a recession; not when the economic cycle has reached its full recovery.
In a recession, we commonly have an excess in the supply of goods and services that is usually driven by a decrease in demand. As a result, prices go down. As prices go down, opportunities for investment arise. Investors can intelligently make full use of these opportunities by making strategic decisions which will give them high returns when the economy recovers.
Taking the real estate example, official statistical figures showed that the dramatic effect of the pandemic has already started having an impact on the number of Cyprus property sale transactions. In particular, there has been a reduction of about 36% in the number of contracts of sale submitted to the Land and Registry Department for the period January to April 2020, in comparison with the same period last year. This means that sellers will be willing to negotiate their prices and offer discounts in the property market. A popular strategy amongst foreign investors in Cyprus is to purchase outstanding Mediterranean properties on the island and rent them, generating passive income which will be increasing as the economy recovers and rent prices go up. On top of that, the Cyprus government has decided to accelerate the process of granting Cypriot citizenship through the Cyprus Investment Programme in order to boost the Cyprus economy. Through this programme, investors and their families can enjoy the full benefits a Cypriot citizenship has to offer.
- The handling of Covid
Cyprus top priority during Covid-19 is public health. This is illustrated by the strong infection prevention and control measures taken by the Cypriot Government to tackle Covid-19. The outcome is that Cyprus keeps very low infection rates and one of the lowest fatality rates in Europe.
According to an online survey among foreign investors in Cyprus, which was organised by ‘Invest Cyprus’, the island’s investment promotion agency, 92% of foreign investors were either “very satisfied” or “satisfied” with the government’s handling of the crisis, with 90% agreeing that service providers in Cyprus, including lawyers, accountants and bankers, had performed well to ensure business continuity.
- Tax Advantages
Cyprus has a very attractive tax regime. Some of its features are:
- Corporate income tax rate at 12.5% – one of the lowest tax rates in the EU
- A competitive intellectual property regime
- No immovable property taxes
- No succession or inheritance taxes
- An attractive personal tax regime for international professionals and non-domiciled individuals
- Access to all EU Tax Directives
- An attractive Double Tax Treaty network of more than 60 countries
- Robust regulatory framework
The Cyprus legal and regulatory framework is based on English Common Law principles, which makes it an ideal, business-friendly and effective system that ensures strong legal protection, as well as, transparency and reliability. Also as a Member State of the EU, the Cyprus legal system is fully compliant with the EU treaties, regulations and directives. This robust regulatory framework ensures safety and stability for investors.
- Strong business support services at low cost
The Professional Services sector in Cyprus ensures that the starting and running of a business in Cyprus is smooth and convenient for investors. Cyprus has a highly educated workforce, 700+ registered accounting firms, 2700+ registered lawyers, low labour and business support costs, and already one of the lowest office rental rates in Europe. Moreover, the English language is spoken by the very high majority of the population, making it easier for investors to live and do business on the island.
- Strategic location
Cyprus is the third largest island in the Mediterranean Sea, strategically located at the crossroads of three continents, Europe, Asia and Africa. Since joining the European Union in 2004, Cyprus has dynamically developed into a strong international center for business activities. Moreover, the relatively recent discovery of natural gas resources has contributed further to the crucial location of the island.
- High quality of life
Cyprus offers its residents a high quality lifestyle with a clean and healthy environment, low crime rates, high quality private and public schools, excellent healthcare, enviable yearlong sunshine, rich cultural heritage and a delicious gastronomy.
In the words of a prominent Chinese investor who is now a citizen of Cyprus and was interviewed recently by a Cypriot newspaper, “Cyprus has all the characteristics to be an attractive destination for investors due to the unique advantages and opportunities it provides for them.” Moreover, talking about Paphos in particular, he said: “Paphos is the most suitable city for one to live. This is shown in various studies of international organizations, including United Nations, for the quality of life it offers. Even though it is not a large city, Paphos has a huge historical and cultural heritage, while due to its location, it perfectly connects the western and the eastern civilization and culture. It is also of course a popular tourist destination.”
ANTONIOU & METAXA LLC