DOING BUSINESS IN CYPRUS - Andreas Neocleous & Co

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Doing Business in Cyprus employees; streamlined procedures for domestic staff employed by senior management personnel; reduction of documentation required to support applications to the essentials; and relaxation of re-entry visa requirements for third country workers who frequently travel outside Cyprus. In particular, Russian businessmen in senior management positions who reside mainly in Cyprus may apply for permanent residence permits, and a fast-track procedure has been established for applications to be examined by the Immigration Control Committee. The Committee liaises closely with the Russian Chamber of Commerce and the Embassy of the Russian Federation in Cyprus in order to resolve any problems that may arise. 12
Doing Business in Cyprus Foreign investment In the run-up to EU membership, in order to attract inward investment and enhance economic prosperity in Cyprus, the government liberalised foreign direct investment policy for both EU and non-EU nationals. In general, foreign investors no longer need approval from the CBC and may invest and do business in Cyprus on equal terms with local investors. In regulated sectors such as banking and financial services approvals may be required for customer protection purposes, but these apply equally to Cypriots, nationals of other EU member states and third-country nationals. Accordingly, in all but a very few strategic or regulated sectors of the economy foreign investors may now participate with no limits on equity holdings and without any prescribed minimum level of capital investment. To further facilitate inward investment the Ministry of Commerce, Industry and Tourism has recently established a Foreign Investors Service Centre tasked with co-ordinating and simplifying potential investors' dealings with the authorities. Investment by EU nationals In line with the freedom of establishment there are no restrictions on investment by citizens of EU member states other than those applying to specifically regulated sectors, such as banking, where a "fit and proper" test is applied. Investment by third country nationals Direct Foreign direct investment in Cyprus from non-EU countries was fully liberalised with effect from 1 October 2004, and minimum investment amounts and maximum participation percentages were generally abolished, although licences may be still be required for certain specific investment activities. There is now no difference between companies carrying on business outside Cyprus (previously known as international business companies ("IBCs") or offshore companies) and companies carrying on business inside Cyprus. In the tourist sector the current policy, introduced in 1995, provides for participation up to 49% in projects such as hotels and tourist villages. For projects that enrich the tourist product, such as golf courses and theme parks, up to 100% participation is permitted. Portfolio Up to 100% of the share capital of a company listed on the Cyprus Stock Exchange may be acquired. The only exceptions are a few regulated sectors such as banking and media. Restricted investments For both EU and third country investors, restrictions remain on acquisitions in the areas of real estate, tertiary education, public utilities, radio and television stations, newspapers and magazines and airlines. Each application is considered on its merits. Incentives Incentives for locating a business in Cyprus include: a favourable business environment, with well-educated human capital available at reasonable rates of pay and world-class infrastructure and services; 13
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