Investing in Cyprus
Investing in Cyprus has become very attractive for foreign investors over recent years. The geostrategic location as well as the weather and lifestyle are just some of the reasons why the investment market in Cyprus is so sought-after. There are various investment opportunities in Cyprus including real estate investment, investing in Cyprus tourism market and investment in the energy sector.
In this article we are going to answer the most frequently asked questions when it comes to investing in Cyprus along with some extra information added in for your benefit.
Recent Developments in Cyprus
Let’s begin by answering some questions regarding recent developments and the impact investing in Cyprus has on particular sectors of the economy.
Why is the energy sector worth investing in?
Back in 2019 the energy sector of Cyprus saw a big shift due to the discovery of natural gas on the offshores of the island. This expanded the interest shown for investment within the Energy and Renewables sector of the Cypriot economy which has since continued.
Cyprus has also begun to make major moves in growing its energy dependency with particular focus on sustainable and renewable energy. This is due to the fact that the country has the highest potential for the usage of solar power in Europe. In a recent statement, the Chairman of the Energy Committee said that Cyprus’ new renewable energy scheme will see this target reached.
What benefits are there with AIFs in Cyprus?
Another major recent development is Cyprus’ enhancement of the Alternative Investment Funds (AIFs). The Cypriot regulatory authorities took initiative to create an attractive and globally competitive sector. This has gained interest from foreign investors for a number of reasons. These advantages include:
1. No restrictions regarding the type of investment
2. AIFs can be set up as an umbrella fund with multiple investment compartments
3. Tax incentives including no withholding tax on dividend distributions for foreign investors
4. Simple application process
Will the new Marina and Port developments bring investment opportunities?
Finally, the two remaining developments we are going to discuss include the new Marina and Port in Larnaca along with the development of the Ayia Napa Marina. Both these projects are set to bring in masses of benefits for the economy and foreign investors who seize the opportunities available. The redevelopment of Larnaca’s Port and Marina will bring at least 4,000 job opportunities as well as real estate investment ventures, hospitality and tourism investment prospects.
Investing in Cyprus Real Estate
The Real estate sector in Cyprus is known for thriving and is an extremely popular industry for local and foreign investors. With this in mind, let’s take a look at some of the most frequently asked questions regarding real estate in Cyprus.
Why is real estate investment so popular in Cyprus?
Cyprus offers various options for real estate investment whether you are interested in residential properties or commercial properties. Real estate investment within Cyprus’ tourism industry is a growing trend for foreign investors as well as investment in office space for international companies.
Which city is good for real estate investment purposes?
Each city or district in Cyprus has its pros and cons when it comes to real estate investment. Limassol has seen the biggest growth in terms of foreign investment over the past 10 years however, Larnaca is seeing a rise in investment. All the cities offer the possibility for residential and commercial property investment. The pros for Larnaca and Paphos are of course the airport access whereas Limassol and Nicosia are home to major local and international companies.
Can you provide some statistics on the real estate market in Cyprus?
Of course! When investing in Cyprus it is essential to know the market. The statistics show that foreign investment has been a driving force behind the housing market with a 12.2% rise in property sales during 2019 from previous years (the biggest rise since 2008). However due to international lockdowns caused by the 2020 pandemic, these numbers have since fallen.
Other information to consider when investing in Cyprus
Finally, we are going to answer the frequently asked questions about Cyprus tax system, the immigration laws and information regarding living in Cyprus.
What is the tax system like in Cyprus?
The Cyprus tax system is one of the most attractive systems in Europe and definitely why so many foreign investors consider Cyprus. The corporate tax rate is 12.5%, making it the lowest rate in the European Union. Cyprus also has an extensive list of countries it has signed the Double Tax Treaty with which you can find here.
What are the immigration laws, residency laws and work permit regulations in Cyprus?
To gain permanent residency in Cyprus you must purchase a property on the island. This can be purchased alone, with a spouse or as a Cyprus-based company. The property cannot be a resale and must be newly constructed with the developer as the sole vendor. If you go to our Investment Guide you will be able to find more information concerning permanent residency.
With regards to work permits in Cyprus, there are different laws depending on whether you are an EU national, EFTA national or a non-EU national. Citizens from other European Union states as well as Iceland, Liechtenstein, Norway and Switzerland do not require a work permit. If you do not fit into this category you will need to ask your employer to provide a statement saying your position could not have been filled by a local.
What is the lifestyle like in Cyprus?
Cyprus is known for its relaxing lifestyle with its pleasant climate and abundance of Blue Flag beaches. It is also ranked the 5th safest country in the world. The healthcare system, GeSY, has seen a recent transformation, making it affordable for all its residents and the education system offers schooling for national and international students.
Conclusion on Investing in Cyprus
As you can see from the answers above, Cyprus is a very attractive market for foreign investors. The geostrategic location, tax system, vast property investment opportunities and new developments make investing in Cyprus a very viable consideration. If you have any more question, please feel free to get in touch.