Address by the Minister of Commerce, Industry and Tourism Mr Antonis Paschalides at the Business Forum: “Cyprus -An International Business and Professional Centre”, in Yekaterinburg Russia
I am very pleased to be here in Yekaterinburg, a dynamic megalopolis and a vital industrial and economic centre, in the central part of the Russian Federation, and to address this Forum of distinguished decision-makers and business-people.
First and foremost, I would like to congratulate everyone involved in the organization of this Forum. Opportunities such as these strengthen even further the relations between Russia and Cyprus, which are based on long standing links across a range of historical and contemporary trade, cultural and economic ties. Our countries have many shared practices and common values that can shape the way we work.
This is the first significant business Forum we organize in your city, at the foot of the Urals, where Europe meets Asia. It is a reflection of the importance we place on the regions of the Russian Federation as economic and business partners. We are committed to strengthening the trade and investment, as well as the tourist relations between our countries. Our Government has much higher ambitions to deepen our relationship and with this visit we want to lay the foundation for making it even stronger in the future.
The presence here of so many leading economic representatives and business-people shows, I believe, how committed our countries are to making this relationship successful.
Despite the global financial and economic crisis, Cyprus’ economy experienced a higher than the EU average growth rate in the last years; inflation is currently low and unemployment in 2010 is expected to be at a low 7.1 per cent. Average per capita income, in terms of purchasing power, corresponds to almost 95% of the EU average.
I mention these figures to show you the strengths of the vibrant Cyprus economy, a place where business can be conducted without red tapes, high taxes and unhelpful attitudes.
What makes Cyprus a leading international Centre of business excellence, a place in which to invest, a country to trade with and a place that foreign enterprises can use as their hub to the Eastern Mediterranean region?
Strategically located at the crossroads of three continents and serving as a springboard for european products and investments in the lucrative Middle East, Asian and African markets, Cyprus has a favourable environment for all types of business. Among others, Cyprus features a stable economic environment which offers confidence, safety and security, a modern and transparent legal framework, a liberal foreign investment policy, low company set-up and operating costs, simple administrative procedures, a wide network of agreements for the avoidance of double taxation and a low corporate tax at 10%, which is the lowest in the whole of the EU.
The service sector plays a critical role in Cyprus’ economy. Service activities constitute the most dynamic and growing sector, which has surged since the mid-1990s, and now accounts for about 80% of the country’s Gross Domestic Product. Cyprus has a clear strength in the area of financial services, being the “Financial and Services Gateway” of the region. In addition, Cyprus offers high quality, value for money, consultancy services and support for professionals worldwide. Given the above, many companies have chosen Cyprus as a jurisdiction for establishing an international holding company.
The professional and business service sector has a comprehensive range of services to offer to Russian business-people, such as accounting, banking, legal, IT, business consulting, design, engineering, shipping, marketing, health care and education. These, in conjunction with the competitive fees charged and the professional attitude of Cypriot service providers, account for the transformation of the island into a highly reputable international and reliable business centre.
Ladies and Gentlemen,
The credibility Cyprus has earned amongst the international investment community is evident from its foreign direct investment track record. The value of Foreign Direct Investments in 2008 was €15.2 billion, continuing an upward trend. Attracting Direct Investments constitutes a major goal of our Government's policy. What Cyprus has to offer is one of the best and most productive investment climates anywhere in the world, with a liberal Foreign Direct Investment regime for both EU and non-EU nationals, allowing up to 100% foreign participation in most sectors of the economy.
In this respect, I wish to refer to two recent huge investments; a project from Qatar in the tourist sector and another project concerning the construction of a major oil import and distribution terminal in the industrial area of Vassiliko. These investments represent a solid vote of confidence in the Cyprus economy.
Russia is amongst the largest foreign investors in Cyprus. The value of Russian investments in Cyprus reached €2 billion in 2008, whereas the value of Cypriot investments in Russia during the same year was more than €1.5 billion. These investments are mainly in real estate and business activities, trade and repairs, financial intermediation, and manufacturing.
Exports of Cyprus products to Russia during the period 2005-2008 increased by 55%, despite the small decline in 2009 which is due to the recent economic crisis. Total imports from Russia are nearly double our exports. Nevertheless, there is a mutual recognition that bilateral trade volumes are below their full potential. Therefore, we seek the improvement of bilateral trade and invite Russian businessmen to expand their interest in the Cypriot market, where they can find appropriate business partners and engage in new business activities.
Our island is also an internationally renowned tourist centre, a place of destination for about two and a half million tourists a year. In 2009, 150.000 Russians visited Cyprus. Prospects for 2010 are looking extremely good as in the period January to July 2010, tourists from Russia reached 120.000. This figure, compared to the January-July figures of last year, represents an increase of about 42 per cent.
It is worth mentioning that a large number of Russians not only visit Cyprus as tourists, but also use our island as a pleasant place to reside and be actively involved in various businesses.
Russian companies can benefit from the numerous tax advantages and other incentives for establishing in Cyprus assembling or manufacturing operations for the supply of existing and newly emerging markets in the region. Cyprus is an ideal platform for both Russian companies and other international companies which are engaged in trade and marketing, targeted to serve the Middle East, Europe, Asia and Africa. Moreover, as a knowledge-based economy, Cyprus offers some of the most advanced infrastructure and a well educated talent pool. We invite businesses seeking to invest in Cyprus in knowledge activities to take advantage of this talent, at very competitive terms. Priority investment sectors include financial intermediary institutions, R&D, medical and educational services, ICT, professional and maritime services and energy.
Cyprus is a small, but important market in the financial sector. It reaches out to offshore financial centres and emerging markets in its vicinity. We offer significant benefits and a lot of niche opportunities to investors and this is the reason why our island attracts so many international companies.
What I have mentioned above is just a snapshot of the real business opportunities that Cyprus’ dynamic, growing economy offers to Russian companies. These opportunities could be explored and exploited in a fruitful cooperation with Cypriot business-people in successful business ventures. Today’s Forum provides the opportunity to discuss all these issues, as well as our business ambitions for the future. Let me assure you that companies from your region will be more than welcome to explore Cyprus and discover the advantages that it can offer. I also hope that Cypriot companies have the aspiration, contacts and the chance to operate and profit in Russia. These will undoubtedly help in creating jobs, business, and wealth in both our countries.
Reference: http://www.moi.gov.cy
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