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CYPRUS
INVEST WITH CONFIDENCE
Using Cyprus as Your Springboard for
International Expansion
Mr. Phidias Pilides
Chairman of the Board, CIPA
Moscow, Russia
June 23, 2011
Historic moment…
Page 2
Cyprus and Russia: Dynamic Relationship
Signing of the Protocol between the
Republic of Cyprus and Russia
Federation – October 2010
Protocol will:
Further strengthen the bilateral investment relationships;
Increase flow of trade
Act as a catalyst of new investment opportunities;
Enhance the business environment and benefit other
areas of growth.
Country Overview
Official Name: The Republic of Cyprus
Capital: Nicosia
Area: 9,251 sq km
Population: 870,000
Official Languages: Greek, Turkish
English Widely Spoken
Real GDP Growth: 1.0%
GDP per inhabitant: €21,700
Inflation (HICP): 2.6%
Unemployment Rate: 6.5%
Monetary Unit: Euro
Life Expectancy: 79 years
Form of State: Presidential Republic
(Data 2010)
CYPRUS
INVEST WITH CONFIDENCE
Cyprus Economy and
Competitive Advantages
“Global Competitiveness Report 2010-2011”
Cyprus was ranked number 40 out of 139
countries by the World Economic Forum "Global
Competitiveness Report 2010 - 2011"
The Global Competitiveness Report is a yearly
report published by the World Economic Forum
The report assesses the ability of countries to
provide high levels of prosperity to their citizens
The World Economic Forum is an independent international
organization committed to improving the state of the world by
engaging leaders in partnerships to shape global, regional and
industry agendas.
10
“Doing Business Report 2011”
Cyprus ranked #37 of 183 countries on the overall ease of doing
business and #15 of the EU 26
High – 1
4
6
9
14
13
25
17
22 23 24
26
32 30
31
37 41
51
46
42
56
49 45
70
63
80
109
Low -183
Cyprus as an Attractive Investment
Destination
EU and European Monetary Union Member
State
Strategic geographical location – ideal for
expansion in new markets
Well-developed socio-economic
infrastructure
An active Stock Exchange and robust
Securities and Exchange Commission
More than 30 years experience as
An International Business Center
Cyprus as an Attractive Investment
Destination
Market-oriented economy
Macroeconomic stability and performance
Highly educated, qualified and multilingual talent
Stable and welcoming business environment
Low set up and operating costs
Advanced transport and telecommunications network
Renown international shipping centre
Enviable quality of life
Cyprus as an Attractive Investment
Destination
Broad range and international quality of
financial and business services - legal, tax,
accounting, investment and brokerage
Transparent accounting system harmonized with
international standards
Well developed banking sector for all
financial needs
Low-risk business environment offering quick
and efficient operations
The Global Integrated Economy is a reality
and Cyprus can play a key role as a
Business and Financial Center
Cyprus: Simple, Low Taxation
Cyprus has the lowest corporate tax in Europe of 10%.
A tax administration regime that wants to help foreign investors.
Exempt from tax:
Dividend income
Profits from overseas permanent establishments
Profits from the sale of securities
No withholding tax on:
Dividends
Interest
Royalties paid from Cyprus
Most international transactions exempt from VAT
Cyprus has concluded Double Tax Avoidance Treaties
with 43 countries worldwide.
Cyprus as a holding company location
Russian Outbound Investments
Russian
Ultimate
Holding Co
Invest through Cyprus in:
an EU country or
a country with no DTT with Russia or
a country with a better DTT with Cyprus
Cyprus
Holding Co
Benefits
Wide Cyprus DTT network
EU Parent Subsidiary Directive
Zero/Low withholding tax in target country
Treaty
subsidiary
EU
subsidiary
Dividends received by Cyprus Holding Co
exempt from tax
No withholding taxes on payments to
Russian Ultitmate HoldCo
Cyprus as a financing company location
Russian Outbound Investments
Russian
Ultimate
Holding Co
Russian investor establishes Cyprus
company to be the group finance
company of foreign operations.
Capitalisation with equity.
Benefits
Cyprus
Financing Co
Tax on profit 10%
Access to EU interest & royalty
directive
Zero/Low withholding tax on interest
from target country
Treaty
subsidiary
EU
subsidiary
Interest deductibility in paying
company
No WHT on dividends paid to
Russia
Cyprus as an Ideal International Business
Services Centre
What Cyprus also offers…
Shipping Companies
– Zero tax rate
Financial Group Companies
– Low tax rate within a small profit margin
Companies Trading Securities
– No tax on profits from sale of securities
Investment Trusts
– Tax exemption
Doing Business Through Cyprus
• Cyprus is a dynamic
business and financial
centre for inward FDI
• Investors have the
opportunity to access,
through Cyprus, new
markets both within Europe
and non-EU countries
• The Global Integrated
Economy is a reality and
Cyprus can play a key role
as an business and financial
center
Cross-border IPOs through Cyprus
Tax benefits important, but also:
– Legal environment based on common law –
similar to UK
– Companies’ Law based on previous version
of English equivalent
– Capital markets legislation fully harmonised
with EU directives
CIS IPOs at the London Stock Exchange
(LSE)
The LSE has been the preferred destination for CIS IPOs abroad
over the last few years.
17 CIS IPOs in LSE during the period 2008-2011
7 of these with topco jurisdiction other than Russia and UK
Cyprus chosen in 4 out of these 7 IPOs
Pipeline appears to be growing
Total funds raised by CIS companies in LSE IPOs 2008-2011
amounted to $6bn.
Russian IPOs into the LSE in 2011
Company Name
Status
Jurisdiction
Cyprus
\
Cyprus
Russia
UK
IPO- Aborted
IPO- Aborted
Russia
Russia
IPO- Aborted
Netherlands
IPO- Aborted
Netherlands
IPO- Aborted
Russia
Cyprus is now an
established and
credible TopCo
jurisdiction, with
increased confidence
placed by issuers,
investors, bankers
and lawyers
\
International Transit Trade Centre
Efficient Customs
Formalities
Reliable Handling and
Delivery System
Advanced Regional
Warehouse &
Distribution Centers
Some of the companies already in Cyprus
GROME MARKETING
Cyprus: Safe & Sunny
Security and safety
Excellent public and private
international schools
High standard of living
High quality tourist facilities
year round
Gastronomy
Millenia of culture, history and art
Fabulous weather
CYPRUS
INVEST WITH CONFIDENCE
Cyprus: Investment Opportunities
Banking & Financial Services
B&F Services account for 9% of GDP
(2009) and the sector is characterized by
economic stability
Offers a strong regional platform for the
provision of various banking products and
financial services, including investment
funds
Unique opportunities for cross-border and
international transactions of mutual funds
through reliable infrastructure
Cyprus: International Shipping Center
Ranks 3rd top maritime nation in EU27
and top 10 globally
Shipping accounts 4% of Cyprus GDP
(2009)
More than 2,000 vessels with 40 million
gross tonnage
Over 130 ship owning and ship
management companies based in Cyprus
2 deep-sea ports with easy access to Suez
Canal and other major freight routes
New legislation enacted 29 April 2010 with
the New Competitive “Tonnage Tax System”
(TTS)
Favorable tax regime and other benefits for
ship owning, ship management, charterers
and crew members
Energy
Opportunities for the development of Renewable Energy Sources
(RES), Technologies and Production
Important Energy Projects underway:
Establishment of the Energy Centre at Vasilikos
- Terminal for the importation and storage of petroleum products
Exploration of vast natural gas reserves in Cyprus’ Exclusive
Economic Zone (EEZ)
Development and Infrastructure Projects
Projects for promotion of sea
tourism (Five marinas in
coastal cities)
Large international-scale
development projects and
thematic parks
Luxurious and state-of-the-art
resorts and golf courses
Infrastructure for development
of advanced educational and
health services
Contact CIPA to learn more!
For more information regarding investment
opportunities in Cyprus, please contact us:
+357-22-441133
www.cipa.org.cy
[email protected]
Thank you!
Спасибо!