Cyprus is a beautiful island situated in the eastern Mediterranean at the crossroads of Europe, the Middle East and Africa. Cyprus' total area is 9.251 sq kms. The island's time zone is GMT + 2 and it is 7 hours ahead of New York and 1 hour behind Moscow.
The island enjoys the best type of Mediterranean climate with about 300 days of sunshine per year. The coldest month is January with minimum and maximum mean temperatures of 6°C and 13°C, respectively, while in August, the hottest month, the corresponding minimum and maximum mean temperatures are 21°C and 36°C.
Cyprus' estimated population is 800.000 of which 85 percent belongs to the Greek Cypriot community and 12 percent to the Turkish Cypriot community, whilst the remaining 3 percent are foreign residents. Greek and Turkish are the official languages of the Republic but English is widely spoken and understood, and is regularly used in commerce and government. Apart from the capital, Nicosia, with an estimated population of 194.000, all major cities are located on the coast. Limassol is the second largest city and the island's biggest port. Larnaca and Paphos, which are popular holiday resorts, are the third and fourth largest cities, respectively. The island is served by 40 major airlines and two international airports, located in Larnaca and Paphos.
Cyprus became an independent republic in 1960. The political system is modeled on Western democracies in which individual rights are respected and private enterprise is given every opportunity to develop. Under its Constitution, Cyprus has a presidential system of Government. The President is the head of State and is elected by universal suffrage for a 5 year term of office. The Council of Ministers, which is appointed by the President, is the executive organ of the Republic. Legislative power lies with the House of Representatives whose members hold office for a period of 5 years. There is a multi-party system of democracy based on proportional representation. The legal system is mainly based on the Anglo-Saxon legal system. The same principles as those applicable in the United Kingdom apply in Cyprus and all statutes regulating business matters and procedures are based essentially on English law. Most laws are translated into English. Cyprus is a member of the United Nations and its specialised agencies, the Council of Europe, the Organization for Security and Cooperation in Europe, and the British Commonwealth. In May 2004 Cyprus became a full member of the European Union.
Cyprus has an open free-market, services-based economy, with some light manufacturing. The Government’s role is limited to regulation, planning and the provision of public utilities. During the last fifteen years, the economy of Cyprus has demonstrated spectacular growth and its currency has enjoyed relative stability. Cyprus’ accession as a full member of the European Union as of 1st May 2004 has been an important milestone in the recent economic development. The island is often aptly referred to as a European country in the Middle East. Per capita GNP is approximately Euro 14.000, one of the highest in the Mediterranean. The cost of living is substantially lower than in most countries offering a comparable standard and quality of life.
The economy is driven by thriving tourist and service sectors and an export-oriented industry. In terms of their contribution to GNP the most important sectors of the economy are: trade, restaurants and hotels; community, social and government services; finance, insurance and business services; and manufacturing. The performance of the economy has been such that it has combined high real growth with low inflation and low unemployment. Moreover, the economy is characterised by a low external debt service to exports ratio and a high international reserves to imports ratio. Of the Euro 3,5 billion annual gross foreign exchange earnings, 38 percent originate from tourism, 22 percent from the export of goods, 9 percent from transportation and more than 9 percent from international business and shipping companies. Over 75 percent of tourist arrivals originate from the European Union.
Cyprus' main exports are potatoes, citrus fruit, clothing, chemicals and toiletries, machinery and transport equipment, cigarettes, wood and metal products, cement and footwear. Manufactured goods and agricultural products account for 75 and 20 percent of domestic exports, respectively. With regard to imports, intermediate inputs and consumer goods are the most important categories, each contributing more than 32 percent of total imports. Cyprus' main trading partner is the European Union accounting for about 55 percent of imports and 40 percent of exports.
The legal tender is Euro, which replaced the Cyprus Pound as Cyprus’ national currency as of 1st January, 2008. Joining the Euro zone was a major accomplishment for the Cypriot economy, resulting in such benefits as a higher degree of price stability, lower interest rates, reduction of currency conversion costs and exchange rate risk, and increased competition through greater price transparency.
Moreover, Cyprus ranks as the sixth leading maritime nation in the world with a merchant fleet exceeding 26 million gross tonnage.
Cyprus’s competitive advantages derive from its strategic geographical location, the favorable business climate and fiscal regime, stable macroeconomic environment, the high educational level of the labour force, in conjunction with the comparatively low level of graduates’ remuneration, the excellent infrastructural facilities, the advanced telecommunications’ network, and the widespread knowledge of English.
The banking system in Cyprus closely follows the British pattern and is well developed and organized whilst being equipped with the latest technology in modern surroundings. The banking system consists of, 30 international banking units, 4 administered banking units, 3 specialised financial institutions and a number of leasing companies. Over 1,200 International Business Corporations currently maintain fully fledged offices in Cyprus.
The banking system also encompasses the co-operative credit institutions, which are supervised by the Co-operative Societies’ Supervision and Development Authority. Local banks have managed to develop strong correspondent networks around the work thus, enabling them to have easy access to the world banking network and being able to carry out traditional and specialized financial transactions. The banking system is sophisticated and well-equipped with modern technology. It is relatively easy to transfer salaries, pensions and income from abroad into Cyprus.
The Central Bank of Cyprus, by virtue of the powers conferred upon it by the Central Bank of Cyprus law, is the licensing authority for the conduct of banking business and for the supervision of banks. The Central Bank of Cyprus has always been guided in its supervisory role by the recommendations of the Basle Committee on Banking Supervision and implements the EU Directives on Banking regulation while following up closely new developments and having its prudential functions under constant review to take account of these developments and changing circumstances. Its main responsibility is to ensure a safe and stable financial system that would preserve public confidence and foster economic stability and growth. This objective is satisfied by maintaining an effective mechanism of bank regulation and supervision.
1 January - New Year's Day
6 January - Epiphany
27 February - Green Monday
25 March - Greek Independence Day
1 April - Greek Cypriot National Day
14 April - Greek Orthodox Good Friday
16 April – Ortodox Easter
17 April - Greek Orthodox Easter Monday
1 May - Labour Day
5 June - Pentecost (Kataklysmos)
15 August - Assumption
1 October - Cyprus Independence Day
28 October - Greek National Day (Ochi Day)
24 December – Christmas Evening
25 December – Christmas Day
26 December – Second Day of Christmas
In recent years Cyprus has proved itself to be one of the most attractive European international business and financial centres due to its extremely advantageous tax regime, offering the following benefits:
VAT: the standard rate is 19%, the lowest in the European Union. Depending on its activity, a Cyprus company may be able to register for VAT in Cyprus and recover the VAT incurred.