Cyprus attracted 1,.6 bln euros in direct foreign investment in 2007, compared to 1,46 bln in 2006 and 940 mln the year before that. Direct investments from EU member states reached 969.4 mln euros in 2007.
The figures were given during the first official presentation of the Cyprus Investment Promotion Agency (CIPA), the aim of which is to contribute in a dynamic and systematic way to the promotion of Cyprus as an attractive investment destination worldwide and as a business centre and a bridge between Europe and other continents.
CIPA, a non profit organisation with the state being the sole shareholder, was established after a Council of Ministers decision in 2007 and is managed by a 13-member Board of Directors.
Presenting CIPA at a press conference, Chairman of the Board of Directors Phidias Pilides noted the need to renegotiate the agreements to avoid double taxation with Russia, Ukraine and India, which ''in the organisation's view are the most significant agreements, since many significant investments are made in these countries through Cyprus.''
He added that Cyprus' priority should be the developing markets, such as republics of the former Soviet Union, especially Kazakhstan.
Pilides said ''there are pending issues with EU countries as well, where because of Cyprus' weakness – due to the absence of appropriate legislation which would have allowed the exchange of information in the framework of the guidelines of the Organisation for Economic Development and Cooperation – we are on various so called black lists or agreements we have already negotiated are not yet in force.'' Such countries, he said, are Italy and Spain.
He said that following President Demetris Christofias’ visit to Russia in November, procedures to finalise negotiations have been accelerated and there is optimism that an agreement will be signed.
Referring to CIPA's mission, Pilides said it has been set up to promote Cyprus as an attractive investment destination for priority sectors of the economy, to submit suggestions to the government on reforms to the institutional and regulating framework, to create the infrastructure aiming at improving the business environment, and to provide facilities and support to new and existing foreign investors to implement new or additional investments.
Pilides noted that Cyprus is an attractive and competitive investment destination due to its strategic geographical position in combination with Cyprus' accession to the EU and its participation in the Eurozone, the well trained and highly educated workforce, the very attractive taxation framework coupled with the agreements to avoid double taxation with over forty countries, the quality of the legal, accounting and financial services, and the advanced communication infrastructure.
CIPA's Director General Soteris Soteriou said the first three financial sectors for attracting direct investments from non nationals in 2007 were the management of real estate and business activities worth 755.6 million euros, trade and repairs worth 395.8 million euros and intermediate financial organisations worth 235.6 million euros.
He added that the organisation's strategy was in line with Cyprus' broader financial strategy and its priority was in the sectors included in the strategic development plan 2007-2013, such as financing and banking services, information and communication technology, research and development, educational and medical services, maritime services, professional services, renewable energy source technologies, and environmental technologies.
Referring to infrastructure projects worth 1 billion euros, planned by the Ministry of Communications and Works, Soteriou said no recession was expected, adding that Cyprus could attract foreign investment for some of these through foreign tenders.
Regarding the sectors that may be affected by the global financial crisis, Pilides said these were real estate and tourism.
Furthermore, Pilides said bureaucracy was a challenge for CIPA, noting that there was cooperation with the One Stop Shop, as well as the Ministry of Commerce, Industry and Tourism and the Ministry of Finance, to overcome problems.
