Cyprus Finance Ministry and CIPA to formulate action plan on FDI

Cypriot Finance Ministry and Cyprus Investment Promotion Agency (CIPA) agreed to formulate an action plan to solve procedural issues considered to hinder foreign direct investment in Cyprus, Cyprus Finance Minister Charilaos Stavrakis said on Tuesday.

CIPA Vice Chairman Christos Mavrellis said that among other factors, which act as a hindrance to FDI in Cyprus, are the delays in the issuing of title deeds, and the employment of foreign labour. However, Mavrellis stressed that lending interest rates must be reduced because high lending rates obstruct development and investments.

Speaking after a meeting with a CIPA delegation, Stavrakis said the Finance Ministry is in close cooperation with the Agency as well as with the private sector because ''foreign investment is oxygen to the Cypriot economy.''

''We made an in-depth assessment of the procedural problems which made the attraction of foreign investments in Cyprus more difficult and which in cooperation with other competent Ministries we will try to solve in a certain timeframe and in the framework of an action plan''.

Mavrellis pointed out the problems obstructing foreign investments in Cyprus such as the delays in the issuing of title deeds, the legislation on employing foreign labour, while he said that the issue of high lending rates must be dealt with immediately.

''You do not need to be an economist to understand that with lending rates of 6% and 6.5% under today's circumstances you cannot have development and investments,'' he said, adding that Cyprus cannot have one of the highest lending rate among the EU, while trying to attract foreign investment.

In 2007 Cyprus attracted 1.5 billion euro of Foreign Direct Investment, while in 2008 FDI in Cyprus reached 1.35 billion.