Cyprus draws new action plan to attract FDIs

The Ministry of Finance and the Cyprus Investment Promotion Agency (www.cipa.org.cy) have agreed to formulate an action plan to solve procedural issues hindering foreign direct investments in Cyprus.
Finance Minister Charilaos Stavrakis said efforts will intensify to better coordinate between various Ministries as part of the drive to attract new foreign direct investments (FDIs) to the island. In 2007 Cyprus attracted EUR 1.5 bln in FDIs, while in 2008, FDIs totalled EUR 1.35 bln.
CIPA Vice Chairman Christos Mavrellis said that some of the factors seen hindering efforts to attract foreign investors are the delays in the issue of title deeds, and the employment of foreign labour. Mavrellis also called for lower lending interest rates to help corporations finance their operations and proceed with new investments.
Speaking after a meeting with a CIPA delegation, Stavrakis said the Ministry of Finance is in close cooperation with the Agency as well as with the private sector because “foreign investment is the oxygen to the Cypriot economy.”
“We made an in-depth assessment of the procedural problems that make attracting foreign investments to Cyprus more difficult and which in cooperation with other competent Ministries we will try to solve within a certain timeframe and in the framework of an action plan,” Stavrakis said.
Informed sources told the Financial Mirror that by far the biggest stumbling block to attracting FDIs is the lack of a promotional budget needed to promote Cyprus abroad, with all the available money being directed to attracting tourists with mixed results.
The absence of a “one-stop-shop” facility, whereby a foreign national could secure all the relevant permits for a single service, is also seen as a major stumbling block to help attract new investments.
Another major grievance repeatedly voiced by experts to the Financial Mirror is the pathetic state of affairs at the Larnaca Free Trade Zone, where even elementary infrastructure services such as water, electricity and telephone lines are lacking, while the delay in infrastructure projects such as marinas, is diverting potential business to other destinations where all these modern facilities are already in place.