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20 th June 2014

C yprus I nvestment P romotion A gency (CIPA). Investing in Cyprus, an ideal gateway to Europe for the Arab world. 20 th June 2014. Charis Papacharalambous Director General. Cyprus Facts. Location : 35  N and 33  E Total area : 9,251 km 2 Population : 866,000 (2012)

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20 th June 2014

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  1. Cyprus InvestmentPromotionAgency (CIPA) Investing in Cyprus, an ideal gateway to Europe for the Arab world 20th June 2014 Charis Papacharalambous Director General

  2. Cyprus Facts Location: 35 N and 33 E Total area: 9,251 km2 Population: 866,000 (2012) Time Zone: GMT+2 Currency: Euro Capital: Nicosia Languages: Greek, Turkish, English for businessPolitical System: Presidential Democratic Republic

  3. Cyprus Investment Promotion Agency (CIPA) Promote Cyprus as an attractive international investment and business centre in key priority economic sectors Provide investor facilitation and support to new and existing investors Advocate reforms in order to improve the regulatory and business environment and infrastructure

  4. Recent facts about the Cyprus economy • All four TROIKA assessments - “Program is on track” - ECB, IMF, EC • Resilient economy: Contraction of 5.4% v initial est. of 8.7% • Return to growth by 2015 - European Commission’s forecast

  5. Economic Indicators Source : Cyprus Ministry of Finance * estimated forecast

  6. Economic Indicators Source : Cyprus Ministry of Finance * estimated forecast

  7. Recent facts about the Cyprus economy • All four TROIKA assessments - “Program is on track” - ECB, IMF, EC • Resilient economy: Contraction of 5.4% v initial est. of 8.7% • Return to growth by 2015 - European Commission’s forecast • Fiscal deficit is much lower than originally expected • Private consumption decline was less than originally expected • 40% of Foreign Investors planning to expand investments within the next 3-5 years - CIPA survey Dec 2013 • Cyprus successfully returned to the markets 18 months before forecasted

  8. Ratings • In November 2013, Standard & Poor’s first upgrade for Cyprus • On 22nd March 2014, Moody’s has upgraded Cyprus’ Government and financial institutions credit worthiness from negative to positive, citing the Cyprus stronger-than-expected fiscal and economic performances in 2013 and the authorities’ track record of meeting conditions under the Troika funding program. • On 25th April 2014, Standard & Poor'sraisedthelong-termforeignandlocalcurrencysovereigncreditratingson Cyprus to 'B' from 'B-'. • S&Paffirmedthe short-termforeignandlocalsovereigncreditratingsat 'B'. Theoutlookremainspositive.

  9. Cyprus 10- Year Government Bond Yield Source: Ministry of Finance

  10. Economic Sentiment Indicator (ESI) Source: Eurostat last update: 28/05/2014

  11. 2013 Global Competitiveness 39thout of 189 countries Ease of Doing Business 32ndout of 161countries Best Countries for Business 31st out of 176 countries Corruptions Perceptions Index 29th out of 140 countries The Travel & Tourism Competitiveness Report 27th out of 145 countries Best Countries for Business 27th out of 142 countries The Global Innovation Index 21stout of 140 countries BestTravel & Tourism Environment & Infrastructure 1st out of EU28Bathing Water Quality 11

  12. Cyprus, the Gateway into Europe and beyond! • Strategic Location: Cyprus has been an important trading hub since antiquity!

  13. Cyprus

  14. Cyprus, the Gateway into Europe and beyond! • Strategic Location: Cyprus has been an important trading hub since antiquity! • Ease of Doing Business: Introduction of numerous structural reforms • EU and Eurozone: Full harmonization of EU legislation and Directives • Tax System: Possibly the most attractive tax systems in Europe - Double Taxation Treaties

  15. Cyprus: Attractive Tax System • Exempt from tax: • Dividend income • Profits from overseaspermanent establishments • Profits from the sale of securities • No withholding tax on: • Dividends • Interest • Royalties paid from Cyprus • Most international transactions are exempt from VAT • Double Tax Treaties with 50 countries • Intellectual Property (IP) regime with an effective tax of less than 2%

  16. Cyprus, the Gateway into Europe and beyond! • Strategic Location: Cyprus has been an important trading hub since antiquity! • Ease of Doing Business: Introduction of numerous structural reforms • EU and Eurozone: Full harmonization of EU legislation and Directives • Tax System: Possibly the most attractive tax systems in Europe - Double Taxation Treaties • Robust Legal & Regulatory Framework: Based on English Common Law Principles

  17. Cyprus: Legal System • Based on the English Common Law Principles • Transparent • Fully harmonized with international standards • High quality legal services • Collaboration with international law firms • Application of EU Directives

  18. Cyprus, the Gateway into Europe and beyond! • Incentives: Wide range of investment incentives for foreign companies • Infrastructure: Well advanced and modern Infrastructure • Value for Money Services: “Centre of Excellence” – First country in the world to train “UK Chartered Accountants and “CIMA Accountants” outside the UK • Human Talent: Highest tertiary education percentage in the EU • Quality of Life: Weather, History & Culture, Gastronomy, International schools -More than 85% of existing foreign investors value the high quality of life in Cyprus - source: CIPA survey Dec. 2013

  19. Cyprusranks 5th best country to relocate Source: www.knightfrank.com

  20. Key Economy drivers • Professional Services  Market has created opportunities • Banking & Financial Services  Niche sectors like ship financing, energy project financing • Tourism  Well developed infrastructure. World’s most Blue flags per coastline km & cleanest waters in the EU (100% success) • Research & Development  Innovation in Medical Research projects • Renewable Energy  2 projects awarded the EU funding NER300 program and over 20 new licenses

  21. Key Economy drivers International Shipping Center • The ONLY EU approved tonnage tax regimewith benefits for ship-owning, ship-managementand crew management • LargestShip Management Centre in EU • 2ndlargest Ship Management Centre globally • 3rd largest merchant fleet in EU • 10th largest fleet worldwide • More than 1,022 registered vessels with 21 million gross tonnage are registered under the Cyprus flag • More than 140 ship owning and ship management related companies are operating from Cyprus

  22. Key Economy drivers Large ScaleDevelopment Projects Potential Opportunities: Luxury Real Estate Developments Marinas Leisure & Theme Parks Luxury Resorts & Golf Courses Health & Wellness Tourism Projects Education & Universities

  23. Upcoming opportunitiesin Privatizations Key Economy drivers Ports Energy Telecommunications

  24. Key Economy drivers Hydrocarbons in Cyprus Note: 60 tcf NG would fully cover Cyprus’ domestic energy needs for approximately 6,000 years - There are also indications for the existence of oil

  25. Existing Foreign Investor survey by CIPA –Dec. 2013

  26. Thank You! Tel: +357-22-441133info@investcyprus.org.cy www.investcyprus.org.cy

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