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1. Openness To, and Restrictions Upon, Foreign Investment

Republic of Cyprus

The ROC has a favorable attitude towards FDI and welcomes U.S. investors.  There is no discrimination against U.S. investment; however there are some ownership limitations and licensing restrictions set by law on non-EU investment in certain sectors, such as private land ownership, media, construction, etc. (see Limits on Foreign Control, below).  The ROC promotes foreign direct investment (FDI) through a dedicated agency, the Cyprus Investment Promotion Agency (CIPA). CIPA’s Invest Cyprus program is the ROC’s dedicated partner tasked to attract and facilitate FDI in key economic sectors of shipping, education, real estate, tourism and hospitality, energy, investment funds, filming, and innovation and startups. (  ).  InvestCyprus is the first point of contact for investors, and provides detailed information on the legal, tax and business regulatory framework.  The ROC and CIPA also promote an ongoing dialogue with investors through a series of promotion seminars each year and a robust Cyprus Chamber of Commerce and Industry (CCCI) with country-specific bilateral chambers dedicated to promoting FDI.

For more information:

Cyprus Investment Promotion Agency, InvestCyprus
9 Makariou III Avenue
Severis Building, 4th Floor
1965 Nicosia, Cyprus
Telephone: +357 22 441133
Fax: +357 22 441134

One-Stop-Shop & Point of Single Contact

Ministry of  Energy, Commerce, and Industry (MECI)
13-15 Andreas Araouzos
1421 Nicosia, Cyprus
Telephone: +357 22 409318 or 321
Fax: +357 22 409432
Email 1:
Email 2:

Area Administered by Turkish Cypriots

Turkish Cypriots welcome FDI and are eager to attract investments, particularly those that will lead to the transfer of advanced technology and technical skills.  Priority is also given to investments in export-oriented industries. There are no laws or practices that discriminate against FDI. The “Turkish Cypriot Investment Development Agency (YAGA)” is a one-stop shop for all investors.  “YAGA’s” investment consultants provide consultancy services, guidance on the legal framework, sector specific advice and information about investor incentives.

“Turkish Cypriot Development Agency” (“YAGA”)
Tel: +90 392 – 22 82317

Limits on Foreign Control and Right to Private Ownership and Establishment

Republic of Cyprus

The ROC does not have a mandatory foreign investment screening mechanism that grants approval, other than sector-specific licenses granted by relevant ministries.  CIPA does grant approvals for investment under an incentive scheme, e.g., the film production scheme. CIPA often refers projects for review to other agencies. Separately, the ROC’s residency and citizenship investment program is regulated by law, with interagency approvals after a due diligence process.

The following restrictions apply to investing in the ROC:

Non-EU entities (persons and companies) may purchase only two real estate properties for private use (two holiday homes or a holiday home and a shop or office).  This restriction does not apply if the investment property is purchased through a domestic company or as a corporation elsewhere in the EU.

Non-EU entities also cannot invest in the production, transfer, and provision of electrical energy.  Additionally, the Council of Ministers may refuse granting a license for investment in hydrocarbons prospecting, exploration, and exploitation to a third-country national or company if that third country does not provide similar treatment to Cyprus or other EU member states.

Individual non-EU investors may not own more than five percent of a local television or radio station, and total non-EU ownership of a local TV or radio station is restricted to a maximum of 25 percent.

The right to register as a building contractor in Cyprus is reserved for citizens of EU member states.  Non-EU entities are not allowed to own a majority stake in a local construction company. Non-EU physical persons or legal entities may bid on specific construction projects but only after obtaining a special license by the Council of Ministers.

Non-EU entities cannot invest in private tertiary education institutions.

The provision of healthcare services on the island is also subject to certain restrictions, applying equally to all non-residents.

Finally, the Central Bank of Cyprus’ prior approval is necessary before any individual person or entity, whether Cypriot or foreign, can acquire more than 9.99 percent of a bank incorporated in Cyprus.

Area Administered by Turkish Cypriots

According to the “Registrar of Companies Office,” foreign ownership of construction companies is capped at 49 percent.  Currently, the travel agency sector is closed to foreign investment. Registered foreign investors may buy property for investment purposes but are limited to one parcel or property.  Foreign natural persons also have the option of forming private liability companies, and foreign investors can form mutual partnerships with one or more foreign or domestic investors.

Other Investment Policy Reviews

Republic of Cyprus

The ROC has been a member of World Trade Organization (WTO) since July 30, 1995.  As of May 1, 2004, the Republic of Cyprus is a member state of the EU. Cyprus has not undergone investment policy reviews by the Organization for Economic Cooperation and Development (OECD) or United Nations Committee on Trade and Development (UNCTAD).  The WTO published a Trade Policy Review on the EU28, including Cyprus, in July 2015. The text is available at:  .

Area Administered by Turkish Cypriots

There have not been any third-party investment policy reviews.

Business Facilitation

Republic of Cyprus

The Ministry of Energy, Commerce and Industry (MECI) provides a “One Stop Shop” business facilitation service.  The One-Stop-Shop offers assistance with the logistics of registering a business in Cyprus to all investors, regardless of origin and size.  MECI’s Department of the Registrar of Companies and Official Receiver (DRCOR) provides the following services: Registration of domestic and overseas companies, partnerships, and business names; bankruptcies and liquidations; and trademarks, patents, and intellectual property matters.

Domestic and foreign investors may establish any of the following legal entities or businesses in the ROC:

  • Companies (private or public);
  • General or limited partnerships;
  • Business/trade name;
  • European Company (SE); and
  • Branches of overseas companies.

The registration process takes approximately two working days and involves completing an application for approval/change of name, followed by the steps outlined in the following link:  .

At the end of 2018, there were a total of 216,239 companies registered in the ROC, 14,526 of which had been registered in 2018 (for more statistics on company registrations, please see:  ).

In addition to registering a business, foreign investors, like domestic business owners, are required to obtain all permits that may be necessary under Cypriot law.  At a minimum, they must obtain residence and employment permits, register for social insurance, and register with the tax authorities for both income tax and Valued Added Tax (VAT).  In order to use any building or premises for business, including commerce, industry, or any other income-earning activity, one also needs to obtain a municipal license. Additionally, town planning or building permits are required for building new offices, or converting existing buildings.  There are also many sector-specific procedures. Information on all of the above procedures is available online at:  .

The World Bank’s 2019 Doing Business report (  ) ranked Cyprus 57th out of 190 countries for ease of doing business.  Among the ten sub-categories that make up this index, Cyprus performed best in the areas of resolving insolvency (26/190) and protecting minority investors (38/190), and worst in the areas of enforcing contracts (138/190) and dealing with construction permits (126/190).  Cyprus has generally backtracked in most areas compared to 2018, including getting credit and paying taxes, causing it to slip in the overall ranking. However, using another metric, the Global Competitiveness Index, issued by the World Economic Forum, Cyprus climbed 19 spots in the 2017-2018 edition, ranking 64th out of 137 countries.  The two most problematic factors for doing business in Cyprus, according to that report were providing access to financing and an inefficient government bureaucracy.

The Republic of Cyprus follows the EU definition of micro-, small- and medium-sized enterprises (MSMEs), and foreign-owned MSMEs are free to take advantage of programs in Cyprus designed to help such companies, including the following:

Additionally, foreign investors can take advantage of the services and expertise of the Cyprus Investment Promotion Agency (CIPA), an agency registered under the companies’ law and funded mainly by the state, dedicated to attracting investment.

9A Makarios III Ave
Severis Bldg., 4th Flr.
1065 Nicosia
Telephone: +357-22-441133
Fax: +357-22-441134

Area Administered by Turkish Cypriots

Information available on the “Registrar of Companies’” website is available only in Turkish:  .  An online registration process for domestic or foreign companies does not exist and registration needs to be completed in person.

The “YAGA” was established by Turkish Cypriot authorities with the aim of it becoming a one-stop-shop for both local and foreign investors interested in investing in the “TRNC.”  Its website (  ) provides explanations and guides in English on how to register a company in the area administrated by Turkish Cypriots.

As of March 2019, the “Registrar of Companies Office” statistics indicated there were 20,648 registered companies, of which 15,483 were Turkish Cypriot majority-owned limited liability companies; 418 foreign companies; and 456 offshore companies.  In addition, there were 2003 limited partnership companies owned only by Turkish Cypriots.

The area administered by Turkish Cypriots defines MSMEs as entities having less than 250 employees.  There are several grant programs financed through Turkish aid and EU aid targeting MSMEs.

The Turkish Cypriot Chamber of Commerce (KTTO) publishes an annual Competitiveness Report on the Turkish Cypriot economy, based on the World Economic Forum’s methodology.  KTTO’s 2017-2018 report ranked northern Cyprus 109 among 137 economies, dropping five places from its ranking in 2016.

For more information and requirements on establishing a company, obtaining licenses, and doing business visit:

“Turkish Cypriot Development Agency” (“YAGA”)
Telephone: +90 392 – 22 82317

Turkish Cypriot Chamber of Commerce (KTTO)
Telephone: +90 392 – 228 37 60 / 228 36 45  Fax: +90 392 – 227 07 82

Outward Investment

Republic of Cyprus

The ROC does not restrict outward investment, other than in compliance with international obligations, like specific UN Security Council Resolutions.  In terms of programs to encourage investment, businessmen in Cyprus have access to several EU programs promoting entrepreneurship, such as the European Commission’s Investment Plan for Europe (EC IPE), known as the “Juncker Plan” for projects over € 15 million (USD 16.6 million) or the Erasmus program for Young Entrepreneurs, in addition to the European Investment Bank’s guarantee facilities for SMEs for projects under € 4 million (USD 4.4 million).

Area Administered by Turkish Cypriots

Turkish Cypriot “officials” do not incentivize or promote outward investment. The Turkish Cypriot authorities do not restrict domestic investors.

3. Legal Regime

Transparency of the Regulatory System

Republic of Cyprus

The ROC achieved a score of 4 out of 6 in the World Bank’s composite Global Indicators of Regulatory Governance score (based on data collected December 2015 to April 2016) designed to explore good regulatory practices in three core areas: publication of proposed regulations, consultation around their content, and the use of regulatory impact assessments.  For more information, please see:  .

U.S. companies competing for ROC government tenders have noted concerns about opaque rules and possible bias by technical committees responsible for preparing specifications and reviewing tender submissions.  Overall, however, procedures and regulations are transparent and applied in practice by the government without bias towards foreign investors. The ROC actively promotes good governance and transparency as part of its administrative reform action plan:  .

In line with the above plan and EU requirements, the ROC launched in 2016 the National Open Data Portal (  ) to increase transparency in government services.  Government agencies are now required to post on this portal publicly-available information, data, records, on the entire spectrum of their activities, for use, including commercial use, by the public.  The number of data sets available through this portal has been growing rapidly in recent months.

Several agencies and non-governmental organizations (NGOs) share competency on fostering competition and transparency, including the ROC Commission for the Protection of Competition (  ), the Competition and Consumer Protection Service, under MECI (  ), the Cyprus Consumers Association (  ), and the Cyprus Securities and Exchange Commission (  ).

Most laws and regulations are published only in Greek and obtaining official English translations can be difficult.  When passing new legislation or regulations, Cypriot authorities follow the EU acquis communautaire.  A formal procedure of public notice and comment is not required in Cyprus, except for specific types of laws.  In general, the ROC will seek stakeholder feedback directly. Draft legislation must be published in the Official Gazette before it is debated in the House to allow stakeholders an opportunity to submit comments.  The ROC House of Representatives typically invites specific stakeholders to offer their feedback when debating bills. Draft regulations, on the other hand, need not be published in the Official Gazette prior to being approved.

In an effort to contribute to global tax transparency, the ROC has adopted the Standard of Automatic Exchange of Information developed by the Organization for Economic Co-Operation and Development (OECD) known as Common Reporting Standard (CRS).  Since January 1, 2016, the ROC Tax Department requires all financial institutions to confirm their clients’ jurisdiction(s) of Tax Residence and Respective Tax Identification Number, if applicable. Additionally, the ROC has signed the U.S. Foreign Account Tax Compliance Act (FATCA), allowing Cypriot tax authorities to share information with U.S. counterparts.

Public finances and debt obligations are published as part of the annual budget process.

Area Administered by Turkish Cypriots

The level of transparency for “lawmaking” and adoption of “regulations” in the “TRNC” lags behind U.S. or EU standards.  There are no informal regulatory processes managed by nongovernmental organizations or private sector associations. Draft legislation or regulations are made available for public comment for 21 days after the legislation is sent to “parliament.”  Almost all legislation and regulations are published only in Turkish.

International Regulatory Considerations

Republic of Cyprus

As an EU member state since May 1, 2004, the Republic of Cyprus must ensure compliance with the acquis communautaire — the body of common rights and obligations that is binding on all EU members.  The acquis is constantly evolving and comprises of Treaties, international agreements, legislation, declarations, resolutions, and other legal instruments.  EU legislation, for its part, is subdivided into:

  • Regulations, which are directly applicable to member states and require no further action to have legal effect;
  • Directives, which are addressed to and are binding on member states, but the member state may choose the method by which to implement the directive.  Generally, a member state must enact national legislation to comply with a directive;
  • Decisions, which are binding on those parties to whom they are addressed;
  • Recommendations and opinions, which have no binding force.

When there is conflict between European law and the law of any member state, European law prevails; the norms of national law have to be set aside, under the principle of EU law primacy or supremacy.

Legal System and Judicial Independence

Republic of Cyprus

Cyprus is a common law jurisdiction and its legal system is based on English Common Law, in both substantive and procedural matters.  Cyprus inherited many elements of its legal system from the United Kingdom, including the presumption of innocence, the right to due process, the right to appeal, and the right to a fair public trial.  Courts in Cyprus possess the necessary powers to enforce compliance by parties who fail to obey judgments and orders made against them. Public confidence in the integrity of the Cypriot legal system remains strong, although long delays in courts, and the perceived failure of the system collectively to punish those responsible for the island’s financial troubles have tended to undermine this trust in recent years.  The Council of Europe’s GRECO called for judicial reforms to build confidence and trust (see:  ).

International disputes are resolved through litigation in Cypriot courts or by alternative dispute resolution methods such as mediation or arbitration.  Businesses often complain of court gridlock and judgments on cases generally taking years to be issued, and even more for claims involving property foreclosure.

Area Administered by Turkish Cypriots

Investors should note the EU’s acquis communautaire is suspended in the area administered by the Turkish Cypriots.

The “TRNC” is a common law jurisdiction.  Judicial power other than the “Supreme Court” is exercised by the “Heavy Penalty Courts,” “District Courts,” and “Family Courts.”  Turkish Cypriots inherited many elements of their legal system from the British colonial rule before 1960, including the right to appeal and the right to a fair public trial.  There is a high level of public confidence in the judicial system in the area administrated by Turkish Cypriots. The judicial process is procedurally competent, fair, and reliable.

Foreign investors can make use of all the rights guaranteed to Turkish Cypriots.  Commercial courts and alternative dispute resolution mechanisms are not available in the “TRNC.”  The resolution of commercial or investment disputes through the “judicial system” can take several years.  The Turkish Cypriot administration has trade and industry “law” and contractual “law.” The Turkish Cypriot administration has several trade and economic cooperation agreements with Turkey.  For more information about “legislation,” visit  .

Laws and Regulations on Foreign Direct Investment

Republic of Cyprus

Below are links to various publications and laws affecting incoming foreign investment:

Area Administered by Turkish Cypriots

Visit the “YAGA” website, for more information about laws and regulations on FDI:  .

Competition and Anti-Trust Laws

Republic of Cyprus

The oversight agency for competition is the Commission for the Protection of Competition:  

Area Administered by Turkish Cypriots

The oversight “agency” for competition is the “Competition Board:”  .

Expropriation and Compensation

Republic of Cyprus

Private property may, in exceptional instances, be expropriated for public purposes, in a non-discriminatory manner, and in accordance with established principles of international law.  The expropriation process entitles investors to proper compensation, whether through mutual agreement, arbitration, or the local courts. Foreign investors may claim damages resulting from an act of illegal expropriation by means other than litigation.  Investors and lenders to expropriated entities receive compensation in the currency in which the investment was made. In the event of any delay in the payment of compensation, the Government is also liable for the payment of interest based on the prevailing six-month LIBOR for the relevant currency.

The 2013 “Bail-In” of Bank Depositors:  Following the 2013 financial crisis and as part of the Memorandum of Understanding between the Republic of Cyprus and international lenders (European Commission, European Central Bank and the IMF), depositors in two Cypriot banks were forced to exchange some of their deposits into equity shares in the banks.  This “haircut” sparked 3,000 lawsuits against the ROC and the banks. Some of these lawsuits have been rejected by EU courts, while most remain unresolved. Additionally, recipients of this “haircut” have filed a class- action suit against various European bodies at the General Court of the European Union, while similar disputes are still pending before the World Bank’s International Centre for Settlement of Investment Disputes and the Paris-based International Chamber of Commerce (ICC) International Court of Arbitration.  The ROC set up a solidarity fund in 2017, aimed at helping depositors who lost money in the “haircut,” although it is still unclear how this will work in practice. In September of 2016, the European Court of Justice (ECJ) ruled that adoption of the Memorandum of Understanding (MOU) was not an unlawful act, and dismissed actions for compensation. European Central Bank in its 2017 annual report noted that it did not expect any losses from four lawsuits filed against it and other EU bodies by depositors, shareholders and bondholders of Cypriot banks.

Area Administered by Turkish Cypriots

Private property may be expropriated for public purposes. The expropriation process entitles investors to proper compensation. Foreign investors may claim damages resulting from an act of illegal expropriation by means other than litigation.

In expropriation cases involving private owners, they are first notified, the property is then inspected, and, if an agreement is reached regarding the amount, then the owner is compensated.  In cases where the owner declines the compensation package, the case relegated to local “courts” for a final decision.

Dispute Settlement

Republic of Cyprus

ICSID Convention and New York Convention

The ROC is a member state to the Convention on the International Centre for the Settlement of Investment Disputes (ICSID Convention), and a signatory to the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.

Investor-State Dispute Settlement

There have been no reports of investment disputes in Cyprus involving U.S. persons over the past 10 years, and there is no history of extrajudicial action against foreign investors.  Local courts recognize and enforce foreign arbitral awards issued against the government.

International Commercial Arbitration and Foreign Courts

Cyprus offers several different means of Alternative Dispute Resolution (ADR).  However, recourse to ADR is not common. Some of the entities offering ADR are the following:

Additionally, the ROC Ministry of Justice and Public Order maintains a publicly-available Register of Mediators for both commercial and civil disputes:  .

EU citizens and businesses can also use SOLVIT, a free, online service, to resolve problems pertaining to internal EU market issues, like visa and residence rights, pension rights, and VAT refunds, within 10 weeks from the day the problem is reported:  .

Under the Arbitration Law of Cyprus, if the parties are unable to reach a settlement an arbitrator can be appointed.  Arbitration rulings are fully enforceable and the court may settle an arbitral award in the same way as a judgment. Mediation is not fully enforceable, unless the settlement agreement explicitly stipulates that the parties can apply to court for enforcement.  The ROC honors the enforcement of foreign court judgments and foreign arbitration awards. Domestic legislation on binding international arbitration is modeled after internationally-accepted regulations, such as the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration, which the ROC adopted in 1985.  Cyprus’ bilateral investment treaties with several countries also include dispute settlement provisions (see Section 3, Bilateral Investment Agreements).

Area Administered by Turkish Cypriots

Investor-State Dispute Settlement

Foreign investors can make use of all the rights guaranteed to Turkish Cypriots.  Alternative dispute resolution mechanisms are not available in the “TRNC.” The resolution of commercial or investment disputes through the “judicial system” can take several years.

Bankruptcy Regulations

Republic of Cyprus

In 2015 the ROC parliament approved a new package of insolvency laws to overhaul existing bankruptcy procedures and help resolve the island’s very high levels of NPLs.  Bankruptcy procedures can be initiated by a creditor through compulsory liquidation or by the debtor through voluntary liquidation. The court can impose debt rescheduling, in cases where aggregate liabilities do not exceed €350,000 (USD 385,000) and individuals with minimal assets and income may apply to the court via the Insolvency Service for a debt relief order of up to €25,000 (USD 27,500).  Discharge from bankruptcy is automatic after three years, provided all debtor assets are sold and the proceeds distributed to creditors. Fraudulent alienation of assets prior to bankruptcy and non-disclosure of assets draws criminal sanctions under the new legislation. Cypriot authorities are closely monitoring implementation of the new insolvency framework. In March 2018, the government and political parties agreed to set up a committee of experts to forge a new national strategy on how best to deal with the persistent problem of NPLs.  NPLs decreased considerably in 2018 mainly due to the collapse of the Cyprus Cooperative Bank (CCB), which transferred bad assets from the banking system to a separate public entity. NPLs declined from 42 percent of gross loans at the end of 2017 to 32 percent at the end of November 2018.

The World Bank’s 2019 Doing Business report ranked Cyprus 26th from the top among 190 countries in terms of the ease with which it resolves insolvency.  For additional information, please see:  .

Area Administered by Turkish Cypriots

In 2013, the “TRNC” passed a debt restructuring “law” aimed at providing incentives to restructure debts and NPLs separately.  Turkish Cypriots also have a bankruptcy “law” that defines “collecting power;” conditions under which a creditor can file a bankruptcy application; and the debtor’s bankruptcy application, and agreement plans.  In December 2018, NPLs had reached USD 187 million (1.045 billion Turkish Lira).

6. Financial Sector

Capital Markets and Portfolio Investment

Republic of Cyprus

The ROC Stock Exchange (CSE), launched in 1996, is one of the EU’s smallest stock exchanges, with a capitalization of € 2.0 billion (USD 2.3 billion) as of March 2019.  The CSE and the Athens Stock Exchange (ASE) have operated from a joint trading platform since 2006, allowing capital to move more freely from one exchange to the other, even though both exchanges retain their autonomy and independence.  The joint platform has increased capital available to Cypriot firms and improved the CSE’s liquidity, although its small size remains a constraint. The private sector has access to a variety of credit instruments, which has been enhanced through the operation of private venture capital firms.  Credit is allocated on market terms to foreign and local investors alike. Foreign investors may acquire up to 100 percent of the share capital of Cypriot companies listed on the CSE with the notable exception of companies in the banking sector.

Area Administered by Turkish Cypriots

There is no stock exchange in the area administrated by Turkish Cypriots and no foreign portfolio investment.  Foreign investors are able to get credit from the local market, provided they have established domestic legal presence, majority-owned (at least 51 percent) by domestic companies or persons.

Money and Banking System

Republic of Cyprus

The ROC banking sector is still consolidating and restructuring, following the March 2013 “haircut” of uninsured deposits.  The banking sector returned to profitability in the first half of 2018 but the high stock of NPLs continues to affect bank performance.  NPLs decreased considerably in 2018 mainly due to the collapse of the Cyprus Cooperative Bank (CCB), which transferred bad assets from the banking system to a separate public entity.  NPLs declined from 42 percent of gross loans at the end of 2017 to 32 percent at the end of November 2018. New laws on insolvency, foreclosures, and securitization support the effort to reduce NPLs further.  Meanwhile, an improving economy and stabilizing property market are helping households and companies service their high debt. Public debt rose to 105 percent of GDP in 2018, due to the government’s support in the sale of the CCB, but is expected to decline to 98.4 percent in 2019, with a steadily declining outlook.  Cyprus’ sovereign debt regained investment grade rating in 2018, mitigating refinancing risks.

Following increased provisioning for NPLs, the banks’ capital position declined moderately although it is still adequate — from 14.9 percent on December 31, 2017 to 14.1 percent on September 30, 2018.  Total deposits in the Cypriot banking system stood at € 47.7 billion (USD 54.4 billion) in February 2019 – only slightly above the level at the end of 2013, reflecting growing, but still fragile, depositor confidence.  The total assets of Cyprus’ three largest banks in 2018 were as follows: Bank of Cyprus € 22.1 billion (USD 26.1 billion), Hellenic Bank € 16.0 billion (USD 18.9 billion), and RCB € 9.1 billion (USD 10.6 billion). Cyprus has a central bank — the Central Bank of Cyprus — which forms part of the European Central Bank.  Foreign banks or branches are allowed to establish operations in Cyprus after obtaining relevant permits, and they are subject to Central Bank of Cyprus supervision, just like domestic banks. Following Deutsche Bank’s decision to stop providing correspondent banking relationships to Cypriot banks in September 2017, only Citibank and Bank of New York currently provide such service to ROC banks.

Opening a personal bank account in Cyprus is straightforward, and the documents needed to do so are:  (a) a copy of a valid passport or identity card (some banks will require notarized copies of identification documents); a utility bill stating the residence address of the applicant (the bill cannot be older than 6 months); and an application form issued by the bank.  Opening a corporate bank account, which is mandatory when registering a company in Cyprus, requires the following documents, such as: (a) Articles of Association, the Certificate of Incorporation and the Share Certificate of the company; (b) a certificate of good standing for foreign companies if they have been opened for over 2 years; (c) Certificates of Directors and Secretary, the Certificate of the Registered Office; (d) proof of the registered office issued by the Group Principal Trading Offices; and (e) an application form released by the bank (each bank has its own model of application).  A current list of authorized credit institutions in Cyprus is available on the Central bank of Cyprus website:  .

Cyprus has taken steps in 2018 to address recognized regulatory shortcomings in combatting illicit finance in its international banking and financial services sector, tightening controls over non-resident shell companies and bank accounts.

Area Administered by Turkish Cypriots

The “Central Bank” oversees and regulates local, foreign, and private banks.  In addition to the “Central Bank” and the “Development Bank”, there are 19 banks in the area administrated by Turkish Cypriots, of which 14 are Turkish Cypriot-owned banks, and five are branch banks from Turkey.  Banks are required to follow “know-your-customer” (KYC) and AML “laws,” which are regulated by the “Ministry of Economy and Energy,” and supervised by the “Central Bank.” Due to non-recognition issues, Turkish Cypriot banks encounter practical difficulties as a result of not qualifying for an international SWIFT number (SWIFT code is a standard format of Bank Identifier Codes (BIC)).  Therefore, Turkish Cypriots and foreigners making international transfers depend on Turkish banks for assistance. The total number of deposits, was approximately USD 4.8 billion as of January 2019. The “Central Bank” claimed 96.7 percent liquidity, assessing this as sufficient to withstand a crisis. NPLs reached USD 187 million (1.045 billion Turkish lira) as of December 2018.

More information is available at the “Central Bank” website:  .

Foreign Exchange and Remittances

Foreign Exchange

Republic of Cyprus

As a member of the Eurozone, the ROC uses the euro as its currency.  The Eurozone has no restrictions on the transfer or conversion of its currency, and the exchange rate is freely determined in the foreign exchange market.  There is no difficulty in obtaining foreign exchange. Since the 2008 financial crisis, the European Commission, has pursued several initiatives aimed at creating a safer and sounder financial sector, known as the Banking Union.  These initiatives, which include stronger prudential requirements for banks, improved depositor protection and rules for managing failing banks, form a single rulebook for all financial actors in the 28 member states of the EU. The single rulebook is the foundation of the Banking Union.  For more info, please refer to:  .

Area Administered by Turkish Cypriots

The “TRNC” has a separate financial system from the ROC.  The financial system in the area administered by Turkish Cypriots is linked closely with that of Turkey.  The Turkish lira (TL) is the main currency in use, although the Euro, U.S. dollar, and British pound are commonly accepted.  The vast majority of business borrowing is derived from domestic and Turkish sources.

A devaluation of the TL against foreign exchange rates (or the opposite) has a strong effect on the economy of the area administered by Turkish Cypriots.  Wages across sectors are generally paid in TL, but almost all real estate, rents, electronic goods, vehicles, and other expensive products are valued in foreign currency.  Banks in the Turkish Cypriot administered areas provide lower interest rates for Euro or British pound loans than for TL loans. Foreign investors are authorized to repatriate all proceeds from their investments and business.

Banks are free to keep foreign currency, act as intermediary in import and export transactions, accept foreign currency savings, engage in purchase and sale of foreign currency, and give foreign currency loans.

Remittance Policies

Republic of Cyprus

There are no restrictions or delays on investment remittances or the inflow or outflow of profits.  Remittance firms, also known as Money Transfer Businesses or MTBs, are regulated by the Central Bank of Cyprus.

Cyprus’ first national risk assessment (NRA) of money laundering and terrorist financing, released publicly November 30, 2018, is available at:  .  The NRA assessed the money laundering threat for MTBs as medium, noting the following:  “The misuse of MTB services for terrorism financing is globally considered as the biggest threat although there are no available local typologies.  No official statistics on investigations, prosecutions or convictions were available for MTBs. Statistics revealed that the value of outward transfers is significantly higher than the inward transfers in MTB sector.  This falls in line with predictions as Cyprus relies on legal immigration to fill labor positions, mainly unskilled, and is home for workers from third countries who despite having access to banking services (obligation for the issuance of working visa) still prefer to use MTBs for the remittance of financial aid to their families due to the significantly lower costs of transmission and the convenience emanating from the infrastructures available in their country of origin.”

The NRA also noted that the Central Bank of Cyprus maintains a public register, including:  (a) licensed payment institutions, (b) the names and addresses of their agents and their branches’ addresses, and (c) payment institutions authorized in other EU Member States with the right of freedom to provide services in the ROC.  As of June 30, 2016, six payment institutions with 330 agents were operating within the sector as money remitters and three agents were passported with physical presence with 62 subagents. As of the same date, there were also around 250 passported institutions, with no physical presence.  The bulk of money transfer business is carried out by two international household names. No indigenous scheme is operating in Cyprus.

Cyprus is a member of the Select Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), a FATF-style regional body.  Its most recent mutual evaluation report of the Cypriot banking sector, conducted in March 2013, can be found at:  .  MONEYVAL’s next assessment of Cyprus will commence in May 2019.

Sovereign Wealth Funds

Republic of Cyprus

The Parliament passed legislation March 1, 2019 providing for the establishment of a National Investment Fund (NIF) to manage future offshore hydrocarbons and other natural resources revenue.  The fund is not established as regulations for the NIF are being drafted and will require legislative approval before the fund can operate. See:  .

Area Administered by Turkish Cypriots

There is no established sovereign wealth fund.

8. Responsible Business Conduct


In recent years, responsible business conduct (RBC) awareness among both producers and consumers is growing in Cyprus.  Leading foreign and domestic enterprises tend to follow generally-accepted RBC principles, and firms pursuing these practices tend to be viewed more favorably by the public.  The Cyprus Stock Exchange is among the entities imposing a responsible code of conduct among listed companies:  .  Most professional associations also promote ethical business conduct among their members, including the Cyprus Bar Association, and the Institute of Certified Public Accountants of Cyprus.

The ROC does not specifically adhere to OECD Guidelines for Multinational Enterprises, however, multinationals are expected to follow generally-accepted RBC principles.  ROC authorities have made some initial soundings considering the possibility of eventually joining the Extractive Industries Transparency Initiative (EITI –  ).

Area Administered by Turkish Cypriots

RBC awareness has grown among both producers, consumers and business in the area administrated by Turkish Cypriots.  Firms pursing these practices tend to be viewed favorably by the public.

9. Corruption

Republic of Cyprus

Transparency International, the global anti-corruption watchdog, ranked Cyprus 38 out of 180 countries in its 2018 Corruption Perception Index.  For reference, please see:  .  Disagreements between the Berlin-based headquarters of Transparency International and its Cypriot division in 2017 led to the disaccreditation of the latter in 2017 and the launch of a successor organization on the island called the Cyprus Integrity Forum (contact details follow).

Corruption, both in the public and private sectors, constitutes a criminal offense.  Under the Constitution, the Auditor General controls all government disbursements and receipts and has the right to inspect all accounts on behalf of the Republic.  Private sector concerns focus on the inertia in the system, as reflected in the Auditor General’s annual reports, listing hundreds of alleged incidents of corruption and mismanagement in public administration that usually remain unpunished or unrectified.  A 2016 survey found 65 percent of local CEOs listed bribery and corruption as the top threat to their companies’ ability to conduct business. GAN Integrity, a business anti-corruption portal with offices in the United States and Denmark, released a report on corruption in Cyprus April 2018 noting the following:  “Although Cyprus is generally free from corruption, high-profile corruption cases in recent years have highlighted the presence of corruption risks in the Cypriot banking sector, public procurement and land administration sector. Businesses may encounter demands for irregular payments, but the government has established a strong legal framework to combat corruption and generally implements it effectively.  Bribery, facilitation payments and giving or receiving gifts are criminal offenses under Cypriot law. The government has a strong anti-corruption framework and has developed effective e-governance systems (the Point of Single Contact and the e-Government Gateway project) to assist businesses.” The report can be accessed at:  

Cyprus cooperates closely with EU and other international authorities to fight corruption and provide mutual assistance in criminal investigations.  Cyprus ratified the European Convention on Mutual Assistance in Criminal Matters. Cyprus also uses the foreign Tribunal Evidence Law, Chapter 12, to execute requests from other countries for obtaining evidence in Cyprus in criminal matters.  Additionally, Cyprus is an active participant in the Council of Europe’s Multidisciplinary Group on Corruption. Cyprus signed and ratified the Criminal Law Convention on Corruption and has joined the Group of States against Corruption in the Council of Europe (GRECO).  GRECO’s most recent report on Cyprus is available at:  .

Cyprus is a member of the UN Anticorruption Convention (  ) but it is not a member of the OECD Convention on Combatting Bribery (  ).

Resources to Report Corruption

Government agencies responsible for combating corruption:

Financial Crime Unit
Cyprus Police Headquarters
1478 Nicosia
Telephone: +357-22-808080

Unit for Combating Money Laundering (MOKAS)
7 Pericleous Str.
2020 Strovolos
Telephone: +357-22-446004

Auditor General of the Republic
6 Deligiorgi Str.
1406 Nicosia
Telephone: +357-22-401300

Anti-corruption NGO:

Cyprus Integrity Forum (CIF)
27 Michalacopoulou Street
City Business Centre
Office FF08
1075 Nicosia
Telephone: +357 22 025772, +357 22 025773

Area Administered by Turkish Cypriots

Corruption, both in the public and private sectors, constitutes a criminal offense.  The “Audit Office” controls all disbursements and receipts and has the right to inspect all accounts.  In its annual report, this office identifies specific instances of mismanagement or deviation from proper procedures and anecdotal evidence suggests corruption and patronage continue to be a factor in the economy.  For more information, visit  .

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