2023 Investment Climate Statements: Cyprus

Policies Towards Foreign Direct Investment

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, and construction (see Limits on Foreign Control, below). The ROC promotes FDI through a dedicated agency, Invest Cyprus, which is tasked with attracting FDI in the key economic sectors of shipping, education, real estate, tourism and hospitality, energy, investment funds, filming, and innovation and startups. Invest Cyprus is the first point of contact for investors, and provides detailed information on the legal, tax, and business regulatory framework. The ROC and Invest Cyprus also promote an ongoing dialogue with investors through a series of promotion seminars each year. The Cyprus Chamber of Commerce and Industry (CCCI) is a robust organization with country-specific bilateral chambers, including the American Chamber of Commerce in Cyprus (AmCham Cyprus), that is dedicated to promoting FDI and serving the business interests of foreign companies and trade partners operating in the ROC.

For more information:

Invest Cyprus
9 Makariou III Avenue
Severis Building, 4th Floor
1965 Nicosia, Cyprus
Tel: +357 22 441133
Fax: +357 22 441134
Email: info@investcyprus.org.cy 
Website: https://www.investcyprus.org.cy 

AmCham Cyprus
38, Grivas Dhigenis Ave. & 3, Deligiorgis Str.,
P.O. Box 21455,
1509 Nicosia Cyprus
Tel: +357 22 889718
Email: amcham@amcham.cy 
Website: www.amcham.cy 

Cyprus Embassy Trade Center – New York
13 East 40th Street
New York, NY 10016
Phone: (212) 213-9100Fax: (212) 213-9100
Website: https://www.cyprustradeny.org/

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. While there are no laws or practices that discriminate against FDI, see the discussion in the Real Property section for a discussion of special considerations relevant to investment in real property. The “Turkish Cypriot Investment Development Agency (YAGA)” provides investment consultancy services, guidance on the legal framework, sector specific advice, and information about investor incentives.

“Turkish Cypriot Investment Development Agency” (“YAGA”)
Tel: +90 392 – 22 82317
Website: https://investnorthcyprus.gov.ct.tr/ 

Limits on Foreign Control and Right to Private Ownership and Establishment

REPUBLIC OF CYPRUS

The ROC does not currently have a mandatory foreign investment screening mechanism that grants approval to FDI other than sector-specific licenses granted by relevant ministries. However, the ROC is currently drafting legislation in line with EU regulation, to establish an investment screening mechanism under the Ministry of Finance. It is expected to be passed in 2023. Additionally, Invest Cyprus can refer projects for review to other agencies or ministries, or approve investments under the film production incentive scheme.

The following restrictions currently 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 ROC company or a corporation elsewhere in the EU. U.S. investment in such companies is welcome.
• Non-EU entities cannot invest in the production, transfer, and provision of electrical energy. 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 allow similar investment by the ROC or other EU member states. ROC hydrocarbon exploration is currently led by two consortiums led by U.S. companies.
• Individual non-EU investors may not own more than five percent of a local television or radio station, and total non-EU ownership of any single local TV or radio station is restricted to a maximum of 25 percent.
• The right to register as a building contractor in the ROC 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 from the Council of Ministers.
• Non-EU entities cannot invest directly in private tertiary education institutions but may do so through ownership of Cypriot or EU companies.
  The provision of healthcare services on the island is subject to certain restrictions, applying equally to all non-residents.
• The Central Bank of Cyprus’s 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 the ROC.
• Companies in the ROC are allowed to employ foreign nationals for up to 50 percent of their workforce, provided there are no qualified ROC citizen applicants. (Prior to February 2023, this limit was even stricter, allowing only a 30-percent share of foreign workers.)

AREA ADMINISTERED BY TURKISH CYPRIOTS

According to the “Registrar of Companies Office,” all non-Turkish Cypriot 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

In its Post-COVID FDI recovery report, released September 2022, FDI Intelligence (fDi) found the ROC ranked 18th in its Greenfield FDI Performance in 2021, rising by 50 places compared to 2020, in terms of new FDI projects across more than 80 countries relative to the size of their economy. According to the same source, the number of greenfield investments in the ROC rose by 150 percent overall (and by 600 percent in software and IT investments) in the first half of 2022 from the same period in 2019, placing it among the 10 top countries that stood out for FDI recovery after the pandemic. (See: https://www.fdiintelligence.com/content/locations/global/post-covid-fdi-recovery-top-10-countries-81398 .)

Business Facilitation

REPUBLIC OF CYPRUS

The Ministry of Energy, Commerce and Industry (MECI) provides a “One Stop Shop” business facilitation service, offering assistance with the logistics of registering a business in the ROC to all investors, regardless of origin and size. For more details, please contact:

One Stop Shop & Point of Single Contact
Ministry of Energy, Commerce, and Industry (MECI)
10 Andrea Araouzou Str.
1421 Nicosia, Cyprus
Tel. +357 22 409318
Fax: +357 22 409432
Email: businessincyprus@meci.gov.cy 
Website: www.businessincyprus.gov.cy

Additionally, in September 2020, MECI established a Business Facilitation Unit (BFU), offering a Fast Track Business Activation mechanism to provide efficient business registration services to eligible foreign investors who want to establish a physical presence on the island. This program has already generated strong interest from abroad, attracting several firms in the technology, IT, and communications sectors. For more information, please contact:

Business Facilitation Unit
10 Andrea Araouzou Str.
1421 Nicosia, Cyprus
POCs:
Katerina Solomou, Tel: +357 22 867193, Email: ksolomou@meci.gov.cy;
George Panayi, Tel:+357  22 867181, Email: gpanayi@meci.gov.cy 
Website: https://www.businessincyprus.gov.cy/business-facilitation-unit/ 

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: http://www.businessincyprus.gov.cy/mcit/psc/psc.nsf/All/A2E29870C32D7F17C2257857002E18C9?OpenDocument.

At the end of 2022, there were a total of 192,469 companies registered in the ROC, 12,583 of which had been registered in 2022 (for more statistics on company registrations, please see: https://www.companies.gov.cy/en/ ).

In addition to registering a business, foreign investors, like domestic business owners, are required to obtain all permits that may be necessary under ROC 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 many sector-specific procedures. Information on all the above procedures is available online at the link above.

The World Bank’s 2020 Doing Business report ( http://www.doingbusiness.org/rankings)  ranked the ROC 54th out of 190 countries for ease of doing business. Among the ten sub-categories that make up this index, the ROC performed best in the areas of protecting minority investors (21/190) and paying taxes (29/190), and worst in the areas of enforcing contracts (142/190) and dealing with construction permits (125/190). Since 2020, the World Bank Group has discontinued the Doing Business project and is now formulating a new approach to assessing the business and investment climate in economies worldwide. Using another metric, in the Global Competitiveness Index, issued by the World Economic Forum, the ROC maintained its ranking of 44th out of 141 countries in the 2019 edition (the last year published). The two areas where the ROC performed the worst were its small market size and relatively low innovation capability.

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

• https://www.fundingprogrammesportal.gov.cy/en/call/enabling-discovery-and-interoperability-of-federated-research-objects-across-scientific-communities/ 

Foreign investors can take advantage of the services and expertise of Invest Cyprus, an agency registered under the Companies’ Law and funded mainly by the state, dedicated to attracting investment.

Invest Cyprus
9A Makarios III Ave
Severis Bldg., 4th Fl.
1065 Nicosia
Tel. +357 22 441133
Fax: +357 22 441134
Email: info@investcyprus.org.cy 
Website: http://www.investcyprus.org.cy/

Additionally, the Association of Large Investment Projects, under the Cyprus Chamber of Commerce and Industry, can provide useful information on large ongoing investment projects:

Association of Large Investment Projects
38 Grivas Dhigenis Ave. & 3 Deligiorgis Str.,
P.O. Box 21455
1509 Nicosia
Tel: +357 22 889890
Fax: +357 22 667593
Email: bigprojects@ccci.org.cy

Lastly, the Cyprus Country Profiler website offers some useful background on the ROC: https://www.cyprusprofile.com/ 

AREA ADMINISTERED BY TURKISH CYPRIOTS

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

The “YAGA” website ( https://investnorthcyprus.gov.ct.tr /) provides explanations and guides in English on how to register a company in the area administrated by Turkish Cypriots.

As of March 2022, the “Registrar of Companies Office” statistics indicated there were 24,563 financial companies; 465 foreign companies; 528 offshore businesses. The area administered by Turkish Cypriots defines MSMEs as entities having fewer than 250 employees. There are several grant programs financed by 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 2019-2020 report ranked northern Cyprus 107 among 141 economies, dropping eighteen places from its ranking in 2019. KTTO published a 2021-2022 Special Edition. In this special edition report countries were not ranked due to the pandemic, but instead provided with transformation readiness scores. Visit KTTO website for Special Edition report. https://www.ktto.net/en/competitiveness-report-2021-2022-special-issue/ 

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

“Turkish Cypriot Investment Development Agency” (“YAGA”)
Tel: +90 392 – 22 82317
Website: https://investnorthcyprus.gov.ct.tr/

Turkish Cypriot Chamber of Commerce (KTTO)
https://www.ktto.net/en/ 
Tel: +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 such as specific UN Security Council Resolutions. In terms of programs to encourage investment, businesses in the ROC have access to several EU programs promoting entrepreneurship, such as the European Commission’s Next Generation EU economic recovery package, or the Erasmus program for Young Entrepreneurs, in addition to the European Investment Bank’s guarantee facilities for SMEs for projects under USD 4.2 million (EUR 4 million).

AREA ADMINISTERED BY TURKISH CYPRIOTS

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

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: http://rulemaking.worldbank.org/en/data/explorecountries/cyprus .

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 the National Open Data Portal ( https://www.data.gov.cy/ ) in 2016 to increase transparency in government services. Government agencies are now required to post publicly available information, data, and records, on the entire spectrum of their activities. The number of data sets available through this portal has been growing rapidly, although many of them are only in Greek.

Several agencies and non-governmental organizations (NGOs) share competency for fostering competition and transparency, including the ROC Commission for the Protection of Competition ( http://www.competition.gov.cy/competition/competition.nsf/index_en/index_en?OpenDocument ), the Competition and Consumer Protection Service, under MECI ( https://meci.gov.cy/en/departments-services/consumer-protection-service ), the Cyprus Consumers Association ( https://www.katanalotis.org.cy/ ), and the Cyprus Securities and Exchange Commission ( https://www.cysec.gov.cy/en-GB/home/ ).

Government and independent oversight agencies such as the Cyprus Securities and Exchange Commission actively promote companies’ environmental, social, and governance (ESG) disclosure to facilitate transparency. In 2017, the European Commission published guidelines to help companies disclose environmental and social information, which it supplemented in 2019 with guidelines on reporting climate-related information. These guidelines are not mandatory, but many progressive local companies are adopting them to ensure sustainability and secure long-term gains.

Most laws and regulations are published only in Greek and obtaining official English translations can be difficult, but expert analysis in English is generally available from local law and accounting firms, particularly when the regulation affects international investment or business activity. When passing new legislation or regulations, ROC authorities follow the EU acquis communautaire – the body of common rights and obligations that is binding on all EU members. A formal public notice procedure and comment is not required in the ROC, 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 OECD known as the Common Reporting Standard (CRS), even though the ROC is not an OECD member. Since 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 ROC 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. and 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.” All legislation and regulations are published in Turkish.

International Regulatory Considerations

REPUBLIC OF CYPRUS

As an EU member state since May 1, 2004, the ROC must ensure compliance with the acquis communautaire. The acquis is constantly evolving and is comprised 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; and
• 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. The ROC is often slow to transpose EU directives into local law, but transposition is generally consistent with EU intent when it happens.

AREA ADMINISTERED BY TURKISH CYPRIOTS

The entire island of Cyprus is considered EU territory, but the acquis communautaire is suspended in the areas administered by Turkish Cypriots and the north is not considered to be within the EU customs area.

Legal System and Judicial Independence

REPUBLIC OF CYPRUS

The ROC is a common law jurisdiction and its legal system is based on English Common Law for both substantive and procedural matters. The ROC 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 the ROC 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 ROC legal system has been undermined by long delays in courts, and the perceived failure of the system to punish those responsible for high-profile corruption cases in recent years. A poll conducted in December 2022 revealed three-quarters of Cypriots were unsatisfied with the justice system, while many retained reservations about the impartiality of judges. The ROC has taken important steps towards judicial reform in recent years but these have yet to achieve the intended goal of shortening court delays.

International disputes are resolved through litigation in ROC courts or by alternative dispute resolution methods such as mediation or arbitration – although, in practice, these are rarely used. Businesses often complain of court gridlock and judgments on cases generally taking years to be issued, particularly 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, which is also 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 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. 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,” and several trade and economic cooperation agreements with Turkey. For more information about “legislation,” visit https://investnorthcyprus.gov.ct.tr/ . Because it is not recognized internationally, “TRNC court” decisions and orders may be difficult to enforce outside of the area administered by Turkish Cypriots or Turkey.

Laws and Regulations on Foreign Direct Investment

REPUBLIC OF CYPRUS

For more information on laws affecting incoming foreign investment see:
https://www.investcyprus.org.cy/

AREA ADMINISTERED BY TURKISH CYPRIOTS

Visit the “YAGA” website, for more information about laws and regulations on FDI: https://investnorthcyprus.gov.ct.tr/ 

Competition and Antitrust Laws

REPUBLIC OF CYPRUS

The oversight agency for competition is the Commission for the Protection of Competition:
http://www.competition.gov.cy/competition/competition.nsf/index_en/index_en?OpenDocument

AREA ADMINISTERED BY TURKISH CYPRIOTS

The oversight “agency” for competition is the “Competition Board:” http://www.rekabet.gov.ct.tr/ 

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 and consistent with EU law, rights, and directives. 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 interest rate for the relevant currency. Like most other jurisdictions, banks in the ROC completed the switch from the London Inter-Bank Offered Rate (LIBOR) to the Secured Overnight Financing Rate (SOFR) by June 2023.

Following a financial crisis in 2013, the ROC took extraordinary steps as part of the Memorandum of Understanding (MOU) between the ROC and international lenders (European Commission, European Central Bank, and the IMF – the “troika”). Depositors in two of the largest ROC banks were forced to take a cut on almost half of their deposits exceeding insured limits. This action sparked 3,000 lawsuits against the ROC and the banks, but the European Court of Justice ruled the MOU with the troika was not an unlawful act and dismissed actions for compensation. The ROC has not taken any similar extraordinary actions since.

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 is reached regarding the amount, then the owner is compensated. In cases where the owner declines the compensation package, the case is relegated to local “courts” for a final decision.

Because the “TRNC” is not recognized internationally, “TRNC court” decisions and orders may be difficult to enforce outside of the area administered by Turkish Cypriots or Turkey.

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

Investment disputes involving U.S. persons are rare in the ROC, although one notable case emerged in 2020-21, when a Hollywood film producer encountered problems with the administration of the ROC film rebate scheme. The film producer cancelled plans for filming a second movie in the ROC, while pursuing compensation through the courts. Local courts recognize and enforce foreign arbitral awards issued against the government and there is no history of extrajudicial action against foreign investors.

International Commercial Arbitration and Foreign Courts

The ROC offers several different means of Alternative Dispute Resolution (ADR), although, in practice, recourse to ADR is not common. The ROC Ministry of Justice and Public Order offers a publicly-available Register of Mediators for both commercial and civil disputes at: http://www.mjpo.gov.cy/mjpo/mjpo.nsf/All/093DD5FE0E4342E7C225861400498853?OpenDocument .

Some of the key mediators locally and abroad are the following:

• The Cyprus Chamber of Commerce and Industry (CCCI): https://ccci.org.cy/ ;
• The Scientific and Technical Chamber of Cyprus: http://www.etek.org.cy ;
• The ROC Financial Ombudsman’s office, offers mediation services between banks and customers since 2015: http://www.financialombudsman.gov.cy/forc/forc.nsf/page02_en/page02_en?opendocument 
• The European Court of Arbitration in Cyprus: http://cour-europe-arbitrage.org/contacts/ ;

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 the parties can apply to the courts 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. The ROC’s 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. The resolution of commercial or investment disputes through the “judicial system” can take several years.

Because it is not recognized internationally, “TRNC court” decisions and orders may be difficult to enforce outside of the area administered by Turkish Cypriots or Turkey.

Bankruptcy Regulations

REPUBLIC OF CYPRUS

The ROC introduced new insolvency legislation in 2015, which has helped overhaul bankruptcy procedures, and gradually resolve the island’s high levels of non-performing loans (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 USD 371,000 (EUR 350,000) and individuals with minimal assets and income may apply to the court via the Insolvency Service for a debt relief order of up to USD 26,500 (EUR 25,000). 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. ROC authorities are closely monitoring implementation of the new insolvency framework.

The World Bank’s (now discontinued) 2020 Doing Business report ranked the ROC 31st from the top among 190 countries in terms of the ease with which it resolves insolvency. For additional information, please see: https://www.doingbusiness.org/en/data/exploreeconomies/cyprus#DB_ri  .

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.

The total NPLs of the sector, which was 1.8 billion TL (USD 9 million) as of the end of June 2022, increased by 6.12 percent to 1.9 billion TL (USD 10 million) as of the end of September 2022. There was a 24.17 percent increase in non-performing loans compared to the same period the previous year.

Investment Incentives

REPUBLIC OF CYPRUS

The ROC offers investors one of the lowest corporate FFtax rates in the EU at 12.5 percent, although this rate could increase to 15.0 percent for companies with an annual turnover of over EUR 750 million, in the foreseeable future, in line with global trends. The ROC’ other tax advantages include:

• One of the EU’s lowest top statutory personal income tax rates at 35 percent;
• An extensive double tax treaties network with 67 countries, enabling lower withholding tax rates on dividend or other income received from the subsidiaries abroad;
• No withholding tax on dividend income received from subsidiary companies abroad under certain conditions.
• No withholding tax on dividends received from EU subsidiaries; and
• Low Tonnage Tax for shipping.

Additionally, MECI offers a Fast Track Business Activation mechanism to provide efficient business registration services to eligible foreign investors who want to establish a physical presence on the island. (See Business Facilitation for more information.)

In July 2022, the ROC introduced new tax deductions for research and development (R&D) expenses. Expenses for scientific research carried out by any business, as well as R&D expenses carried out by small and medium-sized innovative companies, are deductible from taxable income if they were wholly and exclusively incurred for the production of income. An additional deduction of 20 percent of these costs is granted for expenses incurred in the years 2022, 2023, and 2024, including expenses of a capital nature. The condition is that the person carrying on a business should have the economic ownership of the intangible asset that arises or is likely to arise from incurring such expenses.

The ROC also offers a program to attract foreign investment through third country – i.e., non-European Union – innovative start-ups. The plan invites third-country nationals with start-up capital of at least USD 53,000 (EUR 50,000), undergraduate-level education, and fluent either in Greek or English, to set up their headquarters and tax residence in the ROC, provided their proposed business is certifiably innovative. This program, valid for two years until 2024, offers 150 visas to eligible investors, provided the relevant business is successful. For more information, see: https://www.dmrid.gov.cy/dmrid/research.nsf/All/4B4F9A243165076DC2258664002981AB/$file/Practical%20Guide.pdf?OpenElement#:~:text=The%20%22Cyprus%20Startup%20Visa%22%20Scheme,with%20a%20high%20growth%20potential .

In recent years, the ROC has harmonized and enhanced its regulations regarding investment funds, becoming a more attractive jurisdiction for managing and home-basing investment funds. As a result, the number of financial services companies regulated by the Cyprus Securities and Exchange Commission (CySEC) has tripled in the last eight years, from 249 in 2012 to 805 in 2021, with total assets under management reaching USD 12.2 billion (EUR 11.5 billion) in 2021. Brexit, the withdrawal of the United Kingdom from the EU on January 31, 2020, has also prompted several financial services companies based in the UK to relocate to the ROC over the past year – a trend ROC authorities are encouraging.

The ROC’s Recovery and Resilience Plan (RRP), which forms part of the Next Generation EU recovery instrument, is currently in the implementation phase, envisioning broad-reaching reforms spanning six years, from 2021-26 in exchange for $F1.3 billion in EU funding ($1.1 billion in grants and $220 million in loans). Around 41 percent of this funding is dedicated to green transition projects, and another 23 percent to digital transition, with residual funding for many other reforms, including encouraging innovation and advancing the role of women in business. More information on the ROC’s RRP available at: https://ec.europa.eu/info/business-economy-euro/recovery-coronavirus/recovery-and-resilience-facility/ -recovery-and-resilience-plan_en .

Effective November 1, 2020, the ROC abolished a program offering ROC citizenship through foreign investment. The abrupt abolition of the citizenship program left a considerable number of high-end residential properties (each valued at around USD 2 million or more) up for sale. The ROC continues to offer a Residency by Investment program, requiring a minimum investment of USD 318,000 (EUR 300,000).

AREA ADMINISTERED BY TURKISH CYPRIOTS

There are incentives for tourism and industrial-related investments, including:

• 100 to 200 percent investment allowance on the initial fixed capital investment expenditure for certain regions and sectors;
• Exemption from corporate tax and income tax until the above-mentioned allowance percentages are met;
• Exemption from custom duties when importing machinery and equipment the projects;
• Exemption from construction license fees;
• Exemption from VAT for both imported and locally purchased machinery and equipment; and
• Reduction of stamp duty and mortgage procedure fees.

Foreign Trade Zones/Free Ports/Trade Facilitation

REPUBLIC OF CYPRUS

The lead government agency handling areas subject to a special customs regime is the Department of Customs and Excise. Specific rules for the two main areas, namely Customs Warehouses and Free Zones, are listed below and are fully harmonized with equivalent EU norms: https://www.mof.gov.cy/mof/customs/customs.nsf/All/6D61C14C3E95345CC22572A6003BCBD5?OpenDocument .

There are two types of Free Zones:

• Control Type I Free Zone, in which controls are principally based on the existence of a fence; and
• Control Type II Free Zone, in which controls are principally based on the formalities carried out in accordance with the requirements of the customs warehousing procedure.

The ROC has two Control Type II Free Zones (FZs) located in the main seaports of Limassol and Larnaca, which are used for transit trade. These areas are treated as outside normal EU customs territory. Consequently, non-EU goods placed in FZs are not subject to import duties, VAT, or excise tax. FZs are governed under the provisions of relevant EU and ROC legislation. The Department of Customs has jurisdiction over both normal zones and FZs and can impose restrictions or prohibitions on certain activities, depending on the nature of the goods. Additionally, the MECI has management oversight over the Larnaca FZ.

A Customs Warehouse can be set up anywhere in the ROC, provided the right criteria are met and meet with the approval of the Department of Customs. For more information, interested parties may contact:

Department of Customs and Excise
Michali Karaoli Str.
1096 Nicosia
Tel. +357 22 601754 or 55
Fax: +357 22 302018
Email: headquarters@customs.mof.gov.cy 
Website: https://www.mof.gov.cy/mof/customs/customs.nsf/index_en/index_en?OpenDocument

When larger projects are involved, potential investors interested in establishing their own customs warehouse or seeking to engage existing customs warehouses may also contact the One Stop Shop ( https://www.businessincyprus.gov.cy/ ) for guidance on identifying suitable locations.

Additional information on the Limassol and Larnaca FZs can be obtained from:

Cyprus Ports Authority
P.O. Box 22007
1516 Nicosia
23 Kritis Street
1061 Nicosia
Tel. +357 22 817200, X-0
Fax: +357 22 762050
Email: cpa@cpa.gov.cy 
Website: https://www.cpa.gov.cy/ 

AREA ADMINISTERED BY TURKISH CYPRIOTS

Famagusta has a “free port and zone,” which is regulated by the Free Ports and Free Zones “Law.”

Operations and activities permitted there include:

• Engaging in all kinds of industry, manufacturing, and production;
• Storage and export of goods imported to the “Free Port and Zone”;
• Assembly and repair of goods imported to the “Free Port and Zone”;
• Building, repair, and assembly of ships; and
• Banking and insurance services.

Performance and Data Localization Requirements

REPUBLIC OF CYPRUS

There are no requirements for local sourcing, ownership, or employment. Hiring ROC and EU staff is quite easy, though labor supply in certain fields can be tight. Securing work permits for non-EU staff can be difficult, particularly in sectors where there is abundant local labor readily available. In order to overcome this problem, a foreign investor must explain to the satisfaction of ROC authorities why the non-EU staff in question is essential to the business. As with other such matters, Invest Cyprus can assist investors in overcoming hiring problems (see Section 2 on Business Facilitation, and Section 12 on Labor Policies and Practices.)

AREA ADMINISTERED BY TURKISH CYPRIOTS

In order to recruit foreign labor, companies or investors apply to the local labor authorities for “work permits.” Once they apply, the vacancy is announced locally. Priority is given to local “TRNC citizens” with the required expertise or skillset. If the skillset is not available locally, employers can recruit foreign labor.
In evaluating a foreign investment incentives application, the “State Planning Office” carries out a feasibility study regarding the type of investment. For more information on employment, visit the labor authorities’ website: http://csgb.gov.ct.tr/en-us/ .

Real Property

REPUBLIC OF CYPRUS

EU nationals and companies domiciled in any EU country are not subject to any restrictions when buying property in the ROC. By contrast, ROC law imposes significant restrictions on direct foreign ownership of real estate by non-EU individuals. Non-EU persons and entities may purchase a maximum of two real estate properties for private use (defined as a holiday home built on land of up to 4,014 square meters; plus a second home or office of up to 250 square meters, or shop of up to 100 square meters). Exceptions can be made for projects requiring larger plots of land but are difficult to obtain and rarely granted. This restriction applies to non-EU citizens or non-EU companies. Foreign investment in ROC or EU companies is welcome, but a legal entity is deemed to be controlled by non-EU citizens if it meets any of the conditions listed below:

• 50 percent or more of its board members are non-EU citizens; or
• 50 percent or more of its share capital belongs to non-EU citizens; or
• Control (50 percent or more) belongs to non-EU citizens; or
• Either the company’s Memorandum or Articles of Association provides authority to a non-EU citizen securing the company’s activities are conducted based on his/her will during the real estate acquisition period. If the authority is provided to two or more persons, a legal entity is considered to be controlled by non-EU citizens if 50 percent or more of the people granted such authority are non-EU citizens.

Legal requirements and procedures for acquiring and disposing of property in the ROC are complex, but professional help from real estate agents and developers to ease the burden is readily available. The ROC Department of Lands and Surveys keeps excellent records and follows internationally accepted procedures. Non-residents are allowed to sell their property and transfer abroad the amount originally paid, plus interest or profits, without restriction.

Additionally, there are restrictions on investing in Turkish Cypriot property located in the ROC. The Turkish Cypriot Property Management Service (TCPMS), established in 1991, administers properties of Turkish Cypriots who are not ordinarily residents of the government-controlled area. This service acts as the temporary custodian for such properties until a comprehensive political settlement is reached. The TCPMS is mandated to administer properties under its custodianship “in the manner most beneficial for the owner.” Ownership of Turkish Cypriot properties cannot change (except for inheritance purposes) except in exceptional cases when this is deemed beneficial for the owner or necessary for the public interest.

The World Bank’s 2020 Doing Business report ranked the ROC 71st among 190 countries in terms of efficiency and quality for registering property.

AREA ADMINISTERED BY TURKISH CYPRIOTS

Special Note: Investors are advised to consider the risks associated with investing in immovable property in the area administered by Turkish Cypriots. Potential investors are strongly advised to obtain independent legal advice prior to purchasing or leasing property there. Purchase or use of property in the area administered by Turkish Cypriots is a contentious issue in Cyprus, as per the following note posted on the ROC Ministry of Foreign Affairs website: http://www.mfa.gov.cy/mfa/properties/occupiedarea_properties.nsf/index_en/index_en?OpenDocument .

For property in the Turkish Cypriot-administered areas, only pre-1974 title deeds are uncontested. In response to the European Court of Human Rights’ (ECHR) 2005 ruling that Turkey’s “subordinate local authorities” in Cyprus had not provided an adequate local remedy for property disputes, Turkish Cypriot authorities established an Immovable Property Commission (IPC) to handle property claimed by Greek Cypriots. In a March 2010 ruling, the ECHR recognized the IPC as a domestic remedy, but the ROC does not consider the IPC to be a legitimate body. As of March 7, 2023, the IPC had received 7,238 applications, of which 1, 334 have been concluded through friendly settlements, and 34 through formal hearings.

On January 19, 2010, the UK Court of Appeal enforced an earlier court decision taken in the ROC in support of a Greek Cypriot person’s trespassing claim effectively voiding the transfers of Greek Cypriot property in the Turkish Cypriot-administered areas. This landmark decision also establishes precedent in cases where foreign investors purchasing disputed properties outside of the ROC-controlled area can be found liable for damages.

There are significant restrictions on the foreign ownership of real estate. A 2008 “law” requires non-“TRNC” residents to apply to the “Council of Ministers” for permission to purchase real estate, and non-residents are limited to a single small property. Foreigners can, however, own or control more real estate through a “TRNC” registered company.

Intellectual Property Rights

REPUBLIC OF CYPRUS

ROC intellectual property rights (IPR) law is harmonized with EU directives and the ROC is party to major international IPR instruments. The country promotes itself as a low-tax, high protection (i.e., EU standards) destination for IPR.

ROC law (Law 207(I) of 2012) places the burden of proof on the defendant in cases of IPR infringement. The law also allows the police to assess samples of pirated articles in lieu of the whole shipment and introduces the alternative for out-of-court settlement in some cases. Other important IPR laws include Law 103 (2007) on unfair commercial practices and Law 133(I) (2006) strengthening earlier legislation targeting copyright infringement. The Department of Customs and the Police confiscate thousands of counterfeit items every year, including articles of clothing, luggage, accessories, and pirated optical media.

Primary responsibility for enforcing IPR legislation rests with the ROC Police and the Department of Customs. The Competition and Consumer Protection Service of the Ministry of Energy, Commerce, and Industry (MECI) also plays a supportive role, while the Registrar of Companies and Official Receiver handles administration of patents and copyrights.

For additional information about treaty obligations and points of contact at local IPR offices, .please see WIPO’s country profiles at: http://www.wipo.int/directory/en/ .

Capital Markets and Portfolio Investment

REPUBLIC OF CYPRUS

The Cyprus Stock Exchange (CSE), launched in 1996, is one of the EU’s smallest stock exchanges, with a capitalization of USD 3.3 billion (EUR 3.1 billion) as of March 2023. 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 ROC 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 have 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 ROC 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 can get credit from the local market, provided they have established domestic legal presence, and are majority-owned (at least 51 percent) by domestic companies or persons.

Money and Banking System

REPUBLIC OF CYPRUS

At the end of February 2023, the value of total deposits in ROC banks was USD 54.6 billion (EUR 51.5 billion), and the value of total loans was USD 27.6 billion (EUR 26.0 billion). Currently, there are six local banks in the ROC offering a full range of retail and corporate banking services – the largest two are the Bank of Cyprus and Hellenic Bank – plus another 22 subsidiaries or branches of foreign banks offering more specialized services. The full list of authorized credit institutions in the ROC is available on the Central Bank of Cyprus website: https://www.centralbank.cy/en/licensing-supervision/banks/register-of-credit-institutions-operating-in-cyprus .

The banking sector has made significant progress since the 2013 financial crisis resulted in a “haircut” of uninsured deposits, followed by numerous bankruptcies and consolidation. The island’s two largest banks are now adequately capitalized and have returned to profitability. However, the profitability of the banking sector as a whole is challenged by low interest margins, a high level of liquidity, and a still-elevated volume of NPLs. NPLs in the ROC are still the highest in the EU at 10.5 percent of total loans at the end of November 2022, compared to 15.1 percent a year earlier, albeit considerably lower than in 2014, when they reached 47.8 percent. Banks continue striving to reduce NPLs further, either by selling off portfolios or using recently amended insolvency and foreclosure frameworks. Aggregate banking sector data is available here: https://www.centralbank.cy/en/licensing-supervision/banks/aggregate-cyprus-banking-sector-data .

The ROC 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 the ROC. They are subject to Central Bank of Cyprus supervision, just like domestic banks. JPMorgan, Citibank, Bank of New York Mellon, and HSBC currently provide U.S. dollar correspondent banking services to ROC banks.

Opening a personal or corporate bank account in the ROC is straightforward, requiring routine documents. But because of a history of money-laundering concerns, banks now carefully scrutinize these documents and can conduct extensive due diligence checks on sources of wealth and income. A local bank account is not necessary for personal household expenses. Opening a corporate bank account is mandatory when registering a company in the ROC.

In recent years, the ROC has taken steps 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. The ROC issued its first National Risk Assessment (NRA) of money laundering and terrorist financing in November 2018, available at: http://mof.gov.cy/en/press-office/announcements/national-risk-assessment-of-money-laundering-and-terrorist-financing-risks-cyprus . The ROC followed up with a specific NRA on the risks from Virtual Assets and Virtual Asset Service Providers in December 2021. The ROC 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 (2019) and follow-up report (November 2022) can be found at: https://www.coe.int/en/web/moneyval/jurisdictions/cyprus .

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 21 banks in the area administrated by Turkish Cypriots, of which 16 are Turkish Cypriot-owned banks, and five are branch banks from Turkey. Banks are required to follow “know-your-customer” (KYC) and anti-money laundering (AML) “laws,” which are regulated by the “Ministry of Economy and Energy,” and supervised by the “Central Bank,” but AML practices do not meet international standards. Turkish Cypriot banks are not members of SWIFT, complicating international transactions. All international transfers depend on routing through Turkish banks.

Deposits, which have the largest share in the sector’s total liabilities, increased by 85.59 percent in a one-year period and reached 90 billion TL (USD 4.7 billion) at the end of September 2022.

The total NPLs of the sector, which was 1.8 billion TL (USD 9 million) as of the end of June 2022, increased by 6.12 percent to 1.9 billion TL (USD 10 million) as of the end of September 2022. There was a 24.17 percent increase in non-performing loans compared to the same period of the previous year. Note, the “Central Bank” converts all foreign exchange into TL in its reporting of total assets and liabilities, so these figures represent an aggregate of TL as well as U.S. dollars, British Pounds, and Euros.

Foreign Exchange and Remittances

Foreign Exchange

REPUBLIC OF CYPRUS

The ROC is a member of the Eurozone. 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. (Note: The exchange rate used in this report is USD 1.00 = EUR 1.06, effective March 4, 2023.) There is no difficulty in obtaining foreign exchange. Since the 2008 global 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 member states of the EU.

AREA ADMINISTERED BY TURKISH CYPRIOTS

The “TRNC” has a separate financial system from the ROC, linked closely with that of Turkey. The Turkish Lira is the main currency, 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 Turkish Lira 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 Turkish Lira, 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 Turkish Lira 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. All international correspondent banking services must route through Turkish banks.

Remittance Policies

REPUBLIC OF CYPRUS

There are no restrictions or delays on investment remittances or the inflow or outflow of profits. Remittances may be moved through the regular banking system or through licensed Payment Institutions (PIs) or Electronic Money Institutions (EMIs), also regulated by the Central Bank of Cyprus.
The Central Bank of Cyprus maintains two public registers, listing both PIs and EMIs, whether authorized by the Central Bank of Cyprus or authorized in other EU Member States with the right of freedom to provide services in the ROC.

The two relevant CBC registers are:

Register of Licensed Payment Institutions: https://www.centralbank.cy/en/licensing-supervision/payment-institutions/licensing-and-supervision-of-payment-institutions 

Register of Electronic Money Institutions: https://www.centralbank.cy/en/licensing-supervision/electronic-money-institutions/licensing-and-supervision-of-electronic-money-institutions 

Sovereign Wealth Funds

REPUBLIC OF CYPRUS

The Parliament passed legislation in 2019 providing for the establishment of a National Investment Fund (NIF) to manage future offshore hydrocarbon and other natural resource revenue. Section 29 of the NIF Law specified that the Corporation to be set up shall invest the Fund in a diversified manner with a view to maximizing risk-adjusted financial returns and in a manner consistent with the portfolio management by a prudent institutional investor. The Fund is precluded from investing in securities issued by an ROC issuer (including the state) or in real estate located in Cyprus. This provision safeguards against the possibility of speculative development catering to the Fund and political interference favoring domestic investments for purposes other than the best interests of the Fund and the Cypriot people as a whole. Additionally, Section 30 of the law provides that the fund cannot invest, directly or indirectly, to acquire more than five percent of any one company or legal entity. The fund is not yet operational. Regulations for the NIF are still in draft and will require legislative approval. It will likely take several years before any revenues are generated from the ROC’s hydrocarbon assets.

AREA ADMINISTERED BY TURKISH CYPRIOTS

There is no established sovereign wealth fund.

Privatization Program

REPUBLIC OF CYPRUS

The ROC has made limited progress towards privatization, despite commitments to international creditors in 2013 to raise approximately USD 1.6 billion from privatizations by 2018. In 2017, opposition parties passed legislation abolishing the Privatizations Unit, an independent body established in March 2014. A bill to privatize the Cyprus Telecommunications Authority (CyTA) was withdrawn in May 2022, after five years of discussion. In December 2015, under the threat of strikes, the government reversed earlier plans to privatize the Electricity Authority of Cyprus (EAC). However, in recent years, the EAC has been forced to unbundle its operations in line with Cyprus Energy Regulatory Authority (CERA) recommendations and EU regulations. The EAC has created independent units for its core regulated activities, namely Transmission, Distribution, Generation, and Supply. Private firms have been offering renewable energy generation since 2003 and electricity supply since January 1, 2021.

In August 2020, the previous administration (under President Anastasiades) assigned the Larnaca Marina and Port Privatization project to an ROC-Israeli consortium, based on a 40-year lease agreement. The project started in April 2022 and is scheduled to be completed in four phases by 2037. It provides for port infrastructure, a marina, land redevelopment, a road network, green areas, parks and pedestrian areas as well as residential units and catering and recreation establishments. At a cost of about USD 1.3 billion (EUR1.2 billion), this project will be the biggest investment in the ROC so far.

The ROC also has long-standing plans to privatize the Cyprus Stock Exchange, sell the state lottery, and find long-term investors to lease state-owned properties in the Troodos area.

AREA ADMINISTERED BY TURKISH CYPRIOTS

The airport at Ercan and K-Pet Petroleum Corporation have been converted into public-private partnerships. The concept of privatization continues to be controversial in the Turkish Cypriot community.

In March 2015, Turkish Cypriot authorities signed a public-private partnership agreement with Turkey regarding the management and operation of the water obtained from an underwater pipeline funded by Turkey. Within the area administrated by Turkish Cypriots, there has also been discussion about privatizing the electricity authority “KIBTEK”, Turkish Cypriot telecommunications operations, and the seaports.

In 2022, the “TRNC” and Turkey signed an economic protocol that included action items to privatize “KIBTEK,” sea ports, and the lottery “department,” in the area administrated by Turkish Cypriots.