Cyprus has a record of successful economic performance, reflected in rapid growth, near full employment conditions and macroeconomic stability throughout the post-independence period. The underdeveloped economy, inherited from colonial rule in 1960, has been transformed into a modern economy offering dynamic services with advanced physical and social infrastructure.
In terms of per capita income, estimated at CYP 9 834 in 2005 (ˆ 17 048), Cyprus is classified by the World Bank among the high-income countries. The average annual rate of growth during the past five years has been about 3.2 %, while the average inflation rate has been 2.5 % and the average rate of unemployment 4.28 %over the same period.
In addition, Cyprus was ranked 29th in the United Nations 2005 Human Development Index. Considering other socio-economic indications such as the excellent housing conditions, pollution free environment, and low crime rate, one may conclude that the quality of life, standard of living and economic performance position Cyprus favourably among the rest of the EU member states.
The success of Cyprus in economic sphere is attributed, among other factors, to the adoption of a market-oriented economic system, the pursuance of sound macroeconomic policies, as well as the existence of a dynamic and flexible entrepreneurial community and a highly educated labour force. Moreover, the economy has benefited from the close cooperation between the public sector and its social partners.
The basic characteristics of the Cyprus economy are the dominant role of the private sector in production, the small size of the domestic market, as well as its open character. Cyprus’ major imports are raw materials, consumer and capital goods, transport equipment and fuel, while major exports are pharmaceutical products, clothing, cement, cigarettes, paper products, plastics, potatoes, citrus fruit, wines, and furniture.
The services sector is considered as the backbone of the Cyprus economy, accounting for about 76.7 % of GDP in 2005.This reflects the gradual evolution of the economy from an exporter of minerals (mainly copper and asbestos) and agricultural products during 1960-73, to an exporter of manufactured products (mainly clothing) at the end of the 1970s, and finally to an international business and service centre from mid 1980s – today.
There are currently approximately 30 foreign banks and over 1200 International Business Companies (IBCs) with fully-fledged offices in Cyprus. The successful integration of the latest technology into the economy, the constant improvement of the island’s infrastructure and the high quality of the Cypriot labour force, have turned Cyprus into an international business and service centre, contributing significantly to the economic growth of the broader region.
IBCs have played a central role in the development of Cyprus as a world class business centre. The international business community has long maintained its confidence in Cyprus, building a strong presence in the country’s economy. The community’s interests are represented by the Cyprus International Business Association (CIBA).
Professional Services
The development of the commercial infrastructure in Cyprus is mainly attributed to the rapidly expanding role of the professional services sector. The sector supports every aspect of modern business from accounting, legal services, banking and international business services through to information technology, business consulting, education, engineering, healthcare, marketing and filming.
From its unique location, the Cypriot professional services sector combines a global perspective with a diverse spectrum of high-demand services. The comprehensive range of services and the professional attitude of Cypriot service providers account for the transformation of the island into a highly reputable international business centre.
for further info: www.cyprus-prof-serve.com
Shipping
The Cyprus’ Registry is among the 10 leading merchant fleets of the world with 1.819 vessels corresponding to a total gross tonnage of 21.9 mln. No one can deny that the island is now established as one of the leading maritime centres. More than 45 shipmanagement companies and marine-related foreign enterprises conduct their international activities in the country, and most of the largest shipmanagement companies in the world have established fully-fledged offices on the island.
The accession of Cyprus to the EU has undoubtedly had a considerable impact, both in terms of quality and quantity, on the structure of the community fleet. In terms of tonnage, Cyprus accounts for 16 % of the EU fleet, thus enhancing considerably the market share of the European fleet in international sea transport.
Cyprus is an attractive location for the establishment of ship management companies and companies with shipping related activities. The geographical position of the island, its accession to the main international maritime conventions, as well as the generous tax incentives and the extensive network of bilateral agreements in merchant shipping , have enabled Cyprus to become an ideal shipping centre.