Cyprus - light in the economic horizon

Cyprus suffered a lot of negative publicity in the business news these past two to years. As the county has a credit rating of ‘Junk Status’ since its 2013 credit crisis, in general it is not recommend that you have a bank account there. The ruling Government became notorious with an unprecedented taxes on deposits and freezing bank accounts, proving less and less attractive to hold funds here. Healy Consultants suggests other reputable locations, such as Germany and Isle of Man for such accounts or Latvia for innovation corporate banking practices. Furthermore, some offshore banking predominantly operating from Cyprus, now shifted to Isle of Man, due to its competitive advantages in the financial sector.

Coming back to Cyprus, the situation may not be so grim in reality, as the economy begins to wake up and once again attract foreign investors due to i) convenient offshore business setup solutions and ii) optimized taxation practices. The GDP per capita is higher that it’s larger neighbours – Turkey and Greece at US$25,200, boosting confidence in the small country.

Luck may be on Cyrus’ side as the rumoured Aphrodite gas field has just been pronounced commercially exploitable, ending the long saga of four years of energy exploration. US investors began detailed research in the area and concluded the Aphrodite field (Block 12) is estimated to contain around 127.4 billion cubic meters (4.54 trillion cubic feet) of gas, enough to power the country for decades ahead and add revenues to the GDP from energy exports. This milestone is important for the country, it wishes to finally move from the hydrocarbons exploration process to that of ongoing and beneficial exploitation.

If the plans for expansion go well the process for exporting gas may begin by 2022, with most probable market being Egypt. The capitals Nicosia and Cairo are looking into the possibility of moving gas from the field to Egypt via an undersea pipeline.

Cyprus aims to overtake Malta as the preferred logistics port in the region by placing a 25-year contract on the market for upgrade and management of its largest port – Limassol. As currently crate shipping in the region is dominated by Malta with 3 million units per year, a more developed, competitive Cyprus may just overtake and reverse this trend, for a brighter economic future.

Contact us

If you are interested to incorporate in Isle of Man or Cyprus or need any advice with regard to other incorporation matters, please contact Healy Consultants at email@healyconsultants.com/