Location and Area
Cyprus is a small island of 9.251 sq kms (3.572 sq miles), extending 240 kms (149 miles) from east to west and 100 kms (62 miles) from north to south. It is strategically situated in the far eastern end of the Mediterranean (33° E, 35°N), at the crossroads of Europe, Africa and Asia, and in close proximity to the busy trade routes linking Europe with the Middle East, Russia, Central Asia and the Far East.
History in Brief
Few countries can trace the course of their history over 9.000 years, but in approximately 6.800 BC the island of Cyprus was already inhabited and going through its Neolithic Age. Of all the momentous events that were to sweep the country through the next few thousand years, one of the most crucial was the discovery of copper – or Kuprum in Latin – the mineral which was to give its name to the island and generate untold wealth.
The island’s strategic position, its copper deposits and its timber attracted the first Greeks who came to the island over 3.000 years ago at the end of the Trojan wars. They settled down bringing in with them and establishing the Greek identity, language and civilization.
Over the centuries Cyprus came under the sway of various rulers including the Egyptians, Assyrians, Persians, the successors to Alexander the Great and the Romans, before Cyprus became part of the Byzantine Empire. Later came the Crusaders, the Lusignans and Venetians, Ottomans and British.
Cyprus won its independence in 1960, for the first time in 3.500 years, but the Greek identity of language and culture has been retained. In July 1974 Turkey invaded Cyprus and since then 37% of the island in the north is being illegally occupied by Turkish troops who acted in violation of all principles governing international relations.
The total population of the island is estimated at just over 1 million, the majority being Greek Cypriot (80.7%), followed by Turkish Cypriots (11%) and ‘foreign usual residents’ (8.3%). Besides the Greek and Turkish Cypriots there are small Armenian, Maronite, Latin and British communities.
The official languages are Greek and Turkish, but the vast majority of Cypriots speak English.
Mediterranean, with mild, wet winters (mean daily minimum 5°C, 41°F), and hot, dry summers (mean daily maximum 36°C, 97°F).
The currency until 31.12.07 was the Cyprus Pound. As of 1.1.2008 the Cyprus Pound has been substituted by the EURO.
Presidential system of government. The President is elected by universal suffrage for a five-year term. Executive power is exercised through an 11-member Council of Ministers appointed by the President.
Multi-party unicameral House of Representatives.Voting system: Simple proportional representation. House members are elected by universal suffrage for a five-year term.
The administration of justice is exercised by the island’s separate and independent Judiciary. Under the 1960 Constitution and other legislation in force, the following judicial institutions have been established: The Supreme Court of the Republic, The Assize Courts and The District Courts.
Independent Officers and Bodies
There are also independent officers and bodies which do not come under any ministry:
- the Attorney-General and the Auditor-General who head the Law Office and Audit Office respectively;
- the Governor of the Central Bank of Cyprus;
- the Ombudsman (Commissioner for Administration);
- the Public Service Commission;
- the Education Service Commission;
- the Planning Bureau;
- the Treasury;
- the Commission for the Protection of Competition;
- the Office of the Commissioner of Electronic Communications and Postal Regulation;
- the Cyprus Energy Regulatory Authority;
- the Cyprus Agricultural Payments Organisation;
- the Office of the Commissioner for Personal Data Protection;
- the Cooperative Societies Supervision and Development Authority;
- the Internal Audit Service;
- the Office of the Commissioner for State Aid Control;
- the Tenders Review Authority;
- the Law Commissioner and the Tax Tribunal.
Even though the political problem remains unresolved, the free market economy in the government-controlled area has made remarkable recovery since 1974.
The economic success is attributed to, among other factors: the adoption of a market-oriented economic system, the sound macroeconomic policies of successive governments, as well as the existence of a dynamic and flexible entrepreneurial community and a highly educated labour force.
During the last two decades the Cyprus economy turned from agriculture to services and light manufacturing. Cyprus is, today, a major tourist destination as well as a modern economy offering dynamic services with an advanced physical and social infrastructure.
The per capita income in PPS (Performance Presentation Standards) reached 81,6% of EU 25 member-states average in 2004. Additionally, Cyprus was ranked 25th in the United Nations 2003 Index of Human Development.
The Law of Cyprus is Anglo-Saxon and the legal system is based on the English Legal System. At the same time the legislation of Cyprus, as an EU member state, fully corresponds to the requirements of the European Union.
Cyprus Law offers some advantages, which are not offered by other jurisdictions. Some of them are:
- Nominee shareholders
When a real shareholder, “the beneficial owner” of a Cyprus registered company, desires anonymity, he may appoint a nominee shareholder, whose name will appear as a shareholder in all documents of the company to which the public and the official authorities have access.
In such a case a Trust Deed is signed, stating that the nominee shareholder possesses the shares of the company for and on behalf of the beneficial owner and that he can act only upon prior receipt of written instructions from the beneficial owner. The Trust Deed is a perfectly enforceable legal document.
- Nominee directors
The beneficial owners appoint the directors of the company. If and when desired by the beneficial owners of the company, they may remove the said Directors thereby ensuring that the Board of Directors always acts in accordance with the instructions of the beneficial owners.
A trust is established by an individual, “the settlor” , and is a means whereby property, “the Trust Property” , is held by one or more persons, “the Trustees” , for the benefit of another or others, “the Beneficiaries” , or for specified purposes.
International trusts are governed by the International Trusts Law of Cyprus. International Trusts are not subject to any tax in Cyprus. In fact Cyprus International Trusts enjoy important tax advantages, providing significant tax planning possibilities.
Cyprus has a very well developed banking system. Commercial banking arrangements and practices follow the British model. The capital transfers are not subject to exchange control.
All major banks in Cyprus offer internet banking services. This gives the opportunity to the beneficial owners of the Cyprus registered companies to operate personally the bank accounts of the company from practically every country in the world.
There is no requirement for a minimum amount to be deposited when a new bank account is opened.
On May 1, 2004 the Republic of Cyprus became a full member of the EU completing a long journey that lasted more than three decades. Accession to the EU was a natural choice for Cyprus, dictated by its culture, civilization, history, its European outlook and adherence to the ideals of democracy, freedom and justice. EU accession has launched a new era of challenges, opportunities and responsibilities for Cyprus.
The application of the EU laws and regulations (the acquis communautaire) is suspended in the area under military occupation by Turkey, pending a solution to the division of the island. Meanwhile, the government of Cyprus in cooperation with the EU Commission has been promoting arrangements to facilitate increased economic transactions between the two communities and improve the standard of living of Turkish Cypriots.
While Cyprus has a lot to benefit from EU membership, it also has a lot to offer as a member state. Strategically situated at the crossroads of Europe, the Middle East, North Africa and Asia, Cyprus is becoming an even more important regional business centre, as well as an international communications and transport hub.
With its modern infrastructure, sound legal system, tax incentives, low crime rate and well educated labour force Cyprus is a favourite regional operations platform for European companies.
Since its accession to the EU, Cyprus has undergone significant structural reforms that have transformed its economic landscape. Trade and interest rates have been liberalized, while price controls and investment restrictions have been lifted. Private financing has been introduced for the construction and operation of major infrastructure projects and monopolies have been abolished.
The new political context created by the accession to the EU is also expected to impact positively on the efforts to reach a comprehensive settlement to the division of Cyprus that will reunite its people and reintegrate its economy.
Cyprus has developed into an international banking and business centre with many International Banking Units and over 1.000 fully fledged overseas companies operating on the island.
Since 1 May, 2004 when Cyprus became a full member of the European Union, all banks licensed by the competent authorities of European Union countries have been allowed to establish branches in Cyprus or provide banking services on a cross border basis without requiring a license from the Central Bank of Cyprus.
Cyprus is also an important shipping centre and currently has in its registry one of the leading merchant fleets in the world.
The strategic location of Cyprus, its favourable tax environment, educated work force, excellent telecommunications and modern banking and legal infrastructure make the country an ideal business bridge for the European Union and the Middle East.
Cyprus’ friendly entrepreneurial environment and supporting facilities compare favourably with those of the best-established centres in the world. The island is considered to be a primary international business centre among approximately 50 countries offering similar facilities.
The tertiary or services sector is the fastest growing area and today accounts for about 76,3% of GDP and 72,3% of the gainfully employed population. The sector includes tourism, transport and communications, trade, banking, insurance, accounting, real estate, public administration, health, education and business and legal services.
On foreign policy issues the Cyprus government aligns itself with the European Union position in the context of the EU’s Common Foreign and Security Policy. Since 1974 the government’s efforts focused primarily on ending Turkey’s military occupation and division of the island.
Although Cyprus has long identified with the West, it has also developed close relations with Israel, the Arab world, Latin American countries and the African continent.
Cyprus is a member of many international organisations including:
- The World Trade Organisation (WTO) (1995)
- The Organisation for Security and Cooperation in Europe (OSCE) (1975)
- The Commonwealth (1961)
- The Council of Europe (CoE) (1961)
- The United Nations (UN) (1960) and its specialised agencies
- The World Bank
- The International Monetary Fund