September 21, 2018

Speech by the President of the Republic at the Business Dinner organised by the Cyprus Chamber of Commerce and Industry, and the Ministry of Energy of the Republic, in London

It is indeed a great pleasure to welcome you all and I would like to thank you for honouring us with your presence. 


I wish at the outset to extend my sincere appreciation to the organizers – the Μinistry of Energy, Commerce, Industry and Tourism, the Cyprus Chamber of Commerce and Industry, as well the Cyprus – UK Business Forum and City UK - for their invaluable contribution in organizing tonight’s event.


An event which provides a unique opportunity for all participants to hold productive discussions and identify ways and means on further reinforcing the mutually beneficial economic, commercial and investment ventures between our two countries.


Cyprus and the United Kingdom have been enjoying long-standing excellent relations, based on deep-rooted historical, political, economic and cultural ties and amicable people-to-people contacts.

More than 300,000 Cypriots permanently live in the UK, constituting the largest Cypriot community overseas, with the UK also being one of the most favourite academic destination to thousands of Cypriot students.


Likewise, around 60,000 Britons permanently reside in our island, while British tourists have historically represented the largest percentage of tourist arrivals to Cyprus. It is characteristic that in 2017, out of 3.7 million arrivals 1.3 million were from Britain, recording an impressive 8% increase in comparison with 2016.


At the same time, the UK has been one of the most important export and import partner of Cyprus, as well as a valuable source of investments inflows.


Investments accumulated due to Cyprus’s comparative advantages as a competitive center for International Businesses, such as, amongst others, its attractive tax and legal system based on the British Common law, its geographical location at a crossing point between Europe, Asia and Africa, its highly skilled and professional workforce and its modern infrastructures.


Nonetheless, I strongly feel our relationship has the potential to further flourish and strengthen through expanding and enhancing our co-operation in key economic fields, such as banking and finance, shipping and transportation, energy and trade.

It is for this exact reason that today I am accompanied by the Ministers of Finance, Energy, Commerce, Industry and Tourism, as well by a dynamic business delegation, aiming to exchange ideas and establish contacts and channels which will enable us to achieve a substantial and strategic upgrade of our economic, investment and business partnerships.


It is a fact that a few years back Cyprus, being on the verge of financial collapse, made the headlines for all the wrong reasons.


But since then, what has been achieved is nothing short of a remarkable recovery, confirming the resilience and strong foundations of Cyprus’s economy and the excellent prospects of its key productive sectors.


We currently enjoy a growth rate of around 4%, one of the highest in the EU, while macroeconomic forecasts project a robust growth of more than 3% in the years to come.


This year is the 5th consecutive year with a balanced budget, including primary surplus, while unemployment, which in 2013 arose to 16% has dropped to almost 7% and is expected to be reduced even further.


The banking system, re-focusing its operations and fully adhering to the strictest international transparency and compliance regulations, is now based on a stronger and healthier base in terms of capitalization, liquidity and profitability.


At the same time, we promoted significant reforms, amongst others, in the public administration, the welfare and health care system and in tax administration, while, simultaneously, we enhanced the position of Cyprus as a competitive, stable and fully transparent business and investment destination, through enhancing our tax and legal frameworks and providing incentives for new entrepreneurial activities. 


As a result of the above-mentioned, Cyprus, being in the “junk” category seven years ago, it has enjoyed consecutive category upgrades by international rating agencies which last week resulted to Cyprus rated to investment grade.


This affirms the promising economic outlook of our country, vindicates the efforts of our compatriots and of the productive forces of the country and at the same time sends a strong message to new investors, taking also into account existing substantial investments in a wide range of sectors, from banking, to sea-ports, to Marinas, to the largest integrated casino resort in Europe, energy and auxiliary services.   


Even though Cyprus has yet to reach its full potential in terms of economic growth, I strongly believe that, as a result of the strong commitment and the joint efforts of the private and public sector alike, we are on the right track.


Our plan is to remain focused on maintaining and broadening the conditions under which surpluses and high growth rates can be generated, to continue promoting structural reforms and improving the country’s business environment.


In order for this to be achieved, amongst other things, we intend to implement strategies for the transformation of the public service and its transition to the digital era.


An area which we are all well-aware of its importance for any investor and in particular as regards creating a business-friendly environment. Our aim is to fully reform the public service so that it facilitates growth in a modern, knowledge-based, scientific, high-tech and innovative economy.


To this end, Cyprus has signed a Memorandum of Understanding in e-governance with Estonia, a leading country in this field, and a 250 million-euro programme is under development for the full digitalization and implementation of e-government in all state actions. 


The holistic digitalisation of the Tax Department, the implementation of an e-justice system and the introduction of e-signature verification and validation are just a few examples of the first steps that have been taken towards the improvement of the public service’s productivity levels. 


In addition to the above-mentioned, there are also specific incentives which are under examination in order to enrich and diversify Cyprus’s economic sectors. These include a tax incentives package for investment to innovative companies, a new Investment Law to fast-track licensing procedures for large investments, the establishment of a new enhanced investment funds framework, as well as a comprehensive package for the development and promotion of the filming industry.


Further, the discovery of natural gas reserves within Cyprus’s Exclusive Economic Zone creates exciting investment prospects, including for auxiliary service providers, many of which have already established subsidiary companies in Cyprus.


At the same time, important opportunities exist for international investors in sectors such as Renewable Energy Sources, technology, real estate, telecommunications, research and innovation, and education, while a series of tax incentives are also provided for the growing start-up industry.


The investment funds industry has also been expanding at a very encouraging pace, with funds’ registrations increasing by 18% per annum since 2014, while the newly-established Deputy Ministry of Shipping offers substantial support to the already thriving maritime sector of Cyprus.


At the same time, I have no doubt that the Deputy Ministry of Tourism, planned to be operational by January 1st of 2019 will enhance even further the growing tourist industry and provide new promising investment opportunities.


As discussions and negotiations on Brexit and the new partnership to be established between the European Union and United Kingdom are well-underway, I wish to yet again reiterate that we fully support all efforts towards reaching mutual compromises which will ensure a smooth transition to the new state of affairs.


And based on our common values, principles and interests, as well as our economic collaborations and friendly relations between our two countries societies, despite challenges which might arise, we are also committed to engage in an intensified bilateral dialogue in order to redefine the web of our relations and provide further impetus towards strengthening our partnership.


To this end, engaging in constructive dialogue through business events such as today’s working dinner is fundamental in enhancing our bilateral cooperation either on a variety of existing or on new areas of mutually beneficial collaborations.  


In concluding, I would like to once more congratulate the organisers of this dinner and express the Government’s appreciation for their efforts to further enhance the partnership between our two countries.

As a final note, I wish to reiterate Cyprus’s commitment to even closer economic ties between our two countries and underline that my Government is committed to remaining a reliable partner in facilitating business and investment initiatives originating from the UK.