September 28, 2018

Capital Link "Invest in Cyprus" Forum in New York - Address by the President of the Republic

It is indeed an honour and a pleasure to address such a distinguished audience, marking the conclusion of this high calibre Forum.

From the outset, I would like to express my appreciation to Capital Link, the Cyprus Union of Ship owners and the Cyprus Investment Promotion Agency for the successful organisation of today’s event which takes place for a second consecutive year, as well as the numerous sponsors for their invaluable support.

Above all, I wish to thank all of you for your presence and your endless efforts to further facilitate and encourage the business and investment partnership between Cyprus and the US and for supporting our vision to establishing Cyprus as a modern and competitive business hub, catering to the needs of any investor.

I have no doubt that during the productive presentations and discussions which took place earlier on, either with the Ministers of Finance, Energy, Commerce, Industry and Tourism and the Deputy Minister of Shipping or with leading professionals of Cyprus’s economic system, you have been thoroughly informed about the interesting and promising investment and business opportunities Cyprus has to offer, particularly in key areas such as banking and financial services, shipping and transportation, energy and tourism.


At the same time, I also have no doubt that during the various networking events which took place, the business communities of our two countries exchanged a number of innovative ideas for advancing entrepreneurial initiatives and identified new practical ways for developing joint ventures.


On behalf of the Government of Cyprus, I wish to assure and stress that we remain fully committed to facilitating business and investment collaborations between our two countries in order to further widen and deepen our co-operation in all envisioned fields and increase the inflow of direct investments from the US to Cyprus.  


This is most evident by my presence today, the high – level representation at a Ministerial level and the impressive participation of esteemed representatives of the Cyprus’s business community.


During this second term in office, one of the main priorities of our foreign policy remains the further enhancement of our relations and cooperation with the United States.


To this end, I am pleased to assess that our partnership has evolved into one of strategic depth, particularly when dealing with issues of global concern, both bilaterally and multilaterally, via our joint commitment, among others, in the fight against terrorism, illegal drugs, proliferation of weapons of mass destruction and development of nuclear weapons. 


In this respect, I avail myself of this opportunity to yet again express the determination of the Government and me personally to work closely with the new US administration in order to explore new fields of beneficial partnership, as well as deepen and enhance existing ones, to the mutual benefit of our countries and peoples.


Towards this goal we are vigorously working on building more tangible economic and investment relations. During these past years we have seen significant US investments in Cyprus - with the most recent one being to Hellenic Bank, one of the country’s biggest banking institution - and our aim is to facilitate even more.


Talking about the local banking system and taking this opportunity, I wish to raise an issue on which I have a strong view:


Despite any unfounded rumors, Cypriot financial institutions have been very diligent in advancing their corporate governance policies and have vigorously stepped up their efforts to combat money laundering phenomena.


They have been implementing strict procedures for checking and applying loan applications, as well as going through thorough and stringent controls over any suspicious accounts.


Regulating authorities have been applying stricter rules in their attempt to eliminate unlawful actions and in fact Cyprus’s score was significantly improved in the 2017 Corruption Perception Index issued by Transparency International.


What is most important, Cypriot banks are now operating on healthier foundations, in terms of capitalization, liquidity and profitability,  even though constant work is still needed to address remaining challenges, such as the level of non-performing loans.


At the same time, being fully aware of the strict regulatory framework of the United States and the need for transparency and accountability in all investment and businesses transactions, it should also be stressed that our two countries are already implementing the intergovernmental Foreign Account Tax Compliance Act (FACTA).


In parallel, a bilateral US – Cyprus dialogue is in progress in order to address many issues of economic co-operation, particularly as regards US investments in Cyprus. 


As such, American investors can rest assured that the Republic of Cyprus provides investment security and protection, in full compliance with European and international standards.


Further, Cyprus’s comparative advantages which have established our country as a major center for International Businesses, not only remain intact but have been further reinforced leading to a number of new and substantial investments in the fields of banking, energy, shipping, telecommunications, real estate and tourism, with new sea ports, Marinas and the largest integrated casino resort in Europe under construction.


These advantages, amongst others, include the combination of EU membership, the use of the Anglo-Saxon legal framework, an attractive corporate taxation of 12.5% (twelve and a half percent), highly skilled and professional workforce, modern infrastructures and a unique geographical location which provides easy access not only to European markets but also to those of North Africa, the Near and Middle East, the Gulf region and Asia.


During the morning sessions of the Forum you were thoroughly informed from the competent Ministers about the impressive recovery of Cyprus’s economy and the ways and means through which this was achieved.


A recovery which was the result of:


(i)                The prudent management of public finances;


(ii)              The adoption of measures which facilitated economic and investment opportunities, such as, providing corporate tax incentives, reducing the time frame-work for issuing planning permissions, broadening the range of permitted land development for large projects, increasing building coefficients, and facilitating joint tourist developments;  


(iii)   Pursuing significant structural reforms, amongst others,  as regards the pension, welfare and labour market system and the public and tax administration;


(iv)   Recapitalising the banking system.


The positive repercussions of the above-mentioned are being reflected through, among others, successive budget surpluses, a dynamic growth rate of 4%, a drastic fall of unemployment, as well as a significant reduction in taxation charges in an array of areas. 


What is of equal significance and to particular importance to any interested investor, is the fact just two weeks ago Cyprus, following successive upgrades of its economy by international rating agencies, is now rated to the investment grade, after being in the “junk” category seven years ago.


This demonstrates the positive economic outlook of Cyprus, enhances the trust of existing investors and at the same time sends a strong message to new investors to explore the significant potential of our country.


For example, the investment funds industry has been expanding at a very encouraging pace, with funds’ registrations increasing by 18% (eighteen percent) per annum since 2014, while the newly-established Deputy Ministry of Shipping offers substantial support to the increasingly growing 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.


Other promising potential exist in sectors such as tourism, 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.


Dear Friends,


On behalf of the Government, I would like to emphasize that we remain committed so that Cyprus remains firmly on a path of sustainable growth and will continue facilitating investment and economic opportunities.


To this end, we shall continue our policies of:


(i)                Maintaining sound public finances.


(ii)                Preserving and enriching our competitive tax and legal framework and reinforcing our position as a business-friendly economic and investment destination, through:


On the one hand: Promoting further structural reforms and in particular via fully reforming the public service so that it facilitates growth in a modern, knowledge-based, scientific, high-tech and innovative economy;


On the other hand: Adopting new specific incentives in order to enrich and diversify Cyprus’s economic sectors, such as a  tax incentives package for investments to innovative companies, a new Investment Law to fast-track licensing procedures for large investments, an enhanced investment funds framework, as well as a comprehensive package for the development and promotion of the filming industry.

(iii)             Investing in our human capital through supporting higher education, research and innovation.


Please allow me to single out our co-operation in the field of energy.


As I have stated many times in the past, we warmly welcome and express our deep appreciation for the presence and involvement of American companies – Noble and now through the energy giant Exxon-Mobil – in Cyprus’s exclusive economic zone for the exploitation of hydrocarbon reserves.


This does not only mark a new chapter in our bilateral relations, but it is also a tangible sign of trust to the reliable, predictable and stabilizing role we have assumed in our volatile neighbourhood.


To this end, the very recent signing of the Intergovernmental Agreement with Egypt as regards the exploitation of “Aphrodite” and transferring gas from Cyprus to Egypt, constitutes a very important and promising development to our efforts to substantially contribute to enhancing energy security for our region.


The above-mentioned should be viewed in conjunction with the efforts to develop the East Med Gas Pipeline, which will transfer gas from Israel and Cyprus to Greece and Italy and consequently the European Union,  serving our joint vision of transforming the Eastern Mediterranean into an energy hub that would contribute to the region’s stability, through, among others, the diversification of energy sources and routes.


Taking the opportunity of the presence of Mr. Matthew Palmer, Deputy Assistant Secretary of the US Secretary of State, I wish to convey in the strongest manner that my top priority remains none other than addressing the unacceptable current state of affairs with the continuing Turkish occupation of 37% of the territory of the Republic of Cyprus.


What is of course required is to create those necessary conditions that will allow the dialogue to resume on the basis of good will and constructive stance from all stakeholders, particularly by the Turkish side, in order to safeguard the positive outcome of the negotiations.

The above-mentioned were reiterated at today’s fruitful meeting with the UN Secretary – General, during which I also stressed that I remain sincerely committed to negotiate a solution within the framework set by His Excellency, as clarified on July 04, 2017, with the same determination and positive attitude we have demonstrated since the beginning of the dialogue.


Within this context, I do hope that the meetings that he hold with the Turkish side and tomorrow’s meeting with the leader of the Turkish Cypriot side, will allow him to be in a position to resume negotiations,  since there is no doubt that lasting peace and stability can only be achieved through the comprehensive settlement of the Cyprus Problem.


I avail myself of this opportunity Mr. Palmer to express my sincere appreciation for your country’s principled stance on the Cyprus Problem and your unwavering support to our efforts in reaching a lasting and comprehensive solution.


In this respect, it is my strong belief that the US, as a Permanent Member of the Security Council, has an essential role to assume when the negotiations resume, particularly in relation to the external dimensions of the Cyprus Problem and the need  to reach a viable and functional settlement that will reunite Cyprus as a modern, truly independent and sovereign state, free of any third country dependencies.


At the same time, it is of vital importance that the United States exerts all its influence to conveying clear messages to Turkey on the need to refrain from any future actions which will negatively affect the prospect of resuming negotiations.


In concluding, I would like to once more extend my deepest appreciation to the organisers of the Forum and to all of you, the investors, for your ongoing trust, your positive contribution and your strong support.


My Government stands ready to offer any assistance deemed necessary in order to facilitate your business plans and investment initiatives that would enhance competitiveness, development and sustainable growth in Cyprus.