Introduction

Economic and Business Infrastructure

Cyprus is the third largest island in the Mediterranean Sea, with an area of 9,251 square kilometers. It is strategically located in the Eastern Mediterranean at the crossroads of Europe, Asia, and Africa. Its total population is estimated at 1.1 million, of whom approximately 840,000 live in the area controlled by the Republic of Cyprus according to the 2011 census. Up-to-date information for the occupied area is unavailable.

The island was invaded in 1974 by the Turkish army and about a third of the territory remains under Turkish occupation. The so-called Turkish Republic of North Cyprus is recognized only by Turkey, and all the references in this chapter to Cyprus relate to the legitimate government of the Republic of Cyprus. While political uncertainty continues to surround "the Cyprus problem", and it is hoped that there will be a satisfactory resolution in the near future, day-to-day business life is unaffected by the issue.

Cyprus is very well placed as an international business and financial center. Apart from its strategic geographical location, relaxed way of life, and attractive climate, it offers an excellent commercial infrastructure, a highly educated English-speaking labor force, a business-friendly environment, particularly in the area of taxation, a high standard of living, and a low rate of crime. Living costs are moderate, and good airline connections and telecommunications and increasing alignment with the European position in matters of culture and trade make it an effective bridge between West and East. Its time zone is seven hours ahead of New York, two hours ahead of London, one hour behind Moscow, and five hours behind Beijing. The official languages are Greek and Turkish, but English is the lingua franca of business.

Cyprus is an independent, sovereign republic with a presidential system of government and a written constitution which safeguards the rule of law, political stability, human rights and the ownership of private property. Cyprus has been a member of the European Union (EU) since 1 May 2004. In preparation for EU membership, Cyprus made significant structural and economic reforms that transformed its economic landscape and created a modern, open, and dynamic business environment. Since joining the EU, Cyprus has successfully faced the challenge of European integration, and has established itself as the natural portal for inward and outward investment between the EU and the rest of the world, particularly the rapidly-growing economies of Russia, Eastern Europe, India, and China. Cyprus is a member of the Commonwealth, the Council of Europe, the International Monetary Fund (IMF), the United Nations (UN), the World Bank, and the World Trade Organization (WTO), and a founder member of the Organization for Security and Cooperation in Europe.

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