This content is from: Local Insights

Cyprus

Cyprus has attracted offshore enterprises from almost 100 countries, and in the past few years Europe has been the main source of new company registrations. In the first half of 1997, 79.2% of the registrations originated from Europe, 12.9% from America, 5.5% from Asia, 1.7% from Africa and 0.7% from Australia.

These figures were revealed by the Central Bank of Cyprus in a recent interview given by the Bank's senior exchange controller. More than 1,000 offshore enterprises are operating from fully-fledged offices in Cyprus, most of which deal with trade, marketing and distribution. A significant proportion deal with business and engineering consultancy, and ship management and maritime services will follow suit.

The Cyprus offshore sector employs nearly 5,000 people and has a revenue of C£145 million (US$270 million), while shipping companies alone grossed C£9.5 million. The total amounted to 3.8% of the country's GDP and projections estimate that by the end of 1997 the total will reach C£162 million.

The volume and quality of business the offshore enterprises generate are an important asset for the local economy. The Central Bank's projections show an even greater increase in offshore company registration this year and it is estimated that nearly 5,000 permits will be issued by the end of 1997.

How will Cyprus's accession to the EU affect the offshore sector? The government, in association with the Central Bank of Cyprus and other bodies and institutions, has commissioned studies on the future status of the offshore sector when Cyprus joins the EU. Officials have yet to release the findings of the studies, which are still at the stage of assessment.

Clearly, the EU will play a primary role in determining the future of the offshore sector in Cyprus. However, the government remains committed to the continued growth of offshore activity in Cyprus.

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