Bureaucracy and sluggish procedures continue to present obstacles for foreign investors, but this does not affect their overall assessment and experience of our country. This is the conclusion from two new surveys carried out on behalf of the Cyprus Investment Promotion Agency (CIPA), the “Satisfaction Survey among foreign companies with a physical presence in Cyprus” and the “Market Survey among companies of international scope that are not active in Cyprus”. The findings of the surveys, which were carried out by NOVERNA Analytics and Research, were presented on 21 June in Nicosia, to representatives of the Government and Public Service, as well as important stakeholders of the business sector.
The aim of the first survey was to record the views of investors operating in our country, as regards the importance of factors that affect their choice of headquarters for their companies, Cyprus’ advantages and disadvantages compared with other investment destinations, and their expectations and predictions for the future. As the findings show, the Cyprus economy’s competitive advantages are still particularly attractive, with the island’s tax regime, geographical position and air connectivity, but also quality of human resources and quality of life, topping the list of the investors’ priorities.
Bureaucracy remains one of Cyprus’ main disadvantages as an investment destination, followed by delays at the Public Service and Registrar of Companies. Investors also consider the non-resolution of the Cyprus problem as a disadvantage, while other inhibiting factors include the size of the market, the problems the banking sector is still facing and the level of vested interests present in the country.
One important fact is that the vast majority of investors remain pleased with their overall experience in Cyprus, with 90% saying they do not intend to change location, compared with 79% last year. Specifically, 45 of the participants said they were more satisfied than they had expected, especially as regards the tax regime, the measures taken to improve the economy and the quality of services on offer. The corresponding figure for 2015 was 29.
Regarding reforms, participating investors said they were aware of the measures that were taken to boost transparency in the banking sector and update the Law on investment firms. In general,investors say that reforms are moving in the right direction.
In the second survey, which was carried out among investors who have no specific links with Cyprus or reasons to move their operations to another country, a notable25% said they would consider our country to expand their business activity. It is worth noting, however, that 80% of those who have acquaintances active here, stated that they relayed extremely positive comments about their experience. Among the factors they would take into consideration in order to expand their operations to Cyprus are its corporate tax, its EU membership, the extensive use of the English language and the island’s geographical position. Conversely, Cyprus’ market size, political problem and bureaucracy in certain areas are the inhibiting factors.
Commenting on the findings, CIPA Chairman Mr Christodoulos E. Angastiniotis said these surveys “are in essence, the only measurable research that evaluates the existing business environment and which can be effectively utilised by the State and CIPA to implement a collective target for reform and enhancement of the country’s business environment”.
Mr Angastiniotis said there was no doubt that Cyprus has many of the characteristics that investors look for, as the surveys we are presenting today confirm. “But in order for us to optimise the prospects of turning investor interest into real investments, and to ensure that existing investors stay and grow their presence in Cyprus, we must continue the effort to strengthen our comparative advantages unabated.” Therefore, we have a duty to stay on this steady course that has brought us this far, with the same persistence and efficiency, he concluded.
