articles | 12 April 2019 | ServPRO Accountants & Consultants

Cyprus’ potential ‘Brexit’ opportunities

Britain’s eventual exit (Brexit) from the European Union (EU) will consequently impact Cyprus and its economy due to their close financial relations. UK is one of Cyprus’ main supplier of goods and services. Also, Cyprus’ exports to the United Kingdom (UK) exceed 10% of its total. Moreover, Cyprus’ financial services collaborate closely with the City of London and most importantly, Britain has always been Cyprus’ main source for tourism.

The question of what kind and how much of an impact ‘Brexit’ will have on Cyprus and its economy, a study by the Finance Ministry of Cyprus indicates that the consequences of Brexit will be minimal and manageable (depending mainly on the exchange rate between pound sterling and euro).

Financial analysts and market players claim that a number of benefits may come in view of ‘Brexit’. These claims are based on the fact that despite leaving the EU, Britain will continue seeking financial partners and doing business within the framework of its financial and commercial relationship with the EU.

Naturally, British companies will want to to retain the benefits of holding a European passport, therefore many of them consider the possibility of relocating their activities or headquarters from London to other European countries.

Cyprus, is one of the most attractive destinations within the European Union for UK-based companies for a number of reasons, some of them being:

  • Legal system (based on English law)
  • Low Corporate Tax Rate
  • Strategic Geographic Location
  • Recovering economy and restoration of investment confidence
  • Good command of English language (by most of the population)
According to financial experts, Cyprus’ financial sectors such as tourism, financial services, shipping and energy, may have the highest potential for new investments, while banks, insurance companies and investment funds, are the companies expected to benefit the most from relocating their activities.

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