Thanks to its convenient EMEA access and time zone, low operational costs, and tax breaks for expat executives, Cyprus is on the shortlist of decision makers when it comes to choosing the right location to establish international and regional headquarters.
The appeal of Cyprus as an efficient management and corporate location is growing thanks to its pro-business attitude and strong regulatory framework. The country is currently one of the fastest growing economies in the EU and its cost-effective operational environment, stable banking sector and increasing foreign investment in multiple sectors are being recognised by companies worldwide. Another key attraction to set up international headquarters (HQ) in Cyprus is the country’s good relations in the region and its access to the EU’s market of over 500 million people, as well as the evolving markets of the Middle East, Asia and Africa. Keen to build on this success, the country’s government and private sector are expanding the list of incentives to attract more headquarters to its shores and establish the island as the ideal HQ base in the East Med.
Regional Base and EU Access
The geostrategic position of Cyprus in the Eastern Mediterranean has long played a pivotal role in influencing the country’s destiny and prosperity and has led to close cultural and business relationships with countries in the region. Cyprus’ entry into the EU in 2004, and the eurozone in 2008, was welcomed by the international business community, who saw it as a new opportunity for foreign companies to use Cyprus as a convenient entry point into the EU marketplace. As part of the European Single Market, Cyprus enjoys the free movement of goods, services and capital with other EU member states and members of the European Free Trade Association. This comes without tariffs, complex bureaucracy or regulatory obstacles.
Multinationals from a range of different sectors have already chosen Cyprus as the location for their regional headquarters. Global companies such as NCR, Kardex, Wargaming and Amdocs are just some of the corporations that have based operational or corporate management functions on the island.
An added benefit of Cyprus is its secure and stable EU environment in a turbulent region. Prominent news organisations, such as AFP, have capitalised on this aspect and use the island as their base between Europe and the Middle East due to its security, convenient time zone and travel times, reliable communication infrastructure and availability of multilingual support staff. Cyprus is an ideal base for regional headquarters or ancillary and support services for investors with clients in the wider Eastern Mediterranean and Middle East region.
Two prime examples of this are Sykes and Whipper. The global leader in business process outsourcing, Sykes Enterprises, picked Cyprus from 20 other competing jurisdictions as its base, citing the right work-life balance as a key reason. High-tech and entertainment start-up Whipper, led by a founding team of executives and advisors who hail from Riot Games, Netflix, Swiftkey, Amazon, Echo UK, Omnicom, and Viber, also established its global headquarters in Limassol – adding more weight to the growing start-up culture in Cyprus. Major multinational firms in the ICT industry, including consulting, fintech and regtech firms, are based in Cyprus using the country as a gateway into and out of the EU for various corporate services, such as sales and marketing, project management, software development, systems integration, testing services, training and development, disaster recovery and business continuity, as well as joint R&D among countries in the region. Also, international giants such as Microsoft, Oracle, SAP and IBM have been on the ground, supporting Cyprus’ tech evolution for many years. A crucial element especially when it comes to the ICT industry is guarding intellectual property (IP), and Cyprus offers strong IP protection through domestic legislation and a network of EU and international agreements.
Brexit is another development providing new opportunities. A former British colony, Cyprus has a longstanding relationship with the UK, enjoying close business ties as well as a comprehensive, modern and forward-looking legal and regulatory framework based on English Common Law principles. With continuing Brexit uncertainty, Cyprus offers companies the advantages to continue operating in an EU jurisdiction with a familiar UK legal framework.
Global Maritime Hub
Cyprus is one of the most influential global hubs for ship owning and shipmanagement services. Thanks to its advantageous legislative framework, the island has attracted some of the world’s most influential names in shipping for the last 50 years. Today, Cyprus is the largest third-party shipmanagement centre in Europe and the largest crew management centre in the world, while the island’s international ship register is the third largest in Europe and the 11th largest in the world.
The newly established Shipping Deputy Ministry has created a roadmap to ensure Cyprus maintains its competitive edge. The goal is to protect the stable and business-friendly framework provided to foreign investors in shipping by further expanding the island’s registry and maritime cluster, strengthening international relations, and upgrading available services.
UK-regulated ship insurers have identified Cyprus as an attractive jurisdiction for an outpost or base amidst fears that Brexit will hinder their access to the bloc’s financial market, for example, the major global shipping insurer, London P&I Club, announced in July 2018 that it was setting up a ‘post-Brexit subsidiary’ in Cyprus. Also, several Greek shipowners and shipmanagement companies previously based in London have already relocated to the island.
Cyprus is the EU’s largest shipmanagement centre, with one in five vessels under third party management controlled from Cyprus. With more than 200 ship-owning, management and other shipping-related companies based in Cyprus, such as Columbia Marlow and BS Shipmanagement, the success of the sector has developed clusters and auxiliary services, which is a model that could be successfully replicated in other sectors, such as the growing oil and gas sector. Cyprus provides a secure and convenient base for operations for various ancillary services to the oil and gas industry as well as for company headquarters to support activities in the EMEA region.
Cyprus offers a strategic location, a competitive and EU-approved tax environment, a 12.5% corporate tax rate, an educated English-speaking labour force, excellent telecommunications, modern banking and legal infrastructure, and a high quality of life – all of which make it a convenient international management centre and springboard into neighbouring markets. Foreign companies already based in Cyprus comment favourably on their experiences with local employees in terms of productivity, language skills and dependability. The country has one of the youngest and most highly educated workforces in the EU, with over 40% holding a tertiary degree. In addition, the EU has a workforce of 240 million people, all of whom are eligible to legally reside and work in Cyprus, allowing companies to tap into a vast talent pool.
Doing business in and from Cyprus is easy and straightforward. Home to a major international business and financial services sector, the country is an ideal base for region-wide corporate coordination and central management functions, sales, marketing and customer service. As a pro-business, neutral, cost-effective and politically stable country, Cyprus offers companies a perfect climate to successfully compete in the region. A fiscally efficient tax structure leads the way and is complemented by double tax treaties with 64 countries and more than 40 EU trade agreements, facilitating international business and ensuring a smooth trading environment.
In addition to its geographical proximity to major markets, Cyprus has good connectivity. The country is connected by its two international airports with major cities in Europe and key destinations in Asia, North Africa and the Middle East. In the last two years, connectivity has seen further improvement with new airlines adding Cyprus to their schedules and existing airlines increasing the frequencies of their flights. Thanks to its location, Cyprus enjoys business-friendly time zones, enabling international companies to do business with the East in the morning, Europe throughout the day and with the West in the afternoon. The country also has long-established links with Russia and Eastern European countries with many Cypriot professionals having in-depth knowledge of these markets, and often acting as key business introducers.
Turn-Key Office Space
The influx of new companies setting up in Cyprus has spurred the development of new luxury multi-use office complexes in Limassol and Nicosia. Over the years, the coastal city of Limassol has steadily grown to become the main international business hub, while the inland capital city Nicosia attracts multinationals that require closer access to government. The majority of international companies choose Limassol, due to the cosmopolitan seaside lifestyle, the large expat community and the short distance to both Larnaca and Paphos international airports.
Landmark commercial buildings like The Oval and Trilogy have raised the bar for prestigious commercial addresses in Cyprus. As some of the tallest office buildings in Limassol these projects offer large open-air balconies and uninterrupted views across the Mediterranean – an enviable working environment for mixing business with pleasure. A number of other mixed-use buildings are springing up across the city offering residential, commercial and retail space and are changing the skyline of Limassol, offering stunning views and luxury living.
For companies needing proximity to ministries and government departments, the capital Nicosia is also expanding its stock of state-of-the-art offices. For jet-setters, Larnaca – located on the sea and adjacent to the airport – might be the right choice. Cyprus caters for companies of all sizes, and smaller organisations or those new to Cyprus can easily find companies offering serviced office rental on a short-let or permanent basis. Regus, with offices across the world, have locations in both Limassol and Nicosia, and have been joined by numerous local companies offering turn-key spaces.
Cyprus has established itself as a magnet for foreign-owned companies and is continuously improving its competitive position. A stable business environment and excellent quality of life are just a few of the many reasons why companies relocate senior decision makers to perform strategic functions from Cyprus. In the long term, the country has great prospects to benefit from growth in the region and become an increasingly popular choice as a location for international and regional headquarters. Boasting one of the lowest crime rates in the EU, a superb Mediterranean climate, competitive personal tax rates, as well as excellent educational and healthcare systems, Cyprus is an easy sell for expats and in particular to those with families. Cyprus is an ideal location to achieve work-life balance, and to make business both pleasurable and profitable.
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