Saudi companies and investors can benefit significantly from Cyprus’ strong business ecosystem, and there are many business opportunities in both Cyprus and in Saudi Arabia for companies to build on to strengthen cooperation, says Demos Anastassiou.
How would you describe the current trade relations between Cyprus and Saudi Arabia?
The trade relationship between Cyprus and Saudi Arabia dates back decades. Since the 1970s and until very recently a lot of Cypriots emigrated to Saudi to work in the construction but also in other sectors in Saudi Arabia, so traditionally there are strong and friendly ties with the Kingdom.
There is great potential in the trade relationship between Cyprus and Saudi Arabia which is enhanced by the strengthening of the diplomatic relations between the two countries. The opening of the Cyprus Embassy in Riyadh in 2015 and the opening of Saudi Arabia’s Embassy in Cyprus in 2018 cemented the new era in these relations.
In terms of products traded between the two countries, around half of Cyprus’ exports to Saudi are dairy produce and animal products. Other exports include pharmaceutical products, boilers and machinery, animal food, agricultural products and others. Most of our imports from Saudi include mineral fuels and mineral oils, organic chemicals, plastic and others.
What advantages does Cyprus offer specifically to Saudi companies and investors?
Saudi companies and investors can benefit significantly from Cyprus’ strong business ecosystem, from a full access to the European Single Market and to more than 40 EU Trade Agreements.
Cyprus’ legal system is reliable and predictable. It is based on the English Common Law and is in full compliance with EU and International Laws and regulations. There is also strong protection of Investment and Intellectual Property.
Saudi businesses will also benefit from a well-educated, multilingual, highly skilled local talent and professionals with international business experience. In addition, Saudi businesses can also relocate to Cyprus, talent from anywhere in EU without the need of a visa or from any third country through a quick and simplified process by utilising the new government’s incentives for Third Country Nationals.
Furthermore, there is a wide network of high calibre accountants, lawyers, and other professionals to support the Saudi businesses which will set up in Cyprus. At the same time Cyprus maintains a low cost of doing business compared to other EU destinations in terms of labour cost, office rentals, company set up, operational, filing and other costs.
Saudi businesses can benefit from an attractive and transparent tax regime with 12.5% corporate tax rate, one of the lowest in EU, and can utilise the Double Tax Treaty with Saudi Arabia which came into effect on 1st of January 2020.
Equally important is Cyprus’ high quality of life in a safe and friendly international environment, a strong and first-rate education system and schools which makes Cyprus an attractive destination to relocate.
What new prospects and opportunities could be cultivated to facilitate more business between Cyprus and Saudi Arabia?
There are many business opportunities, across various sectors both, in Cyprus and in Saudi Arabia, for companies to build on. Indicatively I would like to highlight the following sectors.
In the construction sector companies in Cyprus have both the technological knowledge and capabilities to take on a big range of construction projects in Saudi Arabia.
In terms of headquartering, following Brexit and the approval of the Fast Track Business Activation mechanism by the Cypriot Council of Ministers in September 2020, Cyprus is now an attractive destination for the establishment of business entities from Saudi Arabia which have activities in the European Union. In addition, Cyprus’ modern and favourable legal environment make it an ideal location for the establishment of investment funds from Saudi Arabia.
Cyprus is an international player in shipping and shipmanagement having one of the most competitive and high-quality flags and at the same time offering first-rate ship management services. Given the high export activity of Saudi Companies such as Aramco Trading in the Mediterranean, Cyprus could also potentially offer oil product storage, mixture and ‘ship-to-ship’ transfers, especially given its strategic geographic location and its already existing infrastructure
Start-up companies from Saudi Arabia could make use of Cyprus’ beneficial corporate and investment environment, its membership to the EU as well as the good relationships Cyprus has with neighbouring countries, while Cypriot start-up companies could benefit from Saudi’s investment appetite for new technologies and innovations.
Our country is a comprehensive travel destination encompassing modern infrastructure and an advanced tourism and hospitality sector. Given the Kingdom’s focus in the development of the tourist industry in Saudi and the proximity with Cyprus, we see great cooperation opportunities for companies in this sector.
In the education sector, forming connections between universities in Cyprus and Saudi Arabia that would enable collaboration in both teaching and research would give these universities the opportunity to be more competitive internationally. Moreover, through such a collaboration, Saudi Arabian universities would become eligible for both EU funding and participation to European Programmes. These institutions could also organise conferences and symposiums together.
In terms of foreign direct investment, there are worthwhile opportunities to invest in university institutions, hotel establishments, hospitals and clinics, banks, renewable energy projects as well as ports and marinas. And as for the Cyprus Stock Exchange (CSE) and given the interest that the Saudi Arabian Stock Exchange receives from international investors, we consider that double listing important companies in both our stock exchanges would be beneficial. This would facilitate foreign investor transactions to Saudi Arabian companies that are referred from a European Exchange.
How does the Cyprus-Saudi Arabia Business Association support and foster business links between the two countries?
The Cyprus Saudi Arabia Business Association was established in September 2020 and operates under the auspices of the Cyprus Chamber of Commerce and Industry. In that respect it is working very closely with the Federation of Saudi Chambers of Commerce (FSCC), the Riyadh Chamber of Commerce and the Jeddah Chamber of Commerce to act as a bridge between the two business communities and to facilitate companies from both countries to explore opportunities both in Saudi and in Cyprus. The cooperation with the Saudi Chambers was formalised via the cooperation agreement that was signed with the FSCC on 7th of June 2022 to form the Saudi Cyprus Business Council which will comprise of members from both business communities.
One of the main tools we use to foster and support the business links between the two countries is the organisation of business delegations. These delegations act as a platform for businesses from both countries to meet and explore opportunities of mutual interest. We organised our first business delegation to Riyadh and Jeddah at the beginning of June this year and we are discussing with the FSCC to organise a similar business delegation from Saudi to Cyprus in the near future.
Furthermore, the Cyprus Saudi Arabia Business Association works very closely with all ministries and especially the Embassy of Saudi Arabia in Nicosia and the Embassy of Cyprus in Riyadh to promote local businesses and projects and to create a solid foundation to build sustainable trade relations between the two countries. To that effect our Association’s agenda includes, amongst other things, to work closely with all stakeholders to establish direct flights between the two countries, to streamline the visa issuing process for Saudi nationals when visiting Cyprus and to establish a Bilateral Investment Protection Treaty.