cyprus telecommunications authority, cytaglobal investment opportunities in cyprus

Cyprus Telecommunications Authority, CytaGlobal

INVESTMENT OPPORTUNITIES IN CYPRUSINVESTMENT OPPORTUNITIES IN CYPRUS

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CYPRUS CYPRUS TELECOMMUNICATIONS TELECOMMUNICATIONS

AUTHORITYAUTHORITY

by Yiannis Koulias,Assistant Manager, CytaGlobal

Acknowledgement: presentation prepared in co-operation with the Foreign Investors Service Centre,Ministry of Commerce, Industry & Tourism

March, 2006

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Republic of Cyprus

Positioned at a strategic location in the Eastern Mediterranean at the crossroads of Europe, Asia and Africa, Cyprus serves as a bridge between the European Union and the Middle East...

ASIA

AFRICA

EUROPE

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Cyprus Telecommunications Authority, CytaGlobal 4

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Republic of Cyprus (contd…)

• Established on 16/8/1960, full member of European Union on 1/5/2004

• Bilingual (Greek/English), highly qualified and skilled work force

• Regional telecommunications, air-transport and services centre

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Republic of Cyprus (contd…)

• Modern and efficient legal, accounting and banking services

• International Financial and Business Centre– 1,200 International Business Corporations (IBCs)

– 6th leading maritime nation in the world

– 30 foreign Banks

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Cyprus Economy

• Main Social Economic Indicators

Total area: 9,250 sq. km Population 2004 (est.):

837,300 Rate of growth 2004: 3.8% Unemployment 2004: 3.6% Inflation 2004: 2.3% Per Capita GDP 2004: EUR

17,239

Source: UNCTAD World Investment Report 2005

264

804652

1057 10111146

0200400600800

1000

1200

1999 2000 2001 2002 2003 2004

FDI INFLOWS to Cyprus(USD Millions)

Sources: Statistical Service of Cyprus, Central Bank of Cyprus

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Foreign Direct Investments

• Sample Top Foreign Investors, 2003–2005

Bank of Beirut, Lebanon (Financials)

Starbucks, USA (Restaurant) GFI, UK (IT & Software) Regus, UK (Consulting &

Services) DAT, United Arab Emirates

(Energy) Boutaris, Greece (Agri-food) Lidl, Germany ( Retailer) Scancom, Lebanon (Telecoms)

Source: Central Bank of Cyprus

INWARD FDI, 2004 (by region)

71%

16.1%10.8% 2.1%

EU 25 (71%)other Europe (16.1%)America (10.8%)Rest of the World (2.1%)

INWARD FDI, 2004 (by sector)

37%

1%3%11%11%

37%

real estate (37%)trading (37%)banking & financial (11%)other services (11%)manufacturing & construction (3%)other non-services (1%)

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FDI Policy

• Since 1/10/2004, FDI Policy is fully liberalized for both EU and non EU nationals, in most sectors of the economy– no limitations on foreigners’ participation

percentage– no limitation on minimum level of investment

• Simplification of administrative procedures– Companies can be established by direct

application to the Registrar of Companies

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Telecommunications in Cyprus

• Telecommunications Market in Cyprus is fully liberalised as from 1/1/2003

• Cyprus Telecommunications Authority (CYTA):– the main telecommunications provider in Cyprus– provides the whole spectrum of electronic

communication products, ranging from fixed and mobile telephony to internet service provision and broadband applications

– offers probably the best telecommunications network in the Eastern Mediterranean region and the cheapest telecommunications in Europe

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Telecommunications in Cyprus (contd…)

– provides an impressive global submarine cable and satellite infrastructure

– is committed to meeting the area's ever expanding needs and business goals via a portfolio of competitively priced and flexible products

– CYTA’s key statistics (Dec., 2005) Direct exchange lines (density): 53.71 % Postpaid mobile telephone service (density): 45.29% Prepaid mobile telephone service (density): 53.02% Internet access customers: 47,189 Broadband access customers: 35,433 ISDN customers: 27,252

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• Tax reform (in effect as from 1/1/2003):– conforms with European Union regulations

and OECD requirements– maintains Cyprus’ competitiveness as an

International Business Centre – enhances Cyprus’ attractiveness as a suitable

jurisdiction for holding companies

Fiscal Incentives

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Fiscal Incentives (contd…)

• Favourable tax regime:no tax on dividendsno tax on profits from permanent establishment

outside Cyprusno tax on profits from reorganizations no tax on capital gains from disposal of securities tax free repatriation of profits and capital favourable tax treatment of losses

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• Uniform corporation tax rate at 10%– lowest corporation tax rate in the EU– 50% of interest income is exempt from tax

• Personal income tax rate up to 30%– no tax on interest and dividends

• Double taxation treaties with 40 countries

Fiscal Incentives (contd…)

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Investment Incentives

• The Government has introduced various Grant Schemes as measures to:– enhance Cyprus’ competitiveness– achieve steady and self sustained growth– maximize GDP

special emphasis: on the manufacturing industry

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Investment Incentives (contd…)

• Basic objectives of the Industrial Development Policy:– to attract and develop new high-tech

industries– to improve productivity– to restructure the Cypriot traditional

manufacturing industry – to attract foreign investment

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• Examples of Grant Schemes:– Technology-Incubating Program up to

CYP120,000 for two-year period – Technological Upgrading Program

covers 30% of investments– Protection against industrial pollution

grant may reach up to CYP150,000


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– National Framework Program for financing research and development projects total Government’s contribution for 2003-2005,

approximately CYP11.65 million

– Strengthening laboratory infrastructure maximum subsidy amount is CYP60,000

– Encouragement of Women & Youth Entrepreneurship 50% of approved budget, up to CYP35,000 for

manufacturing, up to CYP25,000 for other sectors


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The Larnaca Free Zone

• Established in 1980, to encourage external trade and international commerce– abolishment of custom duties and taxes

• All kinds of enterprises are allowed (trade, transit trade, manufacture, services)– currently over 25% of total area

has been leased

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The Larnaca Free Zone (contd…)

• Industrial sites in the Free Zone are leased for a period of up to 99 years (for the first 5 years a nominal rent of CYP1 per year applies)

• Free-of-charge provision of electricity power (maximum demand)

• Free-of-charge provision of unlimited number of direct telephone lines

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Foreign Investors Service Centre

• Based in Nicosia

• Commenced operations in December 1999

• Under the auspices of the Ministry of Commerce, Industry & Tourism

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Foreign Investors Service Centre,

• The Foreign Investors Service Centre was designed to provide total solutions and support… – acts as central agency for information,

support and foreign investors’ relations– provides after-care development services – attracts FDIs in targeted industries and

promotes Cyprus as an International Business and Investment Centre

Scope

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• To attract foreign direct investments, thus contributing in the enhancement of the production capacity and competitiveness of Cyprus industry, and to serve the investors’ needs by providing total solutions and an after-care service program

Mission

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• Provides information regarding financial, legal and taxation matters

• Provides advice regarding the various benefits on-offer (e.g. grant schemes) and after-care development services

• Promotes Cyprus as an international business, investment and R&D centre

Services & Activities

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• Co-ordinates and acts as liaison with other appropriate government departments, and facilitates the acquisition of the required permits and licenses (e.g. work permits)

• Member Euro-Mediterranean Network of Investment Promotion Agencies (ANIMA)

• Member World Association of Investment Promotion Agencies (WAIPA)

Services & Activities (contd...)

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Conclusions

Strategic geographic locationAvailability of high-quality services and

highly-skilled work forceGlobal telecommunications connectivityStandardised and simple proceduresFavourable business envirornmentLow set-up and operation costsFavourable tax regimeGrant Schemes

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Conclusions (contd…)

Dynamic, liberalised FDI regime and Industrial Development Policy

Availability of Free-Zone bonded factoriesThe Foreign Investors Service Centre

provides total services and supportEuropean standard of livingDynamic free-market economy

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…thank you

…the end

INVESTMENT OPPORTUNITIES IN CYPRUSINVESTMENT OPPORTUNITIES IN CYPRUS

cyprus telecommunications authority, cytaglobal investment opportunities in cyprus

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