Francisco A. Laguna & Wojciech Kornacki
Cyprus is a rising regional transport hub in the Mediterranean. The island’s economy has recently been rated one of the top 10 fastest improving economies with great potential in 2016, and thereafter. What is unique about Cyprus is that it is located near the Middle East but is also member of the European Union, and its official currency is Euro.
Cyprus: Business Intelligence Summary
Cyprus is the largest island in the eastern Mediterranean, and although it is divided between Turkey and Cyprus, the whole island is considered to be European Union territory. It population is approximately 800,000. In 2015, country’s GDP was 17,421 billion Euros (~ US$ 19 billion), and it is expected to grow rapidly in the future. After significant reforms in business regulations, Cyprus is showing significantly improved economic performance. In addition, Cyprus is pushing hard to re-unify the entire island which would most likely create many new investment opportunities on the Turkish side of the island.
Currently, transport, trade and accommodation are some of the most important sectors of Cypriot economy.
Regional Transportation Hub
Cyprus’s commercial fleet is third largest in the European Union. Recently, the European Union has invested millions of euros to make Cyprus one of its main sea transport and logistics hubs. In the last 2 years, that investment has transformed Cyprus’s main port, Limassol, into one of the most efficient and modern ports in the southern Mediterranean. The estimated economic benefit to the island approaches 2 billion Euros. In 2015, the port was privatized, and since then, it has breathed new life into Cyprus. Additional construction projects for oil and gas offshore bases and terminals are in progress. The port is expected to be fully operational in early 2017. Since the European Union is seeking to make Limassol a critical logistics hub in the region, and many European and international companies have already invested in it, this offers a great opportunity for additional business prospects in Cyprus.
Opportunities in a Re-Unified Cyprus
While Cyprus has experienced significant economic growth, the Turkish Cyprus remains less developed, and its economy is much smaller. It is estimated that by 2035, a reunified Cyprus could generate 45 billion Euros or (~ US$ 50.5 billion) in economic output – more than double than what it is now. Re-unification would make it very easy for many companies to start developing the recently discovered gas fields on the Turkish Cyprus side. It would also lift the Turkish embargo on Cyprus-flagged ships which would dramatically increase shipping and transshipment of containers through Cyprus to Asia and the Middle East. Since the re-unification appears almost imminent, and both sides are aware that it makes economic sense, the time to consider Cyprus for investment and business opportunities is now.
Contact TransLegal with your questions concerning business opportunities in Cyprus.