1. Investments from European Union Countries
For most sectors, there are no restrictions applicable to direct investments in Cyprus by natural or legal persons from EU member states. However, in the banking sector the non-resident participation is restricted to 50% of the equity capital. There are also restrictions regarding the acquisition of property, the establishment of radio and television stations and the offering of public utilities.
Applications from citizens of European Union member states should be sent directly to the Registrar of Companies. 2. Investments from non - European Countries
Non - EU investors may invest in companies quoted on the Cyprus Stock Exchange, provided the equity participation does not exceed 49%. For investments in other companies the following applies:
Primary Sector
Up to 49% participation is allowed in projects relating to agriculture, animal husbandry, fishing, forestry, etc. The indicative minimum level of investment is CY£ 100.000.
Secondary Sector
Up to 100% equity is allowed in manufacturing, including the establishment and operation of bonded factories or industrial units in the Larnaca Free Zone. There is no indicative minimum level of investment.
Tertiary Sector
Up to 100% participation is permitted in business entities rendering services.
• For services (depending on the nature) the level of investment should be between CY £50.000 and CY £100.000.
• The Central Bank may approve up to 24% non-EU equity participation, even if the aforementioned minimum levels of investment are not satisfied.
The following activities are treated as exceptions to the general tertiary sector policy: • Restaurants and other recreational centers:
Up to 49% equity participation is allowed in restaurants and other recreational centers provided the following additional prerequisites are fulfilled : a) The minimum level of investment is CY £125.000, b) The non-EU investor's contribution to the project exceeds CY£60.000. c) The proposed establishment is of a high standard, as evidenced from: the structure, decor and appearance of buildings -the quality of management and services offered.
• Agencies representing imported goods and services:
Up to 49% equity participation is permitted in agencies representing imported goods and services. The indicative minimum level of investment is CY£50.000. Wholesale and Retail Trade Up to 100% equity participation may be permitted in enterprises engaged in wholesale and retail trade : a) If the non-EU percentage participation is less than 49% then the required minimum level of investment is CY£IO.OOO, b) If the non-EU percentage participation exceeds 49% then the required minimum level of investment is CY£300.000.
• Hotel and Tourist Projects:
The extent of non-EU participation in hotel and tourist projects is determined by the Cyprus Tourist Organization (CTO) policy in force at the time. Applications are examined by the Central Bank in consultation with the MCI&T. According to the current CTO policy: a) up to 49% participation is allowed in hotels and other tourist establishments (e.g. hotel apartments, villas, etc, b) up to 100% participation is allowed in supplementary tourist projects, (e.g. gold courses, marinas, etc).
• Cypriot Tourist and Travel Agencies:
Up to 49% participation is allowed in Cypriot tourist and travel agencies. The participation of non-EU investors is allowed only in licensed domestic tourist agencies which have been operating successfully in Cyprus for at least 7 years. The following prerequisites must be satisfied : a) The investor's contribution should be at least CY£ 150.000, b) The investor should provide evidence of his/her experience as a tour operator, c) The potential importance of a tour operator is assessed by : a) the number of tourists he/she may attract to Cyprus, b) the possibility of expanding his/her business in Cyprus, and c) the prospects of increasing the tourist flow to the island, d) Permission is granted only in cases where the objects of the local enterprise are restricted to the activities of a tourist agent. In cases where this is not so, the objects have to be modified accordingly. Applications are assessed and approved by the Central Bank in consultation with the MCI & T.
Activities of Specific Treatment
Applications regarding non-EU participation in activities falling under the following categories are assessed on a case-be-case basis by the Central Bank in consultation with the competent ministry: a) Establishment of new banks, participation exceeding 10% in existing ones or opening of representative offices in Cyprus, b) Establishment of new insurance companies, participation in existing ones or representation of such companies in Cyprus, c) Establishment of new financial services companies or participation in existing ones d) Publishing of newspapers and/or magazines e) Establishment of new airline companies for the transportation of passengers and/or cargo, f) Trading and/or maintenance of aircraft and parts g) Any activity whose economic sector is unclear or unspecified.
Restricted Activities
Applications for the following activities are rejected outrightly by the Central Bank: a) Real estate development, b) Tertiary education, c) Offices for the servicing of airlines at the airports. However, foreign airlines may offer such services to their own aircraft within the provisions of a bilateral airline agreement, d) The provision of public utilities covered by specific legislation, such as the production and distribution of electricity, telecommunication and postal services, the provision of agricultural insurance, etc.
Permits issued by the Central Bank do not prejudice the stance of other government departments, organizations or authorities regarding the issue of any other permits or consents that may be required under other laws or regulations.
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