Cyprus has historically attracted significant investment and participation from the UK in various economic sectors, but there is scope for more cooperation to further strengthen the bilateral relationship and strategic ties of the two countries.
How would you describe the current trade relations between Cyprus and the UK?
The trade relations between the two countries are quite high, reflecting the two countries' long historical ties, which date back to the 19th century. According to data, the total trade in goods and services, exports and imports, between the UK and Cyprus was a bit over €4 billion in the four quarters to the end of Q2 2023 – an increase of 25.4% from the four quarters to the end of Q2 2022. In addition, the UK is Cyprus’ second most significant trading partner.
It should be noted that the UK and the EU reached a Trade and Cooperation Agreement, that came into effect on 1 January 2021, covering various aspects of their relationship, including trade. While the UK is no longer part of the EU's Single Market and Customs Union, the agreement aims to maintain trade between the UK and the EU member states, including Cyprus, with reduced trade barriers.
What economic sectors in Cyprus have seen significant investment and participation from the UK, and in what type of projects and activity?
Cyprus has historically attracted significant investment and participation from the UK in various economic sectors. Some of the sectors that have seen notable UK involvement include tourism and hospitality, real estate, financial services, shipping, education, and technology and innovation.
The tourism industry in Cyprus has been a major focus for British investors. Many UK tourists visit Cyprus each year, and British companies have invested in hotels, resorts, and other tourism-related ventures on the island. British citizens have been active buyers of real estate in Cyprus, particularly in the coastal areas. The appeal of a Mediterranean climate, beautiful landscapes, and a relatively low cost of living has led to substantial investment in residential and commercial properties.
In terms of financial services, Cyprus has been a popular destination for UK companies seeking to establish a presence within the European Union. The financial services sector, including banking and insurance, has attracted British firms interested in serving both Cypriot and EU markets. In addition, Cyprus has a well-established shipping industry, and the UK has been involved in this sector, including in ship management, maritime services, and ship registration.
The education sector has seen British investment with several private schools and universities in Cyprus offering British-style education programmes. These institutions cater to both local and international students. While the technology sector, particularly in areas like information technology and telecommunications, has witnessed interest from UK companies looking to expand their operations or collaborate with local tech firms. It's important to note that the nature and extent of UK involvement in these sectors may vary over time, influenced by economic conditions, government policies, and market dynamics.
What advantages does Cyprus offer specifically to UK companies and investors?
Perhaps the biggest advantage that Cyprus can offer to UK companies and investors is the combination of a familiar legal system and an abundance of UK graduates and English-speaking people in the talent pool. As the Cyprus legal system is based on English Common Law principles, UK companies and investors will be carrying out business in Cyprus under a familiar legal framework which is very important to create trust when carrying out business. The abundance of English speaking and UK university graduates in the talent pool, who understand British culture and the way of doing business is also reassuring, whether these are business partners, counterparts, or colleagues.
Another very important advantage is the fact that Cyprus, as a full member of the EU, can provide UK companies with a gateway to the EU single market. This can be especially valuable for businesses that want to maintain a presence within the EU following the UK's departure from the Union. Moreover, Cyprus is strategically located at the crossroads of Europe, Asia, and Africa and serves as a bridge between these regions, including as a place for regional headquarters. Its tax system is modern and in line with EU and OECD requirements and has been in place since 2003.
What new prospects and opportunities could be cultivated to facilitate more business between Cyprus and the UK?
Cyprus has been developing its energy resources, including offshore natural gas reserves. The UK, with its expertise in the energy sector, can explore cooperation in energy exploration, production, and distribution, potentially leading to energy security and mutual economic benefits. Collaboration on environmental issues, sustainability, and climate change can also be explored, with both countries working together to address global challenges.
The healthcare sector in Cyprus can attract UK patients seeking high-quality medical services and treatments. Building medical tourism infrastructure and promoting healthcare services can be a mutually beneficial endeavour. The construction sector offers many opportunities for cooperation, with UK companies contributing to infrastructure development in Cyprus, including transportation, housing, and urban planning projects.
Post covid, Cyprus is increasingly becoming a choice for a number of companies to set up their business and individuals as a place to live and work in. This is increasing the demand for quality education at all levels, especially English-speaking education, as families move to Cyprus. There is a great opportunity for UK education institutions to collaborate with Cypriot ones in this space.
By actively pursuing the many opportunities, Cyprus and the UK can strengthen their bilateral relationship, diversify their economic and strategic ties, and adapt to the evolving global landscape while maintaining their historical connections.
How does the Cyprus-UK Business Association support and foster business links between the two countries?
Our Association operates under the auspices of the Cyprus Chamber of Commerce and Industry. The main purpose of our Association is to keep improving the economic and business ties between the two countries. Through its distinguished professional members, it encourages networking for the promotion and stimulation of business relations and investments in the two countries. Moreover, exchange of information, delegations, seminars and business forums organised by the Association, aim at fostering and promoting the bilateral relations of the two countries.
