How would you assess the current trade relations between Cyprus and Japan, and what recent trends or developments have had the most significant impact on bilateral trade?

Currently, trade relations between Cyprus and Japan remain underdeveloped, with significant untapped potential. In 2023, Cyprus imported goods worth €692 million from Japan, while its exports amounted to just €1.3 million. These figures highlight the relatively low volume of trade between the two countries, presenting a clear opportunity for growth. Recent developments, such as the establishment of the Cyprus-Japan Business Association and the Embassy of Cyprus in Japan in 2018, mark important steps towards strengthening economic ties. Moreover, the EU-Japan Economic Partnership Agreement, alongside ongoing efforts to draft a Double Tax Treaty, is expected to facilitate trade and investment by reducing barriers and promoting a more collaborative business environment. The Association’s strategic initiatives are designed to leverage these developments to foster closer bilateral relations and increase trade in the coming years.

Which economic sectors in Cyprus have seen the most notable Japanese investments, and can you provide examples of specific projects or collaborations that highlight this growing participation?

Key sectors in Cyprus that have attracted notable interest from Japanese companies include shipping/shipmanagement, ICT, and professional services. These industries align perfectly with Cyprus' established strengths, presenting promising opportunities for future collaboration. Although Japanese investments in Cyprus have been limited thus far, the entry of global players like MUFG Investor Services stands as a prime example of successful collaboration. The presence of such companies underscores the immense potential of Cyprus as an investment destination for Japanese businesses, particularly in sectors where mutual benefits from knowledge exchange and technological collaboration are evident. Moving forward, the Association is dedicated to fostering partnerships in these industries and exploring new avenues for joint ventures.

What unique advantages does Cyprus offer to Japanese companies and investors compared to other European or Mediterranean markets?

Cyprus offers several unique advantages to Japanese companies, starting with its strategic location at the crossroads of Europe, the Middle East, and Africa, making it a gateway to multiple markets. As an EU member state, Cyprus provides seamless access to the European single market, crucial for Japanese firms aiming to expand their regional presence. Additionally, Cyprus boasts a favourable tax regime with competitive corporate tax rates and has made significant strides in enhancing its business environment by streamlining bureaucratic procedures and offering financial incentives for foreign direct investment (FDI). The country's high standard of living, security, and stable political environment further enhance its appeal. Moreover, Cyprus’ strong shipping industry, burgeoning ICT sector, and established financial services sector position it as an attractive investment hub for Japanese businesses.

What untapped opportunities or emerging sectors do you believe could be leveraged to enhance business ties and increase Japanese investment in Cyprus moving forward?

Several sectors present untapped opportunities for enhancing Cyprus-Japan business ties. The ICT sector in particular holds significant potential, given Cyprus’ focus on digital transformation and innovation. The professional services sector, including legal, financial, and consulting services, also offers substantial room for growth, as Japanese companies may require market-entry support and expertise in navigating EU regulations. Additionally, Cyprus’ expertise in shipping and shipmanagement, combined with Japan’s leadership in maritime technology, creates opportunities for collaboration in the maritime sector. Another emerging area is green technology and renewable energy, where both countries have shown increasing interest in sustainable development, offering a promising platform for joint ventures and innovation.

How does the Cyprus-Japan Business Association actively support and promote business collaboration between the two countries, and what specific initiatives or services have been most effective in fostering these connections?

The Cyprus-Japan Business Association plays a pivotal role in facilitating business collaboration by providing a platform for networking, knowledge exchange, and partnership building. One of the Association’s key initiatives is to promote Cyprus as an attractive destination for Japanese investments through targeted campaigns, market analysis, and identifying potential partners. It also organises sector-specific business delegations and meetings, ensuring that interactions between professionals are focused and productive. Additionally, the Association has been instrumental in fostering collaboration through the establishment of working groups and a partnership council, which brings together prominent businesspeople from both countries to act as ambassadors and promote direct networking. By offering essential support services such as legal and financial consultation, as well as assistance with cultural integration, the Association helps Japanese companies navigate the Cypriot market, thus fostering long-term business relationships.