A.G. GEORGHIOU & CO
Certified Public Accountants

CYPRUS - The Ideal Offshore Centre

Introduction

Cyprus is an established reputable offshore and shipping centre not only of its strategic position, the excellent telecommunications and the high Standard of professional services but mainly of the tax and other incentives that offshore companies enjoy in Cyprus. It follows closely the UK legal system.

Cyprus is situated in the eastern part of the Mediterranean sea close to the busy trade routes linking Europe with the Arab world and the Far East. The island has a Mediterranean climate with about 300 days of sunshine the year round. The coldest month is January with a minimum mean temperature of 4 C. The hottest month is August with a maximum mean temperature of 36C.

Cyprus has an open free market economy. The role of the government is limited to regulation, indicative planning and the provision of public utilities.

Cyprus is a full member of the EEC as form of 1 May 2004

Trade, tourism and services in general are the economy’s most important sector. In particular, earnings from tourism have consistently grown faster than exports. Over 6 percent of tourist arrivals originate in the European Community.

The legal tender in Cyprus has changed form £ Cyprus Pound to € Euro and the rate is 1 euro = 0.585274 CYP. Its ultimate market maker is the Central Bank, which aims to keep it stable against a basket of currencies weighted according to the island’s pattern of trade.

Cyprus is a member of the United Nations, the Commonwealth and the Council of Europe.

The Island has two international airports that are situated near Larnaca and Paphos some 50 and 150 kilometres, respectively from Nicosia. There is a wide network of air-routes connecting Cyprus with Europe Africa and Asia.

The population of Cyprus is about 700,000 of 82 per cent are Greek Cypriots and 18 percent are Turkish Cypriots. The official languages are Greek and Turkish but almost everyone speaks English as a second language. English is widely used in commerce and government.

The banking system consists of 9 onshore commercial banks and a large number of offshore banking units (OBUs) and specialized financial institutions. Commercial banking arrangements and practices follow the British model. Strong correspondent networks are maintained around the world by onshore and offshore banks. Most of these banks subscribe to SWIFT, Reuters Monitor, Telerate and other services.

One of the Government's primary objectives of its policy is to attract foreign investment. To achieve this, it has offered incentives to non-residents encouraging them to establish legal entities for the purpose of managing their overseas affairs or offering services abroad from Cyprus.

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