Of course, Cyprus has long served as a major trading post in the region-located as it is at the gates to Europe and the Middle East. For centuries, traders have used the island’s ports and markets as a point of financial and cultural exchange.

All of this and more has made Cyprus what it is today – A modern democratic nation with a thriving economy and a role as the easternmost trading post of the European Union. Since independence from Britain in 1960, Cyprus has enjoyed considerable economical success – even in light of the events of 1974.

Much of this success can be attributed to the policies of successive governments, the market-educated and flexible local workforce. Over the last five decades, Cyprus has transformed itself from an exporter of agricultural products and minerals, to an international business centre and major tourist destination.

Today, the tertiary or services sector accounts for almost three-quarters of all employment on the island and around 77% of GDP. In fact, the tourism sector alone accounts for almost 10% of the island’s workforce… that’s the same percentage of the workforce as the entire manufacturing sector! However, with manufacturing accounting for 19% of GDP, the Cyprus government is well aware that the island must remain competitive on the international stage. In light of this, it has initiated a New Industrial Policy to attract and develop new high-tech industries, to technologically upgrade traditional local industries, and to attract foreign investment.

Education and technological development have played (and continue to play) key roles in the commercial development of the island.

Cyprus ranks among the first countries in the world in terms of university degree holders in relation to the population, while higher education is offered locally through both public and private institutions. Meanwhile, considerable investment has been made in the telecommunications sector, with fast, efficient telephone and Internet facilities making the island a leading telecommunications hub for the region. And thanks to its modern road network, extensive port facilities and two international airports, travel and transport around and beyond Cyprus is efficient and economical.

For those planning to establish a business in Cyprus, registering a company is a straight forward process. Administrative procedures have been greatly streamlined, and registration is typically completed within one month (or one week, for a minimal additional fee). And for those setting up shop on the island, there is an efficient network of support services in place, including advice on a whole host of sectors, including the legal system, accountancy, banking and insurance services.

Since becoming a full EU Member State in 2004, Cyprus has adopted the European Union’s legislative framework regarding labour relations. However, labour costs are significantly lower in Cyprus when compared with the EU average and office and living accommodation are relatively inexpensive.

The island also offers a number of tax advantages. A 2003 TAX REFORM BROUGHT THE ISLAND INTO LINE WITH EU AND OECD REQUIREMENTS, WHILST ALSO ENSURING THAT CYPRUS REMAINS ATTRACTIVE TO OUTSIDE INVESTORS. The uniform corporate tax rate of 10%, for example, is the lowest in the EU, while Cyprus has entered into Double Tax agreements with 40 countries.

As an island, Cyprus has long relied on international trade for its very survival. Such trade continues to play a major role in the ongoing economic growth of the island, and while Cyprus shares the majority of its trade with its European Union partners, it has also cultivated extensive trading relations with countries in the Middle East, and Central and Eastern Europe.

Larnaka’s ‘Free Zone’ is a high-profile example of Cypriot government efforts to encourage international trade on the island. The Free zone offers various incentives, including abolishment of custom duties and taxes in relation to imported/exported goods, and goods manufactured on-site for export.

Foreign investors can now participate in many areas of the local economy with equity participation of up to 100%, registered companies, acquire shares, and obtain real estate. For further information, investors can contact the Foreign Investors Centre of the Ministry of Commerce, Industry & Tourism.

In view of Cyprus’s membership of the European Union, it is a net contributor to the EU, and fulfils the Maastricht criteria. The Cyprus pound joined the Exchange Rate Mechanism II on 29th April 2005 and THE GOVERNMENT HAS DECLARED ITS INTENTION TO JOIN THE EUROZONE IN JANUARY 2008.