Government moves to simplify processes for foreign businesses

Foreign investors in Cyprus face significant hurdles due to bureaucratic inefficiencies, excessively demanding banking procedures, and gaps in infrastructure, a number of officials warned.

During a House energy committee meeting on the challenges confronting foreign businesses in Cyprus, it was revealed that the government is considering changes to its investment strategy.

According to a report shared by Philenews, the government’s aim is to streamline administrative processes and make the country more attractive to foreign investors.

A representative of the Cyprus Chamber of Commerce and Industry (Keve) said that “banking checks on foreign companies in Cyprus are much stricter than in other EU countries”.

“High costs for transport and energy, along with long delays in issuing permits, create serious obstacles for investors,” they added.

Moreover, a representative of the Cyprus Employers and Industrialists Federation (Oev) highlighted the excessive bureaucracy in both government offices and banks.

The shipowners’ association, meanwhile, said that “the shipping sector has enormous potential, but the banking system remains the main challenge”.

They added that “shipping companies can open accounts faster in England and Switzerland than they can in Cyprus”.

What is more, a representative of the Cyprus Bar Association said that “even though Cyprus’ reputation has improved, the shadow economy, which reaches 25 per cent, and corruption continue to hinder investment”.

“There are serious delays in the judicial system, as well as in banks and government departments processing applications,” they added.

On tax reform, the bar association representative said that “the planned changes are unlikely to benefit foreign investors”.

The Cyprus International Businesses Association (CIBA) said that foreign investments still face delays in government procedures and banking.

“The shortage of international schools in Cyprus creates additional obstacles for attracting executives,” they added.

In the same vein, representatives of investment funds stressed that banking delays are a major issue.

Furthermore, the Institute of Certified Public Accountants of Cyprus (Selk) said that “digitalisation processes must be accelerated and public debates are creating uncertainty in the market”.

A representative of the Business Facilitation Centre pointed out that “the unit for facilitating foreign investments was launched in 2021″.

“At the time, tax measures and incentives were introduced and many administrative procedures were sped up,” they explained.

They added that “the ministerial committee will meet at the end of the month to review all outstanding issues”.

“A revision of the country’s foreign investment strategy is under consideration,” the representative concluded.