The Smart Talk, organised by the Italian-Cypriot Chamber of Commerce, on 25th May 2023, had as its guest speaker Mr. Antonis Christodoulides, tax expert, Partner at PWC Cyprus, with a degree in Accounting and Finance from the London School of Economics and member of the Institute of Chartered Accountants in England and Wales, and of the Tax Planning and Policy Committee of the Institute of Certified Accountants of Cyprus, former consultant for the Cypriot Ministry of Finance on tax reform.
The topic of the Smart Talk, “Innovation and Tech. Business Cooperation and Opportunities for Italian Companies in the Region”, is of extreme interest for the members of the Italian-Cypriot Chamber of Commerce, as it concerns a sector in full development and fertile ground for fruitful cooperation between the two countries.
After the usual opening with institutional greetings and thanks from the President of the Chamber of Commerce, Giuseppe Marino, the discussion, led by Vice-President, Federico Franchina, started with a description by Mr. Christodoulides of the services provided by PWC in Cyprus.
It is the leading professional services consultancy firm in Cyprus, offering tax and legal services to local and international companies, from SMEs to large multinational corporations in various market sectors.
According to the latest European Commission forecasts and IMF report, the Cypriot economy has shown strong resilience in the face of the challenges of the pandemic and the war in Ukraine.
Mr. Christodoulides provided some significant figures: GDP at 6.6% in 2021, 5.6% in 2022, growing at 2.3% in 2023 and 2.7% in 2024. The economy achieved a fiscal surplus of 2.1% of GDP in 2022, and a surplus of 1.8% is expected in 2023. Inflation is expected to be 3.8% and unemployment below 7% in 2023, while public debt will fall to 73% by 2024.
The good performance of the Cypriot economy is due to the strict fiscal policy adopted over the past decade, which has allowed loans to be obtained at reasonable rates, and also to foreign investments in technology, health, transport, energy and tourism. However, long-term challenges remain, because in order not to undermine economic growth, the currently high GDP/debt ratio of households, determined by the adjustment of wages to the cost of living, must be carefully monitored.
The current government, with a view to increasing investments in line with the European legal framework, is adopting some reforms centred on five pillars: 1) Green Transition; 2) Digital Transformation; 3) Public Health System; 4) Economic Competitiveness; 5) Education.
Added to this is investment in Infrastructure in order to find economically viable and sustainable solutions for public transport, and to eliminate pollution from fossil fuel-powered cars. Another challenge is the Digitalisation of public administration, so as to offer citizens faster and more efficient services. One of the most interesting reforms relates to the Public Sector and the Judiciary, in order to ensure a productive and reliable service; finally, the reform of education in the IT sector will bring future generations in line with the labour market demands of foreign companies based in Cyprus.
Expanding sectors of the Cypriot economy include Private Education, at all levels, as there are many requests for the transfer of students or sons of foreign entrepreneurs to Cyprus, as well as the establishment of branches abroad (e.g.: American University of Beirut in Cyprus); Real Estate is another big business opportunity, driven by the growing need for private and commercial housing; Transport and Infrastructure, to cope with the Green Transition; Healthcare, with investments in new facilities, mainly from Israel and Greece; the IT sector, which tends to turn Cyprus into a technology hub. Last year alone, more than 50,000 IT workers arrived in Cyprus, creating an ecosystem for a technology infrastructure of software development and telecommunications services.
Cyprus is a pleasant place to live and work, it allows for the development of ‘incubators’ for technological innovation with low set-up and immediate operational costs, and it also offers an intellectual property regime with monetisation returns taxed at 2.5 per cent (a relatively low rate for the EU). For all this, Italian IT companies, whether in technology development, project management or marketing, can find in Cyprus the ideal place to develop their business and that of their customers in Europe, the Middle East, North Africa and Asia.
The added value of Cyprus as a headquarters in the Mediterranean region is first and foremost determined by its strategic geographic location, it has a regulatory legal framework in line with the EU, it allows access to common law principles and instruments (inherited from having been a British colony), it offers entry to international markets, it welcomes foreign investment, the costs of setting up a business are relatively low, the local staff is welcoming and knowledgeable, it has efficient immigration policies and a low tax regime.
Over the years, Cyprus and Italy have already cooperated in various sectors, trade, infrastructure, energy, exports, and in the future, an increase in trade and investment is hoped for. Furthermore, Cyprus is attractive for the possibility of reaching other territories in the area such as Egypt, Israel, the Black Sea and Caspian Sea countries.
In order to support Italian companies to further develop their business in the East-Med region, PWC can offer consultancy in all areas, from identifying the best investment opportunities to carrying out feasibility studies, guidance on the regulatory framework, relocation of qualified personnel, corporate and tax compliance, also working alongside Italian consultants.
Lastly, the contribution of the Italian-Cypriot Chamber of Commerce to the strategy of strengthening trade relations between the two countries and to cooperation between the countries of the East-Mediterranean Area takes the form of being a forum that is always open to the exchange of ideas and communication, promoting joint events, and keeping the attention of business associations on the opportunities that arise over time.
The Chamber plays a key role in providing support to companies or entrepreneurs wishing to invest in the two countries, offering the basic requirements for doing business and acting as a liaison point with local institutions and organisations.
The Chamber’s commitment will materialise in the 6th Cypriot-Italian Business Forum, which will take place in Rome on 21 June at the UnionCamere and will be entitled “Economic Development and Opportunities in the Mediterranean. Strengthening the Business Relations between Italy and Cyprus”.
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Last modified: September 7, 2023