|Welcoming Address of the President of the Republic, Mr Nicos Anastasiades, at the CIPA International Investment Awards 2015
Dear investors and distinguished guests
Dear President of CIPA
Ladies and Gentlemen,
It is with great pleasure that I welcome you to the Presidential Palace to celebrate the International Investment Awards, organised for the fourth consecutive year by the Cyprus Investment Promotion Agency and Gold Magazine.
We consider tonight’s event a unique opportunity to express once again our utmost gratitude and appreciation to all of you, the foreign investors who have chosen to place Cyprus at the core of your business activities.
Thank you for joining us here tonight in honouring vision and investment, by awarding companies and individuals who have believed, trusted and invested in Cyprus and the values it represents.
At this point, allow me to express my gratitude to CIPA for its contribution to these efforts and to reiterate the Government’s sincere appreciation for its hard work towards the economic recovery of Cyprus, the restoration of confidence and the promotion of Cyprus as an attractive destination for foreign investors.
Let me express the very clear commitment of my government to continue doing its utmost to support and facilitate your efforts in developing and realising your future plans.
It is our firm conviction that the government has a duty not only to open the way, develop opportunities and establish incentives for business, but to create the ideal environment where business can flourish and maximise returns on investments. If the world economic history has taught us one thing, it is that the Government’s role is not to substitute entrepreneurship but instead to open the road by removing obstacles and distortions such as those posed by bureaucracy and high taxes.
In this direction, I am pleased to say that earlier today a major tax reform has been approved by the Cabinet.
Through this reform package our tax system becomes even fairer, simpler and even more competitive. At the same time, a number of incentives for new business and investment activity are introduced.
Specifically, new tax allowance for new equity is being proposed on the basis of a notional interest deduction. This will encourage the creation of equity across the sectors of the economy.
We are also expending the accelerated depreciation for buildings, machinery and infrastructure to 2016.
In order to attract high net-worth individuals we are proposing the introduction of the Non-Domicile Status. The incentive for individuals who will choose to become Cyprus tax residents will be the exemption from the special levy on rent, interest and dividend.
We are also extending the duration of the significant tax breaks on personal income tax for foreign individuals who take up employment in Cyprus.
In order to encourage transaction in the real estate sector transfer fees will be reduced to 50% until the end of 2016.
At the same time we are introducing a full exemption from future capital gains tax for all properties purchased by the end of 2016.
Regarding property, we are fully abolishing the Local Authority Tax and are reforming the Annual Property Tax on the basis of a low flat tax together with a discount for early payments.
For the past two years we are implementing a program of economic reform and fiscal consolidation. It is a difficult and ambitious program but one which is absolutely necessary. But most of all, it is a programme which is fact delivering.
I fully acknowledge that more needs to be done. But standing before you, I can state that our economy has indeed stabilized and has already turned the page.
Thanks to the collective hard work, the determination and sacrifices of our people, Cyprus is registering once again positive growth rates. Unemployment has stabilized and is showing the first signs of de-escalation. Public finances are under control. Capital controls have been lifted. Market access has been re-established. Rating agencies have offered us successive upgrades. All these testify to our determination to close the chapter of uncertainty and recession once and for all.
True to our commitments, we have met our obligations towards our lenders as regards structural reform with consistency and on time.
All of the aforementioned positive signs of recovery are also widely reflected in the number and size of foreign investments that the country has witnessed over the past 12 months.
In the past year, we have seen some of the most sizable Foreign Direct Investments distributed over a number of sectors including the banking sector, tourism, real estate, energy, telecommunications and professional services to mention a few.
Only last month, the terminal of the VTT Vasilikos (VTTV) for the storage and management of petroleum products, a 300 million euro project, was inaugurated and started operating, reminding everyone that Cyprus is not only standing on its feet but moving forward towards the success it deserves.
Furthermore, we are witnessing significant initial demand for new ventures such as the Port facilities, the Integrated Casino Resort, the new marina of Ayia Napa and others.
Having said this, it comes as no surprise that in a recent study conducted by CIPA, foreign investors have expressed significantly higher levels of optimism about the course of the Cyprus economy, recognizing also the growth prospects it offers.
Yet, let me repeat for the second time, that much more needs to be done, and as a government we are determined to maintain the effort with determination and confidence.
For instance, we fully appreciate that more needs to be done in the civil service, the welfare and health care systems, tax administration, tourism and the business environment in general.
It is through reforms in these areas that we aim to lay the sound foundations for a more diverse, competitive and forward looking economic model for Cyprus.
To this end, I am certain that you will soon experience in your day-to-day interaction with the public services, the results of a major effort in the direction of cutting red tape and streamlining procedures for doing business in Cyprus; from simplifying licensing and operational processes to drafting a new law providing for fast track procedures for strategic investments.
We have been looking to turn challenges into opportunities, by putting right what was wrong and by facilitating new sectors of economic activity to emerge and flourish.
Energy is a strategically important multi-billion sector with promising potential, not only through the discovery of offshore natural gas, but also through renewable energy sources. Only last month, Block 12 of our Exclusive Economic Zone was declared commercial by Noble Energy, Delek Drilling and Avner Oil Exploration.
Promising opportunities for growth also exist across many other sectors, such as shipping, tourism, large-scale mixed-use development projects, education, health, research and innovation.
The solution of the Cyprus question is going to be one of the most important elements for having investment stability and growth. I am committed to work tirelessly in order to find a solution that will accommodate the concerns of both Greek and Turkish Cypriots and establish a European country all over the island.
We consider your decision to do business in Cyprus as a vote of confidence in the prospects of our country.
We are convinced that with the appropriate policy decisions we shall establish a more business-friendly environment and we shall succeed in paving the way for greater growth, for you, our country and its people.
In this challenging mission, I am sure that you will continue to demonstrate the necessary will, as you have done many times in the past, whenever was needed.
We are here to offer you all the assistance needed to make this shared goal a reality and commit once again to facilitate and accommodate any feasible business and investment ideas put forward by you all.
In closing, I would like once again to congratulate our hosts, the Cyprus Investment Promotion Agency for all their hard work and initiatives, but more than anything I would like to thank all the foreign investors for your belief and trust in Cyprus.