'STEP' Country Profile Print E-mail

Social - The People

Cypriot culture is among the oldest in the Mediterranean. By 3700 BC, the island was well inhabited, a crossroads between East and West. The island fell successively under Assyrian, Egyptian, Persian, Greek, and Roman domination.

But nowadays, there are different challenges. It is becoming more popular for younger people to have their own home, which is causing a major impact on demand for residential abodes, particularly in the city areas. This, combined with the increasing standard of living and the increasing incomes of the young professional generation, is having a positive effect on property and property prices.

There is a low crime rate, no official homelessness, and the majority of people own their own homes.

This is an easy place for foreigners to visit, especially the British. People are friendly, just about all of them speak English, and thanks to a fairly recent heritage of British rule, everyone drives on the left.

Technology

Until 1992, the state of technology in Cyprus was not considered satisfactory for most of the productive sectors. The industrial sector was in a relatively poor technological state and limited applied research and development activities were undertaken. But things have changed and Cyprus now meets European Union standards for technology and IT infrastructure.

The state of technology in agriculture was much stronger, although it was generally admitted that there was still considerable scope for further technological upgrading, in order to achieve its full potential. In other fields, such as energy, medicine and environment there were very limited research and development activities.

Cyprus recognizes the importance of telecommunications and has invested heavily in the development of this sector. As a result, the island may claim, in this respect, to be among the most developed countries in the world. This claim is justified by Cyprus' automatic telephone connection with almost the entire world. In addition, services provided include telefax, packet switched data transmission, mobile telephony (GSM and NMT900), voicemail, paging, telex, telegraphy, maritime, TV transmission/reception, private leased circuits, audiotex and videoconferencing.

The national network uses state-of-the-art technology such as digital switching and transmission systems and fibre optic cables. There are many computer shops in Cyprus selling a range of computers and accessories. The internet is widely available and there are many internet cafes.

Economy

Cyprus enjoys a prosperous stable economy and a high standard of living. With near full employment and consistent growth, it ranks highly among the high income countries of the world, while the cost of living compares favourably to that of the UK and other European countries. 

The area of the Republic of Cyprus, under government control, has a market economy dominated by the service sector, which accounts for 76% of GDP. Tourism and financial services are the most important sectors. Erratic growth rates over the past decade reflect the economy's reliance on tourism, which often fluctuates with political instability in the region and economic conditions in Western Europe. Nevertheless, the economy in the area under government control grew a healthy 3.7% to 3.8% per year in 2004, 2005, and 2006, well above the EU average. With Travel and Tourism accounting for 27.4% of total employment, or 1 in every 3.6 jobs.

Cyprus joined the EU on 1.5.2004.  The currency has been pegged to the euro for some years with a view to adopting the euro, which will link it with the most stable economies in Western Europe. Cyprus joined the European Exchange Rate Mechanism (ERM2) in May 2005. The government has initiated an aggressive financial programme, which has cut the budget deficit to well below 3%, and the EU is expected to invite Cyprus to adopt the euro as its national currency on 1 January 2008.

This will make the economy even more stable and transparent and can only bode well for the Cypriot property market, as more and more investors look to purchase property in this tried and tested island, in the Eastern Mediterranean.

Cruise ship business is an important driver of the Cypriot economy, as it is an ideal stop-over for many international routes. Limassol and Larnaca are the busiest ports attracting over 10,000 passengers a year.

There are restrictions on the number of homes a foreigner can own currently, however this contravenes EU rules and will have to be phased out. Multiple ownership in Cyprus is currently done through a company.

North/South divide

In 2003 the border opened and every day labourers from the north, where the GDP is roughly a third of the south, cross to find badly needed work. 

Water shortages are a perennial problem, for both the area administered by Turkish Cypriots in the North and the Greek Cypriots in the South. A few desalination plants are now on line. After 10 years of drought, the country received substantial rainfall from 2001-04 alleviating immediate concerns. Rainfall in 2005 and 2006, however, was well below average making water rationing likely in 2007.

The Turkish Cypriot economy has roughly 45% of the per capita GDP of the south, and economic growth tends to be volatile, given the north's relative isolation, bloated public sector, reliance on the Turkish lira, and small market size.

The Turkish Cypriot economy grew around 10.6% in 2006, fuelled by growth in the construction and education sectors, as well as increased employment of Turkish Cypriots in the area under government control. The Turkish Cypriots are heavily dependent on transfers from the Turkish Government. Ankara directly finances around one-third of the "TRNC's" (Turkish Republic of Northern Cyprus)  budget. Aid from Turkey has reached over $400 million annually in recent years. Agriculture and services, together, employ more than half of the work force.

Politics

The Cyprus Government is an independent and sovereign republic. A presidential system of government modelled on western democracies is in place. The president is elected every five years by the people and legislative power lies with the House of Representatives whose 56 members are also elected by the people every five years. The Judiciary is a separate and independent body within the state, administering law.  

Cyprus is a member of the E.U, United Nations and U.N. Agencies. It is also a member of the Council of Europe, the Commonwealth, the Organisation for Security and Cooperation in Europe and many other international Organisations

The Legal System - Cyprus has modelled its legal system on English Common Law, so you can invest with confidence. In fact, Cyprus company law is almost identical with the British Companies Act 1948. This means that reputable operating guidelines and concepts are in place which meet the expectations of the wider international community. The Constitution, too, has helped to establish confidence in Cyprus as a place to do business.


Judiciary
The administration of justice is exercised by the island’s separate and independent Judiciary. Under the 1960 Constitution and other legislation in force, the following judicial institutions have been established: The Supreme Court of the Republic, The Assize Courts, District Courts, Military Court, Industrial Disputes Court, Rent Control Courts and Family Courts. The Supreme Court is the final appellate court in the Republic and the final adjudicator in matters of constitutional and administrative law.