Elena Damianou: Full digitalisation of investor procedures to be completed by end-2024

The government’s Business Facilitation Unit (BFU) was established in January 2022, in the framework of a new strategy to attract investment and talent. GOLD magazine spoke to Elena Damianou, Head of the BFU at the Ministry of Energy, Commerce & Industry, about its mission and its vision for the future, as well as the urgent need to adapt and evolve with the times.

What is the mission of the Business Facilitation Unit and what services does it offer?

The Business Facilitation Unit (BFU), which operates within the Ministry of Energy, Commerce & Industry, offers comprehensive, one-stop-shop investment information, consulting and assistance through every phase up to the implementation of an investment project. Our mission is to help investors grow or set up their business in Cyprus in a prompt and efficient way. We are always available to discuss potential projects and the best way for investors to reach their goals.

Apart from providing information on licensing procedures and funding opportunities, the BFU aims to simplify administrative procedures for issuing business approvals, permits and licences and thereby remove any bottleneck that investors may face in the course of establishing and running their businesses. An investor can request an appointment, either online or in person, and be guided through the process of setting up a business.

The establishment of the BFU was an action included in the Government’s strategy to attract business and talent, fully aligned with Cyprus’ long-term strategy for sustainable growth and intended to contribute substantially towards redefining our economy’s growth model. This strategy includes a series of actions and reforms to enhance the country’s attractiveness as a regional and global entrepreneurial centre and an investment and high-value activities destination, as well as targeted measures, with particular emphasis on attracting investments in strategic sectors such as green energy, the exploitation of hydrocarbons, ICT, shipping, education, health and investment funds. The most important actions of this strategy were the upgrade to the BFU and the introduction of tax incentives to attract highly skilled personnel from third countries, accompanied by the optimisation and simplification of residence and employment permit processes.

At the BFU, we provide an integrated service to investors that includes facilitation of the entire investment value chain, coordination across various line ministries and departments, guidance regarding the necessary permits for the activation and establishment of businesses in Cyprus, facilitation of licensing and permits, provision of information and support on available investor schemes/funding opportunities and registration of companies in the Register of Companies of Foreign Interests, so as to be able to take advantage of government incentives with regard to employing highly skilled personnel from third countries.

Given that Cyprus has aspired for many years to become an international centre and business hub for companies, why has it taken so long to establish such a unit?

It is undeniable that we are entering an era of continuous and rapid evolution. Governments and the private sector need to adapt the way they operate so as to remain competitive, address challenges and better meet citizens’ and investors’ needs.

Before the establishment of the BFU, the Government offered similar services to investors under various schemes (the Fast Track Mechanism, the Foreign Investors Service Centre, etc.) and, based on the knowledge gained from the previous schemes and addressing investors’ needs, it proceeded with the establishment of the BFU which, we believe, best suits the current needs of investors. Offering fast and efficient services to foreign and local companies was always a priority for the Ministry in its effort to facilitate, accelerate and simplify the process of setting up a business and reduce the level of bureaucratic intervention.

How many foreign companies have been registered since the establishment of the Business Facilitation Unit?

In 2022, 1,637 companies were registered in the Register of Companies of Foreign Interests, for which the Civil Registry and Migration Department issued 12,402 work permits, 7,679 family reunification permits and 2,348 dependent visitor permits, in the context of the new strategy. A total of 22,429 licences were issued (compared to 9,000 in 2021). In 2023, 150 foreign companies have been registered to date. With reference to RES energy production & storage projects, 200 projects have thus far been included in this process.

How has the war in Ukraine affected the influx of companies to Cyprus and what shifts have you noticed?

The influx of foreign businesses, especially in the ICT sector, is definitely not the result of an opportunist policy or any geopolitical turmoil. Well before anyone could have envisioned Russia’s invasion of Ukraine, the Government designed, as part of Cyprus’ long-term strategy for sustainable growth, a specific strategy to attract business and talent. The trend of foreign ICT companies relocating to Cyprus was observed well before the war but it is, of course, true that the war has expedited this influx. Many countries – even the United States – have since announced policies and incentives to attract highly skilled talent from Russia and other Eastern European countries but we were already there.

What more can be done to boost the BFU’s effectiveness?

Digital transformation is perhaps the most important revolution of our time and we consider it as the key to improving the services we offer to investors and increasing our competitiveness and effectiveness. We have to acknowledge that Cyprus has made significant strides to become more digitally friendly, yet still there is a long way ahead.

The BFU’s focus is on three pivotal concepts: providing digital services to investors, enhancing the available information with regard to setting up a business in Cyprus, and, in cooperation with line Ministries, streamlining and simplifying procedures. To this end, and in the context of the implementation of the President’s pre-election announcement about the redesign, optimisation and digitalisation of the licensing procedures for Renewable Energy Sources (RES) projects, our online digital platform for RES Projects was launched a few weeks ago. In the first phase, the digital platform offers the possibility for the digital submission of applications for the licensing of projects producing energy from RES.

The second phase, which is expected to be completed by the end of 2024, will enable the full digitalisation of procedures and electronic approval of applications. Moreover, within the next month, companies that wish to register in the Register of Companies of Foreign Interests, will be able to submit their applications online. As the changing effort is continuous, we keep our ears open and we stand by the business community, so as to be aware of the challenges they face and proceed with necessary adaptations, not only regarding the way we work but also by submitting proposals to the competent authorities on any need to revise our Government’s policies.

(This article was first published in the September issue of GOLD magazine. To view it, click here)