Nikos Christodoulides: How we will bring more foreign investment to Cyprus

Emphasising that, in general, the role of the state is to create a business-friendly environment, through which business activity will be encouraged and the appropriate tools will be provided for its development, the President of the Republic Nikos Christodoulides has underlined that one of the priorities of the Government’s economic policy is to attract foreign investment.

In the second part of his interview with InBusinessNews, President Christodoulides indicates that the achievement of this goal requires the implementation of an economic policy, which ensures stable and sustainable growth in the context of fiscal discipline and financial stability.

Also read the first part of the interview: Nikos Christodoulides: No to NPL measures that undermine the payment culture

Pointing out that the meeting he had a few months ago with foreign investors active in Cyprus confirmed the attractiveness of the country and its prospects as an international business center, he underlines that, at the same time, a series of challenges that were creating obstacles to attracting investment were highlighted, with excessive bureaucracy being the most prominent.

The President of the Republic refers to the policies he has implemented and the actions taken by the Government to deal with these challenges, which will be presented in the context of a new meeting with foreign investors, planned for the autumn.

The Government's effort, as Nikos Christodoulides points out, is to be able, where and where appropriate, to carry out actions and reforms that strengthen the country's business environment, making it more competitive.

He characterises the reputation of Cyprus abroad as crucial, pointing out that restoring a country's reputation is not something that happens overnight. The Government underlines President Christodoulides, will continue to monitor the issue closely and take measures where and where necessary.

Below is the second part of the interview of the President of the Republic Nikos Christodoulides with InBusinessNews:

It is universally accepted that businesses are the driving force of the economy. How does the Government encourage entrepreneurship and create conditions for a friendly environment for their activity, but also to protect them from external negative situations?

I would like to emphasise that in general the role of the state is to create a business-friendly environment, through which business activity will be encouraged and the appropriate tools will be provided for its development, such as through tax incentives.

Our goal is also to reduce bureaucratic procedures, which are a significant burden for businesses. Through these actions, we believe that a protection network can be created for businesses, to deal with external situations.

But at the same time, the companies themselves must implement such policies, so that they can survive in difficult economic conditions. These policies should include, among others, the utilisation of technology, which is a necessary tool in the modern era we live in.

At the same time, given the climate change we are already experiencing, businesses will now have to take this dimension very seriously.

In this effort, the state is helping businesses through the announcement of a series of horizontal sponsorship plans for digital transformation and green transition, but also in critical sectors of the economy, such as tourism, manufacturing and the primary sector.

Attracting investment

Attracting productive foreign direct investment is of utmost importance to your Government, something you keep repeating. How is it achieving this and what are the biggest obstacles that Cyprus has to overcome in this effort?

It is a fact that one of the priorities of our economic policy is the attraction of foreign investments, especially those that will bring significant added value to the economy.

In order to achieve this goal, a necessary condition is the implementation of economic policy, which ensures stable and sustainable growth, within the framework of fiscal discipline and financial stability.

The meeting we had as a Government recently with foreign investors confirmed the attractiveness of Cyprus and its prospects as an international business center, but at the same time it also highlighted a series of challenges that are acting as an obstacle to attracting investment, with the existence of excessive bureaucracy being the most prominent.

It is for this reason that the Government emphasises the fight against bureaucracy and electronic governance, the reform of the public service as well as the judicial service, as they are emblematic projects that will form the basis of the transformation into a more efficient state.

The House of Representatives has also recently passed the Bill for the facilitation of strategic investments. Through this strategy, the licensing of important investment projects will be processed in a short period of time.

At the same time, the Government will also move in the direction of immediately dealing with a series of practical issues, which have been pointed out by investors and concern, among other things, the availability of housing and office space, as well as foreign language schools.

It is obvious that Cyprus can benefit at all levels from the further attraction of productive investment, but as I mentioned before it is important to ensure a positive impact on society.

In this context, we as the Government must take the necessary measures to deal with any negative consequences from the increased activity of foreign companies in Cyprus, such as the phenomenon of increasing rental costs in certain areas.

The challenges for investors

You mentioned the meeting you had last June with investors and foreign companies operating in Cyprus. As far as we know, they have placed before you specific points intended to facilitate their activities. In view of the new meeting planned for the autumn what actions have been started?

First of all, let me mention that the meeting in question took place in the context of our efforts to strengthen the communication channels with foreign investors operating in Cyprus, so that we are in a position, where and where appropriate, to carry out actions and reforms that strengthen the business environment of our country, making it more competitive.

After all, existing investors are the best ambassadors of Cyprus and are more likely to make new investments.

Then, the challenges that the investors put before us were recorded and, in collaboration with all the relevant Ministers and Deputy Ministers, we are taking actions to resolve them.

Some of the challenges require long-term planning, such as improving the reputation of Cyprus, others involve ongoing efforts, such as improving the connectivity of our country, while others require more immediate actions, such as speeding up licensing procedures for private schools.

All the actions we are rolling out will be presented at the new meeting planned for autumn, in the context of updating and improving the Strategy for Attracting Business and Talent, which has been successfully implemented since 2022.

The sanctions and the reputation of Cyprus

In the previous months, our country was in the eye of the storm against the background of US and UK sanctions. You had expressed your determination "to end this matter once and for all." Would you say that the reputation of Cyprus is now being restored?

I would like to emphasise that restoring a country's reputation is not something that can be achieved overnight. Despite this, a Government’s reactions to events and clearly influence how our citizens and partners around the world evaluate us.

Problems and difficulties will always exist, but it is how they are dealt with that matters. The Government, from the first moment that the issue of sanctions from the USA and the UK arose, took substantial action, by getting informed about the issue in detail, as well as by taking specific actions, both for the investigation of the specific cases with its involvement Legal Service as well as by taking additional measures to strengthen the control framework and deterrent and repressive capacity of the state and institutions.

Relevant to this is the decision of the Council of Ministers dated 28 June 2023, which through a number of actions, has precisely this purpose, the immediate mobilisation and taking of measures that will reduce the risks and ensure everyone's compliance with their legal obligations.

This immediate reaction and the importance given by the Government to the matter, is something that was publicly recognised and clearly positively affects the image and reputation of Cyprus.

The Government will continue to monitor the matter closely and take measures where and where necessary because the reputation of our country abroad is of crucial importance.

The US Visa Waiver Program

You have recently spoken about the US Visa Waiver Program and about the timetable that has been set for Cyprus to become part of it. What steps are you taking to speed up the whole effort, taking into account the enormous economic, but also political, benefits that will result?

The inclusion of Cyprus in the US Visa Waiver program is something that the government has set as a priority from the beginning. Once achieved, Cypriot citizens will be able to travel to the US, without having to issue a visa, for short stays.

So you realise that beyond the political significance of this, there are other benefits that come from facilitating travel to the US, with a positive impact on business relations and trade, investment, tourism, the development of partnerships in education and research, and innovation, among others.

The existence of political will to lift this obligation for Cyprus is something we have in common, which proves the relationship of mutual trust and cooperation that has developed in recent years with the USA.

Last April we proceeded with the appointment of the Deputy Minister to the President, as the coordinator for the entire effort. Subsequently, we received from the US a work plan, based on which we are working intensively and in full coordination with the US Embassy in Cyprus, to implement.

Intensification of efforts and contacts is expected in the near future, including on-site evaluations, with the aim of completing the entire process.

The competitiveness of tourism

You referred at the beginning of our interview to critical sectors of the economy, naming, among others, tourism, which is of course a fact. How concerned are you as a Government by the increasing passage of tourists to the occupied areas through the crossing and how are you planning to deal with this phenomenon?

It is a fact that part of the tourists who arrive at the airports of the Republic of Cyprus then go to the occupied areas. Our priority remains strengthening the competitiveness of tourism, the contribution of which remains of particular importance to our economy.

To this end, the Governance Programme we have drawn up includes specific actions, which have already begun to be implemented.

Among other things, these actions include the updating of the National Tourism Strategy, which was drawn up by the previous Government covering the time period until 2035.

We also look forward to solving pressing issues that concern the country's tourism sector, such as the modernisation of the relevant legislation that regulates the licensing and operation of leisure centers.

Important pillars are also the further utilisation of digital technology for purposes of promoting Cyprus abroad, the further strengthening of the air connection of our country, as well as the continuous enrichment of the tourist product with the aim of making our country a year-round tourist destination.

(Source: InBusinessNews)