The strategic importance of the Indian market for Cyprus' professional services sector

As India’s economy continues its remarkable growth trajectory, the country is becoming a critical player on the global stage.

The professional services sector in Cyprus, with its strong legal, financial and corporate services infrastructure, stands to benefit immensely from this upward trend.

The rapidly expanding Indian economy offers Cypriot businesses unprecedented opportunities for collaboration, particularly as Indian firms look for gateways into the European market. In return, Cyprus provides the perfect platform for Indian enterprises to access European markets efficiently and profitably.

India’s growing economic power

India has consistently been one of the fastest-growing major economies globally. With a GDP of over $3.5 trillion and a thriving middle class that is predicted to grow exponentially, India offers a wealth of opportunities as Indian companies are increasingly looking abroad to diversify their portfolios and tap into global markets, particularly in sectors like information technology, pharmaceuticals, manufacturing and financial services.

As Indian businesses expand globally, many are seeking favourable jurisdictions that will enable them to establish a presence in Europe. Cyprus, with its attractive tax policies, EU membership and well-established legal framework, is an ideal location for Indian companies to structure their international operations.

The country’s 12.5% corporate tax rate (one of the most competitive in Europe) and the fact that, under the Cyprus IP regime, 80% of profits may be taxed at just 2.5%, are contributing factors which make it particularly appealing to Indian firms looking for cost-efficient ways to enter the EU market.

Cyprus offers Indian firms a stable and favourable business environment, underpinned by its EU membership and access to the EU’s single market. Cypriot firms, with their expertise in navigating European regulatory frameworks, are well-positioned to help Indian companies optimise their European operations, allowing them to focus on growth and innovation.

Indian investment in Cyprus and cross-border opportunities

There has been a noticeable uptick in Indian investments into Cyprus, particularly in sectors such as real estate, investment funds and corporate services. Indian investors, particularly High Net Worth Individuals (HNWIs) and family offices, are looking to diversify their portfolios by investing in Europe and Cyprus provides the perfect platform for doing so.

The island’s extensive network of double tax treaties, including one with India, ensures that Indian businesses can benefit from reduced tax liabilities and streamlined cross-border financial transactions. Additionally, Indian companies can use Cyprus as a base for establishing investment funds, taking advantage of the country's well-regulated and growing investment funds industry.

As the demand for international investment opportunities grows, Cyprus' financial services sector is well-equipped to meet the needs of Indian investors, particularly in areas such as fund management, private equity and venture capital for both inbound and outbound investments.

Digital and financial transformation

India's rapid digital transformation is another area of synergy with the Cyprus professional services sector. The digitalisation of Indian capital markets underscores the vast potential of digital finance and aligns well with Cyprus' growing expertise in fintech, blockchain technology and digital assets.

Cypriot firms can offer specialised services to Indian businesses and investors looking to enter the European digital finance arena. With its early adoption of fintech regulations, Cyprus can help Indian fintech companies navigate EU regulations, secure financing and expand their operations into new markets.

Moreover, the growing global focus on digital finance presents a unique opportunity for both countries to collaborate on innovation, regulatory frameworks and investment in the fintech space.

Indian HNWIs and the real estate boom

India’s rapidly growing class of High Net Worth Individuals presents another significant opportunity for Cyprus. Many of these investors are seeking opportunities to diversify their assets globally, particularly in real estate, private equity and alternative investments.

Cyprus’ booming real estate sector, especially in luxury properties, can become a prime target for Indian investors. The demand for real estate investment is especially strong, with Cyprus offering Indian investors the ability to purchase luxury properties while also gaining access to the European market. The local property market has consistently attracted international buyers due to island's high standard of living, favourable visa schemes and robust legal framework for property ownership.

A bright future for Cyprus-India collaboration

The collaboration between Cyprus and India is not just beneficial for the two nations but also for the broader region. Indian businesses gain access to new markets, while Cypriot professional services firms benefit from an influx of new clients and investment opportunities.

As the two economies continue to grow and evolve, the opportunities for collaboration will only increase, creating new avenues for growth and prosperity on both sides. However, to fully capitalise on this potential, it is essential that the Government to actively supports and enhances this relationship.

This could involve facilitating regulatory adjustments, providing incentives for Indian businesses and fostering more bilateral trade agreements, which will encourage further investment and collaboration between the two countries. State-backed initiatives will be crucial in strengthening this economic partnership and ensuring long-term growth for both markets.

Cyproman Services with customised solutions

Cyproman Services Ltd is a dynamic corporate service provider dedicated to transforming businesses by offering, among others, bespoke regulatory advisory services. It specialises in comprehensive solutions that assist organisations in enhancing their market attractiveness, improving cost-efficiency and overcoming regulatory hurdles. It provides an array of consulting services tailored to meet the needs of businesses operating in sectors including the capital markets, banking and securities.

In the area of investment, we also help fund managers set up their operations in Cyprus. Among the fund administration services we provide are advisory on choosing the optimal organisational fund structuring, NAV Valuation and Fund Accounting, Registrar and Transfer Agency, Regulatory Reporting, AML Compliance and KYC Support, Audit Assistance, and the preparation of Interim and Annual Financial Statements. Our services also include financial evaluations, strategic advisory, risk management, compliance consulting, and transformation strategies.

By aligning solutions to each client’s business model, Cyproman Services Ltd plays a crucial role in facilitating cross-border business collaborations and is an ideal partner for businesses looking to establish or expand operations between Cyprus and India. At the same time, we offer further guidance to businesses in navigating complexities in the operational and regulatory environments, thereby improving efficiency and profitability. Furthermore, Cyproman Services Ltd provides guidance on financial projections, marketing strategies and customer relations management, ensuring that businesses are equipped with the necessary tools for growth.

Whether a business is looking for market entry solutions or to optimise its current operations, Cyproman Services Ltd delivers robust and implementable strategies. Uniquely positioned to facilitate business between Cyprus and India and with a deep understanding of both countries, we bridge the gap between these two markets, assisting businesses in overcoming regulatory and operational challenges and fostering successful collaborations.

India, as one of the world’s largest and fastest-growing economies, offers tremendous opportunities for businesses but it comes with its own set of complexities. Navigating the Indian market requires an understanding of the local legal and regulatory framework, market dynamics and business culture.

Cyproman Services Ltd supports businesses by identifying potential partners and/or clients in India while also helping Indian investors tap into and establish a foothold in the European market through Cyprus. This cross-border approach opens up new growth avenues to businesses from both countries, helping them expand their market reach and diversify their operations.

Our expertise in navigating both the Cypriot and Indian business landscapes allows us to provide bespoke solutions that ensure seamless cross-border collaboration. Whether you're expanding your operations in Europe or entering the dynamic Indian market, we offer tailored support to help you succeed in an increasingly globalised economy.

*Panayiotis Gregoriades, BSc, ACA, Board Member, Cyproman Services Ltd

This Opinion Piece first appeared in the November edition of GOLD magazine. Click here to view it.