Discusses key economic indicators and trade statistics, which countries are dominant in the market, and other issues that affect trade.
Cyprus is the eastern-most member of the European Union (EU), situated at the crossroads of three continents – Europe, Africa, and Asia – and thus occupies a strategic place in the Eastern Mediterranean region.
The Republic of Cyprus (ROC) welcomes foreign direct investment (FDI). The ROC is a member of the Eurozone. English is widely spoken, and the legal system is based on UK common law. Legal and accounting services for foreign investors are highly developed. With a talented, highly-educated, English–speaking workforce, the ROC offers professional services at competitive prices compared with the EU average. The ROC has a low corporate tax rate of 12.5 percent, and a liberal investment regime with 67 double taxation treaties, including with the United States. Invest Cyprus, an independent, government-funded entity, promotes investment in traditional sectors including shipping, tourism, banking, financial, and professional services. Newer sectors for FDI include energy, investment funds, education, research & development, start-ups, information technology, and regional headquartering, and can provide further information on the ROC market. The discovery of significant hydrocarbon deposits in Cyprus’ Exclusive Economic Zone (and in the surrounding Eastern Mediterranean region) has driven major new FDI by multinational companies in recent years. The ROC is further developing an advanced telecommunications network and infrastructure, and - prior to COVID-19 - had first-rate air connectivity. U.S. products, services, technology, and brands are well-regarded.
The ROC is an import-dependent economy, with no significant barriers to U.S. exports. Key statistics for 2021 include: population: 918,100; GDP (current market prices) $27,556; unemployment 6.9 percent; and inflation 2.3 percent. In 2021, U.S. exports of goods and services to Cyprus were $1.4 billion, up 13.8 percent from 2020, and U.S. imports from Cyprus rose to $1.8 billion, up 45.7 percent from 2020. As a result, the U.S. trade deficit with Cyprus increased to $364.0 million.