HomeReportsBureau of Economic and Business Affairs2023 Investment Climate Statements…Cyprus

# 					2023 Investment Climate Statements: Cyprus			

 In this section										/

													EXECUTIVE SUMMARY											

                -  EXECUTIVE SUMMARY 
                -  1. Openness To, and Restrictions Upon, Foreign Investment                    -  Policies Towards Foreign Direct Investment 
                  -  Limits on Foreign Control and Right to Private Ownership and Establishment 
                  -  Other Investment Policy Reviews 
                  -  Business Facilitation 
                  -  Outward Investment 
                -  2. Bilateral Investment and Taxation Treaties 
                -  3. Legal Regime                    -  Transparency of the Regulatory System 
                  -  International Regulatory Considerations 
                  -  Legal System and Judicial Independence 
                  -  Laws and Regulations on Foreign Direct Investment 
                  -  Competition and Antitrust Laws 
                  -  Expropriation and Compensation 
                  -  Dispute Settlement 
                  -  Bankruptcy Regulations 
                -  4. Industrial Policies                    -  Investment Incentives 
                  -  Foreign Trade Zones/Free Ports/Trade Facilitation 
                  -  Performance and Data Localization Requirements 
                -  5. Protection of Property Rights                    -  Real Property 
                  -  Intellectual Property Rights 
                -  6. Financial Sector                    -  Capital Markets and Portfolio Investment 
                  -  Money and Banking System 
                  -  Foreign Exchange and Remittances 
                  -  Sovereign Wealth Funds 
                -  7. State-Owned Enterprises                    -  Privatization Program 
                -  8. Responsible Business Conduct 
                -  9. Corruption 
                -  10. Political and Security Environment 
                -  11. Labor Policies and Practices 
                -  12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs 
                -  13. Foreign Direct Investment Statistics 
                -  14. Contact for More Information 

## EXECUTIVE SUMMARY

Situated at the crossroads of three continents – Europe, Africa, and Asia – Cyprus occupies a strategic place in the Eastern Mediterranean region.

The Republic of Cyprus (ROC), the eastern-most member of the European Union (EU), actively seeks and eagerly welcomes foreign direct investment (FDI). The ROC is a member of the eurozone. English is widely spoken. The legal system is based on UK common law. Legal and accounting services for foreign investors are highly developed. Invest Cyprus, an independent, government-funded entity, aggressively promotes investment in the traditional shipping, tourism, banking, and financial and professional services sectors. Newer sectors for FDI include energy, film production, investment funds, education, research & development, information technology, and regional headquartering. The discovery of significant hydrocarbon deposits in the ROC’s claimed Exclusive Economic Zone (and in the surrounding Eastern Mediterranean region) has driven major new FDI by multinational companies in recent years.

The Government of the ROC is the only internationally recognized government on the island, but since 1974 the northern third of Cyprus has been administered by Turkish Cypriots. This area proclaimed itself the “Turkish Republic of Northern Cyprus” (“TRNC”) in 1983. The United States does not recognize the “TRNC” as a legitimate government, nor does any country other than Türkiye (Turkey). A substantial number of Turkish troops remain in the northern part of the island. A Buffer Zone, or “green line,” patrolled by the UN Peacekeeping Force in Cyprus (UNFICYP), separates the two parts. The ROC and the area administered by Turkish Cypriots are addressed separately below.

The ROC economy performed well in 2022 compared to other EU members, but is facing headwinds in 2023, due to high energy prices and a general weakening of the global economy. Russia’s continuing war of aggression in Ukraine also poses significant downside risks to the growth outlook. ROC GDP growth in 2022 reached 5.6 percent but is expected to slow to 1.0-2.5 percent in 2023. Inflation hit 8.0 percent in 2022 and is forecast to drop to around 4.0 percent in 2023.

The ROC has demonstrated commitment to promoting green investments, with significant funding allocated to securing a green transition (see Section 8).

U.S. companies can invest in the north but should be aware of legal complications and risks due to the lack of international recognition, tensions between the two communities, and isolation of the north from the eurozone. Turkish Cypriot businesses are interested in working with American companies in the fields of agriculture, hospitality, renewable energy, and retail franchising. Significant Turkish aid and investment flows to the area administered by Turkish Cypriots. A political settlement between the communities would be a powerful catalyst for island-wide Cypriot economic growth and prosperity.

							1. Openness To, and Restrictions Upon, Foreign Investment					

### Policies Towards Foreign Direct Investment

The ROC has a favorable attitude towards FDI and welcomes U.S. investors. There is no discrimination against U.S. investment; however, there are some ownership limitations and licensing restrictions set by law on non-EU investment in certain sectors, such as private land ownership, media, and construction (see Limits on Foreign Control, below). The ROC promotes FDI through a dedicated agency, Invest Cyprus, which is tasked with attracting FDI in the key economic sectors of shipping, education, real estate, tourism and hospitality, energy, investment funds, filming, and innovation and startups. Invest Cyprus is the first point of contact for investors, and provides detailed information on the legal, tax, and business regulatory framework. The ROC and Invest Cyprus also promote an ongoing dialogue with investors through a series of promotion seminars each year. The Cyprus Chamber of Commerce and Industry (CCCI) is a robust organization with country-specific bilateral chambers, including the American Chamber of Commerce in Cyprus (AmCham Cyprus), that is dedicated to promoting FDI and serving the business interests of foreign companies and trade partners operating in the ROC.

For more information:

*Invest Cyprus*9 Makariou III AvenueSeveris Building, 4th Floor1965 Nicosia, CyprusTel: +357 22 441133Fax: +357 22 441134Email: info@investcyprus.org.cyWebsite: https://www.investcyprus.org.cy

AmCham Cyprus38, Grivas Dhigenis Ave. & 3, Deligiorgis Str.,P.O. Box 21455,1509 Nicosia CyprusTel: +357 22 889718Email: amcham@amcham.cyWebsite: www.amcham.cy

Cyprus Embassy Trade Center – New York13 East 40th StreetNew York, NY 10016Phone: (212) 213-9100Fax: (212) 213-9100Website: https://www.cyprustradeny.org/

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

Turkish Cypriots welcome FDI and are eager to attract investments, particularly those that will lead to the transfer of advanced technology and technical skills. Priority is also given to investments in export-oriented industries. While there are no laws or practices that discriminate against FDI, see the discussion in the Real Property section for a discussion of special considerations relevant to investment in real property. The “Turkish Cypriot Investment Development Agency (YAGA)” provides investment consultancy services, guidance on the legal framework, sector specific advice, and information about investor incentives.

“Turkish Cypriot Investment Development Agency” (“YAGA”)Tel: +90 392 – 22 82317Website: https://investnorthcyprus.gov.ct.tr/

### Limits on Foreign Control and Right to Private Ownership and Establishment

**REPUBLIC OF CYPRUS**

The ROC does not currently have a mandatory foreign investment screening mechanism that grants approval to FDI other than sector-specific licenses granted by relevant ministries. However, the ROC is currently drafting legislation in line with EU regulation, to establish an investment screening mechanism under the Ministry of Finance. It is expected to be passed in 2023. Additionally, Invest Cyprus can refer projects for review to other agencies or ministries, or approve investments under the film production incentive scheme.

The following restrictions currently apply to investing in the ROC:

- Non-EU entities (persons and companies) may purchase only two real estate properties for private use (two holiday homes or a holiday home and a shop or office). This restriction does not apply if the investment property is purchased through a domestic ROC company or a corporation elsewhere in the EU. U.S. investment in such companies is welcome.
- Non-EU entities cannot invest in the production, transfer, and provision of electrical energy. The Council of Ministers may refuse granting a license for investment in hydrocarbons prospecting, exploration, and exploitation to a third-country national or company if that third country does not allow similar investment by the ROC or other EU member states. ROC hydrocarbon exploration is currently led by two consortiums led by U.S. companies.
- Individual non-EU investors may not own more than five percent of a local television or radio station, and total non-EU ownership of any single local TV or radio station is restricted to a maximum of 25 percent.
- The right to register as a building contractor in the ROC is reserved for citizens of EU member states. Non-EU entities are not allowed to own a majority stake in a local construction company. Non-EU physical persons or legal entities may bid on specific construction projects but only after obtaining a special license from the Council of Ministers.
- Non-EU entities cannot invest directly in private tertiary education institutions but may do so through ownership of Cypriot or EU companies.  The provision of healthcare services on the island is subject to certain restrictions, applying equally to all non-residents.
- The Central Bank of Cyprus’s prior approval is necessary before any individual person or entity, whether Cypriot or foreign, can acquire more than 9.99 percent of a bank incorporated in the ROC.
- Companies in the ROC are allowed to employ foreign nationals for up to 50 percent of their workforce, provided there are no qualified ROC citizen applicants. (Prior to February 2023, this limit was even stricter, allowing only a 30-percent share of foreign workers.)

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

According to the “Registrar of Companies Office,” all non-Turkish Cypriot ownership of construction companies is capped at 49 percent. Currently, the travel agency sector is closed to foreign investment. Registered foreign investors may buy property for investment purposes but are limited to one parcel or property. Foreign natural persons also have the option of forming private liability companies, and foreign investors can form mutual partnerships with one or more foreign or domestic investors.

### Other Investment Policy Reviews

In its Post-COVID FDI recovery report, released September 2022, FDI Intelligence (fDi) found the ROC ranked 18th in its Greenfield FDI Performance in 2021, rising by 50 places compared to 2020, in terms of new FDI projects across more than 80 countries relative to the size of their economy. According to the same source, the number of greenfield investments in the ROC rose by 150 percent overall (and by 600 percent in software and IT investments) in the first half of 2022 from the same period in 2019, placing it among the 10 top countries that stood out for FDI recovery after the pandemic. (See: https://www.fdiintelligence.com/content/locations/global/post-covid-fdi-recovery-top-10-countries-81398.)

### Business Facilitation

**REPUBLIC OF CYPRUS**

The Ministry of Energy, Commerce and Industry (MECI) provides a “One Stop Shop” business facilitation service, offering assistance with the logistics of registering a business in the ROC to all investors, regardless of origin and size. For more details, please contact:

One Stop Shop & Point of Single ContactMinistry of Energy, Commerce, and Industry (MECI)10 Andrea Araouzou Str.1421 Nicosia, CyprusTel. +357 22 409318Fax: +357 22 409432Email: businessincyprus@meci.gov.cyWebsite: www.businessincyprus.gov.cy

Additionally, in September 2020, MECI established a Business Facilitation Unit (BFU), offering a Fast Track Business Activation mechanism to provide efficient business registration services to eligible foreign investors who want to establish a physical presence on the island. This program has already generated strong interest from abroad, attracting several firms in the technology, IT, and communications sectors. For more information, please contact:

Business Facilitation Unit10 Andrea Araouzou Str.1421 Nicosia, CyprusPOCs:Katerina Solomou, Tel: +357 22 867193, Email: ksolomou@meci.gov.cy;George Panayi, Tel:+357 22 867181, Email: gpanayi@meci.gov.cyWebsite: https://www.businessincyprus.gov.cy/business-facilitation-unit/

MECI’s Department of the Registrar of Companies and Official Receiver (DRCOR) provides the following services: registration of domestic and overseas companies, partnerships, and business names; bankruptcies and liquidations; and trademarks, patents, and intellectual property matters.

Domestic and foreign investors may establish any of the following legal entities or businesses in the ROC:

- Companies (private or public);
- General or limited partnerships;
- Business/trade name;
- European Company (SE); and
- Branches of overseas companies.

The registration process takes approximately two working days and involves completing an application for approval/change of name, followed by the steps outlined in the following link: http://www.businessincyprus.gov.cy/mcit/psc/psc.nsf/All/A2E29870C32D7F17C2257857002E18C9?OpenDocument.

At the end of 2022, there were a total of 192,469 companies registered in the ROC, 12,583 of which had been registered in 2022 (for more statistics on company registrations, please see: https://www.companies.gov.cy/en/).

In addition to registering a business, foreign investors, like domestic business owners, are required to obtain all permits that may be necessary under ROC law. At a minimum, they must obtain residence and employment permits, register for social insurance, and register with the tax authorities for both income tax and Valued Added Tax (VAT). In order to use any building or premises for business, including commerce, industry, or any other income-earning activity, one also needs to obtain a municipal license. Additionally, town planning or building permits are required for building new offices or converting existing buildings. There are many sector-specific procedures. Information on all the above procedures is available online at the link above.

The World Bank’s 2020 *Doing Business* report (http://www.doingbusiness.org/rankings) ranked the ROC 54th out of 190 countries for ease of doing business. Among the ten sub-categories that make up this index, the ROC performed best in the areas of protecting minority investors (21/190) and paying taxes (29/190), and worst in the areas of enforcing contracts (142/190) and dealing with construction permits (125/190). Since 2020, the World Bank Group has discontinued the Doing Business project and is now formulating a new approach to assessing the business and investment climate in economies worldwide. Using another metric, in the Global Competitiveness Index, issued by the World Economic Forum, the ROC maintained its ranking of 44th out of 141 countries in the 2019 edition (the last year published). The two areas where the ROC performed the worst were its small market size and relatively low innovation capability.

The ROC follows the EU definition of micro-, small- and medium-sized enterprises (MSMEs), and foreign-owned MSMEs are free to take advantage of programs in the ROC designed to help such companies.

- https://www.fundingprogrammesportal.gov.cy/en/call/enabling-discovery-and-interoperability-of-federated-research-objects-across-scientific-communities/

Foreign investors can take advantage of the services and expertise of Invest Cyprus, an agency registered under the Companies’ Law and funded mainly by the state, dedicated to attracting investment.

Invest Cyprus9A Makarios III AveSeveris Bldg., 4th Fl.1065 NicosiaTel. +357 22 441133Fax: +357 22 441134Email: info@investcyprus.org.cyWebsite: http://www.investcyprus.org.cy/

Additionally, the Association of Large Investment Projects, under the Cyprus Chamber of Commerce and Industry, can provide useful information on large ongoing investment projects:

Association of Large Investment Projects38 Grivas Dhigenis Ave. & 3 Deligiorgis Str.,P.O. Box 214551509 NicosiaTel: +357 22 889890Fax: +357 22 667593Email: bigprojects@ccci.org.cy

Lastly, the Cyprus Country Profiler website offers some useful background on the ROC: https://www.cyprusprofile.com/****

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

Information available on the “Registrar of Companies’” website is available only in Turkish: http://www.rkmmd.gov.ct.tr/.  An online registration process for domestic or foreign companies does not exist and registration needs to be completed in person.

The “YAGA” website ( https://investnorthcyprus.gov.ct.tr/) provides explanations and guides in English on how to register a company in the area administrated by Turkish Cypriots.

As of March 2022, the “Registrar of Companies Office” statistics indicated there were 24,563 financial companies; 465 foreign companies; 528 offshore businesses. The area administered by Turkish Cypriots defines MSMEs as entities having fewer than 250 employees. There are several grant programs financed by Turkish aid and EU aid targeting MSMEs.

The Turkish Cypriot Chamber of Commerce (KTTO) publishes an annual Competitiveness Report on the Turkish Cypriot economy, based on the World Economic Forum’s methodology. KTTO’s 2019-2020 report ranked northern Cyprus 107 among 141 economies, dropping eighteen places from its ranking in 2019. KTTO published a 2021-2022 Special Edition. In this special edition report countries were not ranked due to the pandemic, but instead provided with transformation readiness scores. Visit KTTO website for Special Edition report. https://www.ktto.net/en/competitiveness-report-2021-2022-special-issue/

For more information and requirements on establishing a company, obtaining licenses, and doing business visit:

“Turkish Cypriot Investment Development Agency” (“YAGA”)Tel: +90 392 – 22 82317Website: https://investnorthcyprus.gov.ct.tr/

Turkish Cypriot Chamber of Commerce (KTTO)https://www.ktto.net/en/Tel: +90 392 – 228 37 60 / 228 36 45Fax: +90 392 – 227 07 82

### Outward Investment

**REPUBLIC OF CYPRUS**

The ROC does not restrict outward investment, other than in compliance with international obligations such as specific UN Security Council Resolutions. In terms of programs to encourage investment, businesses in the ROC have access to several EU programs promoting entrepreneurship, such as the European Commission’s Next Generation EU economic recovery package, or the Erasmus program for Young Entrepreneurs, in addition to the European Investment Bank’s guarantee facilities for SMEs for projects under USD 4.2 million (EUR 4 million).****

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

Turkish Cypriot “officials” do not incentivize or promote outward investment. Turkish Cypriot authorities do not restrict domestic investors.

							2. Bilateral Investment and Taxation Treaties					

**REPUBLIC OF CYPRUS**

The ROC is a party to 27 bilateral investment treaties (BITs) and 78 treaties with investment provisions (TIPs) all listed here:https://investmentpolicy.unctad.org/international-investment-agreements/countries/54/cyprus?type=tips

As an EU member state, trade agreement talks are delegated to the European Commission.

The ROC does not have a BIT with the United States, but it does have a bilateral agreement relating to Investments Guarantees, which came into force in 1963 through an exchange of notes. This agreement is listed as item 16 in the ROC’s list of bilateral treaties between the ROC and the United States: http://www.olc.gov.cy/olc/olc.nsf/All/5127B9EF26EA434EC225847300280E1F?OpenDocument.

For additional reference on bilateral agreements in effect, please refer to the Department of State’s Treaties in Force: https://www.state.gov/s/l/treaty/tif/index.htm.

The United States and the ROC entered into a Tax Convention in 1985, which remains in force: https://www.irs.gov/businesses/international-businesses/cyprus-tax-treaty-documents.

An agreement between the United States and the ROC on the Foreign Account Tax Compliance Act (FATCA) entered into full effect January 4, 2017.

Additionally, the ROC has signed bilateral double tax treaties with 67 countries:http://mof.gov.cy/en/taxation-investment-policy/double-taxation-agreements/double-taxation-treeties.

The ROC is not a member of the Organization for Economic Co-Operation and Development (OECD), nor the OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS).

***AREA ADMINISTERED BY TURKISH CYPRIOTS***

The United States does not recognize the “TRNC,” nor does any country other than Turkey, and it is not a party to any multilateral trade or investment instruments. It has bilateral investment and taxation agreements only with Turkey. Some of these agreements include prevention of double taxation on income tax and loss of tax; trade and economic cooperation; investment; and economic and financial cooperation.

							3. Legal Regime					

### Transparency of the Regulatory System

**REPUBLIC OF CYPRUS**

The ROC achieved a score of 4 out of 6 in the World Bank’s composite Global Indicators of Regulatory Governance score (based on data collected December 2015 to April 2016) designed to explore good regulatory practices in three core areas: publication of proposed regulations, consultation around their content, and the use of regulatory impact assessments. For more information, please see: http://rulemaking.worldbank.org/en/data/explorecountries/cyprus.

U.S. companies competing for ROC government tenders have noted concerns about opaque rules and possible bias by technical committees responsible for preparing specifications and reviewing tender submissions. Overall, however, procedures and regulations are transparent and applied in practice by the government without bias towards foreign investors. The ROC actively promotes good governance and transparency as part of its administrative reform action plan.

In line with the above plan and EU requirements, the ROC launched the National Open Data Portal (https://www.data.gov.cy/) in 2016 to increase transparency in government services. Government agencies are now required to post publicly available information, data, and records, on the entire spectrum of their activities. The number of data sets available through this portal has been growing rapidly, although many of them are only in Greek.

Several agencies and non-governmental organizations (NGOs) share competency for fostering competition and transparency, including the ROC Commission for the Protection of Competition (http://www.competition.gov.cy/competition/competition.nsf/index_en/index_en?OpenDocument), the Competition and Consumer Protection Service, under MECI (https://meci.gov.cy/en/departments-services/consumer-protection-service), the Cyprus Consumers Association (https://www.katanalotis.org.cy/), and the Cyprus Securities and Exchange Commission (https://www.cysec.gov.cy/en-GB/home/).

Government and independent oversight agencies such as the Cyprus Securities and Exchange Commission actively promote companies’ environmental, social, and governance (ESG) disclosure to facilitate transparency. In 2017, the European Commission published guidelines to help companies disclose environmental and social information, which it supplemented in 2019 with guidelines on reporting climate-related information. These guidelines are not mandatory, but many progressive local companies are adopting them to ensure sustainability and secure long-term gains.

Most laws and regulations are published only in Greek and obtaining official English translations can be difficult, but expert analysis in English is generally available from local law and accounting firms, particularly when the regulation affects international investment or business activity. When passing new legislation or regulations, ROC authorities follow the EU *acquis**communautaire* – the body of common rights and obligations that is binding on all EU members. A formal public notice procedure and comment is not required in the ROC, except for specific types of laws. In general, the ROC will seek stakeholder feedback directly. Draft legislation must be published in the Official Gazette before it is debated in the House to allow stakeholders an opportunity to submit comments. The ROC House of Representatives typically invites specific stakeholders to offer their feedback when debating bills. Draft regulations, on the other hand, need not be published in the Official Gazette prior to being approved.

In an effort to contribute to global tax transparency, the ROC has adopted the Standard of Automatic Exchange of Information developed by the OECD known as the Common Reporting Standard (CRS), even though the ROC is not an OECD member. Since 2016, the ROC Tax Department requires all financial institutions to confirm their clients’ jurisdiction(s) of Tax Residence and Respective Tax Identification Number, if applicable. Additionally, the ROC has signed the U.S. Foreign Account Tax Compliance Act (FATCA), allowing ROC tax authorities to share information with U.S. counterparts.

Public finances and debt obligations are published as part of the annual budget process.

******AREA ADMINISTERED BY TURKISH CYPRIOTS**

The level of transparency for “lawmaking” and adoption of “regulations” in the “TRNC” lags behind U.S. and EU standards. There are no informal regulatory processes managed by nongovernmental organizations or private sector associations. Draft legislation or regulations are made available for public comment for 21 days after the legislation is sent to “parliament.” All legislation and regulations are published in Turkish.

### International Regulatory Considerations

**REPUBLIC OF CYPRUS**

As an EU member state since May 1, 2004, the ROC must ensure compliance with the *acquis**communautaire*. The *acquis* is constantly evolving and is comprised of treaties, international agreements, legislation, declarations, resolutions, and other legal instruments. EU legislation, for its part, is subdivided into:

- Regulations, which are directly applicable to member states and require no further action to have legal effect;
- Directives, which are addressed to and are binding on member states, but the member state may choose the method by which to implement the directive. Generally, a member state must enact national legislation to comply with a directive;
- Decisions, which are binding on those parties to whom they are addressed; and
- Recommendations and opinions, which have no binding force.

When there is conflict between European law and the law of any member state, European law prevails; the norms of national law have to be set aside, under the principle of EU law primacy or supremacy. The ROC is often slow to transpose EU directives into local law, but transposition is generally consistent with EU intent when it happens.

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

The entire island of Cyprus is considered EU territory, but the *acquis**communautaire* is suspended in the areas administered by Turkish Cypriots and the north is not considered to be within the EU customs area.

### Legal System and Judicial Independence

**REPUBLIC OF CYPRUS**

The ROC is a common law jurisdiction and its legal system is based on English Common Law for both substantive and procedural matters. The ROC inherited many elements of its legal system from the United Kingdom, including the presumption of innocence, the right to due process, the right to appeal, and the right to a fair public trial. Courts in the ROC possess the necessary powers to enforce compliance by parties who fail to obey judgments and orders made against them. Public confidence in the integrity of the ROC legal system has been undermined by long delays in courts, and the perceived failure of the system to punish those responsible for high-profile corruption cases in recent years. A poll conducted in December 2022 revealed three-quarters of Cypriots were unsatisfied with the justice system, while many retained reservations about the impartiality of judges. The ROC has taken important steps towards judicial reform in recent years but these have yet to achieve the intended goal of shortening court delays.

International disputes are resolved through litigation in ROC courts or by alternative dispute resolution methods such as mediation or arbitration – although, in practice, these are rarely used. Businesses often complain of court gridlock and judgments on cases generally taking years to be issued, particularly for claims involving property foreclosure.

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

Investors should note the EU’s *acquis**communautaire* is suspended in the area administered by the Turkish Cypriots, which is also a common law jurisdiction. Judicial power other than the “Supreme Court” is exercised by the “Heavy Penalty Courts,” “District Courts,” and “Family Courts.” Turkish Cypriots inherited many elements of their legal system from British colonial rule before 1960, including the right to appeal and the right to a fair public trial. There is a high level of public confidence in the judicial system in the area administrated by Turkish Cypriots. The judicial process is procedurally competent, fair, and reliable.

Foreign investors can make use of all the rights guaranteed to Turkish Cypriots. Commercial courts and alternative dispute resolution mechanisms are not available. The resolution of commercial or investment disputes through the “judicial system” can take several years. The Turkish Cypriot administration has trade and industry “law” and contractual “law,” and several trade and economic cooperation agreements with Turkey. For more information about “legislation,” visit https://investnorthcyprus.gov.ct.tr/. Because it is not recognized internationally, “TRNC court” decisions and orders may be difficult to enforce outside of the area administered by Turkish Cypriots or Turkey.

### Laws and Regulations on Foreign Direct Investment

**REPUBLIC OF CYPRUS**

For more information on laws affecting incoming foreign investment see:https://www.investcyprus.org.cy/

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

Visit the “YAGA” website, for more information about laws and regulations on FDI: https://investnorthcyprus.gov.ct.tr/

### Competition and Antitrust Laws

**REPUBLIC OF CYPRUS**

The oversight agency for competition is the Commission for the Protection of Competition:http://www.competition.gov.cy/competition/competition.nsf/index_en/index_en?OpenDocument

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

The oversight “agency” for competition is the “Competition Board:” http://www.rekabet.gov.ct.tr/

### Expropriation and Compensation

**REPUBLIC OF CYPRUS**

Private property may, in exceptional instances, be expropriated for public purposes, in a non-discriminatory manner, and in accordance with established principles of international law and consistent with EU law, rights, and directives. The expropriation process entitles investors to proper compensation, whether through mutual agreement, arbitration, or the local courts. Foreign investors may claim damages resulting from an act of illegal expropriation by means other than litigation. Investors and lenders to expropriated entities receive compensation in the currency in which the investment was made. In the event of any delay in the payment of compensation, the Government is also liable for the payment of interest based on the prevailing six-month interest rate for the relevant currency. Like most other jurisdictions, banks in the ROC completed the switch from the London Inter-Bank Offered Rate (LIBOR) to the Secured Overnight Financing Rate (SOFR) by June 2023.

Following a financial crisis in 2013, the ROC took extraordinary steps as part of the Memorandum of Understanding (MOU) between the ROC and international lenders (European Commission, European Central Bank, and the IMF – the “troika”). Depositors in two of the largest ROC banks were forced to take a cut on almost half of their deposits exceeding insured limits. This action sparked 3,000 lawsuits against the ROC and the banks, but the European Court of Justice ruled the MOU with the troika was not an unlawful act and dismissed actions for compensation. The ROC has not taken any similar extraordinary actions since.

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

Private property may be expropriated for public purposes. The expropriation process entitles investors to proper compensation. Foreign investors may claim damages resulting from an act of illegal expropriation by means other than litigation.

In expropriation cases involving private owners, they are first notified, the property is then inspected, and, if an is reached regarding the amount, then the owner is compensated. In cases where the owner declines the compensation package, the case is relegated to local “courts” for a final decision.

Because the “TRNC” is not recognized internationally, “TRNC court” decisions and orders may be difficult to enforce outside of the area administered by Turkish Cypriots or Turkey.

### Dispute Settlement

**REPUBLIC OF CYPRUS**

*ICSID Convention and New York Convention*

The ROC is a member state to the Convention on the International Centre for the Settlement of Investment Disputes (ICSID Convention), and a signatory to the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.

***Investor-State Dispute Settlement***

Investment disputes involving U.S. persons are rare in the ROC, although one notable case emerged in 2020-21, when a Hollywood film producer encountered problems with the administration of the ROC film rebate scheme. The film producer cancelled plans for filming a second movie in the ROC, while pursuing compensation through the courts. Local courts recognize and enforce foreign arbitral awards issued against the government and there is no history of extrajudicial action against foreign investors.

***International Commercial Arbitration and Foreign Courts***

The ROC offers several different means of Alternative Dispute Resolution (ADR), although, in practice, recourse to ADR is not common. The ROC Ministry of Justice and Public Order offers a publicly-available Register of Mediators for both commercial and civil disputes at: http://www.mjpo.gov.cy/mjpo/mjpo.nsf/All/093DD5FE0E4342E7C225861400498853?OpenDocument.

Some of the key mediators locally and abroad are the following:

- The Cyprus Chamber of Commerce and Industry (CCCI):  https://ccci.org.cy/ ;
- The Scientific and Technical Chamber of Cyprus:  http://www.etek.org.cy ;
- The ROC Financial Ombudsman’s office, offers mediation services between banks and customers since 2015:  http://www.financialombudsman.gov.cy/forc/forc.nsf/page02_en/page02_en?opendocument
- The European Court of Arbitration in Cyprus:  http://cour-europe-arbitrage.org/contacts/ ;

EU citizens and businesses can also use SOLVIT, a free, online service, to resolve problems pertaining to internal EU market issues, like visa and residence rights, pension rights, and VAT refunds, within 10 weeks from the day the problem is reported.

Under the Arbitration Law of Cyprus, if the parties are unable to reach a settlement an arbitrator can be appointed. Arbitration rulings are fully enforceable, and the court may settle an arbitral award in the same way as a judgment. Mediation is not fully enforceable, unless the settlement agreement explicitly stipulates the parties can apply to the courts for enforcement. The ROC honors the enforcement of foreign court judgments and foreign arbitration awards. Domestic legislation on binding international arbitration is modeled after internationally accepted regulations, such as the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration, which the ROC adopted in 1985. The ROC’s bilateral investment treaties with several countries also include dispute settlement provisions (see Section 3, Bilateral Investment Agreements).

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

***Investor-State Dispute Settlement***

Foreign investors can make use of all the rights guaranteed to Turkish Cypriots. Alternative dispute resolution mechanisms are not available. The resolution of commercial or investment disputes through the “judicial system” can take several years.

Because it is not recognized internationally, “TRNC court” decisions and orders may be difficult to enforce outside of the area administered by Turkish Cypriots or Turkey.

### Bankruptcy Regulations

**REPUBLIC OF CYPRUS**

The ROC introduced new insolvency legislation in 2015, which has helped overhaul bankruptcy procedures, and gradually resolve the island’s high levels of non-performing loans (NPLs). Bankruptcy procedures can be initiated by a creditor through compulsory liquidation or by the debtor through voluntary liquidation. The court can impose debt rescheduling, in cases where aggregate liabilities do not exceed USD 371,000 (EUR 350,000) and individuals with minimal assets and income may apply to the court via the Insolvency Service for a debt relief order of up to USD 26,500 (EUR 25,000). Discharge from bankruptcy is automatic after three years, provided all debtor assets are sold and the proceeds distributed to creditors. Fraudulent alienation of assets prior to bankruptcy and non-disclosure of assets draws criminal sanctions under the new legislation. ROC authorities are closely monitoring implementation of the new insolvency framework.

The World Bank’s (now discontinued) 2020 Doing Business report ranked the ROC 31st from the top among 190 countries in terms of the ease with which it resolves insolvency. For additional information, please see: https://www.doingbusiness.org/en/data/exploreeconomies/cyprus#DB_ri .

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

In 2013, the “TRNC” passed a debt restructuring “law” aimed at providing incentives to restructure debts and NPLs separately. Turkish Cypriots also have a bankruptcy “law” that defines “collecting power;” conditions under which a creditor can file a bankruptcy application; and the debtor’s bankruptcy application, and agreement plans.

The total NPLs of the sector, which was 1.8 billion TL (USD 9 million) as of the end of June 2022, increased by 6.12 percent to 1.9 billion TL (USD 10 million) as of the end of September 2022. There was a 24.17 percent increase in non-performing loans compared to the same period the previous year.

							4. Industrial Policies					

### Investment Incentives

**REPUBLIC OF CYPRUS**

The ROC offers investors one of the lowest corporate FFtax rates in the EU at 12.5 percent, although this rate could increase to 15.0 percent for companies with an annual turnover of over EUR 750 million, in the foreseeable future, in line with global trends. The ROC’ other tax advantages include:

- One of the EU’s lowest top statutory personal income tax rates at 35 percent;
- An extensive double tax treaties network with 67 countries, enabling lower withholding tax rates on dividend or other income received from the subsidiaries abroad;
- No withholding tax on dividend income received from subsidiary companies abroad under certain conditions.
- No withholding tax on dividends received from EU subsidiaries; and
- Low Tonnage Tax for shipping.

Additionally, MECI offers a Fast Track Business Activation mechanism to provide efficient business registration services to eligible foreign investors who want to establish a physical presence on the island. (See Business Facilitation for more information.)

In July 2022, the ROC introduced new tax deductions for research and development (R&D) expenses. Expenses for scientific research carried out by any business, as well as R&D expenses carried out by small and medium-sized innovative companies, are deductible from taxable income if they were wholly and exclusively incurred for the production of income. An additional deduction of 20 percent of these costs is granted for expenses incurred in the years 2022, 2023, and 2024, including expenses of a capital nature. The condition is that the person carrying on a business should have the economic ownership of the intangible asset that arises or is likely to arise from incurring such expenses.

The ROC also offers a program to attract foreign investment through third country – *i.e.*, non-European Union – innovative start-ups. The plan invites third-country nationals with start-up capital of at least USD 53,000 (EUR 50,000), undergraduate-level education, and fluent either in Greek or English, to set up their headquarters and tax residence in the ROC, provided their proposed business is certifiably innovative. This program, valid for two years until 2024, offers 150 visas to eligible investors, provided the relevant business is successful. For more information, see: https://www.dmrid.gov.cy/dmrid/research.nsf/All/4B4F9A243165076DC2258664002981AB/$file/Practical%20Guide.pdf?OpenElement#:~:text=The%20%22Cyprus%20Startup%20Visa%22%20Scheme,with%20a%20high%20growth%20potential.

In recent years, the ROC has harmonized and enhanced its regulations regarding investment funds, becoming a more attractive jurisdiction for managing and home-basing investment funds. As a result, the number of financial services companies regulated by the Cyprus Securities and Exchange Commission (CySEC) has tripled in the last eight years, from 249 in 2012 to 805 in 2021, with total assets under management reaching USD 12.2 billion (EUR 11.5 billion) in 2021. Brexit, the withdrawal of the United Kingdom from the EU on January 31, 2020, has also prompted several financial services companies based in the UK to relocate to the ROC over the past year – a trend ROC authorities are encouraging.

The ROC’s Recovery and Resilience Plan (RRP), which forms part of the Next Generation EU recovery instrument, is currently in the implementation phase, envisioning broad-reaching reforms spanning six years, from 2021-26 in exchange for $F1.3 billion in EU funding ($1.1 billion in grants and $220 million in loans). Around 41 percent of this funding is dedicated to green transition projects, and another 23 percent to digital transition, with residual funding for many other reforms, including encouraging innovation and advancing the role of women in business. More information on the ROC’s RRP available at: https://ec.europa.eu/info/business-economy-euro/recovery-coronavirus/recovery-and-resilience-facility/ -recovery-and-resilience-plan_en.

Effective November 1, 2020, the ROC abolished a program offering ROC citizenship through foreign investment. The abrupt abolition of the citizenship program left a considerable number of high-end residential properties (each valued at around USD 2 million or more) up for sale. The ROC continues to offer a Residency by Investment program, requiring a minimum investment of USD 318,000 (EUR 300,000).****

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

There are incentives for tourism and industrial-related investments, including:

- 100 to 200 percent investment allowance on the initial fixed capital investment expenditure for certain regions and sectors;
- Exemption from corporate tax and income tax until the above-mentioned allowance percentages are met;
- Exemption from custom duties when importing machinery and equipment the projects;
- Exemption from construction license fees;
- Exemption from VAT for both imported and locally purchased machinery and equipment; and
- Reduction of stamp duty and mortgage procedure fees.

### Foreign Trade Zones/Free Ports/Trade Facilitation

**REPUBLIC OF CYPRUS**

The lead government agency handling areas subject to a special customs regime is the Department of Customs and Excise. Specific rules for the two main areas, namely Customs Warehouses and Free Zones, are listed below and are fully harmonized with equivalent EU norms: https://www.mof.gov.cy/mof/customs/customs.nsf/All/6D61C14C3E95345CC22572A6003BCBD5?OpenDocument.

There are two types of Free Zones:

- Control Type I Free Zone, in which controls are principally based on the existence of a fence; and
- Control Type II Free Zone, in which controls are principally based on the formalities carried out in accordance with the requirements of the customs warehousing procedure.

The ROC has two Control Type II Free Zones (FZs) located in the main seaports of Limassol and Larnaca, which are used for transit trade. These areas are treated as outside normal EU customs territory. Consequently, non-EU goods placed in FZs are not subject to import duties, VAT, or excise tax. FZs are governed under the provisions of relevant EU and ROC legislation. The Department of Customs has jurisdiction over both normal zones and FZs and can impose restrictions or prohibitions on certain activities, depending on the nature of the goods. Additionally, the MECI has management oversight over the Larnaca FZ.

A Customs Warehouse can be set up anywhere in the ROC, provided the right criteria are met and meet with the approval of the Department of Customs. For more information, interested parties may contact:

Department of Customs and ExciseMichali Karaoli Str.1096 NicosiaTel. +357 22 601754 or 55Fax: +357 22 302018Email: headquarters@customs.mof.gov.cyWebsite: https://www.mof.gov.cy/mof/customs/customs.nsf/index_en/index_en?OpenDocument

When larger projects are involved, potential investors interested in establishing their own customs warehouse or seeking to engage existing customs warehouses may also contact the One Stop Shop (https://www.businessincyprus.gov.cy/) for guidance on identifying suitable locations.

Additional information on the Limassol and Larnaca FZs can be obtained from:

Cyprus Ports AuthorityP.O. Box 220071516 Nicosia23 Kritis Street1061 NicosiaTel. +357 22 817200, X-0Fax: +357 22 762050Email: cpa@cpa.gov.cyWebsite: https://www.cpa.gov.cy/****

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

Famagusta has a “free port and zone,” which is regulated by the Free Ports and Free Zones “Law.”

Operations and activities permitted there include:

- Engaging in all kinds of industry, manufacturing, and production;
- Storage and export of goods imported to the “Free Port and Zone”;
- Assembly and repair of goods imported to the “Free Port and Zone”;
- Building, repair, and assembly of ships; and
- Banking and insurance services.

### Performance and Data Localization Requirements

**REPUBLIC OF CYPRUS**

There are no requirements for local sourcing, ownership, or employment. Hiring ROC and EU staff is quite easy, though labor supply in certain fields can be tight. Securing work permits for non-EU staff can be difficult, particularly in sectors where there is abundant local labor readily available. In order to overcome this problem, a foreign investor must explain to the satisfaction of ROC authorities why the non-EU staff in question is essential to the business. As with other such matters, Invest Cyprus can assist investors in overcoming hiring problems (see Section 2 on Business Facilitation, and Section 12 on Labor Policies and Practices.)

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

In order to recruit foreign labor, companies or investors apply to the local labor authorities for “work permits.” Once they apply, the vacancy is announced locally. Priority is given to local “TRNC citizens” with the required expertise or skillset. If the skillset is not available locally, employers can recruit foreign labor.In evaluating a foreign investment incentives application, the “State Planning Office” carries out a feasibility study regarding the type of investment. For more information on employment, visit the labor authorities’ website: http://csgb.gov.ct.tr/en-us/.

							5. Protection of Property Rights					

### Real Property

**REPUBLIC OF CYPRUS**

EU nationals and companies domiciled in any EU country are not subject to any restrictions when buying property in the ROC. By contrast, ROC law imposes significant restrictions on direct foreign ownership of real estate by non-EU individuals. Non-EU persons and entities may purchase a maximum of two real estate properties for private use (defined as a holiday home built on land of up to 4,014 square meters; plus a second home or office of up to 250 square meters, or shop of up to 100 square meters). Exceptions can be made for projects requiring larger plots of land but are difficult to obtain and rarely granted. This restriction applies to non-EU citizens or non-EU companies. Foreign investment in ROC or EU companies is welcome, but a legal entity is deemed to be controlled by non-EU citizens if it meets any of the conditions listed below:

- 50 percent or more of its board members are non-EU citizens; or
- 50 percent or more of its share capital belongs to non-EU citizens; or
- Control (50 percent or more) belongs to non-EU citizens; or
- Either the company’s Memorandum or Articles of Association provides authority to a non-EU citizen securing the company’s activities are conducted based on his/her will during the real estate acquisition period. If the authority is provided to two or more persons, a legal entity is considered to be controlled by non-EU citizens if 50 percent or more of the people granted such authority are non-EU citizens.

Legal requirements and procedures for acquiring and disposing of property in the ROC are complex, but professional help from real estate agents and developers to ease the burden is readily available. The ROC Department of Lands and Surveys keeps excellent records and follows internationally accepted procedures. Non-residents are allowed to sell their property and transfer abroad the amount originally paid, plus interest or profits, without restriction.

Additionally, there are restrictions on investing in Turkish Cypriot property located in the ROC. The Turkish Cypriot Property Management Service (TCPMS), established in 1991, administers properties of Turkish Cypriots who are not ordinarily residents of the government-controlled area. This service acts as the temporary custodian for such properties until a comprehensive political settlement is reached. The TCPMS is mandated to administer properties under its custodianship “in the manner most beneficial for the owner.” Ownership of Turkish Cypriot properties cannot change (except for inheritance purposes) except in exceptional cases when this is deemed beneficial for the owner or necessary for the public interest.

The World Bank’s 2020 Doing Business report ranked the ROC 71st among 190 countries in terms of efficiency and quality for registering property.

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

Special Note: Investors are advised to consider the risks associated with investing in immovable property in the area administered by Turkish Cypriots. Potential investors are strongly advised to obtain independent legal advice prior to purchasing or leasing property there. Purchase or use of property in the area administered by Turkish Cypriots is a contentious issue in Cyprus, as per the following note posted on the ROC Ministry of Foreign Affairs website: http://www.mfa.gov.cy/mfa/properties/occupiedarea_properties.nsf/index_en/index_en?OpenDocument.

For property in the Turkish Cypriot-administered areas, only pre-1974 title deeds are uncontested. In response to the European Court of Human Rights’ (ECHR) 2005 ruling that Turkey’s “subordinate local authorities” in Cyprus had not provided an adequate local remedy for property disputes, Turkish Cypriot authorities established an Immovable Property Commission (IPC) to handle property claimed by Greek Cypriots. In a March 2010 ruling, the ECHR recognized the IPC as a domestic remedy, but the ROC does not consider the IPC to be a legitimate body. As of March 7, 2023, the IPC had received 7,238 applications, of which 1, 334 have been concluded through friendly settlements, and 34 through formal hearings.

On January 19, 2010, the UK Court of Appeal enforced an earlier court decision taken in the ROC in support of a Greek Cypriot person’s trespassing claim effectively voiding the transfers of Greek Cypriot property in the Turkish Cypriot-administered areas. This landmark decision also establishes precedent in cases where foreign investors purchasing disputed properties outside of the ROC-controlled area can be found liable for damages.

There are significant restrictions on the foreign ownership of real estate. A 2008 “law” requires non-“TRNC” residents to apply to the “Council of Ministers” for permission to purchase real estate, and non-residents are limited to a single small property. Foreigners can, however, own or control more real estate through a “TRNC” registered company.

### Intellectual Property Rights

*REPUBLIC OF CYPRUS*

ROC intellectual property rights (IPR) law is harmonized with EU directives and the ROC is party to major international IPR instruments. The country promotes itself as a low-tax, high protection (*i.e.,* EU standards) destination for IPR.

ROC law (Law 207(I) of 2012) places the burden of proof on the defendant in cases of IPR infringement. The law also allows the police to assess samples of pirated articles in lieu of the whole shipment and introduces the alternative for out-of-court settlement in some cases. Other important IPR laws include Law 103 (2007) on unfair commercial practices and Law 133(I) (2006) strengthening earlier legislation targeting copyright infringement. The Department of Customs and the Police confiscate thousands of counterfeit items every year, including articles of clothing, luggage, accessories, and pirated optical media.

Primary responsibility for enforcing IPR legislation rests with the ROC Police and the Department of Customs. The Competition and Consumer Protection Service of the Ministry of Energy, Commerce, and Industry (MECI) also plays a supportive role, while the Registrar of Companies and Official Receiver handles administration of patents and copyrights.

For additional information about treaty obligations and points of contact at local IPR offices, .please see WIPO’s country profiles at: http://www.wipo.int/directory/en/.

							6. Financial Sector					

### Capital Markets and Portfolio Investment

**REPUBLIC OF CYPRUS**

The Cyprus Stock Exchange (CSE), launched in 1996, is one of the EU’s smallest stock exchanges, with a capitalization of USD 3.3 billion (EUR 3.1 billion) as of March 2023. The CSE and the Athens Stock Exchange (ASE) have operated from a joint trading platform since 2006, allowing capital to move more freely from one exchange to the other, even though both exchanges retain their autonomy and independence. The joint platform has increased capital available to ROC firms and improved the CSE’s liquidity, although its small size remains a constraint. The private sector has access to a variety of credit instruments, which have been enhanced through the operation of private venture capital firms. Credit is allocated on market terms to foreign and local investors alike. Foreign investors may acquire up to 100 percent of the share capital of ROC companies listed on the CSE with the notable exception of companies in the banking sector.

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

There is no stock exchange in the area administrated by Turkish Cypriots and no foreign portfolio investment. Foreign investors can get credit from the local market, provided they have established domestic legal presence, and are majority-owned (at least 51 percent) by domestic companies or persons.

### Money and Banking System

**REPUBLIC OF CYPRUS**

At the end of February 2023, the value of total deposits in ROC banks was USD 54.6 billion (EUR 51.5 billion), and the value of total loans was USD 27.6 billion (EUR 26.0 billion). Currently, there are six local banks in the ROC offering a full range of retail and corporate banking services – the largest two are the Bank of Cyprus and Hellenic Bank – plus another 22 subsidiaries or branches of foreign banks offering more specialized services. The full list of authorized credit institutions in the ROC is available on the Central Bank of Cyprus website: https://www.centralbank.cy/en/licensing-supervision/banks/register-of-credit-institutions-operating-in-cyprus.

The banking sector has made significant progress since the 2013 financial crisis resulted in a “haircut” of uninsured deposits, followed by numerous bankruptcies and consolidation. The island’s two largest banks are now adequately capitalized and have returned to profitability. However, the profitability of the banking sector as a whole is challenged by low interest margins, a high level of liquidity, and a still-elevated volume of NPLs. NPLs in the ROC are still the highest in the EU at 10.5 percent of total loans at the end of November 2022, compared to 15.1 percent a year earlier, albeit considerably lower than in 2014, when they reached 47.8 percent. Banks continue striving to reduce NPLs further, either by selling off portfolios or using recently amended insolvency and foreclosure frameworks. Aggregate banking sector data is available here: https://www.centralbank.cy/en/licensing-supervision/banks/aggregate-cyprus-banking-sector-data.

The ROC has a central bank – the Central Bank of Cyprus – which forms part of the European Central Bank. Foreign banks or branches are allowed to establish operations in the ROC. They are subject to Central Bank of Cyprus supervision, just like domestic banks. JPMorgan, Citibank, Bank of New York Mellon, and HSBC currently provide U.S. dollar correspondent banking services to ROC banks.

Opening a personal or corporate bank account in the ROC is straightforward, requiring routine documents. But because of a history of money-laundering concerns, banks now carefully scrutinize these documents and can conduct extensive due diligence checks on sources of wealth and income. A local bank account is not necessary for personal household expenses. Opening a corporate bank account is mandatory when registering a company in the ROC.

In recent years, the ROC has taken steps to address recognized regulatory shortcomings in combatting illicit finance in its international banking and financial services sector, tightening controls over non-resident shell companies and bank accounts. The ROC issued its first National Risk Assessment (NRA) of money laundering and terrorist financing in November 2018, available at: http://mof.gov.cy/en/press-office/announcements/national-risk-assessment-of-money-laundering-and-terrorist-financing-risks-cyprus. The ROC followed up with a specific NRA on the risks from Virtual Assets and Virtual Asset Service Providers in December 2021. The ROC is a member of the Select Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), a FATF-style regional body. Its most recent mutual evaluation (2019) and follow-up report (November 2022) can be found at: https://www.coe.int/en/web/moneyval/jurisdictions/cyprus.

*AREA ADMINISTERED BY TURKISH CYPRIOTS*

The “Central Bank” oversees and regulates local, foreign, and private banks. In addition to the “Central Bank” and the “Development Bank”, there are 21 banks in the area administrated by Turkish Cypriots, of which 16 are Turkish Cypriot-owned banks, and five are branch banks from Turkey. Banks are required to follow “know-your-customer” (KYC) and anti-money laundering (AML) “laws,” which are regulated by the “Ministry of Economy and Energy,” and supervised by the “Central Bank,” but AML practices do not meet international standards. Turkish Cypriot banks are not members of SWIFT, complicating international transactions. All international transfers depend on routing through Turkish banks.

Deposits, which have the largest share in the sector’s total liabilities, increased by 85.59 percent in a one-year period and reached 90 billion TL (USD 4.7 billion) at the end of September 2022.

The total NPLs of the sector, which was 1.8 billion TL (USD 9 million) as of the end of June 2022, increased by 6.12 percent to 1.9 billion TL (USD 10 million) as of the end of September 2022. There was a 24.17 percent increase in non-performing loans compared to the same period of the previous year. Note, the “Central Bank” converts all foreign exchange into TL in its reporting of total assets and liabilities, so these figures represent an aggregate of TL as well as U.S. dollars, British Pounds, and Euros.

### Foreign Exchange and Remittances

***Foreign Exchange*******REPUBLIC OF CYPRUS**

The ROC is a member of the Eurozone. The Eurozone has no restrictions on the transfer or conversion of its currency, and the exchange rate is freely determined in the foreign exchange market. (Note: The exchange rate used in this report is USD 1.00 = EUR 1.06, effective March 4, 2023.) There is no difficulty in obtaining foreign exchange. Since the 2008 global financial crisis, the European Commission has pursued several initiatives aimed at creating a safer and sounder financial sector, known as the Banking Union. These initiatives, which include stronger prudential requirements for banks, improved depositor protection and rules for managing failing banks, form a single rulebook for all financial actors in the member states of the EU.

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

The “TRNC” has a separate financial system from the ROC, linked closely with that of Turkey. The Turkish Lira is the main currency, although the Euro, U.S. dollar, and British pound are commonly accepted. The vast majority of business borrowing is derived from domestic and Turkish sources.

A devaluation of the Turkish Lira against foreign exchange rates (or the opposite) has a strong effect on the economy of the area administered by Turkish Cypriots. Wages across sectors are generally paid in Turkish Lira, but almost all real estate, rents, electronic goods, vehicles, and other expensive products are valued in foreign currency. Banks in the Turkish Cypriot administered areas provide lower interest rates for Euro or British pound loans than for Turkish Lira loans. Foreign investors are authorized to repatriate all proceeds from their investments and business.

Banks are free to keep foreign currency, act as intermediary in import and export transactions, accept foreign currency savings, engage in purchase and sale of foreign currency, and give foreign currency loans. All international correspondent banking services must route through Turkish banks.****

***Remittance Policies***

**REPUBLIC OF CYPRUS**

There are no restrictions or delays on investment remittances or the inflow or outflow of profits. Remittances may be moved through the regular banking system or through licensed Payment Institutions (PIs) or Electronic Money Institutions (EMIs), also regulated by the Central Bank of Cyprus.The Central Bank of Cyprus maintains two public registers, listing both PIs and EMIs, whether authorized by the Central Bank of Cyprus or authorized in other EU Member States with the right of freedom to provide services in the ROC.

The two relevant CBC registers are:

Register of Licensed Payment Institutions: https://www.centralbank.cy/en/licensing-supervision/payment-institutions/licensing-and-supervision-of-payment-institutions

Register of Electronic Money Institutions: https://www.centralbank.cy/en/licensing-supervision/electronic-money-institutions/licensing-and-supervision-of-electronic-money-institutions

### Sovereign Wealth Funds

**REPUBLIC OF CYPRUS**

The Parliament passed legislation in 2019 providing for the establishment of a National Investment Fund (NIF) to manage future offshore hydrocarbon and other natural resource revenue. Section 29 of the NIF Law specified that the Corporation to be set up shall invest the Fund in a diversified manner with a view to maximizing risk-adjusted financial returns and in a manner consistent with the portfolio management by a prudent institutional investor. The Fund is precluded from investing in securities issued by an ROC issuer (including the state) or in real estate located in Cyprus. This provision safeguards against the possibility of speculative development catering to the Fund and political interference favoring domestic investments for purposes other than the best interests of the Fund and the Cypriot people as a whole. Additionally, Section 30 of the law provides that the fund cannot invest, directly or indirectly, to acquire more than five percent of any one company or legal entity. The fund is not yet operational. Regulations for the NIF are still in draft and will require legislative approval. It will likely take several years before any revenues are generated from the ROC’s hydrocarbon assets.

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

There is no established sovereign wealth fund.

							7. State-Owned Enterprises					

**REPUBLIC OF CYPRUS**

The ROC maintains exclusive or majority-owned stakes in more than 40 SOEs and is making slow progress towards privatizing some of them (see sections on Privatization and OECD Guidelines on Corporate Governance of SOEs). There is no comprehensive list of all SOEs available but the most significant are the following:
                    - Electricity Authority of Cyprus (EAC);
                    - Cyprus Telecommunications Authority (CyTA);
                    - Cyprus Sports Organization;
                    - Cyprus Ports Authority;
                    - Cyprus Broadcasting Corporation (CyBC);
                    - Cyprus Theatrical Organization; and
                    - Cyprus Agricultural Payments Organization.

These SOEs operate in a competitive environment in accordance with commercial considerations. SOEs must provide non-discriminatory treatment in their purchase and sale of goods and services, although the Auditor General of the Republic, whose mandate includes auditing SOEs, occasionally reports on problems with SOE bidding procedures. These SOEs are generally dedicated to serving the local market and are only active in the ROC, although some of them — particularly, EAC and CyTA — are involved in regional infrastructure projects with neighboring countries but without investing in the United States. The state-owned EAC monopoly on electricity generation and distribution ended in 2014, although competition remains difficult given the small market size and delays in implementing new market rules. As an EU Member State, the ROC is a party to the WTO Government Procurement Agreement (GPA).

OECD Guidelines on Corporate Governance are not mandatory for ROC SOEs, although some of the larger SOEs have started adopting elements of corporate governance best practices in their operating procedures. Each of the SOEs is subject to dedicated legislation. Most are governed by a board of directors, typically appointed by the government at the start of its term, and for the duration of its term in office. SOE board chairs are typically technocrats, affiliated with the ruling party. Representatives of labor unions and minority shareholders contribute to decision making. Although they enjoy a fair amount of independence, they report to the relevant minister. SOEs are required by law to publish annual reports and submit their books to the Auditor General.

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

In the area administrated by Turkish Cypriots, there are several “state-owned enterprises” and “semi-state-owned enterprises,” usually common utilities and essential services.

In the Turkish Cypriot administered area, the below-listed institutions are known as “public economic enterprises” (POEs), “semi-public enterprises” and “public institutions,” which aim to provide common utilities and essential services.

Some of these organizations include:
                    - Turkish Cypriot Electricity Board (KIBTEK);
                    - BRTK – State Television and Radio Broadcasting Corporation;
                    - Cyprus Turkish News Agency;
                    - Turkish Cypriot Milk Industry;
                    - Cypruvex Ltd. – Citrus Facility;
                    - EMU – Eastern Mediterranean Foundation Board;
                    - Agricultural Products Corporation;
                    - Turkish Cypriot Tobacco Products Corporation;
                    - Turkish Cypriot Alcoholic Products LTD;
                    - Coastal Safety and Salvage Services LTD; and
                    - Turkish Cypriot Development Bank.

### Privatization Program

**REPUBLIC OF CYPRUS**

The ROC has made limited progress towards privatization, despite commitments to international creditors in 2013 to raise approximately USD 1.6 billion from privatizations by 2018. In 2017, opposition parties passed legislation abolishing the Privatizations Unit, an independent body established in March 2014. A bill to privatize the Cyprus Telecommunications Authority (CyTA) was withdrawn in May 2022, after five years of discussion. In December 2015, under the threat of strikes, the government reversed earlier plans to privatize the Electricity Authority of Cyprus (EAC). However, in recent years, the EAC has been forced to unbundle its operations in line with Cyprus Energy Regulatory Authority (CERA) recommendations and EU regulations. The EAC has created independent units for its core regulated activities, namely Transmission, Distribution, Generation, and Supply. Private firms have been offering renewable energy generation since 2003 and electricity supply since January 1, 2021.

In August 2020, the previous administration (under President Anastasiades) assigned the Larnaca Marina and Port Privatization project to an ROC-Israeli consortium, based on a 40-year lease agreement. The project started in April 2022 and is scheduled to be completed in four phases by 2037. It provides for port infrastructure, a marina, land redevelopment, a road network, green areas, parks and pedestrian areas as well as residential units and catering and recreation establishments. At a cost of about USD 1.3 billion (EUR1.2 billion), this project will be the biggest investment in the ROC so far.

The ROC also has long-standing plans to privatize the Cyprus Stock Exchange, sell the state lottery, and find long-term investors to lease state-owned properties in the Troodos area.

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

The airport at Ercan and K-Pet Petroleum Corporation have been converted into public-private partnerships. The concept of privatization continues to be controversial in the Turkish Cypriot community.

In March 2015, Turkish Cypriot authorities signed a public-private partnership agreement with Turkey regarding the management and operation of the water obtained from an underwater pipeline funded by Turkey. Within the area administrated by Turkish Cypriots, there has also been discussion about privatizing the electricity authority “KIBTEK”, Turkish Cypriot telecommunications operations, and the seaports.

In 2022, the “TRNC” and Turkey signed an economic protocol that included action items to privatize “KIBTEK,” sea ports, and the lottery “department,” in the area administrated by Turkish Cypriots.

							8. Responsible Business Conduct					

**REPUBLIC OF CYPRUS**

In recent years, responsible business conduct (RBC) awareness among both producers and consumers is growing in the ROC. Leading foreign and domestic enterprises tend to follow generally accepted RBC principles, and firms pursuing these practices tend to be viewed more favorably by the public. The Cyprus Stock Exchange is among the entities imposing a responsible code of conduct. Most professional associations also promote ethical business conduct among their members, including the Cyprus Bar Association, and the Institute of Certified Public Accountants of Cyprus. For example, the Cyprus Integrity Forum promotes transparency and accountability in business through its Business Integrity Forum certification program – see: https://cyprusintegrityforum.org/business-integrity-forum/.

The ROC does not specifically adhere to OECD Guidelines for Multinational Enterprises; however, multinationals are expected to follow generally-accepted RBC principles. ROC authorities have made some initial soundings considering the possibility of eventually joining the Extractive Industries Transparency Initiative (EITI – https://www.eiti.org/).

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

RBC awareness has grown among producers, consumers, and business in the area administrated by Turkish Cypriots. Firms pursuing these practices tend to be viewed favorably by the public.

***Additional Resources***

Department of State
                    - Country Reports on Human Rights Practices ( https://www.state.gov/reports-bureau-of-democracy-human-rights-and-labor/country-reports-on-human-rights-practices/ );
                    - Trafficking in Persons Report ( https://www.state.gov/trafficking-in-persons-report/ ); and
                    - Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities ( https://www.state.gov/key-topics-bureau-of-democracy-human-rights-and-labor/due-diligence-guidance/ )
                    - U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises ( https://www.state.gov/u-s-national-contact-point-for-the-oecd-guidelines-for-multinational-enterprises/ )
                    - Xinjiang Supply Chain Business Advisory ( https://www.state.gov/xinjiang-supply-chain-business-advisory/ )

Department of the Treasury
                    - OFAC Recent Actions ( https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions ).

Department of Labor
                    - Findings on the Worst Forms of Child Labor Report ( https://www.dol.gov/agencies/ilab/resources/reports/child-labor/findings  );
                    - List of Goods Produced by Child Labor or Forced Labor ( https://www.dol.gov/agencies/ilab/reports/child-labor/list-of-goods );
                    - Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World ( https://www.dol.gov/general/apps/ilab ) and;
                    - Comply Chain ( https://www.dol.gov/ilab/complychain/ ).

***Climate**Issues***

**REPUBLIC OF CYPRUS**

Promoting green investment is high on the ROC government’s agenda as it looks to make gains toward a green transition. The ROC Recovery and Resilience Plan under the EU’s Next Generation EU recovery instrument envisions a total of 58 reforms in exchange for 1.3 billion USD in EU funding (1.1 billion USD in grants and 220 million USD in loans). Fully 41 percent of the plan’s allocation for reforms and investments support climate objectives, ranging from green taxation, energy efficiency and renewable energy, and promoting more sustainable transport modes.

In the private sector, PWC Cyprus’ 2023 CEO Survey, released January 2023, revealed that CEOs of leading local companies saw climate risk impacting their cost profiles and supply chains over the next 12 months, with 58 percent developing a strategy for reducing emissions and mitigating climate risks. See: https://www.pwc.com.cy/en/press-room/press-releases-2023/pwc-26-annual-ceo-survey-press-release.html

							9. Corruption					

**REPUBLIC OF CYPRUS**

Corruption continues to undermine growth and investment in the ROC, despite the existence of a strong-anti corruption framework. A Eurobarometer survey conducted by the European Commission in March-April 2022 confirmed findings in earlier reports, ranking the ROC very near the bottom among EU member states in terms of various metrics measuring corruption perception. In this survey, 94 percent of Cypriots think the problem of corruption is widespread, compared to an average of 68 percent in the EU. In the same survey, 57 percent of Cypriots said they were personally affected by corruption in their daily life, compared to an average of just 24 percent across the EU. Perhaps even more alarmingly, 66 percent of Cypriots said they thought the level corruption had increased in the past three years, against 41 percent in the EU, who thought the same for their countries. As in the rest of the EU, Cypriots put political parties at the top of their list of groups they thought perpetrated corruption (at 70 percent). Other groups perceived as perpetrating corruption in the ROC were the healthcare system (60 percent), officials awarding public tenders (58 percent), and officials issuing building permits (57 percent). Corruption, both in the public and private sectors, constitutes a criminal offense. Under the Constitution, the Auditor General controls all government disbursements and receipts and has the right to inspect all accounts on behalf of the Republic. Fear of the Auditor General’s scrutiny is widespread. Government officials sometimes manage procurement efforts with greater concern for the Auditor General than for getting the best outcome for the taxpayer. Private sector concerns focus on the inertia in the system, as reflected in the Auditor General’s annual reports, listing hundreds of alleged incidents of corruption and mismanagement in public administration that usually remain unpunished or unrectified.

Transparency International ranked the ROC 51st out of 180 countries in its 2022 Corruption Perception Index – one place better than in 2021, when it ranked 52nd. Disagreements between the Berlin-based headquarters of Transparency International and its Cypriot division in 2017 led to the dis-accreditation of the latter in 2017 and the launch of a successor organization on the island called the Cyprus Integrity Forum (contact details follow).

GAN Integrity, a business anti-corruption portal with offices in the United States and Denmark, released a report on corruption in the ROC in November 2020 noting the following: “Although the ROC is generally free from corruption, high-profile corruption cases in recent years have highlighted the presence of corruption risks in the ROC banking sector, public procurement, and land administration sector. The close relationship between bankers, businesses, and politicians have resulted in the economic crisis that the country faced in 2012-2013, contributing to corruption in other areas (e.g., bias in the awarding of public tenders). Businesses may encounter demands for irregular payments, but the government has established a strong legal framework to combat corruption and generally implements it effectively. Bribery, facilitation payments and giving or receiving gifts are criminal offenses under ROC law. The government has a strong anti-corruption framework and has developed effective e-governance systems (the Point of Single Contact and the e-Government Gateway project) to assist businesses.” The report can be accessed at: https://www.ganintegrity.com/portal/country-profiles/cyprus/.

The ROC cooperates closely with EU and other international authorities to fight corruption and provide mutual assistance in criminal investigations. The ROC ratified the European Convention on Mutual Assistance in Criminal Matters. The ROC also uses the foreign Tribunal Evidence Law, Chapter 12, to execute requests from other countries for obtaining evidence from the ROC in criminal matters. Additionally, the ROC is an active participant in the Council of Europe’s Multidisciplinary Group on Corruption. The ROC signed and ratified the Criminal Law Convention on Corruption and has joined the Group of States against Corruption in the Council of Europe (GRECO). GRECO released its Fourth Evaluation Round Addendum to the Second Compliance Report on Cyprus July 8, 2022, available at: https://www.coe.int/en/web/greco/evaluations/cyprus.

The ROC is also a member of the UN Anticorruption Convention but is not a member of the OECD Convention on Combatting Bribery.****

***Resources to Report Corruption*****Government agencies responsible for combating corruption:

Financial Crime UnitCyprus Police HeadquartersAthalassa1478 NicosiaTel. +357 22 808080E-mail: fcu@police.gov.cyWebsite: https://www.police.gov.cy/police/police.nsf/index_gr/index_gr?opendocument

Unit for Combating Money Laundering (MOKAS)7 Pericleous Str.2020 StrovolosTel. +357 22 446004E-mail: mokas@mokas.law.gov.cyWebsite: http://www.law.gov.cy/law/mokas/mokas.nsf/index_en/index_en?OpenDocument

Auditor General of the Republic6 Deligiorgi Str.1406 NicosiaTel. +357 22 401300E-mail: omichaelides@audit.gov.cyWebsite: http://www.audit.gov.cy/audit/audit.nsf/home/home?opendocument

Anti-corruption NGO:

Cyprus Integrity Forum (CIF)38 Grivas Dhigenis Avenue & 3 Deligiorgis StreetPO Box 214551509 NicosiaT. +357 22 025772F. +357 22 025773E-mail: info@cyprusintegrityforum.orgWebsite: https://cyprusintegrityforum.org/

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

Corruption in the area administered by Turkish Cypriots continues to be a major problem, mainly in the public sector, allegedly involving politicians, political parties, and bureaucrats.

Given its small size and disputed status, international anti-corruption organizations do not evaluate conditions in the north.

According to a 2022 Corruption Perception Report carried out by Turkish Cypriot researchers at the Friedrich Ebert Stiftung (FES), a non-profit foundation funded by the German Government, 99 percent of businesspeople responding to the survey believe bribery and corruption occurs in northern Cyprus, while 72 percent believe corruption is a “very serious problem.” Respondents said bribery is most common in public tenders and licensing transaction, incentives and leasing of public land.

The “Audit Office” controls all disbursements and receipts and has the right to inspect all accounts. In its annual report, this office identifies specific instances of mismanagement or deviation from proper procedures and anecdotal evidence suggests corruption and patronage continue to be a factor in the economy.

							10. Political and Security Environment					

***REPUBLIC OF CYPRUS***

There have been no incidents of politically-motivated damage to foreign projects and or installations since 1974. U.S. companies have not been the target of violence. There were numerous relatively peaceful protests against the ROC government following the financial crisis of March 2013 and in response to the forced conversion of deposits into equity. Since then, protests against additional austerity measures have been fairly calm.

***AREA ADMINISTERED BY TURKISH CYPRIOTS***

There have been no incidents of politically-motivated damage to foreign projects and or installations since 1974. U.S. companies have not been the target of violence. Protests and demonstrations, usually targeting the “government,” are commonplace. They are generally peaceful and well-regulated; however, some demonstrations result in scuffles with police or minor damage to buildings.

							11. Labor Policies and Practices					

**REPUBLIC OF CYPRUS**

As an EU country, the ROC has robust labor standards, safeguarding the freedom of association and the right to organize and bargain collectively. The Department of Labor Inspection and other bodies effectively guard against forced labor, child labor, employment discrimination, and secure acceptable working conditions with respect to minimum wage, occupational safety and health, and hours of work. There are several social safety net programs, including unemployment insurance. There is likely some undeclared income in the ROC, as in most developed countries, but there are no indications the informal economy plays a decisive role here. Illegal migrants are sometimes used as cheap labor but this does not appear to be a systemic problem, and authorities do not hesitate to fine employers of illegal laborers.

The rate of unemployment in the ROC had been declining steadily in recent years, dropping from 16.1 percent in 2014 to 7.2 percent at the end of 2022 – at par with the Eurozone area. According to Eurostat, the ROC has a tertiary education attainment level of 36.3 percent of the total population – well above the EU average of 26.7 percent, and one of the highest in the EU. Many of these graduates are from UK and U.S. colleges and universities, resulting in an abundant supply of English-speaking staff. The ROC’s total labor force was estimated at 455,727 persons in 2022, broken down as follows: services, 80.3 percent; industry and construction, 17.4 percent; and agriculture, 2.3 percent. More women are joining the labor force and their percentage participation has risen from 33.4 percent in 1980 to 47.5 percent today. Applications for work permits for non-EU workers must be submitted to the Civil Registry and Migration Department by the intended employer and should be accompanied by a work contract stamped by the Ministry of Labor and Social Insurance. This ministry must certify that there are no available or adequately qualified Cypriots to carry out the work in question.

ROC labor law differentiates between layoffs and firing on redundancy grounds. In order to be eligible for redundancy pay, an employee must have worked in the same position for more than two years and must be laid off either due to: (a) budget constraints leading the employer to abolish the position, or (b) inability on the part of the employee to keep up with technological advances. Employees laid off by their employer are entitled to a redundancy payment depending on their length of service. Redundancy payments are equivalent to between two and four weeks of pay per year of service depending on length of service for up to 25 years, with a maximum of 75 weeks of pay or USD 58,300 (EUR 55,000) per employee, whichever is greater. Redundancy payments come out of a government fund, supported with employer and employee contributions. In addition to redundancy pay, a handful of employers, including banks and SOEs, offer severance pay to their employees, although this is not common in the private sector.

Some employers hire temporary workers or employ staff on personal contract to avoid hiring unionized labor, often offering less than the going rate under collective agreements. Similarly, some employers hire employees for a year in order to benefit from a wage subsidy of up to USD 1,166 (EUR 1,100) per month by the Human Resources Development Authority and then dismiss them as soon as the subsidy expires.

International companies are not required by law to hire union labor, but investors should be aware the ROC tends to have strong unions in several sectors. As of March 2022, the percentage of the labor force belonging to unions was unofficially estimated at approximately 50 percent, compared to the EU average of approximately 33 percent. The unions remain vocal opponents to privatizations and general austerity measures.

ROC public sector working hours are 07:30 – 15:00, Monday to Friday.

One of the last EU countries to do so, the ROC adopted a national minimum wage in August 2022. This rate, effective January 1, 2023, was set at USD 938 (EUR 885), rising to USD 996 (EUR 940) after six months’ employment. Employees in agriculture, shipping, and domestic workers are exempted from the minimum wage requirements, as are interns or individuals undertaking training for a degree or professional qualifications. Collective bargaining agreements between trade unions and employers cover most sectors of the economy. Wages set in these agreements are typically significantly higher than the legislated minimum wage.

Under the EU single market, EU citizens benefit from the right to free movement of workers. Employers are required to seek work visas for third-country nationals from the Civil Registry and Migration Department. The ROC caps the number of third-country nationals a company may employ. Some companies have noted seeking visas for their third-country national staff can be lengthy and cumbersome.

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

The 2021-2022 Special Edition Competitiveness Report published by the Turkish Cypriot Chamber of Commerce focused on proposed measures and economic policies to recover from the pandemic period. https://www.ktto.net/en/competitiveness-report-2021-2022-special-issue/. According to the previous 2019-2020 Turkish Cypriot Competitiveness Report, the greatest obstacle to doing business was an insufficiently trained workforce.

Reliable labor statistics are often difficult to obtain. The “State Planning Office” (“SPO”) estimated the total number of people employed in 2022 was over 130 thousand. The unemployment rate was 6.3 percent as of December 2022.

Women accounted for approximately 34.1 percent of the labor force. Around 10 percent of private sector workers and more than 65 percent of “semi-public” and “public sector” workers belong to labor unions. Workers are allowed to form and become members of unions. As of March 2023, the minimum wage was 11,800 Turkish Lira (USD 410) base salary per month.

Foreign persons are required to obtain work permits through their employer. Foreign entities may import their key personnel from abroad and are also permitted to hire trainees and part-time workers. A full-time work week is 40 hours for “public sector” employees.

Private sector employees can work up to 8 hours a day. After 8 hours, employees can continue to work up to 4 hours of overtime a day. Overtime during weekdays is paid at 110 percent of the base rate. On weekends and holidays, overtime is paid at 150 percent of the base rate. Employees cannot work on Sundays unless there is an emergency, or an approval by “labor authorities.”

Workers are able to exercise their right to bargain collectively, mainly in the public sector. “Public sector” and “semi-public sector” employees benefit from collective bargaining agreements. The “law” provides for collective bargaining.

According to “authorities,” the majority of foreign workers are from Turkey and work in the service (hotel, restaurant, catering) and construction sectors.

							12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs					

**REPUBLIC OF CYPRUS**

The U.S. International Development Finance Corporation (DFC) is not active in the ROC, but DFC finance and insurance programs are open and may be useful when bidding on build, operate, and transfer (BOT) contracts in the government-controlled areas.

Likewise, U.S. exporters should avail themselves of Export-Import Bank financing whenever possible. Please see: https://www.exim.gov/.

The ROC is a member of the Multilateral Investment Guarantee Agency (MIGA) and of the multilateral Convention on the Settlement of Investment Disputes between States. A full list of ROC multilateral agreements currently in effect is available from the ROC Office of the Law Commissioner website: http://www.olc.gov.cy/olc/olc.nsf/home_en/home_en?openform.

**AREA ADMINISTERED BY TURKISH CYPRIOTS**

See: https://investnorthcyprus.gov.ct.tr/

							13. Foreign Direct Investment Statistics