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Cyprus - The Professional Services Sector and the Challenges of 2018

Cyprus - The professional Services Sector

The Professional Services sector in Cyprus is rebounding, following a steady growing trend, evident from the continuous increase of new companies being registered. This was mainly due to the fact that the Cypriot economy continues to gain trust and due to the recent tax reforms adopted.

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Apart from traditional markets such as Europe and Russia, there has been enhanced interest for investments in or through Cyprus from new markets such as Asia (e.g. China, India), Africa, the Middle East and the Arab world. The Professional Services sector succeeded to adapt to the new needs and demands of entrepreneurs, society and international enhanced regulation (especially in relation to compliance and exchange of information). In addition, new financial products such as licensing of mutual funds and investment firms are being promoted.

Despite the constant challenges of today's ever-changing political and economic international environment, Cyprus continues to remain a competitive financial centre with high-skilled professionals and significant comparative advantages, such as the stable and attractive tax system, its geographical location and the large double taxation agreement network that it has created.

Cyprus has fully implemented the directives in regards to money laundering and, since 2017, it has implemented the Common Reporting Standard (CRS) for the automatic exchange of information (AEOI). In addition, it continues to steadily strengthen itself as an international shipping centre. There is a large number
of vessels registered in the Cypriot register, while the number of ship-management companies that choose the island as their base is even larger.

The evidence demonstrates that the tourism sector is already performing well for this year. It is worth noting that a strategic redesign is being made, with enhanced efforts to attract new forms of tourism (nautical, medical, sport), expansion of the touristic season all year round, the construction of marinas and the gradual operation of a multi-functional casino resort. Furthermore, the forthcoming operation of the sub-ministry of Tourism incorporating CTO activities is expected to make the executive management of tourism-related issues more rapid and effective.

It is important to note that in recent years many organisations that have used Cyprus for their international activities have created substance in the country; employing staff, acquiring assets and transferring additional administrative activities such as accounting, either internally or through outsourcing. The mild climate, the high-skilled staff and the low cost of living and services, make Cyprus ideal to play an important role in a globalised environment.

© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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