Cyprus Trade

Subchapters:

  • Business Relationships
  • Foreign direct investment
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Business relations

Trade relations with the EU

2017 2018 2019 2020 2021
Exports from the EU (million EUR) 943.5 1,082.6 1,250.6 914.4 ON
Imports into the EU (million EUR) 4,445.70 4,672.30 4,826.90 4,427.20 ON
Balance with the EU (million EUR) 3,502.2 3,589.7 3,576.3 3,512.9 ON

Source: European Commission

Trade relations with the Czech Republic

Cyprus steadily occupies the 60th-70th place among Czech business partners in the world, in terms of the total volume of trade and Czech exports. For the year 2021, Cyprus was in 71st place in terms of turnover with trade partners of the Czech Republic. In recent years, the interannual trade turnover index between the Czech Republic and Cyprus has recorded relatively dynamic development: 2017 (82.7%), 2018 (90.7%), 2019 (131.8%), 2020 (93.3%) and 2021 ( 93.7%). Even the trade turnover statistics between the Czech Republic and CY are distorted especially by re-exports. In the long term, approx. 2,000 companies originating from the Czech Republic have been registered in Cyprus. Their number, however, is decreasing with the changing rules on ownership structure and taxation.

  • Allcountrylist: Overview of major industries in Cyprus, including mining, construction, transportation, tourism, and foreign trade.
2017 2018 2019 2020 2021
Exports from the Czech Republic (billion CZK) 0.8 1.7 2.7 2.4 2.3
Imports to the Czech Republic (billion CZK) 2.2 1 0.8 0.9 0.8
Balance with the Czech Republic (billion CZK) 1.4 -0.6 -1.9 -1.5 1.4

Source: CZSO

Trade relations with countries outside the EU

As a small island economy with a low population and minimal domestic production, the Republic of Cyprus is generally dependent on imports that exceed exports. However, Cyprus’ foreign trade and financial statistics are heavily influenced by a large share of re-exports, international financial transfers and the shipping sector. This fact is due to the nature of the Cypriot economy, where around 250,000 companies (mainly foreign) are registered in Cyprus, which do not carry out their main business activities in CY.

2017 2018 2019 2020 2021
Exports from countries outside the EU (million EUR) 1,851.3 3,169.10 1,828.50 1,782.50 2,348.80
Imports to countries outside the EU (million EUR) 3,402.4 4,519.6 2,931.1 2,921.9 ON
Balance with non-EU countries (million EUR) -1,551.1 -1,309.7 -1,245.8 -1,239.6 ON

Source: EIU, Eurostat

Foreign direct investment

The state of foreign direct investments in the Czech Republic at the end of 2020 reached CZK 4,17billion. According to the Czech National Bank, foreign direct investment from Cyprus amounts to 4.7%. According to Dun & Bradstreet, in 2022 companies registered in Cyprus owned Czech companies in the amount of CZK 50.57 billion of invested capital in the share capital (in 2021 it was CZK 41.94 billion). Thus, in 2022, Cyprus ranked 6th (behind LU, DE, NL, AT and GB) among the twenty largest foreign owners of Czech companies in terms of the volume of capital invested in the share capital.

FTAs and treaties

Treaties with the EU

The Republic of Cyprus is part of the EU.

Contracts with the Czech Republic

Contract base + commentary in general and commentary on the most important contracts and what follows from them.

After the accession of both countries to the EU, a number of bilateral treaties remained formally in force, the provisions of which were replaced by a later amendment contained in the acquis communautaire. Most of the bilateral agreements were concluded during the time of Czechoslovakia, some of them will therefore be revised. However, the authorities of the Czech Republic cannot provide effective consular and legal assistance in the occupied territory of the Republic of Cyprus (north of the island).

  • Defense cooperation agreement of 11/19/2012
  • Agreement on exchange and mutual protection of classified information dated 06/09/2011, valid from 09/01/2012
  • Agreement on the avoidance of double taxation and the prevention of tax evasion in the field of income tax dated 28/04/2009, valid on 26/11/2009
  • Agreement on the international road transport of passengers and goods of 20/05/2002, valid from 22/06/2005
  • Agreement on the promotion and mutual protection of investments dated 15/06/2001, valid from 25/09/2002
  • Contract on social security of 19 January 1999
  • Agreement on economic cooperation of 8/4/1986, valid from 9/10/1986
  • Protocol to the Agreement on Economic Cooperation from 8 April 1986, valid from 29 December 1987
  • Agreement on legal assistance in civil and criminal matters dated 23/04/1982, valid from 18/05/1983
  • Consular Convention of 12/05/1976, valid from 27/07/1978
  • Agreement on cooperation in the field of tourism dated 8/5/1974, valid from 7/2/1975
  • Convention on cooperation in the field of health care dated 29/06/1972, valid from 25/05/1973
  • Agreement on cooperation in the field of culture, science and education of 16/04/1971, valid from 01/07/1971
  • Air Transport Agreement of 11/13/1967; valid from 30 September 1968
  • Agreement on scientific and technical cooperation of 11/13/1965

Developmental cooperation

The Czech Republic does not provide development aid to Cyprus. There are currently no joint development projects in third countries either.

The European Commission has been providing an assistance program to the Turkish Cypriot community on the island (northern part of the island) since 2006. The goal of the program is to support the development of the territory of northern Cyprus and prepare for its inclusion in the EU in the event of the unification of the island. Between 2006-2020, more than EUR 555 million was allocated in this area. Czech companies may be involved in building and repairing infrastructure, especially water infrastructure.

Prospective fields of study (MOP)

Healthcare and pharmaceutical industry

The sector represents one of the main areas for the direct import of industrial production – state hospitals will have to make substantial investments in infrastructure and equipment. Dozens of Cypriot doctors educated in the Czech Republic also act as a natural lobby. Specific opportunities for Czech companies will be mainly in the supply of hospital equipment – ​​beds, medical equipment, instruments. In January 2022, the construction of the new psychiatric clinic Athalassa began with a budget of €40 million (CZK 1.03 billion).

ICT

Modernization of services has become one of the government’s priorities. €283 million (CZK 7.3 billion) was set aside for Cyprus from the European Fund for Reconstruction and Resilience for the digitization of state administration and the private sector. Concrete opportunities for Czech companies could be especially in the creation of software for e-government, e-justice, e-health, broadband, smart cities, digital transformation of schools, smart management of water management, connection of authorities’ databases.

Energy industry

Cyprus is not fulfilling its obligations in the area of ​​reducing CO2 emissions or increasing the share of energy produced from renewable sources. Specific opportunities for Czech companies are in the development of infrastructure for the production and distribution of electricity, primarily from solar and wind energy. In accordance with the long-term European policy of cleaner energy, Cyprus allocated €93 million (CZK billion) from European subsidies to support the construction of renewable energy sources.

Water management and waste industry

For a long time, Cyprus significantly lags behind the EU’s goals in the area of ​​waste treatment, recycling less than a quarter of solid municipal waste, the majority of which, on the contrary, is landfilled. Cyprus invests €1 million (CZK 383 million) within the EU project LIFE-IP CYzero WASTE in waste management. Specific opportunities for Czech companies are in the creation of infrastructure for waste collection and sorting in the southern part of the island.

Services – Tourism

The tourism sector is one of the most important in the Cypriot economy. The government focuses on its restoration, development and diversification. Opportunities are offered here for Czech companies (equipment of hotels, including e.g. design lighting, sports, information centers and theme parks). €18.6 billion (CZK 482 billion) is set aside for the restoration of tourism after the pandemic.

Transport infrastructure

Repairs and construction of transport infrastructure are underway in the Republic of Cyprus, incl. bike paths and sidewalks. The plan includes, for example, the modernization and reconstruction of two ports on the southern part of the island. Concrete opportunities for Czech companies are, for example, in the supply of “smart” public transport stops, traffic lights and signs, charging points for electric cars and other parts of the transport infrastructure (construction of bridges). At the end of 2021, a tender was announced for the construction of 11 km of a four-lane expressway with a budget of €89 million (CZK billion).

Cyprus Trade