Cyprus is situated in the north eastern basin of the Mediterranean Sea at the crossroads of three continents: Europe, Asia and Africa. It is 65 km south of Turkey, 328 west of Israel, 385 north of Egypt, 980 south east of Athens. The strategic location of the island has played an important role in its continuing development into a financial centre. With an area of 9,251 sq km, Cyprus is the third largest island in the Mediterranean after Sicily and Sardinia.

The Cyprus Economy
The Cyprus economy is based on the free enterprise system. The private sector is the backbone of economic activity, with the government’s role being limited to monitoring the economy and the provision of public utilities, although with Cyprus’ accession to the EU, privatisation of public utilities is inevitable.

Cyprus and the EU
The Republic of Cyprus became a member of the European Union from 1 May 2004. The accession of Cyprus to the EU and the adoption of the acquis communittaire have given rise to new challenges and opportunities in the business world in Cyprus. Moreover, a number of new funding opportunities became available from EU funds aiming mainly to support the development of business activities in the manufacturing, agriculture and agrotourism sectors as well as human resource upgrading and the development of the rural areas of the island. Cyprus has recently entered the European Exchange Mechanism (ERMII). The Government of Cyprus has already successfully implemented a strategic plan when the euro was introduced. Business in Cyprus has now faced the challenge and taken all of the necessary action which ensured the smooth transition to the euro in January 2008.

Political and Social Environment
Cyprus is an independent and sovereign Republic with a presidential system of government. The elected President of the Republic is the Head of State and takes precedence over all persons in the Republic. His term of office is set for a five year period but he may be re-elected for an unlimited number of terms. Legislative power lies in the hands of the House of Representatives, the 56 members of which hold office for a period of five years. Cyprus’ legal system has been structured on its English counterpart. English case law is closely followed and all statutes regulating business matters and procedures are based essentially on English laws.