By Andrea Busfield/Nicosia
Cyprus’s “health-over-wealth” response to the pandemic has made the island an increasingly desirable place for investors, according to new global citizenship figures.
Applications to invest and stay in Cyprus jumped by 250% in the first quarter of 2020 compared to the same period in 2019.
Data analysts also predict a further shift in global movement with those who can afford it choosing to live in countries that have better weathered the crisis.
Global strategy adviser Parag Khanna, founder of FutureMap, said, “The combined effect of the Covid-19 pandemic on public health, the global economy and social behaviour may augur deeper shifts in our human geography — and our distribution around the world.
“As the curtain lifts, people will seek to move from poorly governed and ill-prepared places to more proactive countries with greater resilience and better medical care.”
The Mediterranean island of Cyprus – which boasts 320 sunny days a year – has always profited handsomely from tourism, pulling in €54.6mn in 2019.
However, when the pandemic started to run unchecked throughout Europe, Cyprus closed all airports and shut up shop. These early restrictions have largely paid off.
The latest figures released by the government show the total number of coronavirus cases on the island at 935. The health ministry has recorded 17 deaths.
Tourism has paid a heavy price – hotels remain closed, as do restaurants, and the island’s beaches are almost empty, though restrictions on movement have been relaxed since May 21.
It is not yet known when travel restrictions will be lifted yet there remains strong interest in Cyprus – as a long-term destination rather than a holiday hotspot.
The sharp rise in year-on-year applications for the island’s real estate-linked investment migration programme reveals a desire to live in Cyprus that experts predict will only be helped by the government’s swift response to the pandemic, not to mention recent studies which showed a strong correlation between severe vitamin D deficiency and mortality rates.
Christian Kalin, chairman of the global citizenship firm Henley & Partners, said, “Investment migration has shifted from being about living the life you want in terms of holidays and business travel to a more holistic vision that includes healthcare and safety.”
Although ‘Golden Visa’ programmes have been criticised by the European Union, Cyprus is one of a number of countries offering permanent residency opportunities to investors. Other governments offering similar incentives include Australia, Austria, Antigua, St Kitts and Nevis, Tuvalu, Vanuatu, Portugal, Switzerland, Montenegro and Malta.
These days, tourism is no longer the golden goose it once was and Nicosia-based research consultancy Sapienta Economics believes the country’s real GDP may only contract by between 3.5% and 9.2% in 2020 as a result of Covid-19.
Director Fiona Mullen said: “Tourism remains a key driver of growth in Cyprus, accounting for 6.1% of GDP in 2019, and with obvious knock-on effects for sectors such as construction and retail.
“However, its impact is not as big as it was in the past, having been overtaken by sectors such as finance and insurance, professional services and real estate.
“We estimate that these days the total contribution of tourism to GDP is 12%, down from almost 20% in 2000.”
Since the financial crisis of 2008, Cyprus has been actively courting foreign direct investment into the country, offering a number of attractive incentives to establish the island as a world-class destination for international business activity.
George Campanellas, CEO of the government agency Invest Cyprus, said, “In recent months we have seen increasing interest in investment opportunities on our island from several countries, including Qatar.”
Offering one of the lowest corporate tax rates in the EU as well as multiple exemptions for companies and individuals, the discovery of natural gas has helped bolster the government’s ambitions.
As well as positioning itself as an energy hub in the eastern Mediterranean, Cyprus is fast becoming one of the top emerging investment fund centres in Europe. The boom in real estate and construction though slowed by the pandemic shows no sign of abating with prestigious large-scale projects continuing to attract investment as well as world-class stars such as Shakira and her footballer husband Gerard Pique, who have reportedly bought a huge new villa off the west coast of the island.
Cyprus also has an enviable and globally-respected reputation in the maritime industry, with the island considered to be one of the most reliable and competitive shipping centres in the world in terms of services, registration fees and taxes.
And the latest addition to the island’s business portfolio has even lured Hollywood hotshot Nic Cage over after the government gave production companies that film in Cyprus a choice between a cash rebate or tax credit, among other incentives.
Campanellas said the end goal was to establish Cyprus as a world-class destination for international business activity and investment.
While acknowledging the huge role holidaymakers play in the economy, he said a recent survey had shown a high level of satisfaction among investors at the government’s handling of the coronavirus crisis, which has all but killed tourism for 2020.
Campanellas said, “Considering the current global circumstances, we know that the island cannot rely heavily tourism for the recovery of the economy and we actually have much more to offer the wider world. That’s why we put extra attention in implementing our strategic plan – before the pandemic was even a consideration.
“Our objectives are simple and attainable. We want more tech companies to move their headquarters to Cyprus, we want to promote Cyprus as a European centre for investment funds and fund managers, we want to strengthen the higher education sector, develop the filming and animation industry, and attract even greater investment in our renewable energy and tourism projects.
“The world is changing and we are determined to be part of that change – and emerge stronger from this crisis.”
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