Chrysilios Pelekanos, Partner Head of Indirect Tax Department, PwC Cyprus & by Keshav Doolar, Manager of Direct Tax Department, PwC Cyprus
On December 29, 2022, India's Minister of External Affairs, Dr. S. Jaishankar paid a two-day visit to Cyprus. Bilateral relations between the two countries have traditionally been very close and friendly. In fact, 2022 marked 60 years of diplomatic relations between India and Cyprus. During the visit of the Indian Minister, three important agreements were signed between the two countries, which relate to (a) cooperation in the field of defense and security, (b) the declaration of intent to conclude an Agreement on Migration and Mobility and (c) the International Solar Alliance (International Solar Alliance) in the context of the Paris Agreement on climate change. In addition, various issues were discussed between the Ministers of the two sides, in which Cyprus and India cooperate more and more closely and have the scope to further develop their existing economic and diplomatic ties. More specifically, the seven areas identified and agreed that Cyprus and India should proceed to further deepen their relations are as follows: Finance, Shipping, Tourism, Knowledge Economy, Mobility Flows, Third Country Projects and Regional Cooperation of the Mediterranean.
Cyprus is among the top 10 investors in India with a cumulative investment of $12 billion for the period April 2000 to September 2022. These investments as FDI equity inflows were made in sectors such as services, computer and software development, automotive , manufacturing, real estate, cargo handling, construction, shipping and pharmaceuticals. In mutual funds, Cyprus is classified as Foreign Portfolio Investors (FPIs) eligible for Category I licence. Cyprus is one of three countries, outside of the Financial Action Group countries, to have received such approval from the Central Government of India. This makes it easier for Cypriot investment funds, investors and asset managers to gain access to the Indian markets.
In December 2021, Invest India and Invest Cyprus signed a Memorandum of Cooperation, which aims to in strengthening bilateral efforts to
increasing mutual investment activities and supporting business cooperation between Indian and Cypriot companies. Cyprus can act as an ideal destination for attracting, managing, structuring and channeling trade and investment flows to Europe and India, while offering a favorable and efficient organization to foreign entities. In this direction, the country's advantages linked to its business environment, its investment regime and compliance with international standards, the regulatory framework, political and social stability, investment protection agreements, the flight connectivity, infrastructure and highly skilled workforce.
The visit of the Indian Minister of External Affairs to Cyprus sent a positive message about the strong ties maintained by the two countries, clearly demonstrating the will for further cooperation and development of economic and political ties at the highest level. There is optimism that these initiatives will be successful in giving new impetus to Cyprus-India relations, which are expected to strengthen business cooperation and stimulate trade and sustainable development of the two countries.