Cyprus Market Opportunities

Cyprus Market Opportunities

MFA: Strategic opportunities for foreign exporters

The Cypriot economy is very open, heavily dependent on tourism, international financial services, commercial higher education and some other services whose external demand Cyprus cannot influence. The sectors traditionally forming the basis of economic growth will recover slowly and will probably be dampened in the long term by the crisis in foreign demand.

Moreover, the covid-19 pandemic has hit Cyprus at a stage of expected economic cooling, its effects will be profound and will be felt across all major productive sectors. The speed of restarting growth will depend not only on foreign demand but also on the extent of fiscal stimulus and the resumption of household consumption, which, however, is hindered by high public (113.3% of GDP) and private (110.45% of GDP) indebtedness, both with the prospect of further deepening.

The implemented and so far approved measures to mitigate the effects of the covid-19 pandemic amount to EUR billion, of which EUR billion is intended as a financial injection into the state treasury. The remaining EUR billion has been set aside for direct support of companies, which includes support for companies with suspended activity as well as compensation of 60% of their workers’ wages. The government has developed several programs to support small and medium-sized enterprises.

It also provides state guarantees for commercial loans in cooperation with the EIB and other international institutions. Concessions in the form of reduced VAT, tax and social insurance relief and the possibility of late payment of levies and loans were also introduced. Support programs for companies are financed by the Cypriot government for about half.

Post-COVID-19 opportunities

Transport industry and infrastructure

Repairs and construction of roads and road bypasses, bicycle paths and sidewalks are underway in the Republic of Cyprus. The solution is a proposal for the construction of a special lane for buses in the capital Nicosia, which should also serve trams in the future. The plan is to modernize and rebuild two ports on the southern part of the island. The placement of smart bus stops and charging points for electric cars is expected. Projects of this type in Cyprus are largely financed by the European Union, and tenders are issued in English, which enables participation by Czech companies as well.

ICT

The state is digitizing the state administration, and the government has allocated EUR 85 million to this large-scale government project of the Ministry of Research, Innovation and Digital Policy. The Republic of Cyprus would like to aspire to the position of a regional IT hub. Although there has been some progress in the sector over the past year (the Ministry of Research, Innovation and Digital Policy was opened in March 2020), Cyprus still has a long way to go. The modernization of services became one of the government’s priorities already in 2019, but during the pandemic it acquired a completely new dimension and resources.

Czech companies and their solutions can find application mainly in the areas of automatic data processing, SW network infrastructure and database systems, authentication or cyber protection of IT systems, modernization of telephone services, etc. In addition to state administration, there are also opportunities in the field of financial technology, where demand is already growing on the part of banks and insurance companies, which, as a result of the covid-19 pandemic, manage to change the long-term ingrained rigid habits of clients and are slowly switching to online services.

Services

According to allcountrylist, the tourism sector is one of the most important in the Cypriot economy (about 20% of GDP). The government focuses on its further development and diversification so that this sector is regionally competitive. The relatively short post-pandemic period will be critical for the recovery of the growth curve in this sector. The Minister for Tourism has drawn up a detailed plan that should help tourists return to the island. According to him, in 2030 the number of tourists should be even higher than in 2019, when less than 4 million tourists visited the island.

The investment plan focuses on, among other things, the development of wellness and agritourism, the construction of sports centers and theme parks, as well as the reconstruction and modernization of hotels and accommodation facilities. Opportunities are offered here for Czech companies focused, for example, on hotel equipment, incl. e.g. designer lighting, or equipment for sports, information centers and theme parks. EUR 18.6 billion is earmarked for tourism recovery.

Water management and waste industry

For a long time, Cyprus has significantly fallen short of the adopted EU goals in the field of waste treatment, recycling less than a quarter of solid municipal waste, and the majority of it, on the contrary, is landfilled. In the field of recycling, there are only two non-profit companies associated in the European organization PRO EUROPE (similar to Eko-Kom in the Czech Republic) focused on recycling batteries and old appliances operating in the Republic of Cyprus. From 2020, the government decided on stricter limits for the share of landfilling and at the same time increased the mandatory percentage of ecologically recycled waste.

The Ministry of Agriculture plans to introduce programs such as “I pay for how much I throw away” or “cleaner beaches in hotel areas” – following this program, a tender will be issued for the import of garbage containers especially for hotel areas. Pharmaceuticals should also start to be recycled. The construction of new facilities for the energy utilization of waste and related infrastructure is planned, especially municipal waste sorting facilities and operations for the processing of recyclable material. There are no domestic manufacturers/suppliers, so there is an opportunity for Czech companies.

Healthcare and pharmaceutical industry

Despite the covid-19 epidemic, the Government of Cyprus completed the General Health Insurance Scheme (GESY), the full implementation of which began in June 2020. GESY includes both public and private hospitals and introduces a fully competitive environment from the client’s perspective. Due to the pandemic situation, investments in the healthcare sector are increasing, both from state and EU sources. State hospitals will have to fundamentally invest in infrastructure and equipment, in the future they should gain complete autonomy with the authority to independently purchase medical equipment directly, which offers significant opportunities for Czech exporters.

Czech medical technology and rehabilitation aids have a very good reputation in Cyprus and successful reference projects are implemented here. This sector represents one of the main areas for direct import of industrial production. Dozens of Cypriot doctors educated in the Czech Republic also act as a natural lobby. The Cyprus Ministry of Health announces new tenders for the supply of medicines and medical supplies almost every week.

Cyprus Market Opportunities