Cyprus: Good News For Foreign Investors As Central Bank Relaxes Repatriation Of Funds Rules

Lorys Charambolous, Tax-news.com, Cyprus

02 February 2001

Foreigners in Cyprus are now allowed to invest in the island's local equities and repatriate capital plus profits without fear of cumbersome restrictions. This is according to Senior Manager of the International Division at the Cyprus Central Bank, Spyros Stavrou, who says that the bank has recently relaxed its rules on repatriation: 'There is no bureaucracy or red tape when it comes to the repatriation of funds by foreigners.'

Reported in the Cyprus newspapers this week, the move was suspected by the private sector to be a response to widespread criticism that the Central Bank's exchange controls have deterred foreigners from investing in Cyprus. But Mr Stavrou denied this by saying that foreigners will invest in Cyprus depending on market conditions and not exchange controls.

Mr Stavrou confirmed that the new simplified repatriation process has been in force since last December. He explained that a foreigner simply has to provide a statement of account, contract notes, or documentation of some kind as evidence that the original funds came from another country, and then complete the usual procedure with the stockbroker who carried out the transaction. Once the evidence is accepted the stockbroker will inform the bank and the repatriation will be concluded. 'It's only after the transaction has been completed that the stockbroker needs to inform the Central Bank,' he said.

The Central Bank does not need to give its authorisation for any sum up to CY£ 500,000, but for amounts in excess of this figure the stockbroker should request authorisation and this can be performed over the phone. For excessively large funds the Central Bank says it will examine the case further and identify a time frame in which to repatriate the funds.

Cyprus' stockbrokers have been informed of the relaxed repatriation of funds process by the Central Bank, many of whom attended the Cyprus Stock Exchange (CSE) promotion, which took place in London yesterday. The event featured the simplified repatriation procedure with keynote speeches given by Central bank governor, Afxentis Afxentiou, who discussed the liberalisation of the monetary market; Finance Minister, Takis Klerides, who spoke of the Cyprus economy and his government's role in supporting the market; and CSE director, Nontas Metaxas, who highlighted the exchange's development.

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