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Cyprus IBCs Register Small Rise In 2001

by Lorys Charalambous, Tax-News.com, Nicosia

19 April 2002

According to a Cyprus Central Bank official, the jurisdiction has about 14,000 active International Business Companies, of which about 1,100 have offices and staff on the island. This represents a small increase on 2000, despite the island's moves towards the EU and the OECD which might be thought to have compromised its attractions as an offshore base.

Spyros Stavrou, Senior Manager International Division at the Central Bank told the Financial Mirror that in 2001, the number of new registrations reached 5,800 compared to 5,700 in 2000, but in the same period, the Central Bank also revoked the permits of 3,960 companies.

The Central Bank counts as 'active' just those companies which submit annual accounts. Stavrou said the Central Bank closely follows the development of IBCs and has repeatedly received full marks from foreign regulatory authorities for the way it ensures that companies do not engage in money laundering or other illegal acts.

“However, part of the foreign media continues to generate negative publicity against Cyprus and focuses on the number of permits issued since the concept started as opposed to the actual number of 14,000 active companies, which by international standards is not large,” said Stavrou.

81% of the 1098 IBCs with fully fledged offices in Cyprus have EU and North American owners. The IBCs employ 3,175 foreigners and 2,900 Cypriots. Stavrou said of the 2,900 Cypriots employed, some 900 are university graduates, adding that in recent years, more and more Cypriots have been filling up managerial posts.

The majority of the IBCs are in international trade, marketing and distribution, followed by shipping, ship management, business and professional consulting as well as banking and financial services.

Stavrou told the Financial Mirror that foreign exchange earnings from the offshore industry rose to CYP293m in 2001 from CYP268m in 2000, with revenue from foreign shipping companies at CYP80m.

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