CYPRUS
to refinance its debt; as well as to provide as much
liquidity to the Cypriot banks as is needed during this
period: €2.5bn will recapitalise the Cypriot banking
sector, €4.1bn will redeem maturing government debt
and €3.4bn will cover the government’s fiscal needs in
the next three years.
The Cypriot president has been commended by
European finance ministers on the government’s
swift reaction to restructure Laiki Bank to be split
into two banks – a “good bank” taking the good loans
and deposits up to €100 000 which are guaranteed
by the Cypriot government; and a “bad” bank which
will go into liquidation. The Bank of Cyprus will be
recapitalised using a percentage of the money from
deposits over €100 000 in exchange for shares in the
bank.
The government also imposed capital controls (which
are now virtually lifted) to ensure there was not a run
on the banks thereby preserving Cyprus’ reputation as
a reliable banking hub.
Cyprus’ global appeal
As a corporate investment destination, Cyprus is widely
recognised as strategically being a very important
business centre excelling in financial services, shipping
38
Offshore Handbook 2013
and maritime activities. Cyprus has a highly educated
workforce, is a global player offering true ease-of-doingbusiness platforms and has a track record of adopting and
implementing solid macroeconomic strategies. Being
conveniently located at the crossroads of three continents
(Africa, Asia and Europe) gives Cyprus a distinct
advantage for businesses wishing to be exposed to every
market – all the while offering access to top facilities,
services, amenities and infrastructure. Rounding off the
appeal is Cyprus’ low corporate tax rate, capped at 12.5%.
Cyprus’ vast natural gas reserves
Cyprus identified 13 sectors in their Exclusive Economic
Zone (in the seas that exclusively belong to them) and in
late 2011 Cyprus entered the natural gas game in a big
way. The US company Noble Energy was contracted to
do initial exploration in the furthest South sector (sector
12) and the initial findings there excited not only the EU
but energy industry as a whole. seven trillion cubic metres
of natural gas (conservatively worth €100bn per annum)
was discovered in this sector alone; with over €100trn per
annum anticipated for all 13 sectors! This is the largest
find to date in The Med; and the implications for Cyprus
in the short, medium and long term are enorm ????9??)?????????
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