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Government responds to issues raised by foreign investors

The government’s ministers were on hand to answer a series of questions raised by key foreign investors in Cyprus, who gathered to hear what measures have been taken since they last offered their feedback to the government back in June.

The Q&A took place during the “Foreign Investors Dialogue with Government: From feedback to action” at the Presidential Palace, organised by the government and Invest Cyprus as a follow-up to the roundtable that was held with investors back in June. The new meeting was arranged so some of the government’s key ministers could present the actions they have taken to address the concerns investors raised in the previous meeting.


Here are some of the issues raised by some of the island’s most prominent foreign investors:

Alexey Gubarev, Co-Founder & Board Member at Palta

Alexey Gubarev, Co-Founder & Board Member at Palta, thanked the government for the improvements especially for licensing, but raised the issue of schools and the “complicated process” of bringing teachers for foreign pupils. “There are not enough teachers, we need more,” he said.

With the foreign companies coming to Cyprus “we need around 10,000 to 20,000 new seats in schools in the next five years,” he said and wondered whether the building of schools could be exempted from the 19% VAT, noting “we will perhaps need in the next five years, ten to fifteen new schools.”

Responding to the question, Education Minister Athena Michaelidou said there is a surplus of teachers in Cyprus with high qualifications and fluent in English who could be utilised, noting that there is procedure for teachers from abroad which entails the alignment of their qualifications with the Cypriot requirement “but it doesn’t have to take so long”.


On his part, Interior Minister Constantinos Ioannou said the Ministry has implemented a fast-track procedure on building permits, noting the new law for strategic investment covers building of schools.

Regarding the estimates for the need of school capacity, the Interior Minister said that a more thorough projection should be drafted, noting that “if we are talking about these figures we have to move faster”.

On the issue of financial incentives, Keravnos said we have to discuss the whole issue with other Ministers but “I am sure we will see how to proceed with this issue.”

Jaro Popowic, Chief Brand Lead at Mercuryo

Jaro Popowic, Chief Brand Lead at Mercuryo, said the company has operated in Cyprus since 2018 and employs quite a lot of high tech IT professionals. He was keen to know how the government plans to proceed with its digital transition.

The Deputy Minister of Research, Innovation and Digital Policy Nicodemos Damianou was on hand to explain that a number of transformational projects will be implemented this year that will update the infrastructure and the process around it.

“The aim is to have this open and modern infrastructure in the next few years,” Damianou said.


Valentinos Polykarpou, Chairman of TechIsland and General Manager of Wargaming

Valentinos Polykarpou, Chairman of TechIsland and General Manager of Wargaming, raised the issue of allowing private universities to issue Greek language proficiency certificates, with Education Minister Michaelidou responding that the amendments were a first step and the Ministry is open for consultations with other universities.

Alexander Chekarev, Global Director, Government Relations / Public Policy at inDrive

Alexander Chekarev, Global Director, Government Relations / Public Policy at inDrive, raised the issue of transportation in Cyprus and especially between airports, with Deputy Ministry to the President Irene Piki replying that the government and the Ministry of Transport is working on a plan to improve congestion in general, utilising more buses, bicycle lanes, noting that there is number of infrastructure plans coming the next years.

Arthur Mamedov, CEO of TheSoul Publishing

Congratulating the government on its “tremendous work in such a short timeframe”, TheSoul Publishing’s CEO Arthur Mamedov raised the difficulties international investors are facing in finding competitive banking services in Cyprus, what with the island’s offering of banks being too small.

He said he knows of dozens of companies that opted to go to the UK, Portugal or another country instead, “simply because they had easier access to bank services”. He wondered, “Is addressing this a part of the government’s vision?”

Mamedov added, “We bank over several countries and the level of services in Cyprus is almost the lowest among the countries where we do banking in, and the reason this happens is simply, the need for more banks. A disruption of the banking market”.

Responding, Finance Minister Makis Keravnos pointed out that the government cannot intervene in the banking sector. “But we are in contact all the time with the Central Bank of Cyprus and banks’ association.”

He said specific measures to improve the competitiveness of Cyprus and its companies are in the pipeline: namely, the National Development Agency and the other is the Cyprus Equity Fund. But as for the banking sector and its regulation, Cyprus is obliged to follow the policies of the ECB, Keravnos stressed.

Nayef Kassatly, Managing Director of Kassatly Chtaura

Nayef Kassatly, the Managing Director of Kassatly Chtaura, which is currently building a huge factory in Ypsonas, wondered whether there was a provision to allow investors to build accommodation for their blue collar workers in non-residential areas, provided this accommodation complies with health and safety regulations.

Interior Minister Ioannou was keen to stress the government’s policy of avoiding creating what he called low-income camps or ghettos.

“The reason we have urban planning is because we evaluate the needs and we have a certain urban planning,” Ioannou pointed out. “We cannot, just because it is an easy solution, build on agricultural land for blue collar workers. We don’t want to create low-income camps, ghettos. So we are offering incentives instead, such as the extra building coefficient.”

He continued, “Giving permits to build on agricultural land… I am opposed to that. And the government opposes to that. Industrial zones are for industry, not for housing. It is hazardous, there are lots of reasons why you can’t do that.”

This, said Ioannou, was why the government wishes to distance itself from terms such as social housing; “The word has a bad connotation, it happened in other countries and leads to discrimination.”

Kassatly also raised the issue of high energy prices, which Energy Minister George Papananastasiou said was a general issue facing the country. “We give subsidies. We use other technologies, other than power generation, such as photovoltaics and batteries, to get the bill far lower.”

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