Thursday, 29 July 2010
Introduction
Cyprus became an independent state in 1960, after 82 years of British rule and is a politically stable democracy with a system of government based on that of other Western Democracies where human rights, political pluralism and private property are safeguarded. Cyprus acceded to the European Union on the 1st of May 2004. Cyprus is also a Member of the United Nations, the Commonwealth, the World Bank and the International Monetary Fund. In addition, Cyprus has taken a major step toward joining the euro-zone by linking its currency to the euro in the European Exchange Rate Mechanism. The goal is to switch to the euro currency by 2007.
Head of State
Under the Constitution of 1960 the Head of State is the President who is elected to office by absolute majority and, failing that, by simple majority in a second vote, in a universal and secret ballot every five years with provision for re-election. Cyprus has a multiparty system of democracy based on proportional representation.
Executive Body
Headed by and appointed by the President, the executive body of Cyprus is the Council of Ministers, whose members are responsible for the administration of the eleven ministries and the initiation of legislation.
Legislative Body
The House of Representatives is the legislative body of Cypriot government whose members are elected to office every five years by a system of proportional representation with candidates from the various existing political parties and social groups.
Judiciary
The judiciary of Cyprus, which is independent from the other bodies of government, is modeled on the British system consisting of the Supreme Court, the Assize Courts and the District Courts.
Legal System
The Cyprus legal system has developed from its English counterpart and has retained the same principles, including those relating to banking, commercial and company law and procedures. Most statutes and regulations relevant to business practices are in the English language.
A system of administrative law according to Continental principles under the Constitution provides for the judicial review of public administrative decisions.
European Union
The relations of Cyprus with the European Economic Community and subsequently with the European Union, have evolved gradually from an Association Agreement in 1972 to a Customs Union Protocol in 1987, followed by the application for full membership in 1990, the positive opinion of the EU Commission on Cyprus’ application in 1993, and the initiation of accession negotiations in March 1998.The evolution of close relations has culminated in the formal accession of Cyprus to the European Union, along with 9 other countries in May of 2004.
As an EU member state, Cyprus must adhere to the Acquis Communautaire. There has thus been a concentrated effort to affect economic and social reforms as a result of harmonization with EU legislation. Cyprus laws adopted in 2002 also considerably modified the country’s fiscal regulations. A significant example of such modification is that the difference between the resident regimes (on-shore) and those of non –residents (off-shore) will not exist as from 2006.
Cyprus is represented in EU by one Commissioner and six members in the European Parliament. It has four votes in the EU’s policy-making Council of Ministers.
The world’s largest market has been opened up to Cypriot goods and services as a result of EU accession. Cyprus’ geo-strategic location at the crossroads of Europe, Africa and Asia, as well as its close proximity to the important oil routes of the area can offer EU countries access to the large Arab markets, and place them in an advantageous position with respect to their trade and commercial interests. Further, the EU has become the world’s largest shipping power on acquisition of the island’s mercantile fleet, which ranks sixth in the world in terms of gross tonnage.
As a financial and business hub the island will also afford EU member states attractive investment opportunities. Investments of European origin have to comply only with certain restrictions such as respect for the environment and safety standards. In addition, Cyprus companies are favoured as Holding Companies. As from May 2004, dividends exported to Cyprus from other EU countries have no tax withheld in those countries. (For non-EU countries, lower withholding rates apply under many of the Cyprus Tax Treaties.)
In the real estate field, an agreement has been signed with the EU which stipulates that acquisition of secondary residences by EU citizens remains subjected to controls until 31st December 2007.
Cyprus became an independent state in 1960, after 82 years of British rule and is a politically stable democracy with a system of government based on that of other Western Democracies where human rights, political pluralism and private property are safeguarded. Cyprus acceded to the European Union on the 1st of May 2004. Cyprus is also a Member of the United Nations, the Commonwealth, the World Bank and the International Monetary Fund. In addition, Cyprus has taken a major step toward joining the euro-zone by linking its currency to the euro in the European Exchange Rate Mechanism. The goal is to switch to the euro currency by 2007.
Head of State
Under the Constitution of 1960 the Head of State is the President who is elected to office by absolute majority and, failing that, by simple majority in a second vote, in a universal and secret ballot every five years with provision for re-election. Cyprus has a multiparty system of democracy based on proportional representation.
Executive Body
Headed by and appointed by the President, the executive body of Cyprus is the Council of Ministers, whose members are responsible for the administration of the eleven ministries and the initiation of legislation.
Legislative Body
The House of Representatives is the legislative body of Cypriot government whose members are elected to office every five years by a system of proportional representation with candidates from the various existing political parties and social groups.
Judiciary
The judiciary of Cyprus, which is independent from the other bodies of government, is modeled on the British system consisting of the Supreme Court, the Assize Courts and the District Courts.
Legal System
The Cyprus legal system has developed from its English counterpart and has retained the same principles, including those relating to banking, commercial and company law and procedures. Most statutes and regulations relevant to business practices are in the English language.
A system of administrative law according to Continental principles under the Constitution provides for the judicial review of public administrative decisions.
European Union
The relations of Cyprus with the European Economic Community and subsequently with the European Union, have evolved gradually from an Association Agreement in 1972 to a Customs Union Protocol in 1987, followed by the application for full membership in 1990, the positive opinion of the EU Commission on Cyprus’ application in 1993, and the initiation of accession negotiations in March 1998.The evolution of close relations has culminated in the formal accession of Cyprus to the European Union, along with 9 other countries in May of 2004.
As an EU member state, Cyprus must adhere to the Acquis Communautaire. There has thus been a concentrated effort to affect economic and social reforms as a result of harmonization with EU legislation. Cyprus laws adopted in 2002 also considerably modified the country’s fiscal regulations. A significant example of such modification is that the difference between the resident regimes (on-shore) and those of non –residents (off-shore) will not exist as from 2006.
Cyprus is represented in EU by one Commissioner and six members in the European Parliament. It has four votes in the EU’s policy-making Council of Ministers.
The world’s largest market has been opened up to Cypriot goods and services as a result of EU accession. Cyprus’ geo-strategic location at the crossroads of Europe, Africa and Asia, as well as its close proximity to the important oil routes of the area can offer EU countries access to the large Arab markets, and place them in an advantageous position with respect to their trade and commercial interests. Further, the EU has become the world’s largest shipping power on acquisition of the island’s mercantile fleet, which ranks sixth in the world in terms of gross tonnage.
As a financial and business hub the island will also afford EU member states attractive investment opportunities. Investments of European origin have to comply only with certain restrictions such as respect for the environment and safety standards. In addition, Cyprus companies are favoured as Holding Companies. As from May 2004, dividends exported to Cyprus from other EU countries have no tax withheld in those countries. (For non-EU countries, lower withholding rates apply under many of the Cyprus Tax Treaties.)
In the real estate field, an agreement has been signed with the EU which stipulates that acquisition of secondary residences by EU citizens remains subjected to controls until 31st December 2007.