Cyprus – U.S. Commercial Ties
Trade: As per the attached tables, Cypriot imports of U.S. goods reached $90 million in 2017, accounting for 1 percent of the island’s total imports, compared with $137 million and 2.1 percent in 2016. The large decrease from the previous year is attributable to the abnormally high, one-off increase in imports of commercial aircraft in 2016, which was not repeated in 2017 (please see Table 3, HS# 88). Adjusting for this spike, imports from the United States have been rising steadily over the past six years. Main imports from the United States in 2017 included machinery and mechanical appliances, data processing equipment, electrical appliances, specialized vehicles and vessels, photographic/optical goods, mineral fuels, and edible fruit and nuts. It should be noted that bilateral trade figures do not include Cypriot imports of U.S.-branded products manufactured or re-packaged outside the United States, which would raise the actual volume of bilateral trade higher. The United States is also an important export market for Cyprus. In 2017, Cyprus exports to the United States reached $49.8 million, accounting for 1.5 percent of the island’s total exports, compared with $54 million and 2.8 percent in 2016, mainly due to a drop in re-exports of electrical machinery and aircraft parts. Many Cypriot products, such as dairy products, and mineral substances have been doing quite well in the United States in recent years, while others, such as fresh fish, hold much potential for growth.
Services Flows: In 2016, the inflow of services (from the United States to Cyprus) reached $125 million, while the outflow of services (from Cyprus to the United States) reached $604 million. This exchange of services is founded on numerous agreements between Cypriot and U.S. service providers, covering anything from transport and internet services to legal, accounting, and management services. Several large U.S. firms have shifted their regional operations to Cyprus and, generally, U.S. franchises are doing well in Cyprus.
Investment: Cyprus’ liberal investment climate and, more recently, its offshore energy potential make it an attractive destination for U.S. investors. According to the Department of Commerce’s Bureau of Economic Analysis (www.bea.gov), in 2016, the U.S. direct investment position in Cyprus (outward) was $1.6 billion, a decrease of 20 percent from 2015. The direct investment position from Cyprus in the United States (inward) was $2.2 billion, a decrease of 14.7 percent from 2015. In 2014, a consortium led by a U.S. investor bought $532 million worth of Cyprus’ largest bank, marking the largest investment in the island in recent years. In the energy sector, the advent of Noble, a few years ago, played a catalytic role in developing Cyprus’ offshore gas reserves, followed, more recently, by Exxon Mobil’s involvement. In tertiary education, Cyprus’ two largest private colleges — the University of Nicosia and European University Cyprus, have considerable U.S. investment (the former is 42 percent-owned by University Ventures since 2012, and the latter fully owned by Providence Equity Partners since January 2018). Other projects involving U.S. investment in recent years have focused on services, such as finance and insurance (including re-insurance); management consulting; real estate; professional, scientific and technology/IT consulting; and wholesale trade. Over the next few years, Cyprus is poised to attract additional investment in the field of offshore energy exploration and infrastructure. For more info on Cyprus’ FDI position, please refer to following links:
For additional information, please visit the following websites:
- American Chamber of Commerce Cyprus: http://www.amchamcyprus.com.cy/
- Cyprus Investment Promotion Agency: http://www.investcyprus.org.cy/
Updated: June 5, 2018