Cyprus – U.S. Commercial Ties
Trade in Goods: As per the attached tables, Republic of Cyprus (ROC) imports of U.S. goods reached $102 million in 2018, accounting for almost 1.0 percent of the ROC’s total imports. That is an increase from $90 million but a similar percentage in 2017. Imports from the United States have been fairly constant since 2012, with the exception of an upward spike in 2016 on account of a one-off increase in commercial aircraft imports. Main imports from the United States in 2018 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 ROC 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 the ROC. In 2018, ROC exports to the United States doubled from $49.8 million to $99.8 million due to an increase in re-exports of aircraft, ships, and electrical machinery. Many ROC 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 2018, the inflow of services from the United States to the ROC reached $303 million, while the outflow of services from the ROC to the United States reached $896 million. This exchange of services is founded on numerous agreements between ROC and U.S. service providers, covering everything from transport and internet services to legal, accounting, and management services. Several large U.S. firms have shifted their regional operations to the ROC and, generally, U.S. franchises are doing well.
Investment: The ROC’s 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 2018, the U.S. direct investment position in the ROC (outward) was $3.5 billion, more than double the 2017 amount. The direct investment position from the ROC in the United States (inward) was $526 million, a decrease of 24.4 percent from 2017. In 2017, ROC-based majority-owned affiliates of U.S. multinational enterprises (MNEs) employed 1,600 people, little changed from 2016, and sales were $1.7 billion, up 14.3 percent. U.S.-based majority-owned affiliates of ROC MNEs employed 2,600 people in 2016, a decrease of 10.3 percent from the previous year. In recent years, U.S. investors have acquired considerable stakes in Cypriot banks (estimated at over 13 percent in the Bank of Cyprus and around 35 percent of Hellenic Bank). Additionally, U.S. hedge funds and private equity firms have made sizeable investments in distressed assets in Cypriot banks. In the energy sector, since 2008 Noble Energy has played a catalytic role in developing the ROC’s offshore gas reserves, attracting companies like ENI and TOTAL and followed, more recently, by Exxon Mobil. In tertiary education, the ROC’s two largest private universities — 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, the ROC is poised to attract additional investment in the field of offshore energy exploration and infrastructure. For more info on the ROC’s FDI position, please refer to following links:
- Bureau of Export Administration: https://apps.bea.gov/international/factsheet/factsheet.cfm?Area=304
- Cyprus Central Bank: https://www.centralbank.cy/en/statistics/external-statistics/data-based-on-bpm6-methodology
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: November 15, 2019