29/08/2002 11:47
The Central Bank of Cyprus announces new simplified procedures for investments overseas by residents of Cyprus in line with its policy of full harmonisation with the European Union aquis.
Specifically, as of 1 September, 2002 the following arrangements will apply:
The export of funds for direct investments abroad by residents of Cyprus, which have been free of restrictions regarding the country, sector or amount since 7 January 2000, will henceforth be effected through commercial banks without reference to the Central Bank. Cypriot investors will apply to their bank to which they will provide information for the proposed investment using appropriate forms. Furthermore, investors will have to submit information confirming the genuineness of their investment proposal, such as a copy of the relevant investment agreement, the present value of the proposed investment prepared by an independent professional assessor, and relevant details concerning the contracting parties.
The Central Bank will follow closely the flow of investments abroad to ensure that any negative impact on the balance of payments is minimised or avoided. For this reason, commercial banks will be instructed to report to the Central Bank all those cases necessitating the transfer of funds in excess of CY£5 million per investment, per annum, prior to the issue of the foreign exchange. The foreign exchange value will be calculated by taking into account the investment capital transferred abroad as well as any guarantees issued by commercial banks for the purpose of the investment. The Central Bank reserves the right to request from investors information proving that their investments have been effected.
It is stressed that these procedures are applicable only to direct investments abroad by residents of Cyprus and not to portfolio investments. In this context the term "direct investment" means any investment effected by a resident of Cyprus for the establishment, extension or maintenance of a stable and long term relationship with an enterprise in another country, through the acquisition of at least 10 percent of the share capital and implies the control or significant participation of the investor in the management of the enterprise.
Interested parties should apply to the commercial banks for further information. The banks will also be able to provide the form for the necessary statistical declaration.
Specifically, as of 1 September, 2002 the following arrangements will apply:
The export of funds for direct investments abroad by residents of Cyprus, which have been free of restrictions regarding the country, sector or amount since 7 January 2000, will henceforth be effected through commercial banks without reference to the Central Bank. Cypriot investors will apply to their bank to which they will provide information for the proposed investment using appropriate forms. Furthermore, investors will have to submit information confirming the genuineness of their investment proposal, such as a copy of the relevant investment agreement, the present value of the proposed investment prepared by an independent professional assessor, and relevant details concerning the contracting parties.
The Central Bank will follow closely the flow of investments abroad to ensure that any negative impact on the balance of payments is minimised or avoided. For this reason, commercial banks will be instructed to report to the Central Bank all those cases necessitating the transfer of funds in excess of CY£5 million per investment, per annum, prior to the issue of the foreign exchange. The foreign exchange value will be calculated by taking into account the investment capital transferred abroad as well as any guarantees issued by commercial banks for the purpose of the investment. The Central Bank reserves the right to request from investors information proving that their investments have been effected.
It is stressed that these procedures are applicable only to direct investments abroad by residents of Cyprus and not to portfolio investments. In this context the term "direct investment" means any investment effected by a resident of Cyprus for the establishment, extension or maintenance of a stable and long term relationship with an enterprise in another country, through the acquisition of at least 10 percent of the share capital and implies the control or significant participation of the investor in the management of the enterprise.
Interested parties should apply to the commercial banks for further information. The banks will also be able to provide the form for the necessary statistical declaration.
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