Time for Foreign Investments in Cyprus?

Due to the economic recession in most countries, every country is searching for foreign and local investors in order to help regenerate its economy and provide employment.

Cyprus is one of these countries with numerous schemes to attract this category of large scale investors, but then what type of investment can a possible investor do in Cyprus in order to make his worth while?

Real estate is out at this point of time for the known reasons,unless for investors who have access to potential buyers and can be involved in the marina and golf projects. But even these (the latter in particular) there are so many projects around that it makes their attraction difficult to sustain. Already one (existing) golf project in Pafos is expanding with another 18 hole golf offering in addition to the existing unsold (first golf project) of around 300 units, another 400 units for the new phase/expansion and all these in addition to the numerous resales. This is one and there are another 4 golf projects with permits. Limassol marina is doing well, but then it is the first and only one, it is in Limassol and its results cannot be projected similarly to the other two marinas and the one pending (in Pafos).

In our search to ascertain some sort of suitable investment opportunities in Cyprus, the only ones we came up with is that of touristic base projects and health care/ spots and education.

Tourism is on the up, whereas the future expectations are positive with respect to top quality hotels on the beach. This new generation of hotels must be combined with spa, entertainment and large scale conference halls which can accommodate around 1.000 people. These hotels are more suitable to Limassol and Pafos, as opposed to other areas, since conference people combine a conference with entertainment and as such locations such as Polis, Paralimni etc are not in first priority. Even hotels with some sort of golf facilities/connections are not doing as well as one would expect with the golf connection.

Water parks and theme parks is another option, but then examining the water parks, one has managed to survive, plus another two whose financial results are not so clear. Another 2 which operated for a while shut down. Theme parks need a lot of land in suitable areas which is not easily found in tourist locations.

Health-private hospitals are another option especially for those who can provide top medical brains and equipment, in order to attract our Arab neighbors. A connection with say an Israeli hospital is one way and which can attract part of the over 200 mil. Arab residents, as well as from other countries. The cost of equivalent care must be checked however. A most successful local heart hospital for example, is charging more or less the same as a specialized German hospital. So is there a future for this (let alone the free Governmental hospitals – be it with a lot of failings)??

Higher education is another option usually a branch of a European university is also to be considered not so much to cover the local needs but the Middle East, as well as far eastern countries. The degrees given must be equivalent and the fees charged much be less in order to make it competitive.

Sports centers are another option taking advantage of the good weather. A sports set up which will include in addition football, tennis, swimming, gymnastics etc, to cooperate with local authorities and use the existing dams for sailing, canoeing and other water sports could be an all year operation, attracting foreign teams for training. The recent success by a Russian firm to establish a sailing school in Pafos is a start, as is the expected Scuba diving investments (to be) all over the island.

Using the old Larnaca airport or the under utilized Pafos airport for light plane training/pilots could be another, depending on local costs in relation to those, abroad.

There must be other, but whatever one decides to adopt, funding is the major problem since local finance is not available and incoming foreign investors must have their funding in place. Another problem is the bureaucracy which takes too much time. Notwithstanding that the Government has set up a “fast-track” procedure, time is still a problem – see Qatar deal, the Larnaca Shopping Mall, the Russian Conference Hall at Alamanos and so many other who left due to time. We have a somewhat problematic attitude, as people, we are afraid. A most recent example is the old Limassol port which is being developed into a “fishing/entertainment” port, but because a couple of the buildings block the view to the sea (from where?) there is a lot of discussion to demolish them and thus placing the whole project under question. We hope that now that we are “poor”, we will put some sort of sense in our head and we could forget some of our peculiar behaviors.

The ending of this Government’s term will, hopefully, open the door to casino and other investments and a more liberal approach to such matters. Time is not with us we are afraid and other countries in more or less the same economic situation such as ours are watching and talking to the limited international investors that have left.

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