In the context of the planned gradual lifting of all exchange control restrictions by the time of accession to the European Union in May 2004, the Central Bank of Cyprus announces the removal, with immediate effect, of the exchange control restrictions described below.
Regarding current international payments, all restrictions concerning prepayments for imports, foreign currency in cash to be transferred abroad for local purchases and commission payments to non-residents, are lifted.
As regards personal expenses, all limits regarding the issuing of foreign currency to residents of Cyprus to be used abroad for personal expenses, business travel, recreation, study or medical treatment , are removed.
Furthermore, the issuing of credit / debit cards to Cypriot residents as well as the foreign exchange payments undertaken with these cards are liberalised.
All restrictions have been removed regarding personal capital movements (e.g. gifts, endowments, inheritances, etc.)
Direct investments abroad by Cypriot residents are free of restrictions. Certain restrictions on portfolio investments, foreign bank deposits and the purchase of mutual funds, insurance products and residential property abroad, will continue to be in effect. Specifically, the limit of C£50.000 per adult, per annum, will continue in order to facilitate a possible tax amnesty. For the same reason, the limit of C£200.000 for the acquisition of a secondary residence abroad will remain in place.
The ceiling on the participation of non-residents in the share capital of domestic banks listed on the Cyprus Stock Exchange has been lifted. Furthermore, all transfers of shares in banks will no longer require the consent of the Central Bank of Cyprus, provided the provisions of other laws are not contravened (e.g. the provisions of article 17(1) of the Banking Law).
Following the lifting of these exchange control restrictions, the only remaining restrictions will concern the short-term foreign currency borrowing by Cypriot residents, borrowing from non-residents in Cyprus pounds, the free conversion of Cyprus pounds into foreign currency by residents of Cyprus, and the capital transfers mentioned above. These remaining restrictions will be removed upon accession to the EU in May 2004, at the latest.
The lifting of these restrictions is occurring earlier than the deadline agreed with the EU.