Russians in Love with the Island of Love


SUCH is Russian interest in Cyprus that the recent visit by Russian Federation President Dmitry Medvedev is causing great excitement.

Russian strategy appears to undermine ongoing negotiations with the EU as it seeks to reduce visa requirements. Russia is determined to be taken seriously by the European Union and is irritated by the EU’s stalling.


If the EU apparatus refuses to get around the negotiating table then the Russians will approach each of the member states independently and come to whatever arrangement suits them. This stratagem is not lost on the Cypriots who are keen to take advantage of their pole position.

The president’s visit to the island was primarily to sign an agreement for the avoidance of double taxation. This will create prospects for a new boom in the international services sector, which includes the housing market.

Bulgaria, A Serious Challenge

Haris Menelaou, director of Best of Cyprus Property Services says: “The Russians are in love with Cyprus; it is their dream to have a second home here. Those who cannot stretch to the ‘love island’s’ property prices look at more economical options. Bulgaria has a little further to go to bring its services and infrastructure up to excellent standards, which makes it perfect for future returns on their investment.”

Cypriot Finance Minister, Charilaos Stavrakis is buoyant: “The prospects are big. The activities of the Russian companies will increase and this will affect the economy positively. The signing of the double taxation agreement is part of the transparency process that will remove Cyprus from Russia’s blacklist; a hangover from 2007.

Speaking to the business forum, CCCI Chairman, Manthos Mavromatis said that the recovery of the Russian economy, together with the signing of the agreements, create prospects for an “even bigger development of the economic cooperation between the two countries. Our ambition is to continue to be the biggest investing power in the Russian Federation, just like we used to”, he added.

Big Spending Russians

Russian investors are famously free with their cash; enough to make formerly free-spending Americans look like comparative paupers. The Russian Federation’s economic buoyancy boosts confidence. Best of Cyprus Haris Menelaou has discovered that the Russians are optimistic; they are keen to invest and lack the timidity of many western investors. Perhaps they are more far-sighted.

“You have to see how the Russian community in Cyprus, predominantly in Limassol, which they love the most, has grown. Typically last Saturday there was a private party that included an internationally recognised singing legend. I mean, the amount of money flowing here from Russian mega-investors is phenomenal.”

Investments in Russia are made by holding companies of foreign interests based in Cyprus. The presence of those companies has contributed to the rapid growth of the financial sector and Cypriot banks, in the past few years, are estimated to hold deposits of more than €17 billion in the island.

The businessmen and the bankers could not hide their satisfaction for the latest developments, stressing that this move seals their strategic choice to turn to the Russian market. Despite the benefits from the bilateral cooperation, some did not omit to warn that the new prospects must be combined with the development of similar activities in other countries too, which will restrict the increasing dependence of Cyprus on the Russian market.

By Paul Polke

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