Cyprus Innovation and Entrepreneurship Dynamics

Transcription

1 January 2017 Cyprus Innovation and Entrepreneurship Dynamics Issue 2 Contents Contents At a glance 1 Innovation 2 Research & development 4 Entrepreneurship 9 Developments 12 Definitions 13 References 15 The Innovation and Entrepreneurship Dynamics Newsletter is published annually and provides key information, data and developments in the Innovation and Entrepreneurship sectors in Cyprus, based on official data from the European Commission and the Government of Cyprus. At a Glance The promotion of innovative Companies and entrepreneurship is amongst the top policy priorities of the European Union as it is thought to be one of the main drivers of competitiveness and job creation. The 7th edition of the Regional Innovation Scoreboard 1 (RIS) includes Cyprus at the country level and ranks it as a moderate innovator, a ranking that is well below the EU average. As at the end of 2015, almost all the businesses in Cyprus (99.8%) were Small and Medium sized Enterprises (SMEs 2 ) accounting for 45.7% of total employment. The European Union recognises that SMEs play an ever-increasing role in innovation and is exploring means of improving the environment for entrepreneurship and small firm development and increasing the innovation capacity of enterprises. Cyprus s GDP in 2014, or 83.48m in real terms, amongst the lowest rates in the EU. At the same time, 52.7% (or 44m) of total R&D expenditure was attributed to research carried out at higher educational institutions (2014). The Cyprus Entrepreneurship Fund was established by the Republic of Cyprus and financed by the European Investment Bank (EIB), with the view to facilitate access to finance for Cypriot SMEs, thereby supporting and strengthening entrepreneurship in the country. To promote investment in innovative businesses in Cyprus, the government has proposed new legislation that includes targeted personal income tax allowances. The proposed legislation is expected to go to the House of Parliament for a vote well before the end of the year. Research and Development (R&D) expenditure only accounted for 0.48% of 1 European Commission 2016, 2 Please refer to Definitions (p.13).

2 Key Indicators R&D expenditure * ( m (% of GDP)) 88.9 (0.45) 83.3 (0.43) 83.8 (0.46) 84.1 (0.48) Total R&D expenditure ( per inhabitant) (EU 28) Total R&D expenditure ( per inhabitant) (Cyprus) Innovation Index-Cyprus Innovation Index EU Share of government spending (% of total R&D spending) National applications for patents Renewal of patents (per 1,000 persons) Source: CyStat, Department of Registrar of Companies and Official Receiver, Eurostat, Innovation Union Scoreboard Innovation Innovation in the EU The EU 2020 Strategy aims for the European Union to develop as a smarter, knowledge-based, greener economy, growing fast and sustainably, creating high levels of employment and social progress. A set of structural indicators for monitoring the progress made in achieving the objectives of the EU 2020 strategy is used, with Eurostat compiling and publishing these indicators annually. Main objectives of the EU 2020 strategy: creating value by basing growth on knowledge empowering people in inclusive societies creating a competitive, connected and greener economy The 7 th edition of the Regional Innovation Scoreboard (RIS) provides a comparative assessment of innovation performance across 214 regions of 22 EU Member States and Norway. Cyprus, Estonia, Latvia, Lithuania, Luxembourg and Malta are included at the country level, as the regional administrative level as such does not exist in these countries. The RIS accompanies the European Innovation Scoreboard (EIS), which benchmarks innovation performance at the level of Member States. Compared to the EIS, the RIS has a stronger focus on the performance of SMEs. The EU strategy on innovation, which is part of the Europe 2020 strategy for growth and jobs, was launched in 2010 and was termed the Innovation Union. The Innovation Union aims to create an innovation-friendly environment that makes it easier for great ideas to be turned into products and services that will bring economic growth and jobs. Innovation is the act that endows resources with a new capacity to create wealth Peter Drucker, Innovation and Entrepreneurship *Includes direct government spending and government university funds. 2 Innovation & Entrepreneurship January 2017

3 European innovators scoreboard (2016) Innovation leaders Strong innovators Moderate innovators Modest innovators I want Europe to be a place where innovative SMEs and start-ups flourish and scale up within the Single Market. This requires a concerted effort. (Elżbieta Bieńkowska, EU Commissioner) Source: EC Innovation by sector of performance According to the 2016 Innovation Union Scoreboard, Cyprus ranked below the EU average in innovation. The performance relative to the EU peaked in 2011 (95%), but has declined to 86.5% in Cyprus performs below the EU average in licence and patent revenues from abroad, R&D expenditure in the business sector, non- EU doctorate students, new doctorate graduates, as well as Patent Cooperation Treaty patent applications, amongst other indicators. On the contrary, stronger performance relative to the EU average was recorded in community trademarks, international scientific co-publications, innovative SMEs collaborating with others and percentage of the population that completed tertiary education. According to the most recent report, published in July 2016, performance has improved in some areas, in particular in Open and excellent research systems (7.7%) and Human resources (7.6%). The indicator with the strongest growth is new doctorate graduates (23%). Performance has worsened most in economic effects and Firm investments, in particular due to strong growth declines in License and patent revenues from abroad (-42%) and Non-R&D innovation expenditures (-17%). The main findings of the Innovation Scoreboard report are that EU innovation is catching up with Japan and the US, Sweden is once again the innovation leader, and Latvia has become the fastest growing innovator. Innovation & Entrepreneurship January

4 Research & Development R&D Policy Development The Organisations involved in R & D policy development in Cyprus are the following: Planning Bureau National Council for Research and Innovation Cyprus Scientific Council Research Promotion Foundation Ministry of Finance Tertiary Education Budget Planning Bureau Public Sector National Council for Research & Innovation (chaired by the President of Cyprus and the council of Ministers) Research Promotion Foundation Enterprises Cyprus Scientific Council Scientists Research Organisations Source: Euraxess The Planning Bureau is the Government agency engaged in the formulation of strategy, the identification of objectives and the introduction of policy measures aiming at the promotion of research activities in Cyprus. The Planning Bureau, in collaboration with the Ministry of Finance, provides direct financing for research initiatives undertaken by the state research institutions / departments, through the annual Development Budget of the Republic. The Research Promotion Foundation was established in 1996, to serve as the national organisation for the promotion of scientific and technological research in Cyprus. The Foundation is fully supported by the Government and its resources are derived mostly from the Government, but also from the Framework Programmes of the EU. The Foundation s core objective is the promotion of scientific and technological research and innovation in Cyprus. The National Council for Research and Innovation determines the long term strategy of the Republic on Research, Technological Development and Innovation (RTDI). The Council is chaired by the President of Cyprus and defines the medium and long term national goals and aspirations in RTDI, which conform to the wider development goals of the State and the implementation of the strategic objectives of the EU. The Cyprus Scientific Council is an advisory scientific body and brings together scientists, who advise the Government and the National Council for Research and Innovation for the wider development strategy and policy in RTDI. 4 Innovation & Entrepreneurship January 2017

5 R&D expenditure In 2014, R&D expenditure accounted for only 0.48% of Cyprus GDP, a small increase over the 0.46% level of The EU average expenditure on R&D was at 2.03% of GDP in 2014, much lower than the EU2020 growth strategy target of 3%. (Source: European Commission) R&D expenditure (% of GDP) Partly because of the financial crisis, the R&D budget and several measures related to innovation have been put on hold during the process of fiscal consolidation Source: Eurostat EU-28 CY Target R&D expenditure by sector (2014) In 2014, the higher education sector received most of the funding allocated for R&D, amounting to 52.7% (or 43.6m) of the total. The government sector received 13.7% of the total (or 11.3m), while 16.3%, (or 13.5m) were allocated to the private non-profit sector. 17.3% 13.7% Business enterprise sector Government sector Higher education sector Private-non profit sector 16.3% 52.7% Source: CyStat Private sector expenditure on R&D (2014) R&D expenditure by the private sector in Cyprus is amongst the lowest in the EU. In 2013, the business enterprise expenditure on R&D accounted for only 0.1% of Cyprus GDP, while the EU-28 average was 1.3%. Furthermore, in the period from 2007 to 2013, the R&D expenditure by the private sector fell by an average annual rate of 4.1%. Source: EuroStat Research and development (R&D) consists of investigative activities that a business chooses to conduct with the intention of making a discovery that can either lead to the development of new products or procedures, or to improvement of existing products or procedures. Innovation & Entrepreneurship January

6 R&D expenditure versus employment in R&D Of the EU-28 states, only Romania has fewer researchers ** per 1,000 employed persons than Cyprus. The country with the highest number of researchers is Finland, which also spends the most on R&D (3.17% GDP). Researchers per thousand employment vs R&D Expenditure (% of GDP) Researchers per thousand employment 25 PT RO CY LV EL SK HR MT BG PL LT ES LU IT EE HU IE UK NL EU-28 CZ R&D Expenditure (% of GDP) FR SI BE DE AT DK FL SE Source: Eurostat Investment in R&D versus real GDP growth Gross domestic spending on R&D is defined as the total expenditure (current and capital) on R&D carried out by all resident companies, research institutes, university and government laboratories, etc., in a country. It includes R&D funded from abroad, but excludes domestic funds for R&D performed outside the domestic economy. The theoretical tenet suggests that endogenously determined innovation enables sustainable economic growth, given that there are constant returns to innovation in terms of human capital employed in the R&D sectors. Investment in R&D vs Real GDP Growth (2015) 9 8 IE GDP (annual growth rate %) LU 4 CZ RO SK PL SE ES SI 3 BG LV HU UK 2 DE PT NL FR BE CY HR LT DK 1 EE IT FL AT 0 EL R&D Expenditure (% of GDP) Source: Eurostat MT R&D promotion in Cyprus The Research Promotion Foundation (RFP), established in 1996, aims to promote the development of scientific and technological research in Cyprus, providing funding in the form of governmental grants. In September 2016, the RPF announced RESTART, its new framework of Programmes for the support of Research, Technological Development and Innovation (RTDI) in Cyprus, co-funded by national and European resources and implemented in conjunction with other national initiatives. ** Researchers are professionals engaged in the conception or creation of new knowledge, products, processes, methods and systems, as well as in the management of the projects concerned. 6 Innovation & Entrepreneurship January 2017

7 RESTART The vision of the RESTART programs is the promotion of research, technological development and innovation (RTDI) as a key factor in the economic development of Cyprus, that can contribute to addressing social and economic challenges. RESTART will promote conditions for achieving sustainable development, in accordance with the principles highlighted in the Europe 2020 strategy 3 for smart, sustainable and inclusive growth. RESTART will run to 2020 with a total budget for the period of 99,140,000. At the same time, RPF launched its IRIS portal, via which interested parties may register and access the Foundation s online services mainly related to the submission of proposals and management of funded projects of the RESTART framework and for accessing information and updates regarding related activities. The RESTART programs focus on priority areas defined through the Smart Specialisation Strategy for Cyprus (S3Cy) and are cofounded by European Regional Development Fund (ERDF) under priority 1 ( improving the competitiveness of the economy ). Horizontal objectives: Foster, develop and enhance the human capital of Cyprus and especially the next generation of researchers. Strengthen cooperation with industry as a key component of the research and technological development (RTD) process to help maximise return on public investment in RTD. Promote and enhance international cooperation as a means of achieving the strategic objectives of the strategic goals of Cyprus. Promote innovation throughout the economy as a means of developing and enhancing competitive advantage for businesses and in addressing societal challenges Priority Areas: pillar I Smart Growth pillar II Sustainable RTDI System pillar III Transforming the RTDI System 3 Europe 2020 is the EU s growth strategy for the coming decade. In a changing world, we want the EU to become a smart, sustainable and inclusive economy. These three mutually reinforcing priorities should help the EU and the Member States deliver high levels of employment, productivity and social cohesion. Concretely, the Union has set five ambitious objectives - on employment, innovation, education, social inclusion and climate/energy - to be reached by Each Member State has adopted its own national targets in each of these areas. Concrete actions at EU and national levels underpin the strategy. Innovation & Entrepreneurship January

8 Horizon 2020-Framework for Research and Innovation Horizon 2020 is aimed at securing Europe s global competitiveness and it is the largest EU Research and Innovation Programme with nearly 80b of funding available over 7 years ( ). A major goal of the framework is to improve productivity and competitiveness of SMEs and to bring new products and services to the market. The 660m that are available for Cyprus over the period 2014 to 2020, are providing much needed funds for the R&D sector and financial support to SMEs. The programme s thematic priorities include innovative waste treatment technologies, energy efficiency and public health and represent excellent opportunities for Cypriot researchers and entrepreneurs. Europe 2020 Europe 2020 is the EU s growth strategy for the coming decade. The goal of the strategy is for the EU to become a smart, sustainable and inclusive economy. These three mutually reinforcing priorities should help the EU and the Member States deliver high levels of employment, productivity and social cohesion. Concretely, the Union has set five ambitious objectives - on employment, innovation, education, social inclusion and climate/energy - to be reached by Each Member State has adopted its own national targets in each of these areas. Concrete actions at EU and national levels underpin the strategy. Horizon 2020 comprises 5 sections, each one with specific aims: 1. Excellent Science: Activities under this Section aim to reinforce and extend the excellence of the Union s science base and to consolidate the European Research Area to make the Union s research and innovation system more competitive on a global scale. 2. Industrial Leadership: This section aims to speed up development of the technologies and innovations that will underpin tomorrow s businesses and help innovative European SMEs to grow into world-leading companies. 3. Societal Challenges: This section reflects the policy priorities of the Europe 2020 strategy and addresses major concerns shared by citizens in Europe and elsewhere. 4. European Institute for Innovation and Technology (EIT): The EIT contributes to the competiveness of Europe, by promoting and strengthening synergies and cooperation among businesses, education institutions and research organisations. 5. Joint Research Centre (JRC): JRC is the European Commission s science and knowledge service which employs scientists to carry out research to provide independent scientific advice and support to EU policy. Horizon 2020 funding Societal Challenges Excellent Science 31.7b Industrial Leadership 24.6b 17.9b Joint Research Centre 1.96b European Institute for Innovation & Technology 2.8b Source: EC 8 Innovation & Entrepreneurship January 2017

9 Entrepreneurship Innovation and entrepreneurship are two key drivers of higher productivity. Per the World Economic Forum s Global Competitiveness Report , Cyprus ranks 65th out of 140 economies assessed. Of the 36 advanced economies, it only ranks higher than Slovakia and Greece. The country s capacity to leverage talent is at the heart of improving competitiveness. High unemployment figures of recent years weigh heavily on society, risking not only prolonged lower demand but also the de-skilling of a significant segment of the labor force and growing discontent. The most problematic factors for doing business in Cyprus were reported to be access to financing, inefficient government bureaucracy, corruption, insufficient capacity to innovate and restrictive labour regulations. Despite Cyprus s relative strengths (large educated human resources pool, a favourable tax regime and one of the best lifestyle destinations in the world), it has made little progress in the entrepreneurship field. Ease of doing business in Cyprus rankings Ranking Ease of Doing Business Rank Starting a Business Dealing with Construction Permits Getting Electricity Registering Property Getting Credit Protecting Investors Paying Taxes Trading Across Borders Enforcing Contracts Resolving Insolvency The rankings are based on a sample of 189 countries. Source: World Bank Favourable corporate tax regime corporate tax rate 12.5% one of the lowest rates in the EU Bilateral agreements with 58 countries No withholding taxes Zero tax on interest and dividend income Innovation & Entrepreneurship January

10 SMEs Small and medium-sized enterprises (SMEs) are the backbone of Europe's economy. They represent 99% of all businesses in the EU ***. The European Commission considers SMEs and entrepreneurship as key to ensuring economic growth, innovation, job creation, and social integration in the EU. In the past five years, they have created around 85% of new jobs and provided two-thirds of the total private sector employment in the EU. In sectors such as biotechnology and information technology, relatively small numbers of new, technology-based firms are key suppliers of new technologies. The ability to exploit new technologies, and to respond quickly to changing market needs, give SMEs a pivotal role in the success of the European economy. Support for the creation of new ventures and spin-offs from research institutions and large companies, as well as the removal of barriers to their rapid growth and support for the transfer of know-how, also deserve to be accorded the highest priority. After the most recent financial crisis, the Cyprus government has been slowly trying to introduce initiatives aimed at addressing the access of financing for start-ups and SMEs and providing fiscal incentives for private sector investment in innovation. Cyprus Entrepreneurship Fund The Republic of Cyprus ( RoC ) has established the CYPEF with the view to facilitate access to finance for Cypriot SMEs, thereby supporting and strengthening entrepreneurship in the country. The CYPEF is being financed by a loan from the European Investment Bank to RoC. The CYPEF is being managed and operated (on behalf of the RoC) by the European Investment Fund ( EIF ) and it is envisaged to implement, over time, different financial products to better satisfy market conditions and needs. CYPEF s operations are initiated with the deployment of a portfolio risk sharing loan product. Loans provided to SMEs under the Facility shall benefit from improved funding conditions, such as reduced interest rates and potentially lower collateral requirements. On June 6, 2016 the EIF published a call for the selection of eligible financial institutions to become financial intermediaries for the granting of the risk sharing loans. One of the major challenges faced by SMEs is access to finance. The large amounts of non-performing loans at Cypriot banks continue to restrict the ability of businesses to borrow. The ratio of non-performing exposures to total credit facilities for SMEs stood at 60.8% as at the 30th of June NPEs by sector or industry (June 2016) 5,000 4,000 mn 3,000 2,000 1,000 0 Agricultre, forestry & finishing Mining & Manufacturing Construction Quarrying, Water Supply, Electricity, gas, Wholesale & Retail Trade, Accom. & Food Service Information & Communication Financial & Insurance Activities Real Estate Activities Professional, scientific & technical activities, Other Activities *** Source: European Commission 10 Innovation & Entrepreneurship January 2017

11 SMEs in Cyprus In 2015, 99.8% of total enterprises or 38,917 in real terms were SMEs, while the vast majority of Cypriot enterprises employ fewer than nine persons (2015: 92.4%). SMEs: the backbone of the Cyprus economy 99.8% 92.4% 45.7% of enterprises are SMEs Source: Cystat, EC (2015) of enterprises employ fewer than 10 persons of the employees work in SMEs SME by sector % 10.81% 0.20% 4.33% 13.24% Source: EC 11.37% 0.54% 1.36% 2.23% 12.13% 37.82% 5.95% Administrative and support services Professional, Scientific and Technical activities Real estate activities Information and Communication Accommodation/Food service activities Transportation and storage Wholesale and retail trade Construction Water supply Electricity, gas, steam and air condition supply Manufacturing Mining and Quarrying Innovation & Entrepreneurship January

12 Developments (Entrepreneurship and M&A activity) The development of the Cyprus entrepreneurship and innovation ecosystem is vital in helping to promote growth and economic prosperity. The ecosystem comprises complex relationships that are formed between actors or entities whose functional goal is to enable technology development and innovation. In the years after the recent financial crisis, Cypriot innovation actors have slowly but steadily started to flourish, simultaneously adding value to the economy and enhancing the local ecosystem. DisruptCyprus The disruptcyprus.com online portal is a development of RiseTech Media and provides an aggregator of news related to startups, research, innovation, entrepreneurship and technology in Cyprus. The portal features news media coverage for more than 150 events in Cyprus and abroad, has over 4,000 members and 10,000 followers in social media. RiseTech Media also recently launched disrupteurope.eu, a global human-curated news portal dedicated to sourcing and publishing the most disruptive news in the innovation and entrepreneurship in Europe. The portal includes a modern artificial intelligence chatbot called disruptbot, which helps easily find and read related news. Disrupt Cyprus 2016 is the flagship event of the Global Entrepreneurship Week (GEW) in Cyprus, organized for the third time by Industry Disruptors Game Changers (ID-GC), the Youth Board of Cyprus and Way Out Communications. The event aims to foster dialogue and facilitate the exchange and realization of cutting - edge entrepreneurial practices and ideas. One of the highlights of this year s event is the Disrupt Cyprus Cup final, the last part of an exciting competition that aims to identify the most innovative startups. Gravity Gravity is a next generation venture building incubator that fosters and propels innovation through constant interaction, empowering founders to make real impact. This new approach addresses a gap in the entrepreneurship ecosystem by building startups from early-stage to a mature venture, bringing together entrepreneurs and ideas, while building a strong network capable of unifying a vast array of resources in the most effective way. Gravity is an initiative of the Cyprus Research and Innovation Center (CyRIC), a private professional research and innovation services company. In February 2016, the Company was certified by the European Business Network (EBN) as the first Business Innovation Center (BIC) in Cyprus. CyRIC offers incubation services to startups and SMEs and represents Cyprus at the Executive board of EBN. Microsoft Innovation Center Microsoft has selected European University Cyprus to be its partner institution for the establishment of the only Microsoft Innovation Center (MIC) in Cyprus. MIC offers state of the art technology facilities for collaboration on innovative research, technology and software solutions, bringing together government, academic and industry participants. There are currently more than 100 MICs worldwide. Microsoft and strategic partners in each community work together to operate the MICs, which are centers open to students, professional software developers, IT professionals, entrepreneurs, start-ups and academic researchers. MICs provide content and services designed to accelerate technology advances and stimulate local software economies through skills and professional training, industry partnerships and innovation. MICs can play a vital role in fostering innovation and growing sustainable local software economies by generating powerful new ideas through training, education and knowledge transfer. IDEA IDEA, is a new incubator for innovative startups established by Bank of Cyprus in collaboration with CIIM (Cyprus International Institute of Management and it offers free space, support, education and advice for these businesses to become commercially viable. IDEA is located at the Bank of Cyprus building in the Faneromeni area of Old Nicosia and aims to: Help new entrepreneurs and their businesses grow and succeed Stimulate and support the entrepreneurship and innovation culture in Cyprus Help develop the ecosystem of innovation in Cyprus 12 Innovation & Entrepreneurship January 2017

13 Definitions SMEs: The category of micro-small and medium-sized enterprises (SMEs) is made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding 50m, and/or an annual balance sheet total not exceeding 43m. Innovation indicators Indicator Community designs Community trademarks Employment in knowledge-intensive activities Innovative SMEs collaborating with others International scientific co-publications Knowledge-intensive services exports Licence and patent revenues from abroad Medium and high-tech product exports Most cited scientific co-publications Non-EU doctorate students Non-R&D innovation expenditures Patent Cooperation Treaty (PCT) patent applications PCT patent applications in societal challenges Population completed tertiary education Public-private co-publications R&D expenditure in the business sector R&D expenditure in the public sector Sales of new to market and new to firm innovations the market, for all enterprises SMEs innovating in-house SMEs introducing marketing or organisational innovations SMEs introducing product or process innovations Youth with upper secondary education Definition Number of new community designs applications Number of new community trademarks applications Number of employed persons in knowledge-intensive activities in business industries. Knowledge intensive activities are defined, based on EU Labour Force Survey data, as all NACE Rev.2 industries at 2-digit level where at least 33% of employment has a higher education degree (ISCED5 or ISCED6) Sum of SMEs with innovation co-operation activities. Number of scientific publications with at least one co-author based abroad (where abroad is non-eu for the EU28) Exports of knowledge-intensive services are measured by the sum of credits in EBOPS (Extended Balance of Payments Services Classification). Export part of the international transactions in royalties and license fees Value of medium and high-tech exports, in national currency and current prices. Number of scientific publications among the top-10% most cited publications worldwide For EU member states, is the number of doctorate students from non-eu countries (for non-eu countries: number of non-national doctorate students) Sum of total innovation expenditure for enterprises, in thousand Euros and current prices excluding intramural and extramural R&D expenditures Number of patent applications filed under the PCT, at international phase, designating the European Patent Office (EPO). Patent counts are based on the priority date, the inventor s country of residence and fractional counts Number of PCT patent applications in Environment-related technologies and Health Number of persons in the age class with completed first or second stage of tertiary education Number of public-private co-authored research publications. The definition of the "private sector" excludes the private medical and health sector All R&D expenditures in the business sector All R&D expenditures in the government sector (GOVERD) and the higher education sector (HERD) Sum of total turnover of new or significantly improved products, either new to the firm or new to Sum of SMEs with in-house innovation activities. Number of SMEs who introduced a new marketing innovation or organisational innovation to one of their markets Number of SMEs who introduced a new product or a new process to one of their markets Number of young people aged years having at least upper secondary education attainment level Source: Innovation Union Scoreboard 2015 Innovation & Entrepreneurship January

14 Country codes AT: Austria BE: Belgium BG: Bulgaria CH: Switzerland CY: Cyprus CZ: Czech Republic DE: Germany DK: Denmark EE: Estonia EL: Greece ES: Spain FL: Finland FR: France HR: Croatia HU: Hungary IT: Italy IE: Ireland LT: Lithuania LU: Luxembourg LV: Latvia NL: Netherlands NO: Norway PL: Poland PT: Portugal RO: Romania SE: Sweden SI: Slovenia SK: Slovakia Double taxation agreements Armenia Austria Azerbaijan Belarus Belgium Bosnia Bulgaria Canada China Czech Republic Denmark Egypt Estonia Finland France Georgia Germany Greece Hungary Iceland India Iran Ireland Italy Kingdom of Bahrain Kuwait Kyrgyzstan Lebanon Lithuania Malta Mauritius Moldova Montenegro Norway Poland Portugal Qatar Romania Russia San Marino Serbia Seychelles Singapore Slovakia Slovenia South Africa Spain Sweden Swiss Confederation Syria Tajikistan Thailand The States of Guernsey Ukraine United Arab Emirates United Kingdom USA Uzbekistan Source: Ministry of Finance 14 Innovation & Entrepreneurship January 2017

15 References Cyprus National Reform Programme 2015, European Commission, 2015 Double Taxation Agreements, Ministry of Finance, 2015 Innovation Union Scoreboard 2015, European Commission, 2015 R&D Policy Development Euraxess, The Cyprus Entrepreneurship Fund, European Investment Fund, 2014 The Global Innovation Index 2014: The Human Factor in Innovation Fontainebleau, Ithaca, and Geneva, Cornell University, INSEAD, and WIPO, 2014 Global Competitiveness Report , World Economic Forum Innovation & Entrepreneurship January

16 EY Assurance Tax Transactions Advisory EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com Ernst & Young Cyprus Ltd. All rights reserved. This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice. This material has been produced by Emergo Wealth Ltd. ey.com/cy