1. Using Cyprus as Your Springboard for International Expansion Mr. Phidias Pilides Chairman of the Board, CIPA Moscow, Russia June 23, 2011 CYPRUS INVEST WITH CONFIDENCE

2. Historic moment… Page 2

3. Cyprus and Russia: Dynamic Relationship  Signing of the Protocol between the Republic of Cyprus and Russia Federation – October 2010  Protocol will:  Further strengthen the bilateral investment relationships;  Increase flow of trade  Act as a catalyst of new investment opportunities;  Enhance the business environment and benefit other areas of growth.

4. Country Overview Official Name: The Republic of Cyprus Capital: Nicosia Area: 9,251 sq km Population: 870,000 Official Languages: Greek, Turkish English Widely Spoken Real GDP Growth: 1.0% GDP per inhabitant: €21,700 Inflation (HICP): 2.6% Unemployment Rate: 6.5% Monetary Unit: Euro Life Expectancy: 79 years Form of State: Presidential Republic (Data 2010)

5. Cyprus Economy and Competitive Advantages CYPRUS INVEST WITH CONFIDENCE

6. “Global Competitiveness Report 2010-2011”  Cyprus was ranked number 40 out of 139 countries by the World Economic Forum "Global Competitiveness Report 2010 - 2011"  The Global Competitiveness Report is a yearly report published by the World Economic Forum  The report assesses the ability of countries to provide high levels of prosperity to their citizens The World Economic Forum is an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas. 10

7. “Doing Business Report 2011”  Cyprus ranked #37 of 183 countries on the overall ease of doing business and #15 of the EU 26

8. Cyprus as an Attractive Investment Destination  EU and European Monetary Union Member State  Strategic geographical location – ideal for expansion in new markets  Well-developed socio-economic infrastructure  An active Stock Exchange and robust Securities and Exchange Commission More than 30 years experience as An International Business Center

9. Cyprus as an Attractive Investment Destination  Market-oriented economy  Macroeconomic stability and performance  Highly educated, qualified and multilingual talent  Stable and welcoming business environment  Low set up and operating costs  Advanced transport and telecommunications network  Renown international shipping centre  Enviable quality of life

10. Cyprus as an Attractive Investment Destination  Broad range and international quality of financial and business services - legal, tax, accounting, investment and brokerage  Transparent accounting system harmonized with international standards  Well developed banking sector for all financial needs  Low-risk business environment offering quick andefficient operations The Global Integrated Economy is a reality and Cyprus can play a key role as a Business and Financial Center

11. Cyprus: Simple, Low Taxation Cyprus has the lowest corporate tax in Europe of 10%. A tax administration regime that wants to help foreign investors. Exempt from tax: Dividend income Profits from overseas permanent establishments Profits from the sale of securities No withholding tax on: Dividends Interest Royalties paid from Cyprus Most international transactions exempt from VAT Cyprus has concluded Double Tax Avoidance Treaties with 43 countries worldwide.

12. Cyprus as a holding company location Russian Ultimate Holding Co Cyprus Holding Co Treaty subsidiary EU subsidiary Invest through Cyprus in: an EU country or a country with no DTT with Russia or a country with a better DTT with Cyprus Benefits  Wide Cyprus DTT network  EU Parent Subsidiary Directive  Zero/Low withholding tax in target country  Dividends received by Cyprus Holding Co exempt from tax  No withholding taxes on payments to Russian Ultitmate HoldCo Russian Outbound Investments

13. Cyprus as a financing company location Russian Ultimate Holding Co Cyprus Financing Co Treaty subsidiary EU subsidiary Russian Outbound Investments Russian investor establishes Cyprus company to be the group finance company of foreign operations. Capitalisation with equity. Benefits  Tax on profit 10%  Access to EU interest & royalty directive  Zero/Low withholding tax on interest from target country  Interest deductibility in paying company  No WHT on dividends paid to Russia

14. Cyprus as an Ideal International Business Services Centre What Cyprus also offers…  Shipping Companies – Zero tax rate  Financial Group Companies – Low tax rate within a small profit margin  Companies Trading Securities – No tax on profits from sale of securities  Investment Trusts – Tax exemption

15. Doing Business Through Cyprus Cyprus is a dynamic business and financial centre for inward FDI Investors have the opportunity to access, through Cyprus, new markets both within Europe and non-EU countries The Global Integrated Economy is a reality and Cyprus can play a key role as an business and financial center

16. Cross-border IPOs through Cyprus Tax benefits important, but also: – Legal environment based on common law – similar to UK – Companies’ Law based on previous version of English equivalent – Capital markets legislation fully harmonised with EU directives

17. CIS IPOs at the London Stock Exchange (LSE) The LSE has been the preferred destination for CIS IPOs abroad over the last few years.  17 CIS IPOs in LSE during the period 2008-2011  7 of these with topco jurisdiction other than Russia and UK  Cyprus chosen in 4 out of these 7 IPOs  Pipeline appears to be growing  Total funds raised by CIS companies in LSE IPOs 2008-2011 amounted to $6bn.

18. Russian IPOs into the LSE in 2011 Company NameStatusJurisdiction Cyprus Russia UK IPO- AbortedRussia IPO- AbortedRussia IPO- AbortedNetherlands IPO- AbortedNetherlands IPO- AbortedRussia \ Cyprus is now an established and credible TopCo jurisdiction, with increased confidence placed by issuers, investors, bankers and lawyers \

19. International Transit Trade Centre  Efficient Customs Formalities  Reliable Handling and Delivery System  Advanced Regional Warehouse & Distribution Centers

20. Some of the companies already in Cyprus GROME MARKETING

21. Cyprus: Safe & Sunny  Security and safety  Excellent public and private international schools  High standard of living  High quality tourist facilities year round  Gastronomy  Millenia of culture, history and art  Fabulous weather

22. CYPRUS INVEST WITH CONFIDENCE Cyprus: Investment Opportunities

23. Banking & Financial Services  B&F Services account for 9% of GDP (2009) and the sector is characterized by economic stability  Offers a strong regional platform for the provision of various banking products and financial services, including investment funds  Unique opportunities for cross-border and international transactions of mutual funds through reliable infrastructure

24. Cyprus: International Shipping Center  Ranks 3 rd top maritime nation in EU27 and top 10 globally  Shipping accounts 4% of Cyprus GDP (2009)  More than 2,000 vessels with 40 million gross tonnage  Over 130 ship owning and ship management companies based in Cyprus  2 deep-sea ports with easy access to Suez Canal and other major freight routes  New legislation enacted 29 April 2010 with the New Competitive “Tonnage Tax System” (TTS)  Favorable tax regime and other benefits for ship owning, ship management, charterers and crew members

25. Energy  Opportunities for the development of Renewable Energy Sources (RES), Technologies and Production  Important Energy Projects underway:  Establishment of the Energy Centre at Vasilikos -Terminal for the importation and storage of petroleum products  Exploration of vast natural gas reserves in Cyprus’ Exclusive Economic Zone (EEZ)

26. Development and Infrastructure Projects  Projects for promotion of sea tourism (Five marinas in coastal cities)  Large international-scale development projects and thematic parks  Luxurious and state-of-the-art resorts and golf courses  Infrastructure for development of advanced educational and health services

27. Contact CIPA to learn more! For more information regarding investment opportunities in Cyprus, please contact us:  +357-22-441133  www.cipa.org.cy www.cipa.org.cy  info@cipa.org.cy info@cipa.org.cy

28. Thank you! Спасибо!