The government law that would cut the red tape and speed up the procedures for what are defined as ‘strategic investments’ is commendable, but whether it will have the desired results is another matter. Over the years, there have been many attempts by different governments to cut the bureaucratic procedures driving away potential investors, but they all failed.
The impression given was that no government could bring under control a state bureaucracy designed to place as many obstacles as possible in the way of foreign investors and companies wanting to set up operations in Cyprus. Most, inevitably, took their money and business elsewhere, to countries whose bureaucracies were not so hostile to foreign investment.
This will all change now, according to the new Interior Minister Nicos Nouris who presented the Facilitation of Investments Law of 2019 to the House on Monday. The law, Nouris said, would set up a ‘one-stop shop’ for strategic investments above €1 million. A project manager would act as a liaison between the licensing department and the investor and the state would guarantee that all licences and permits required for a project would be issued within 12 months by a single licensing authority, under the Strategic Investments Management Directorate.
Even this sounds rather bureaucratic, despite the idea being that the Directorate will deal with and secure approvals from all the different authorities rather than the investor and get everything done within a year. The question which nobody at the legislature seems to have asked the minister was why only ‘strategic investments’ would be eligible for speeded up procedures? According to the law, certain criteria would have to be satisfied before the investment can be classified as ‘strategic’ and have access to the Strategic Investments Management Directorate.
What about non-strategic foreign investments and investments by local businesses? Why would they have to wait for years before the authorities issue licences and permits for their proposed investments? In a way the Facilitation of Investment law, which could be seen as discriminatory, is an admission of defeat by the government – an acceptance that it cannot change state bureaucracy and improve the lousy service it has been providing. The concept of customer care will continue to be alien to state services that will continue to be slow, inefficient and obstructive to locals and foreign businesses that do not meet the strategic investment criteria.
The government’s objective should be to change the entire ethos and work practices of the state services so that it can serve rather than punish people dealing with it. This is easier said than done, but hopefully, if the Facilitation of Investments Law proves effective the government might feel confident enough to undertake the more sweeping changes to the state bureaucracy that will benefit everyone.