Strengthening Economic Ties: Cyprus and Vietnam Sign Double Taxation Agreement
Cyprus and Vietnam have recently taken a significant step forward in enhancing their economic relationship. On a momentous Monday, officials from both countries gathered to sign an agreement designed to avoid double taxation and prevent tax evasion. This move aims to facilitate smoother business interactions, promising to make transactions between the two nations not only easier but also more predictable.
A Strategic Signing
The agreement was formalized at the Ministry of Finance, where Cyprus’s Finance Minister, Makis Keravnos, and Vietnam’s Deputy Minister of Finance, Cao Anh Tuan, put pen to paper. This initiative underscores both countries’ commitment to strengthening their economic and political ties, despite the considerable geographical distance separating them. Minister Keravnos emphasized the shared values and burgeoning interest in cooperation between Cyprus and Vietnam.
Clarity and Stability for Business
In his remarks following the signing, Keravnos stressed that this agreement establishes clear guidelines for how income and capital gains are taxed. This clarity is crucial, as it fosters an environment of stability and security for businesses operating across both jurisdictions. By preventing potential tax avoidance, the agreement aims to create a fair playing field, encouraging investment and trade between Cyprus and Vietnam.
A Milestone in Bilateral Relations
For Vietnam, this agreement represents yet another milestone in a steadily improving relationship with Cyprus. Deputy Minister Tuan noted the significance of 2025, which will mark 50 years of diplomatic relations between the two nations. Trade between Cyprus and Vietnam has already reached an impressive $111.6 million, while Cyprus has established 28 investment projects in Vietnam, totaling nearly $470 million in registered capital. These investments span various sectors, including real estate, manufacturing, and agriculture, indicating a growing mutual interest and commitment to collaboration.
Leveraging Strategic Advantages
Tuan highlighted the unique strengths Cyprus brings to the table—especially in areas such as tourism, financial services, and logistics. The island’s strategic location serves as a crucial link between the Middle East, southern Europe, and North Africa, making it an attractive partner for Vietnam. This perspective aligns perfectly with Vietnam’s long-term economic ambitions, as it seeks to expand its international footprint.
Building on a Global Framework
Notably, Vietnam is not new to the world of international trade agreements. With 81 double taxation agreements already signed globally and participation in 19 free trade agreements, including the EU-Vietnam Free Trade Agreement, Vietnam is actively working to enhance its trade and investment landscape. Tuan characterized the agreement with Cyprus as both a practical tool for businesses and a symbol of friendship between the two nations. It establishes a transparent and stable legal framework, which is crucial for foreign investment and collaboration.
The Economic Impact for Cyprus
For Cyprus, the agreement holds particularly significant implications. Minister Keravnos pointed to the presence of Cypriot pharmaceutical companies in Vietnam as a testament to the growing economic ties. Additionally, he mentioned the 4,000 Vietnamese nationals currently working in Cyprus, indicating a vibrant, multicultural workforce that contributes to the local economy.
Moreover, there are ripe opportunities for future collaboration, especially in emerging sectors such as information technology. Vietnam’s dynamic and expansive economy aligns with Cyprus’s vision for its own development, including its longstanding historical relations with the country, reflecting mutual support on various national issues.
Looking to the Future
The optimism surrounding the agreement is palpable on both sides. Both Minister Keravnos and Deputy Minister Tuan expressed confidence that this new collaboration would take economic and financial relations to a deeper level. As this partnership evolves, it promises to yield tangible benefits for businesses and citizens in both Cyprus and Vietnam, paving the way for a more interconnected economic future.