Cyprus and Vietnam have officially signed a groundbreaking agreement aimed at preventing double taxation and combating tax evasion, a move expected to significantly enhance their economic and political relationship. This accord, formalized at the Cypriot Ministry of Finance, has been lauded by officials as a pivotal step towards promoting greater cross-border trade and investment. It will undoubtedly foster a more predictable and secure business environment for entities operating between the two nations.
The signing ceremony was attended by prominent figures, including Makis Keravnos, Cyprus's Minister of Finance, and Cao Anh Tuan, Vietnam's Deputy Minister of Finance. This significant pact arrives as both countries are preparing to celebrate fifty years of diplomatic relations in 2025. The agreement's principal aim is to establish a clear and stable legal framework for individuals and businesses with financial interests in both Cyprus and Vietnam. Minister Keravnos highlighted that the pact provides precise guidance on the taxation of income and capital gains, thereby reducing uncertainty.
This initiative stems from a mutual aspiration to strengthen existing economic ties, which have already shown impressive growth. Bilateral trade between Cyprus and Vietnam has reached $111.6 million, demonstrating a robust upward trend. Furthermore, Cyprus has made a substantial investment in Vietnam, with 28 projects totaling nearly $470 million, primarily focused on real estate, manufacturing, and agriculture. While Vietnamese investment in Cyprus is growing, this new tax treaty is anticipated to accelerate this development considerably.
Vietnam has consistently pursued similar international agreements, having now entered into eighty-one such treaties globally. Its involvement in nineteen free trade agreements, including the comprehensive EU-Vietnam Free Trade Agreement, underscores its commitment to global economic integration. The new double taxation agreement with Cyprus aligns perfectly with this strategic approach, establishing a transparent and internationally recognized legal framework, as confirmed by Deputy Minister Tuan.
The ramifications of this agreement are considerable, effectively reducing the financial burden and complexity for businesses operating across both jurisdictions. This enhanced clarity is projected to stimulate increased trade volumes and investment flows in both directions. Moreover, the pact signifies a deepening of cooperation on tax matters, facilitating improved information exchange and mutual assistance between fiscal authorities. Ultimately, this treaty is designed to cultivate a more secure and attractive environment for businesses, strengthening the overall economic partnership.