The American Chamber of Commerce in Cyprus (AmCham Cyprus) has called for a measured approach to implementing the OECD/G20 Pillar Two global minimum tax, warning that policy choices could affect investment, employment and Cyprus’ position as an international business hub.
While supporting international tax cooperation and compliance with OECD and EU rules, the chamber urged policymakers to assess the regime’s impact on Cyprus’ competitiveness. International investors and multinational companies have raised concerns about how the framework could influence future investment decisions.
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Investment Risks And Competitive Pressure
Some US-headquartered multinationals could reconsider expansion plans or choose other jurisdictions if Cyprus becomes less competitive, AmCham warned. The chamber said an objective assessment is needed to determine the potential effects on investment, employment and long-term growth.
The comments followed Finance Minister Makis Keravnos’ rejection of claims that Pillar Two was driving companies out of Cyprus. According to Keravnos, the government is preparing an amending bill following a European Commission decision as part of Cyprus’ obligations under the OECD framework.
Pillar Two Targets Large Groups
Pillar Two does not impose a 15% tax on every company in Cyprus, Keravnos stressed. Instead, the rules apply to multinational and domestic groups with annual revenue above €750 million, with additional tax potentially applying when their effective rate falls below 15%.
The framework was agreed through the OECD, G20 and EU before being incorporated into EU law.
US Investment And Future Growth
US investment remains an important source of foreign capital, jobs and business activity in Cyprus, AmCham said. The chamber cited US foreign direct investment stock of about $14.9 billion and estimated that US companies generate around €140 million in annual tax revenues.
BrainRocket’s recent closure of its Limassol offices and relocation of most remaining employees abroad has added to the discussion about Cyprus’ ability to retain international employers. No evidence has linked the company’s departure to Pillar Two, but the case has heightened attention on the island’s competitiveness.
AmCham Seeks Economic Impact Assessment
An independent assessment should examine affected multinational groups, employment, economic activity, government revenues and potential effects on future investment, AmCham said. The chamber also called for consultation with investors, businesses and tax professionals.
Cyprus should use the flexibility available under international rules while continuing discussions with the OECD and EU, AmCham said. It also proposed a broader US-Cyprus investment competitiveness strategy focused on talent, regulation and investor services.
