The Foreign Minister of San Marino, Fabio Berardi, who was in Cyprus on an official visit, met President Tassos Papadopoulos and signed a protocol which may lead to a Double Tax Avoidance Treaty between the two countries.
Cyprus has a wide range of DTAAs, especially with Eastern European and ex-USSR states, which make it a good base for investment into those regions. San Marino is a good base for Italian holding companies and has a thriving banking sector. Many Italian companies would be likely to use a San Marino/Cyprus axis in their international structures if there was a DTAA.
Welcoming Mr Berardi on his visit, the President of the Cyprus House of Representatives Demetris Christofias stressed that Cyprus and San Marino shared many common characteristics such as their small state status and mutual interests, which should be promoted on the basis of a dialogue and solidarity. For his part, Mr Berardi expressed San Marino’s unreserved support to the people of Cyprus, adding that his country defended the positions of Cyprus regarding its national problem in international fora.
Both Mr Christofias and Mr Berardi made reference to the strategic role small states could play in the international scene, and underlined the need for enhancing further bilateral cooperation.
Landlocked San Marino, with a population of 27,000, is the world's second smallest and oldest surviving republic. Surrounded by Italy, it is a holdover from an era when small city-states proliferated across Europe. Tourism dominates the economy of the 61 square kilometre country, which welcomes more than three million visitors every year. However, financial services run a close second in importance, and GDP per head is $35,000, one of the highest figures in Europe.
San Marino is said to have been founded in the fourth century AD by a Christian stonemason called Marinus, who took refuge there and set up a small community. Its rugged isolation helped the enclave to develop and keep its independence. An 1862 friendship and cooperation treaty with Italy, which has since been revised and expanded, reinforced San Marino's independence.
In 1992 San Marino was admitted to the UN and also joined the IMF. In 1991 the government signed a financial and monetary agreement with Italy in which the republic gained greater autonomy in banking and financial operations as well as an agreement with the EU putting the country on equal footing with other EU member countries over trade and tariffs.
San Marino benefits from the customs union with the European Union (EU) and adopted the euro on Jan. 1, 1999. In the three years following the adoption of the euro, the growth rate accelerated to an average of more than 8% per year. The country's lower wages and tax rates on labor, lower tax burden, industry-friendly public administration relative to its EU neighbors and its long-term political stability have contributed to Sammarinese prosperity.
More recently legislation has been enacted to deter money laundering and an advance commitment letter was addressed to the Organization for Economic Cooperation and Development (OECD) in April 2000 stating that San Marino would comply with OECD guidelines regarding "harmful tax competition." This assertion was reiterated by San Marino upon membership into the World Bank in September 2000.
