The Cypriot government has announced a long term plan to target inward property investment and finance, with the ambition of transforming itself into the main trade, finance, services and tourism centre in the east Mediterranean.

The government is particularly keen to take advantage of its position as a hub between the EU and the Middle East, and has pointed to the high levels of education, a high standard of services and low taxation as obvious draws to investment.

'All these advantages as well as the revolution in the sectors of information and communications create the conditions to establish Cyprus as the main trade, finance and services centre in the Eastern Mediterranean, as the pipeline that will connect a market of 450 million Europeans with 300 million consumers of the Middle East" said Minister of Commerce, industry and tourism George Lillikas

Mr Lillikas also announced that the government would be simplifying the process of gaining construction permits and rationalising building regulation to aid both holiday home growth and commercial property investment.

The rate of expansion can be measured by the Cypriot construction industry, currently employer of 20 per cent of island residents.

"It is true to say that the last few years have been an amazing time for Cyprus. As a country we have matured overnight and now with the backing of being a full European member we envisage Cyprus becoming stronger and even more popular," said Litsa Chrysostomou, international sales manager for agents Antonis Loizou and Associates.

The country now draws two million tourists a year, with half of those coming from the UK, and the number of tourists rising by, on average, around seven per cent every year. In what has been a good year for the Cypriot tourism industry, 650,000 British tourists arrived over the summer months, and 60 per cent of the current stream of inward property investment comes from the UK.

Interest rates have been consistently falling since the islands recent EU accession, and are likely to continue doing so as the country prepares for entry to the euro, further boosting potential property investment gains. And the current shortage of year round jet to let property makes the island particularly rich for buy to let investors, says Neil Lewis chief executive of Property Secrets.

"South-east Cyprus beats the Bulgarian coast and the Costa del Sol hands down as a sun investment location. It offers investors high potential reward for comparatively low risk - something which neither of the other two favourite destinations can," he said.