Cyprus (officially: Republic of Cyprus) is an island nation in the eastern part of the Mediterranean Sea, just south of the Anatolian peninsula of the Asian mainland and east of the Greek island of Rhodes.

It is the third largest island in the Mediterranean Sea (after the Italian islands of Sicily and Sardinia).

A former British colony, Cyprus gained independence in 1960, while the British retained two sovereign base areas.

Turkey launched a two-stage invasion of the island in 1974. This invasion led to the internal displacement of thousands of Greek and Turkish Cypriots and the subsequent establishment of a separatist regime to govern the invaded area, currently styling itself Turkish Republic of Northern Cyprus, separated from the south by the United Nations-controlled “green line” and recognized only by Turkey.

Today, Cyprus is a developed country and a member state of the European Union (EU), although economic affairs are substantially dominated by the division of the country.

The island's economy is prosperous and has diversified in recent years. Cyprus has been sought as a basis for several offshore businesses, due to its highly developed infrastructure and favourable tax regime.

The economy of the Turkish Cypriot part is dominated by the services sector (including the public sector), tourism, and trade. This economy operates on a free-market basis, although it continues to be handicapped by the political isolation of Turkish Cypriots and shortages of skilled labour.

Despite these constraints, the Turkish Cypriot economy turned in an impressive performance, with growth rates of 9.6 and 11.4% (2006 and 2007). The most vital reason for this sudden increase of the Turkish Cypriot economy was the conditional opening of the “borders” with mainland Cyprus.

Recently, oil has been discovered in the sea south of Cyprus (between Cyprus and Egypt) and negotiations are pending with Egypt to reach an agreement as to the exploitation of these resources. The level of the oil field in terms of production (barrels per day), that the two countries will be able to produce, is still a matter of speculation.

At this moment, Cyprus is the ninety-fifth largest economy of the world.