Successful Business Magazine #46

OUR TEAM

Successful Business Magazine Issue 46, January - March 2023

Editorial Board: Natalia Kardash, Andrey Korneev, Igor Nossonov, Vladimir Izotov.

Editorial Team: Sophia Petrides, Agnieszka Rakoszy, Andrew Eric.

Contributors: Julia Avanessova, Ekaterina Kardash, Lusine Mirzoyan, Igor Voronin, Kiryl Shcharbinin, Alina Moseykina. Circulation: 3,000 copies.

Distribution: free at business forums, conferences, seminars. Subscriptions: four issues – 48 euro (delivery by courier service) or 24 euro (by mail).

Website: www.sb-cyprus.com

A note to readers: the views expressed are the authors' and not necessarily those of SUCCESSFUL BUSINESS Magazine. Authors may have consulting or other business relationships with the companies they discuss.

Copyright: no part of this publication may be reproduced or transmitted in any form or by any means without prior permission of VESTNIK KIPRA or N. G. K. Cyprus Advertiser Ltd.

Photos: Vestnik Kipra, Successful Business, PIO, CNA,

CYPRUS

GROUP

Vestnik Kipra Publishing House (N. G. K. Cyprus Advertiser Ltd)

Editor-in-Chief: Natalia Kardash (nk@vkcyprus.com)

Director Lusine Mirzoyan (mm@vkcyprus.com)

Head of Administration Dept.: Galina Panagassova (ads@vkcyprus.com) www.vkcyprusgroup.com Tel.: (+357) 25 590530

Postal Address: P.O.Box 58236, 3732, Limassol, Cyprus

EDITORIAL

Each January Successful Business Magazine is published in English (in April, July and October we publish in the Russian language). This issue is addressed to all the expats in Cyprus, who want to know more about the economy, finance, and business development of the island and the Eastern Mediterranean region.

Recently, there were many changes in the way we see the prospects of economic prosperity in Cyprus, the potential of the Cyprus economy, its main drivers and areas for improvement. The services sector in Cyprus is still the biggest driver of the economy but it shifted from professional accounting and legal services to digital products and services, new projects in the energy sector, innovations, technologies and education. For decades, tourism was one of the main pillars of the Cyprus economy. It kept its role, however, in 2021-2022, it changed from being a tourism of agencies to becoming a tourism of individuals.

Natalia Kardash Publisher, Editor-in-Chief

Projects like the Euro-Asia Interconnector that will bring Israel, Cyprus and Greece into one network became a reason to strengthen regional cooperation.

Cyprus is on the way to establishing a modern entrepreneurial ecosystem of startups, SMEs and well-established local and international businesses. Efforts of the private sector and the newly established cooperation between business and public sectors resulted in a transformation of Cyprus into a regional tech centre that has a fastgrowing comprehensive ecosystem of information and communications technology companies.

In this issue you will find a summary of the most important news and events of recent months, Cyprus economy forecasts for 2023, statistics, as well as analytics. We spoke to a few company leaders to track developments sector by sector: investment services, gaming development industry, ICT and innovations, health and lifestyle. You will also find some insights from the Best Invest Congress speakers and a photo reportage of this event.

Having this opportunity, we invite you to the next event organised by our magazine: Best Invest Congress (29-30 of May) and Best Legal Conference (28-29 of September).

€46M €31M

€40M

CYPRUS NEWS www.sb-cyprus.com

€23M

The second phase of Eleftheria square

One billion for the capital

€16.5M €10M €12M

New mental health centre Astromeriti-Evrychou highway

€88

The commercial triangle on MakariosEvagorou-Stasikratous the tax office and Nicosia district offices

€2M €1M

Doxa THOI Katokopias FC football stadium

Over €1 billion has been spent in the past decade to improve Nicosia’s development and business drive. Between 2013-2022 there have been 112 projects at a cost of €1.25 billion with funding from state coffers or co-funding from the EU. So far, 71 projects have been completed, while 23 are underway – valued at €461 million.

M €400K €72M

first phase of the Nicosia perimeter highway renewing Nicosia’s old theater new theater building

Cyprus banks do not dare to lend money

The European Central Bank statistics reveal that the systematically important banks of Cyprus had a ratio of interest-bearing loans to deposits of around 47 per cent at the end-June 2022. The corresponding ratio for counterpart banks in 17 other EU countries was around 100 per cent. This factor is indicating the inability of banks to use a sizable portion of their deposits in extending income-yielding loan accounts. In fact, in the first half of 2022 the returns on equity and assets for Cyprus banks averaged 2.18 per cent and 0.17 per cent respectively, while such returns on equity and assets for banks in 17 other EU countries were much higher and averaged 6.83 per cent and 0.42 per cent respectively.

More public sector employees

Expenditure on personnel is expected to reach €3.2 billion or 12.2 per cent of GDP in 2022 partly as a result of an increase of 1,165 or 6.3 per cent in the number of casual workers over the 12 months to November 2022

Eight housing units in Kokkinotrimithia

A&E department at Makarios hospital

Real estate market growth

StockWatch has reported that 12,074 sales documents were filed to the Department of Lands and Surveys up until November 2022, a 33 per cent increase from 9,063 documents last year. That would make the 2022 period the most active since 2008 with its 14,043 sales.

Stelios Ioannou library

Cyprus GDP to fall in 2023

According to a Central Bank of Cyprus report Cyprus’ GDP growth rate is expected to fall to 2.5 per cent in 2023, before rising to 3.1 per cent both in 2024 and 2025.

The report predicts a mild and short-lived recession and the downward revision of the outlook for the external environment, due to the turbulence in the international energy markets that adversely affected the consumer and business climate,

In 2022 Cyprus’ GDP reached a growth rate of 5.8 per cent.

MONEYVAL: Cyprus makes progress

The second enhanced follow-up report (FUR) by Council of Europe’s Committee of Experts on Money Laundering and Terrorist Financing (MONEYVAL) said Cyprus made progress in improving its compliance with Financial Action Task Force (FATF) standards on combating money laundering and the financing of terrorism.

At present, Cyprus is «compliant» with 16 of the 40 FATF recommendations, «largely compliant» with 20 recommendations and «partially compliant» with four recommendations, namely non-profit organisations, correspondent banking, new technologies, and powers of law enforcement and investigative authorities. It has no «non-compliant» ratings.

According to the report, the authorities took measures to assess terrorism financing (TF) risk exposure by the non-profit sector and strengthen its oversight activities and made substantive progress in the implementation of its VASP regime.

However, certain moderate shortcomings remain. The measures were not fully implemented, there is no national action plan to address risks identified in the VASP sector and some technical deficiencies remain in the implementation of preventive measures, including the so-called «travel rule».

Moreover, the interception of the content of communications covers only some ML predicate offences, namely murder or manslaughter, human trafficking, drug dealing, corruption offences and offences related to counterfeiting currency.

Real estate prices continue to rise

Property sale values in Cyprus increased by 3.9 per cent for apartments, 1.1 per cent for houses, and 0.6 per cent for offices, on a quarterly basis in 2022, according to Cypriot fintech Ask WiRE property market report, for the third quarter of 2022.

They decreased by 0.3 per cent for retail space and 1.5 per cent for warehouses.

In terms of holiday apartments and holiday houses, sale values increased by 1.9 per cent and 0.6 per cent respectively.

Moreover, on an annual basis, prices increased by 9.4 per cent for apartments, 1.4 per cent for houses, 3.9 per cent for holiday apartments and 0.4 per cent for holiday houses.

Limassol stands out from the districts, as sale values of apartments continued to rise for the fourth quarter in a row, the report said, noting that these increased by 4.8 per cent during the third quarter of the current year, while the Paphos district experiences a sharp rise in rental prices.

CYPRUS NEWS www.sb-cyprus.com

6.17bn

EURO REACHED CYPRUS’ TRADE DEFICIT

Increase in Cyprus trade deficit

Cyprus’ trade deficit reached 6.17 billion euro in the first ten months of 2022, exceeding the whole deficit of 2021 by almost one bilion.

According to preliminary data by the Cyprus Statistical Service (CyStat), the total imports of goods, from both EU Member States and third countries, between January and October 2022 amounted to 9.38 billion, compared to 6.99 billion in the corresponding period from 2021, marking an increase of 34.3 per cent.

The total exports of goods experienced a 21.2 per cent increase, amounting to 3.2 billion, compared to 2.65 billion for the same period of the previous year.

3.2bn

EURO AMOUNTED THE TOTAL EXPORTS OF GOODS

Successful Business Magazine

Cyprus Airways’ new strategic plan

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Cyprus and Lebanon signed an agreement for the construction and maintenance of a new subsea telecommunications connection between the two countries. The CADMOS-2 cable will complement and subsequently replace a cable system interconnecting the two countries since 1995. It is expected to be operational in 2024.

According to Cyprus Airways’ new five-year strategic plan, by 2026 the airlines will operate flights to 30 destinations.

By summer 2023, the number will increase from 11 to 16, with the airlines introducing twice-weekly flights to Prague, Zurich and Cairo, Basel and Milan Bergamo.

Moreover, Athens will have three flights daily, Beirut – one, flights to Tel Aviv will increase to up to 10 flights per week and Yerevan – up to four flights per week.

Current popular destinations such as Paris and Rome will remain in service throughout the summer along with Santorini (twice weekly), Skiathos (twice weekly) and Preveza (twice weekly).

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The Bank of Cyprus was named Bank of the Year in Cyprus for 2022 by the international magazine «The Banker». The magazine’s editor-in-chief Joy Macknight said the bank won the award for strengthened its digital economy platform Jinius and expanded its ESG initiatives which improved its efficiency and the quality of its customer service.

Crete and Rhodes will be served by flights three times a week, while Thessaloniki will be served daily.

The airlines plan to increase the fleet to six aircraft in 2024, nine aircraft in 2025 and up to 11 aircraft by 2026.

In 2023 Cyprus Airways will operate with four Airbus A320ceo aircraft with a view to transitioning to the Airbus A320neo by 2025.



Eight thousand passengers with 2,000 vehicles made the trip from Cyprus to Greece this summer between 19 June and September 16. The route is operated by a Cypriot-registered cruiser, the Daleela, which can carry up to 270 passengers and 100 cars. The voyage lasts about 30 hours. The ferry is expected to resume in May of 2023.

Passenger traffic increased



The Deputy Ministry of Shipping announced that following a tender process it had signed a contract with the CSC Consortium (Cellock, SignalGenerix and Computer Resources International (Luxemburg)) for digitising its services at the cost of 1.68 mln euros. The project, financed by the EU through the Recovery and Resilience Facility, is expected to be completed within 21 months.

Cyprus airports’ operator Hermes said that until November 2022, Larnaca and Paphos welcomed 8.7 million passengers, up from 4.8 million in 2021.

In the first eleven months of 2019, a record year for Cyprus’ tourism, the figure was 10.8 million people. More than 9 million passengers used two Cyprus’ airports by the end of 2022, according to Eleni Kaloyirou, CEO of Hermes Airports.

DESTINATIONS WILL BE OPERATED BY CYPRUS AIRWAYS BY 2026

National Tourism Strategy 2030

Outlining the National Tourism Strategy 2030, Deputy Minister of Tourism, Savvas Perdios said the ultimate goal for the island’s tourism industry is to be ranked in the world’s top 30 countries as an all-season, high quality, digitally intelligent and accessible tourist destination.

In fact, Cyprus is currently ranked 31st out of 117 countries in the Travel and Tourism Development Index of the World Economic Forum, 21st out of 43 in Europe and 6th out of 16 in the Mediterranean.

The minister added that 95 per cent of the National Tourism Strategy for the period 2020-2022 had been implemented. Cyprus had created a new tourist brand name for itself «as a destination with history, culture and authentic experiences all-year round» and the connectivity of the island, both by sea and by air, improved, going back to the levels as in 2019. Cruise companies became more active, using the island as a home port. In 2022 cruise ship passenger arrivals increased to 350,000 people, from 130,000 in 2019.

However, more work is needed to further improve product quality and public transport as well as to speed up the visa procedures for entry from third countries.

65.4%

www.sb-cyprus.com



President Nicos Anastasiades signed the foreclosures law, finally accepting the moratorium on prohibiting repossessions on primary residences valued at up to 350,000 euros, business premises with annual turnover of up to €750,000 euros, and agricultural land plots valued at up to 100,000 euros, until January 31, 2023.



The Cypriot banking system incurred losses after tax of 36 million euros, on a consolidated basis, in the first half of 2022, compared to profits of 22.54 million euros in the corresponding period of 2021, according to a report released by the Central Bank of Cyprus.

According to the data, which have a reference date of September 30 2022, total net operating profits stood at 916.3 million euros in the first half of 2022, compared to 939.5 million euros in the corresponding period of 2021.



Global ratings agency Fitch announced that it has upgraded the Bank of Cyprus’ Long-Term Issuer Default Rating (IDR) to «B+» from «B-» and Viability Rating (VR) to «b+» from «b-».

In addition, the agency’s outlook on the Long-Term IDR has been deemed as Positive.



According to Eurostat, the percentage of employees that work from home in Cyprus has increased after the COVID-19 pandemic, up to nearly 7 per cent. In 2019, the figure was 1.3 per cent, in 2020 – 4.5 per cent, and in 2021 – 6.7 per cent.

LABOUR FORCE

OF THE POPULATION AMOUNTED

OF CYPRUS IN THE THIRD QUARTER OF 2022

Successful Business Magazine

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Eurobank increased its stake in Hellenic Bank to 26 per cent, and became its majority shareholder, provided that its acquisition of a 13.4 per cent share from video game company Wargaming is approved by the supervisory authorities in Frankfurt.

Tourism revenue reaches 88 per cent of pre-Covid levels

In the first nine months of 2022, revenue from Cyprus tourism reached an impressive 88 per cent of pre-COVID levels.

According to data from the Cyprus Statistical Service, for the period January-September 2022 tourism income was estimated at 1.965.4 bln euros from 1.045.2 bln euros in the same period of 2021 and to 298.9 mln euros during COVIDravaged January-September 2020.



The Cyprus Statistical Service (CyStat) declared that according to its preliminary financial results, Cyprus’ general government posted a surplus of 556.4 million euros for the period between January and October 2022. The amount is equal to 2.1 per cent of GDP. In the same period of 2021, the central government recorded a deficit of 329.5 million euros, which corresponded to 1.4 per cent of GDP.

It is down by 268.6 mln or 12 per cent, compared to the record-breaking pre-pandemic 2019 when it stood at 2.234 bln.

Just in September alone, the revenue increased on an annual basis by nearly 30 per cent or 80 mln euros, reaching 348.3 mln euros, compared to 268.2 mln in September 2021. Daily expenditure per person in September increased to an average of 85.97 euros from 72.53 a day last year. And total per capita expenditure increased in September to 842.49 euros, from 790.63 euros in September last year.

Israelis were the biggest daily spenders, with an average budget of 153.40 euros, while the most frugal were Greeks, with 45.11 euros per day.



The Council for Registration of Real Estate Agents announced an implementation of a new measure seeking to eliminate any misunderstandings created by the generic real estate valuation provided by the Land and Surveys Department. The statement that the general valuation assessment is only useful for tax purposes and does not represent the market value of the property will be printed on every title deed.

Although tourist arrivals in September increased by 21.9 per cent to 413,382 (from 339,242 last year), the average length of stay decreased to 9.8 days from 10.9 days in 2021.

Tourism is a key driver of the economy, contributing around 15 per cent of Cyprus’ GDP.

Pre-coronavirus 2019 was a record year for the Cypriot tourism industry, seeing 3.97 million tourists arrive on the island and spending 2.68 bln euros.

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The East Mediterranean Gas Forum (EMGF) announced that it has decided to approve the proposal of the Cypriot Presidency of the forum for the creation of a permanent Scientific and Technical Advisory Committee. The committee, under the supervision of the EMGF, will provide the necessary scientific and technical expertise to the member countries on decarbonising the energy sector and mitigating the effects of climate change.

PASSENGERS MADE THE FERRY TRIP FROM CYPRUS TO GREECE THIS SUMMER

Nearly half of businesses suffer cyberattacks

Nearly half of the Cyprus businesses experienced some kind of cyberattack in 2022, according to surveys on cyber security.

The surveys showed that 46 per cent of businesses were attacked or suffered a security breach in the last 12 months, with an average of three or four attacks per month.

Among the local businesses that were attacked, 48 per cent incurred an average financial cost of almost 23,000 euros. The most frequent attack was phishing (36 per cent).

www.sb-cyprus.com

Cyprus wines make comeback

In the framework of the first Ministry of Commerce’s National Action Plan to promote Cypriot wine, grants totalling 15.3 mln euros had been approved for 45 wine companies, including 13 new wineries, and 13.5 mln euros had been distributed to date to 43 wineries.

In 2020, Cyprus exported $1.97 mln in wine, making it the world’s 68th largest exporter.

The main destination of wine exports from Cyprus is China ($288k), Russia ($231k), Denmark ($204k), Algeria ($150k), and Kenya ($149k).

The fastest-growing export markets for Cyprus wine between 2019 and 2020 were Denmark ($195k), France ($125k), and Italy ($29.7k).

The ministry operates the Export Help Desk, responsible for facilitating contacts between wineries and importers in 44 countries, which 16 Cyprus Trade Centres cover.

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Unemployment in Cyprus increased to 6.8 per cent in the third quarter of 2022, compared with 6.6 per cent during the corresponding period of 2021, according to a report released by the Cyprus Statistical Service (CyStat). The number of unemployed persons amounted to 32,868 in the third quarter of 2022, compared with 31,355 persons in the third quarter of 2021. The labour force in the third quarter of 2022 amounted to 486,492 persons or 65.4 per cent of the population in comparison to 472,314 persons (64.6 per cent) in the corresponding quarter of 2021.

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According to the CyStat report, government employment in Cyprus experienced a 1 per cent increase year-on-year in November 2022. The increase has been primarily attributed to an increase 6.3 per cent (1,165 people) in temporary staff, especially in public education employees. In terms of permanent staff, there was a decrease of 747 people, which corresponds to a percentage decrease of 2.8 per cent.

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According to national investment agency Invest Cyprus, in the last two years the number of international technology companies investing in Cyprus increased by 49 per cent and the total number of jobs – by 78 per cent. By the end of 2022, the total impact on the economy was 3 billion euros.

Sources: CBC, Cyprus Mail, CNA, CyStat, StockWatch.

46% OF CYPRUS BUSINESSES SUFFERED A CYBERATTACK OR A SECURITY BREACH IN THE LAST 12 MONTHS

CYPRUS STATE BUDGET 2023

The government welcomed parliament approving the 2023 state budget, the last tabled by the 10-year administration of outgoing President Nicos Anastasiades.

The budget provides for general government revenue of 11.76 bln euros and expenditure amounting to 11.29 bln.

It features a fiscal surplus of 0.46 bln euros, corresponding to 1.7 percent of GDP, while primary (excluding debt servicing expenditure) is estimated at 3 per cent of GDP.

The budget provides an increase of 12 per cent in development projects and increased social protection spending, while debt servicing expenditure is estimated to drop by 500 mln euros.

Primary spending in 2023 is expected to mark an increase of 554 mln euros, while social transfers are estimated to increase by 4 per cent.

Parliament froze 100 mln euros in state expenditure, including a 10 mln budget for the island’s audio-visual incentive scheme.

The budget was approved by 29 votes in favour and 24 against.

According to the budget macroeconomic scenario of Ministry of Finance GDP growth is estimated to slow down to 3% in 2023 from a projected 6% this year and will amount to 3.3% and 3.2% in 2024 and 2025 respectively. Inflation is estimated to decline to 3% in 2023 from a projected 7.7% in 2022.

The budget features fiscal surplus of €0.46 billion corresponding to 1.7% of GDP while primary (excluding debt servicing expenditure) is estimated at 3% of GDP.

between the total appropriations of the 2023 Budget and the MediumTerm Financial Framework 2023-2025 and the total expenditure ceilings set by the Council of Ministers (2025).

Successful Business Magazine

www.sb-cyprus.com

Personnel spending, including pensions and bonuses, is expected to rise 4.7% to 3,193.7 million in 2023, up from 3,048.8 million in 2022. The above increase is primarily due to the payment of the ATA, increments, and an increase in employment.

Operating expenses are expected to rise 15.5% to 1,099.7 million in 2023, up from 951.6 million in 2022. The increase is due to inflationary revaluations caused by increases in fuel prices, energy products, and supply chain shortages.

TRANSFER PAYMENTS (€ million)

Transfer payments primarily consist of social benefits, grants to public and private law organisations, and grants to local governments, as well as government contributions to various funds (Social Security and GIS), and our contribution to the EU budget.

DEVELOPMENT SPENDING (€ million) (projects under construction, co-financed projects, training, educational institution sponsorships, fixed assets, etc.)

The above increase is due to the start of major development projects such as road, building, and other projects, as well as to promote projects included in the Recovery and Resilience Plan.

ECONOMIC FORECAST FOR CYPRUS

European Commission Autumn 2022 Economic Forecast: The EU economy at a turning point (released in November 2022)

STRONG GDP GROWTH IN 2022

Real GDP in Cyprus increased by 6.3% in the first half of 2022, compared to the same period of 2021, driven mainly by domestic demand. Buoyant private consumption growth was supported by increased employment and savings accumulated during the pandemic. Construction investment was negatively affected by the high prices of material and tightening financing conditions. The tourism sector performed well with arrivals and revenues from tourism reaching almost 80% of the pre-pandemic levels. Exports of Information Communication and Technology (ICT) and of financial and transport services continued to expand in the first half of 2022.

HEADWINDS TO WEIGH ON GROWTH

Low purchasing power in Cyprus’ trading partners is set to weigh on exports of services, notably tourism. Moreover, weakening consumer and business confidence in Cyprus and increasing interest rates are negatively affecting private consumption and household investments. This is expected to intensify in 2023. Targeted government measures to mitigate the impact of high energy prices and the partial indexation of wages are expected to support purchasing power. The wage indexation concerns around 50% of employees covered by collective agreements, limiting somewhat the negative impact on private consumption.

UNEMPLOYMENT IS SET TO DECLINE

Employment and vacancies were on the rise in 2022. In 2023, the unemployment rate is forecast to remain stable, before declining to 6.9% in 2024.

THE DEBT-TO-GDP RATIO IS EXPECTED TO DECREASE OVER THE COMING YEARS

ECONOMIC FORECAST FOR CYPRUS TRENDS AND FORECASTS

PUBLIC FINANCES CONTINUE TO BE SOUND

The fiscal performance has been stronger than expected over 2021 and 2022, supported by the economic rebound. In 2022, the government headline balance is forecast to turn into surplus, reaching 1.1% of GDP.

Government revenues are set to grow strongly in 2022 by 10.2%, supported by high inflation. This is only marginally offset by an increase in public spending of 3.1%. The costs of measures to mitigate the impact of high

energy prices, mainly the reduction of indirect taxation and subsidies on energy bills, are estimated at 0.7% of GDP in 2022. For 2023, government revenues are projected to increase at a slower pace, reflecting the slowdown in economic activity.

The debt-to-GDP ratio is expected to decrease over the coming years on the back of expected nominal GDP growth (including due to the high GDP deflator) and primary surpluses. It is set to reach 89.6% by the end of 2022, and further decline to 84.0% and 77.7% in 2023 and 2024 respectively.

GDP growth (%, yoy)

6,6 5,6 1,0 1,9

Inflation (%, yoy) 2,3 8,0 4,2 2,5

Unemployment (%) 7,5 7,2 7,2 6,9

General government balance (% of GDP) -1,7 1,1 1,1 1,6

Gross public debt (% of GDP) 101,0 89,6 84,0 77,7

Current account balance (% of GDP) -6,8 -9,6 -7,3 -6,2

Central Bank of Cyprus

Cyprus’ GDP is estimated to have reached a growth rate of 5.8% for 2022. However, in a reflection of adverse economic conditions on the international level, Cyprus GDP growth rate is expected to fall to 2.5% in 2023, before rising to 3.1% in 2024 and 2025 respectively.

The increased energy prices are expected to reduce the purchasing power of household incomes which, in combination with the increase in interest rates, will result in a negative impact on domestic demand in 2023.

In the following years, there is an expectation for a downward trend in unemployment, with the unemployment rate reaching 6.5% in 2023, 5.9 per cent in 2024 and approaching full employment conditions with a rate of 5.5% in 2025.

Between 2023 and 2025, structural inflation is expected to fall to 2.9%, 2.2% and 2.1% respectively, mainly due to an expectation that supply chain disruptions will be largely resolved, primarily due to the impact on demand resulting from recent interest rate hikes.

2023 opens with high inflation, rising interest rates and expected slowdown in growth. If inflation continues to rise, which in turn will force further rate hikes, then Cyprus economic growth will fall sharply, corporate earnings will be poor, prompting higher risk of defaults. This will have a direct impact on the real estate, IT and tourism sectors. On the other side, if inflation falls faster than expected, prompting rate cuts by central banks and lower borrowing costs, then current growth in the Cyprus economy will continue.

Hanna (Johny) Abuaitah Chief Executive Officer, Windsor Brokers

Indicators 2021 2022 2023 2024

Cyprus Ministry of Finance

The positive development is largely due the better-than-expected estimated performance in the tourism sector and continuing expansion in exports in services. In the medium term, real GDP growth will reach around 3% in 2023, 3.3% in 2024 and 3.2% in 2025.

Projections for continued recovery are reflected in the reduction of unemployment rate which is projected to decline from 7% in 2022 to 6.4% in 2023, 5.7% in 2024 and 5% in 2025.

The inflationary pressures were in peak in 2022 (7.7%), with harmonised inflation expected to decline to 3% in 2023.

On the fiscal side, the budgetary plan provides for a surplus of 1.2% of GDP (€308.3 million) in 2022 and a primary (excluding debt servicing expenditure) of 2.7% or €707 million. Based on the projected growth rate in the 2023 state budget, fiscal surplus is expected to widen in the period of 2023-2025 reaching 1.7%, 2.3% and 2.3% of GDP respectively.

The Ministry of Finance estimates that public debt in 2022 will decline significantly to 89.3% of GDP from 103.6% in 2021 and will continue its downward trajectory, declining to 83.3% in 2023, 76.5% in 2023 and 72.3% in 2025.

Constantinos Petrides, Minister of Finance

The economy of Cyprus will show more than 6% GDP growth in 2022. The island’s annual growth rate would be substantially higher than the EU average of 2.4% GDP and the Eurozone’s 2.1%. This proves the resilience but also the prospects of the Cypriot economy ahead a very difficult period, during which a number of EU economies may even enter a period of recession. Main Economic Indicators

*DBP 2023 (October 2022)

In 2023 the main sources of growth apart from ICT sector will be expected migration of labour and capital due to geopolitical situation and soft tax policies. The year 2023 can be more challenging than 2022 due to a possibly weak political leadership, changes in the taxation system and exhaustion of labour and capital migration effect. The risks for Cyprus that can not be controlled by the local government are related to elections in Turkey and global recession.

Nikolay Ivchikov, entrepreneur, expert in international relations

Capital Intelligence

Capital Intelligence Ratings has upgraded Cyprus’ Long-Term and Short-Term Foreign Currency Rating to ‘BBB-’ and ‘A3’ from ‘BB+’ and ‘B’ but revised the outlook from Positive to Stable.

SUSTAINABLE PATH

A statement said the upgrade reflects the demonstrated resilience of the economy and improving fiscal fundamentals, with both the budget deficit and general government debt returning more quickly than expected to a sustainable path. The government, it says, continues to proactively manage debt by securing its financing needs through timely market access while maintaining a substantial cash buffer to counter short-term shocks.

GDP GROWTH

CI adds that economic growth has exceeded projections as real GDP grew by 6.1% in the first half of 2022, compared to 5.1% during the same period last year, reflecting a robust recovery in tourism and trade. CI expects GDP growth to average 4.7% in 2022, fuelled by resilient private consumption and investment in numerous economic activities supported by RRF funding. It expects GDP growth to ease to an average of 3% in 2023-24.

TOURISM

Despite the absence of the Russian market –which accounted for nearly 25% of total tourist arrivals in 2021 – tourism posted strong growth in the first seven months of 2022, with tourist arrivals increasing to 1.7 million from 638.292 during the same period in 2021. This increase is mainly attributable to arrivals from the United Kingdom, Israel, Poland, Germany and Sweden.

GOVERNMENT BUDGET

It expects the overall general government budget position to return to surplus, averaging 1.1% of GDP in 2023-24. Reflecting the improvement in the budget position, general government debt declined significantly to 96.1%

DESPITE THE ABSENCE OF THE RUSSIAN MARKET – WHICH ACCOUNTED FOR NEARLY 25% OF TOTAL TOURIST ARRIVALS IN 2021 –TOURISM POSTED STRONG GROWTH IN THE FIRST SEVEN MONTHS OF 2022

of GDP in the first half of 2022 and is on course to reach 80.6% in 2024.

CI points out that short-term refinancing risks appear manageable. This is attributable to the government’s sound fiscal management, the cash buffers cover 100% of the government’s gross financing needs for at least the next nine to twelve months.

As a small country, Cyprus and its economy is inevitably overly dependent on a small number of sectors, namely tourism, real estate, shipping and professional services. The new government that will take over the reins in 2023 should take the necessary measures to diversify the country’s economic model, aiming on the one hand at further economic development, and on the other hand at encouraging investment in new sectors, such as digital technology, research and innovation, life sciences, sustainability, education, and renewable energy. The most important challenge facing Cyprus, in my opinion, both in the short and in the long term, is the need to maintain and further improve its competitiveness and credibility as an investment destination.

George Economides Partner, E & G Economides LLC

The EU tourism market is the most stable framework for the development of our tourism over the next three years.

THE GENERAL GOVERNMENT BUDGET DEFICIT NARROWED TO 1.7% OF GDP IN 2021 FROM 5.8% IN 2020

DBRS Ratings

DBRS Ratings GmbH (DBRS Morningstar) confirmed the Republic of Cyprus’ Long-Term Foreign and Local Currency – Issuer Ratings at BBB and Cyprus’ Short-Term Foreign and Local Currency – Issuer Ratings at R-2 (high). The trend on all ratings remains Stable.

FISCAL AND ECONOMIC OUTLOOKS

The stable outlook balances recent favourable fiscal dynamics against important downside risks for the fiscal and economic outlooks. Fiscal balances have recovered strongly over the past two years. The general government budget deficit narrowed to 1.7% of GDP in 2021 from 5.8% in 2020, driven by a strong economic growth rebound from the COVID-19 shock, which led to a marked increase in tax revenues.

RISKS FOR CYPRUS ECONOMY

Going forward, the most important downside risks are a further escalation of the conflict in Ukraine and highfor-longer energy prices, which might weaken economic activity and require a substantial increase in public support measures. Fiscal pressures might also arise from the National Health System and the planned expansion of the public asset management company KEDIPES. Public debt dynamics currently benefit from high nominal GDP growth and improved fiscal balances. The government’s stability program of April 2022 projects a decrease in the general government debt-to-GDP ratio to an albeit still high 93.9% of GDP at end-2022 from 103.9% of GDP at end-2021.

RISING PRIVATE CONSUMPTION

The Cypriot economy recovered strongly from the COVID-19 shock over the past year. Growth was driven by rising private consumption, notwithstanding a deterioration in consumer sentiment as exemplified by a marked decrease in the European Commission’s Consumer Confidence Indicator for Cyprus following Russia’s invasion of Ukraine and the accompanying increase in inflationary pressures.

GOVERNMENT REFORMS, GRANTS AND LOANS FROM EU

The high, albeit decreasing, public debt ratio continues to be a rating weakness. Implementation of investments and reforms in Cyprus’s recovery plan could lead to GDP outcomes more favourable than currently envisaged. Cyprus is expected to receive a substantial amount of funds from

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Savvas Perdios, Deputy Minister of Tourism

the Next Generation EU financial instrument (EUR 900 million in grants and EUR 200 million in loans) during 2021-2026, including the EUR 157 million in pre-financing received in 2021. These amounts are in addition to the Multiannual Financial Framework funds of EUR 1.0 billion during 2021-2027. The government’s Stability Programme of April 2022 projects general government debt to decrease to 93.9% of GDP at end2022 and 76.7% at end-2025.

LONG TERM GROWTH: ENERGY AND LABOUR

The expected exploitation of off-shore gas reserves represents another potential source of growth in the longer term. In general, however, the ratings of Cyprus continue to be constrained by the small size of its service-driven economy, which renders it vulnerable to external shocks. In addition, labour productivity levels of the economy remain clearly below the EU average. According to Eurostat, the level of nominal GDP per person employed in Cyprus amounted only to 82.3% of the EU27 average in 2021. The Social factor Human Capital and Human Rights affects the ratings assigned. Cyprus’s nominal GDP per capita is relatively low at USD 30,846 in 2021 compared with its euro system peers.

Going forward, potential headwinds for public finances might arise from high-for-longer energy prices as they might necessitate additional energy-related support measures beyond 2023. Since late 2021, the government has implemented different measures to cushion the population from high energy prices (e.g. reduction of VAT on household electricity bills and a decrease in excise duties on gasoline). The fiscal cost of current measures is estimated at a moderate 0.6 % of GDP in 2022.

The global economy is going through a difficult phase. Inflation is more persistent and monetary policy will remain tight for a relatively long period of time. This entails the risk of a global recession and the risk of financial distress, particularly in the emerging and developing countries. Most advanced countries, including Cyprus, are in a much better position to weather the storm.

ACCORDING TO EUROSTAT, THE LEVEL OF NOMINAL GDP PER PERSON EMPLOYED IN CYPRUS AMOUNTED ONLY TO 82.3% OF THE EU27 AVERAGE IN 2021.

For 2023, we expect the financial services sector and the education sector to contribute positively to the economy. This contribution can take many forms – taxes, employment of personnel and consultants, rentals or acquisitions of offices, purchase of services, relocation of people from abroad who pay taxes, live with their families and spend in Cyprus, transfer of knowhow and expertise to locals etc. Despite headwinds and challenges, financial services have faired well in recent years and demand and activity remain relatively strong. Education has seen steady growth for some time and is expected to continue through 2023. Importantly, both these sectors source clients from abroad, either from the EU or from third countries.

Demetris Taxitaris, CEO, MAP S.Platis

Ioannis Tirkides, President of the Cyprus Economic Society

LEON MFO Investments

GROWTH IN 2023 WILL BE DRIVEN BY THREE MAIN SECTORS

a) Tourism – given the increasing flight connections added and the higher hotel capacity locally. In addition, we are still experiencing the post-covid demand for travel. The inauguration of the large casino project in Limassol is also expected to boost arrivals. The decline of tourism from Russia is expected to be compensated by tourists from the EU, Israel and even the USA.

b) Consumption – driven by the influx of professionals working in the tech and IT sectors, having to establish residence, buy durable goods, education for their children, etc.

c) Construction – despite the rising interest rates and the high property prices, many projects that started in 2022 will be completed in 2023, still fueling the construction sector. In

addition, some large public works have been announced and added to the 2023 budget which should keep the construction sector busy for the coming years.

2023 VS 2022

Even though the Cyprus economy is expected to post positive GDP growth in 2023, we expect local households to be affected by the rising interest rates and fuel prices. This will restrict their consumption to some extend and hence affect local businesses mainly in the retail sector. The property sector may see some signs of cooling as well. Services and IT, which are less dependent on the local consumers, will post descent growth.

IMPORTANT EVENTS

Tourist arrivals in 2023 may exceed those of 2019 through concerted efforts between relevant Ministries and the airports’ operator.

The outcome of the Presidential Elections in February could have a positive or negative impact, depending on who is the new President and the policies they will pursue. Also, any delays in the efforts to extract and distribute natural gas will have a negative impact. The ongoing efforts to reunite Cyprus may get a boost, depending on the new President, but the impact on the economy will be minimal.

THE INTERNATIONAL MONETARY FUND (IMF) FORECASTS THE GLOBAL ECONOMY TO GROW BY 2.7% IN 2023 AND BY 3.2% IN 2024. IN ITS WORST-CASE SCENARIO, THE IMF FORECASTS GDP TO GROW BY AS LITTLE AS 1.2% AND 1.6% IN 2023 AND 2024, RESPECTIVELY.

Sources: Cyprus Ministry of Finance, Public Debt Management Office, Central Bank of Cyprus, Statistical Service of the Republic of Cyprus, European Central Bank, European Banking Authority, Eurostat economy-finance.ec.europa.eu; financialmirror.com; dbrsmorningstar.com

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Yiannis Karousos, Minister of Transport, Communications and Works

MAP S.Platis Group

MAP S.Platis is a leading Financial Services Consulting Group with clients that include regulators, banks, funds and fund managers, investment firms, financial technology firms, insurance firms, payment and electronic money institutions. The group’s expert team provides tailored solutions in international licensing, regulatory compliance, risk management, internal audit, HR, regulatory technology, information technology, business resilience, information security including cybersecurity, governance, executive training and innovation consulting to financial institutions in the UK, Cyprus, and the EU.

Services:

Financial Advisory: International Licensing, Regulatory Compliance Consulting, Internal Audit, Financial Forensics.

Risk Management: MAP Risk Management Services specialises in the provision of Risk Management and Capital Adequacy services in the financial services industry.

Regulatory Technology: MAP FinTech is an award winning global regulatory technology provider for the financial services industry specialising in regulatory reporting solutions across several complex and challenging EU Directives and international regulations.

Professional Training: The European Institute of Management and Finance (EIMF), is leading provider of premium training, professional and executive education, eLearning and tailored

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learning solutions with a strong emphasis on the financial and professional services sector. New Horizons, a member of the world’s largest independent IT training provider, offers a wide range of courses preparing IT professionals and corporate teams in Cyprus to acquire certifications in leading technologies.

HR Consulting, Recruitment and Temporary Placements: MGR Human Resources (MGR) is a broad HR Consulting practice, Training Centre, licensed Recruitment Agency and licensed Temporary Placements Agency, with offices in Cyprus and Malta.

Information Security & Business Resilience: Quadprime is a consulting agency which provides Information Security including Cybersecurity and Business Resilience services.

Fund Management: MAP Fund Management Services is an Alternative Investment Fund Manager (AIFM), authorised and regulated by the Cyprus Securities and Exchange Commission (CySEC).

• Limassol: 82 Archiepiskopou Makariou C, Amaranton Court, 1st Floor, Mesa Geitonia, 4003 Limassol. Tel: +357 2535 1335 Fax: +357 2535 1330

• Nicosia: 2 Diagorou, ERA House, Floors 9-12,1097 Nicosia. Tel: +357 2287 7744 Website: www.mapsplatis.com | E-mail: info@mapsplatis.com

YANNIS MATSIS: «CYPRUS TICKS MORE BOXES THAN COMPETITOR EU COUNTRIES IN ATTRACTING FOREIGN BUSINESSES»

Yannis Matsis, head of the Cyprus office for MUFG Investor Services, the global asset servicing arm of Mitsubishi UFJ Financial Group, speaks to the Successful Business Magazine about how the company represents all the best one can find in both the Anglo-Saxon and Japanese business cultures and what Cyprus needs to do to attract big investment funds, international fund managers and administrators to the island.

Parent company of MUFG Investor Services is Japanese, the business you conduct is international, and your office in Cyprus will serviceyour existing client base globally. Is that not a lot to juggle on the business/ cultural front?

Yes and no. The way we deliver our services is Anglo-Saxon in that we are very open and flexible. As an employer, we are very modern, all-inclusive, with full transparency and very little hierarchy. But how we focus on our long-term goals and on ensuring zero error rates in what we do for our clients is very Japanese. Our approach – treating our clients as our trusted partners – is very much Japanese-driven...

It is very interesting that a Japanese company that clearly thinks long term, low risk and has a conservative business approach would choose Cyprus as its base. It may mean that Cyprus is competitive compared to other EU business destinations. How was the choice made?

We are one of the largest fund administrators globally and our clients include the biggest investment managers in the world. Our business is a 24/7 model. We follow the sun, our aim is to address and satisfy customer needs without regard to geographic location or time zone.

So when the company decided to establish a new office in this particular time zone, our parent company set out to find what they considered to be the best and most suitable country in Europe. Cyprus proved to be the best option and was chosen for a variety of reasons. Of course, the fact that Cyprus is in the EU was important but so too were many other countries that we considered.

Cyprus offered other advantages: the fact that almost everybody speaks English here, which isn’t the case in many other European states; the fact that in addition to EU laws and regulations that apply here, common law like in the UK also applies because of the island’s past. Then there is the location – not just in Europe and a part of the EU but close to the Middle East! Also, there is the

We have been very impressed by the exceptional quality of professionals that we have so far hired.

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www.sb-cyprus.com

quality of life. Last but perhaps the most important to us, is the quality of localtalent that can be accessible to us as an employer. We always look for the best quality centres where we can hire well, train well and be in a position to ensure and offer our clients the best quality service. Our choice of Cyprus proved this to be the case.

We have been receiving very high quality CVs, and we have been impressed by the exceptional quality of professionals that we have hired here, in Cyprus, so much so that we decided to expand our initial plans to employ around 100professionals, and instead to grow the Cyprus office up to 300 professionals over the next few years.

What countries are Cyprus’ main competitors when companie set out to choose a place for their offices?

Every European country is a potential competitor but frankly Cyprus ticks off more boxes than the others. Of course, you never find a perfect place, but you aim to find a place that best satisfies most of your requirements. Cyprus is very strong in this. Our biggest disadvantage is the air connectivity.

What about reputation?

Reputation of the island, due to bad practices of the past is indeed an issue and poses a disadvantage

Matsis Managing Director, Head of Cyprus, MUFG Investor Services

Yannis heads the new MUFG Investor Services office in Cyprus, expected to grow to 300 staff over the coming 4-5 years. Yannis has 30 years of professional experience, having served as CEO of Hellenic Bank, as Global Head of Credit, Interest Rate and Foreign Exchange Derivatives at Mizuho in London, and as Global Head of Credit Derivatives at ING Barings in London. He also co-founded Point Nine, a Financial Technology company, recently acquired by MUFG. Yannis currently serves as Chairperson of the Boards of the Cyprus Institute of Neurology and Genetics and of Point Nine Data Trust. He previously served as Chairperson of the Boards of the Association of Cyprus Banks, as Chairperson of Artemis Bank Information Systems, a private Credit Bureau, and as a Member of the Boards of Hellenic Bank and of the European Banking Federation in Frankfurt.

Yannis

The fact that almost everybody speaks English in Cyprus is an advantage, which isn’t the case in many other European states.

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to Cyprus as a business destination. Back in the 2000-2013 period, Cypriot banks had low standards and the compliance level was not very high. However, since then the island has fully and comprehensively addressed these issues.

If you were to name the most important steps Cyprus should take in the immediate future to change and improve, what would they be?

Cyprus doesn’t have much to do – we have mostly done it. What Cyprus needs is more marketing and exposure. We now have international best standards on areas of compliance. We just have to go out there and communicate it, making sure we avoid scandals while going forward. The reality is that we fixed it. Now, it is about how we market it.

When I was Chairman of the Association of Cyprus Banks, together with the deputy CEO of the Bank of Cyprus and the CEO of the Cyprus Development Bank (CDB), I visited the United States Congress and Senate to explain our compliance standards and policies because Washington had been applying pressure on us to improve them. We sat with various Committees of the Senate and the Congress, including the Finance Committee and the Armed

Forces Committee – the latter may appear strange to the layman, but it does demonstrate the importance that the United States is placing on issues of Anti-Money Laundering and Countering the Financing of Terrorism. So we went item by item through our policies, through all that we had changed, and we convinced them. In fact, the Finance Committee stated that our standards were stricter than theirs.

So what we need is marketing. We need to go out there, see the important stakeholders, talk, meet the press, convince through communicating our tangible actions, project the positive image that I believe we developed, and most importantly walk the talk. In other words, we must continue to show that we are serious about what we do, avoid scandals and keep on maintaining and implementing the highest standards. The reality is that reputation takes years to build and a day to destroy.

So what improvements have there been? Are we doing better than 10 months ago, than two years ago?

Two years ago we had just one corresponding bank. All the banks in Cyprus – the Bank of Cyprus, Hellenic Bank, all the smaller banks – had only one corresponding bank,this being Citibank. Had the day come and this one corresponding bank decided to leave, the whole island would have been left frozen… But we did all the corrective work and today the biggest Banks have more correspondents, such as the Bank of New York (BoNY) and JP Morgan also – a huge sign of improvement.

As you noted, there are two sides to every coin. The reverse side of improving all these banking procedures is that our banks have now become very difficult to work with…

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FINANCE

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www.sb-cyprus.com

I agree. There is a problem and it arises because of two issues. The first is that the pace of change to raise the compliance level was huge so staff in the banks had to struggle in order to keep up in terms of training and understanding the new policies and procedures. Secondly, systems lagged behind because introducing new systems in banking is notoriousy difficult. So our policies are strong and reflect international standards but implementation of these policies still requires hard work and that implementation comes down to new technology and staff training. However, the Banks fully recognise that, and, driven by the Central Bank, are working hard to get there.

What do you think the immediate future holds for Cyprus? What changes, challenges, problems or benefits do you expect in 2023?

It is certain that the Cyprus economy will grow stronger than in Europe. We keep on attracting foreign companies and this brings revenue from abroad to the island. This is the best form of revenue, the best quality business for the country. Remember that this revenue is spent by the foreign companies that establish base here to pay salaries and rent, and is consumed locally, in sectors such as schools, supermarkets, food and entertainment, real estate, the auto industry, etc.

What I am mostly concerned about currently – and this is a global and not just a Cyprus phenomenon – is inflation. This has been caused by a number of factors, including excessive liquidity, the suupply-chain constraints due to the pandemic and the war in Ukraine. Its current level, both in the Euro-area and the US is very worrying and with the end of the war not in sight, there are no signs as to when it will abade.

MUFG Investor Services is a leading asset servicing provider for the global investment management industry, operating from 16 locations worldwide. With over $770 billion in assets under administration, MUFG Investor Services is a top fund administrator globally. It is a core business of Mitsubishi UFJ Financial Group (“MUFG”), one of the largest banks with more than US$3.3 trillion in assets.

Local banks’ policies are strong and reflect international standards but implementation of these policies still requires hard work and that implementation comes down to new technology and staff training.

HOW WILL CYPRUS COMPETE FOR INVESTMENT IN A DISRUPTED WORLD?

EY Cyprus Attractiveness Survey 2022

EY Cyprus Attractiveness Survey 2022 shows that Cyprus needs more investment in infrastructure projects, skilling and re-skilling of the local workforce and introducing new regulations to keep pace of developments. Technology, sustainability and talent remain high on the investors’ agenda.

Planned investments in Cyprus (29%) for the next year, although higher than in our previous survey of 2020, still remain well below the European average (53%). In contrast, attractiveness projections for the next three years remain optimistic and closer to the European average.

Cyprus would primarily be considered by investors for supply chain and logistics operations (35%), followed by sales and marketing offices and activities (24%), and headquartering (14%). It is also the first time the FDI intent includes manufacturing activity (7%).

Investors consider telecommunication and digital infrastructure, offering a good quality of life, and

favorable corporate taxation as the most attractive criteria to invest in Cyprus. Investor responses reflect that Cyprus could do better in creating a more entrepreneurial, less bureaucratic and less administrative culture, and be more supportive of startups, the high-technology industry and SMEs. Investors’ perception is that Cyprus should concentrate its efforts on providing the means for regulation to keep pace with technological and other developments, to continue investing in major infrastructure projects, and that Cyprus needs to do more to advance education, skilling and reskilling, and facilitate access to talent.

FINANCE AND INVESTMENTS

HOW WILL CYPRUS COMPETE FOR INVESTMENT IN A DISRUPTED WORLD?

Key economic indicators

Cyprus actual

Cyprus revised projections

Cyprus actual

EU

Cyprus pre-pandemic projections

Key economic indicators 2017 2018 2019 2020 2021 2022 P* 2023 F

Real GDPgrowth (atconstant market prices 2010,annual change in percent) 5.9 5.7 5.3 -5.0 5.5 2.0 3.5

Nominal GDP (at current prices, € billion) 20.3 21.6 23.0 21.6 23.4 24.7 26.4

GDP per capita (EU-28 = 100) 84 86 88 90 90

Public debt (as percentage of GDP) 93.9 100.6 91.1 115.0 103.9 97.7 94.1 0.5 1.4 0.5 -1.1 2.3 5.3 2.3

Unemployment (percentage of total labor force) 11.1 8.4 7.1 7.6 7.5 7.9 7.5 *Projected

Research & development investments

R&D activity in Cyprus, in 2020, was estimated at around 0.82%25 of the country’s GDP, with only 0.5% of the active population engaged in R&D activities. Cyprus’ R&D-related GDP share continues to be considerably lower than its European counterparts (EU average of 2.2%).

R&D investments by sector (2019)

Does your company have plans to establish or expand operations in Cyprus over the next year?

In your view, where should Cyprus concentrate its efforts in order to maintain/improve its competitive position in the global economy?

FINANCE AND INVESTMENTS

HOW WILL CYPRUS COMPETE FOR INVESTMENT IN A DISRUPTED WORLD?

What type of investment project does your company want to establish or expand in Cyprus?

In your opinion, which main business sector will drive Cyprus’ growth in the coming years?

BUSINESS MEETS TECH

Natalia Kardash and Panis Pieri invite their personal networks to meet each other in 2023. The first BMT event is planned for mid-February in Limassol, followed by Nicosia in March, Paphos in April and Larnaca in May 2023.

MAXIMUM 100 PEOPLE

Each event will be attended by 30-50 business leaders from tech industry invited by Panis and 30-50 leaders of non-tech companies invited by Natalia.

PROGRAM AT A GLANCE

• 16.00-16.30 – one-to-one meetings and networking

• 16.30-17.00 – first «roundtable» discussions (maximum 10 delegates per group)

• 17.00 – 17.30: one-to-one meetings and networking

• 17.30 – 18.00: second «roundtable» discussions

• 18.00 – 20.00: cocktail reception and networking

FOUR HOURS TOGETHER

The event is to begin at 16.00. In the first half hour participants may conduct prearranged one-to-one meetings or simply walk around meeting other participants.

There will be a moderated discussion in each group that will start by a two-minutes introduction from each participant, followed by a «round-

Natalia Kardash

Main areas of expertise: publishing, communications, business introductions and networking. Publisher, Editor-in-chief, VESTNIK KIPRA Newspaper and SUCCESSFUL BUSINESS Magazine; Founder, SUCCESSFUL BUSINESS Leaders’ Club; Founder, Chairwoman, BEST LEGAL Conference, BEST INVEST Congress, HEALTH&BEAUTY Forum. Natalia’s personal network exceeds 6000 members, from leaders within government; corporate and private enterprises and foreign business executives who reside in Cyprus or live abroad and have interests in Cyprus.

Panis Pieri

Startup and Tech Journalist; Founder of Startups364; Startup & Innovation Editor, Cyprus Mail; Host and Producer of the podcast “Live with Panis”. Organiser of EcoX Cyprus Networking Meetups. Panis is also involved in different non-profit initiatives around the world as a startup mentor or startup judge. Furthermore, he regularly contributes content material relating to start-ups and tech innovation, to major publications globally.

table» discussion on a specific theme which is of interest to this group. The moderator’s role is to ensure everyone has had the opportunity to introduce themselves and their business, contribute to the discussions and keep to the 30-minute timeline per meeting.

Delegates will have the opportunity to network between the “roundtable” meetings scheduled for that afternoon and attend the pre-registered one-to-one meetings.

From 17.30 to 18.00 attendees will participate in a discussion with a different group — around 10-15 minutes for group participants’ introductions, this time to a different audience, and 15-20 minutes for an exchange of ideas, thoughts and information.

At 18:00, participants will be invited to attend a reception to enjoy a glass of wine, whilst having the opportunity to keep networking.

HOW DOES THE NETWORKING WORK?

At this networking event people can meet and create many new contacts. Group meetings take 30 minutes, which allows enough time to establish connections. Then the bell rings to finish group meetings and after some time the next round of meetings starts. When participating in two groups, each person hears introductions of 14-16 people and can discuss with them relevant subjects during the group talk and later in the event.

Upon the registration, few weeks before meetings, participants provide their photo and business profile. A few days before the event, each participant will receive a meeting schedule, showing names, time and location of the personal meetings, and also enough information on anyone they can meet in groups or during the cocktail time during this event.

WHAT ARE THE BENEFITS OF PARTICIPATING IN THIS NETWORKING EVENT?

1. Meet many new contacts of C-level at once.

2. Have enough time to speak to most of them.

3. Introduce your business, your ideas and plans to like-minded people. All participants can present their expertise, company profile and future business plans prior to the event, online. This way, registered delegates can start networking prior to the BMT event and be more targeted with their networking at the event.

PARTICIPANTS

Only business owners and C-level executives can register for this event. The organisers will keep a 50/50 balance: half of participants work in IT and technology sector and the other half not. Organisers know all the participants in person and can help in networking.

DATES 2023 AND REGISTRATION

Limassol – February Nicosia – March Paphos – April Larnaca – May

The participation fee is €50 per event and if you wish to participate in one or more of these events, please send an email including your information and company profile to vk@vkcyprus.com.

bmtcyprus.com

THE FTX COLLAPSE, STUPID CAPITAL AND ABSENT REGULATORS

The FTX collapse and scandal continue to unfold in the media. As a tech investor and advisor, I can’t help being more than a little furious with the investors who backed it so consistently over years with $ 1.8 billion in total capital raised. Many of these are regulated entities; others invest public money or pension fund assets. Their apparent failure to insist on real transparency and better governance is almost certainly an enabling factor in how FTX was managed. And therefore, their failure is arguably a factor in FTX’s collapse.

Let’s start by looking at what FTX was before its bankruptcy announcement. FTX was a crypto exchange. This means that buyers and sellers were able to create and fund their accounts, and then buy or sell cryptocurrencies or crypto derivatives. An exchange does not trade its own money: an exchange allows clients to conduct trades. The income of an exchange typically

comes from trading fees: from the “flow” of buy/sell customer trades occurring where each trade incurs a transaction fee.

According to Business of Apps, on 6 September 2022:

1. FTX made $1.02 billion revenue in 2021 compared to $85 million in 2020;

2. It had over one million users on its mobile and desktop platforms;

3. Peak 24-hour trading volume has reached $21 billion in 2021;

4. Annual trading volume of crypto reached $385 billion in 2020.

FTX was valued at $32 billion in January 2022 and has now collapsed because of a liquidity shortfall that was exacerbated by reputational damage. As doubts have grown about FTX’s ability to withdraw their own funds from the exchange, this created a “run” which

Philip Ammerman Investment Advisor & Angel Investor Navigator Consulting & Innovation Partners Ltd.

FINANCE AND INVESTMENTS

THE FTX COLLAPSE, STUPID CAPITAL AND ABSENT REGULATORS

eventually forced FTX to stop withdrawals and seek external investors to recapitalise the company.

This run was apparently exacerbated in the last days by a theft of crypto and cash reserves that many investors had on their accounts.

Now in receivership, FTX is a private company, operating in and regulated by the Bahamas. Although it complied with certain aspects of international regulation -- for example, it had a European MIDIF II brokerage license issued in Cyprus by CySEC -- it is arguably not a fully-regulated company. Why?

a. Because unlike a fully-licensed brokerage regulated by FINRA, the US Financial Industry Regulatory Authority, there was apparently no oversight on any of the critical elements of brokerage operations, notably the necessity to maintain segregated accounts for customer capital and to comply with detailed reporting requirements.

b. Because it is obvious that if the company does not publish fullyaudited accounts, including cash positions and banking operations, there is no way a regulator or any external authority will be able to form a strong opinion on whether the company is solvent and in compliance or not.

Any potential investor or brokerage user can spot this immediately from the non-existent financial information published on the FTX website.

On the occasions when I teach young founders, I tell them there are two types of investors: smart capital and stupid capital.

Smart capital usually means institutional investors with an investment thesis; a comprehensive due diligence process which challenges the founder team; an investment committee (decisions made by more than one person); participation in governance post-investment (usually through Board seats and sometimes insistence on nominating the CFO; and insist-

IF THE COMPANY DOES NOT PUBLISH FULLY-AUDITED ACCOUNTS, INCLUDING CASH POSITIONS AND BANKING OPERATIONS, THERE IS NO WAY A REGULATOR WILL BE ABLE TO FORM A STRONG OPINION ON WHETHER THE COMPANY IS SOLVENT AND IN COMPLIANCE OR NOT.

ence on professional governance. I typically include most Sand Hill Road VC firms in this category: companies with multiple partners, investing a mix of own and client assets, with deep experience in the tech sector.

Stupid capital, in contrast, usually means decisions taken on the spur of the moment based on personal chemistry or attraction to a charismatic founder; few term sheet requirements on reporting or governance; decisions made by a single investor; little or no due diligence (or simple acceptance of documentation). Investment decisions are typically made due to Fear of Missing Out (FOMO) or due to falling victim to a “reality distortion field” such as that emitted by Steve Jobs, Adam Neumann or, apparently, Sam Bankman-Fried.

So, I was furious over the past three days when I learned that:

1. FTX had a 3-person Board: two company founders and their Bahamas lawyer. There are no Board committees one would expect: Audit, Compensation, Nomination. Not a single external investor had a seat at the board. There were no skeptical eyes looking at strategy, decisions or financial reports.

2. The company had an openlyexpressed relationship with Alameda Research, a crypto broker, essentially

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owned and operated by the same team that ran FTX. This is an obvious conflict of interest.

3. As we move forward, I am sure we will see additional conflicts of interest featuring FTX / Alameda investments in a number of other coins or related partners. This is a result of strategic decisions made. Formally, 130 related entities filed for bankruptcy alongside FTX.

4. The FTT token, which essentially held no value but a trading discount on FTX, reached a market cap of over $ 6 billion, and apparently was accepted by investors (and regulators) as a real asset.

5. The Financial Times reported that one of the largest liquid assets on FTX’s balance sheet was “Serum”, a cryptocurrency with a listed $ 2.2 billion in value. According to the FT, the same day valuation of Serum was $ 88 million. This is a massive failure of mark-to-market asset valuation which calls into question what else FTX was over-valuing on its asset register.

6. FTX is registered in The Bahamas, and despite having received $ 1.8 billion from VCs and Institutional Investors, did not publish audited financial accounts. This is despite being a brokerage with millions of customer accounts and billions in daily transactions. On one occasion where a GAAP audit was passed (in 2001), the company did not publish it, but tweeted about its existence.

7. FTX somehow transferred $ 10 billion in client assets to Alameda Research, where Alameda presumably lost them in trading. How is this possible? Client assets are supposed to be in one or more segregated accounts, precisely so that in the case the broker or fund manager collapses, client money is safe. How is it possible that both the auditor as well as investors missed such a movement of cash?

According to Dealroom, FTX has raised $ 1.8 billion in funding in one Seed Round and 4 major funding rounds between 2019 and 2022. The list of institutional investors on board includes some of the most hallowed names in finance, including BlackRock, Binance, Greylock Partners, Lightspeed Venture Partners, the Ontario Teachers Pension Plan, Sequoia Capital, Softbank, Temasek and Tiger Global Management.

Some of these—Sequoia, BlackRock, Softbank—represent some of the leading tech investors in the world. Others, like Temasek, represent sovereign wealth funds with a high duty of accountability and transparency. None of these should be characterised as Stupid Capital. Yet that is exactly how they behaved:

• Why didn’t they demand basic corporate governance at FTX?

• Why didn’t they demand audited accounts?

• Why were investors not represented on the Board of Directors?

• Why didn’t they flag potential arms-length transaction issues between FTX, Alameda and others?

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“ ARE CYPRIOT AND EUROPEAN REGULATORS ABLE TO EFFECTIVELY REGULATE HIGH DEALFLOW COMPANIES IN ADVANCE OF A POTENTIAL DISASTER, AND NOT AFTER THE FACT?

THE FTX COLLAPSE, STUPID CAPITAL AND ABSENT REGULATORS

• Why did no one ask for a funds or liquidity statement? Did no one check the bank accounts? (This was the same oversight that Wirecard was able to use to commit financial fraud for years).

And this brings me to the final issue of regulation, particularly as it affects Cyprus. Cyprus has the oft-repeated ambition to become a global financial hub. Cyprus has also recently passed regulations on cryptocurrency and aims to begin attracting investment in this area as well. All investment-related companies in Cyprus are regulated by CySEC, the Cyprus Securities and Exchange Commission, taking into account all relevant European directives and regulations.

The following are a list of questions I have that are relating to the ability of Cypriot and European regulators to effectively regulate high dealflow companies in advance of a potential disaster, and not after the fact:

1. In the case of FTX, under what grounds was the license approved given that the parent company publishes no annual accounts and has a clearly-compromised Board of Directors?

2. In the case of FTX, how did regulators evaluate the financial liabilities and strength of the company, given that FTX is issuing a token called FTT that is essentially a trading discount on FTX? Did they give their own valuation to the token?

3. What is the risk analysis process that the regulators use to identify high(er) risk companies? How does this translate into enhanced surveillance and reporting requirements?

4. Which regulatory staff have enough primary work experience in managing or operating high deal flow trading companies that include millions of transactions per day as well as the use of derivatives, algorithmic trading, and global currency trading?

5. Which regulatory staff have enough experience in forensic auditing and the analysis of complex trading systems and software?

6. What real-time statistical and financial sampling, analysis and reporting systems does the regulator use (besides self-declarations on paper reporting forms) to determine whether a company has an opaque relationship with a related trading party? Or is exhibiting a pattern of unusual trading activity?

7. What cross-checking method does the regulator employ to make sure that regulated investment firms are indeed using segregated accounts and are not mis-using customer funds to trade on their own behalf?

8. What methods is the regulator using to control leverage offered to retail clients at forex and general trading brokerages?

9. Of the consumer complaints or questions submitted on the the regulator’s website, how many are actually answered and acted upon?

I am afraid there are rather predictable answers to these questions.

So the question any investor must ask themselves is: given the total absence of either real regulation or real financial disclosure from so many opaque crypto projects in the world today, what real guarantees do we have that this is not a scam?

The answer is also predictable: there are none.

List of Sources

Bloomberg. 11 November 2022. FTX Meltdown Mystery Centers on a Financial Reporting Black Hole. Business of Apps. 6 September 2022. FTX Revenue and Usage Statistics (2022). DealRoom. Undated. FTX Listing. Financial Times. 12 November. FTX held less than $1bn in liquid assets against $9bn in liabilities. Reuters. 12 November 2022. Further details emerge on FTX bankruptcy and missing funds.

CYPRUS GAMING INDUSTRY: CRISIS OR NEW OPPORTUNITIES

The video game industry, which had only recently attracted a narrow circle of enthusiasts, had become a powerful sector of the modern economy and had become one of the drivers of digital development. Every year, the gaming industry sets new records in terms of revenue and number of attracted adherents. The gaming industry of Cyprus does not stand aside - the country is an active participant in the global digital trend.

GLOBAL VIDEO GAME MARKET

The digital gaming industry (including game development, production and promotion) is one of the fastest growing areas of computer technology and, at the same time, the global entertainment sector. The number of gamers is growing rapidly (2.5 billion players in 2019, in 2020 – 2.7 billion, 3 billion in 2021), and gaming itself is becoming a highpaying sport and profession. This doesn’t come as a surprise, as the leisure of a person under the influence of a number of factors moves into the virtual space.

The COVID-19 pandemic has had a positive impact on the gaming industry. In fact, from 2019 to 2021, the market grew cumulatively by 26 percent, reaching a record 191 billion U.S. dollars. The rapid growth was due to the fact that in most countries people had to spend a lot of time at home due to quarantine restrictions, and it was games that became a convenient way to diversify leisure.

Some facts: the global market of the gaming industry, according to Newzoo, for 2020 amounted to 179

billion, for 2021 – 192 billion, for 2022 is projected to reach 200 billion U.S. dollars.

In recent years, according to market experts, the portrait of the average gamer has changed – now it is a man – a resident of a large city, about 30 years old, with a permanent employment and an income above average.

The main driver of the market growth across the world is mobile, which will generate revenues of $103.5 billion this year.

The forecast of experts consulting company PwC for the future development of gaming industry is optimistic.

CYPRUS GAMING INDUSTRY FORECAST: RATHER POSITIVE

Cyprus has traditionally been the center of international business, and an increasing number of technology companies and start-ups are choosing Cyprus for their jurisdiction. This is facilitated by the Government’s efforts to minimize bureaucratic procedures under British law on the island, as well as by more than 60 taxation agreements. According to

Kiryl Shcharbinin journalist, Successful Business

2022 global games market Per Segment with Year-on-Year Growth Rates

Source: Newzoo

some estimates, there are currently more than 300 companies operating in the gaming industry in Cyprus, including world-famous developers. 2022 was a challenging year for the Cyprus gaming industry. Among the negative factors are:

• the end of the COVID-19 pandemic and the subsequent decline in home-based leisure activities (1.2% decline in the global market);

• semiconductor shortage due to reduced production in Taiwan;

• the military conflict in Ukraine and the sanctions against Belarus and Russia.

A number of the largest Cypriot technology companies – game manufacturers have Russian or Belarusian roots, a significant part of the staff and offices before the war were located in these countries. European Union sanctions against Russia and Belarus forced owners of companies to close offices, reduce or relocate personnel, which affected the increase in

costs. According to the Forbes report, up to 2,500 Russian developers have lost jobs in such studios as Plarium, MYTONA, Playgendary, Green Grey and Game Insight. Many of them had their headquarters in Cyprus.

INDUSTRY PROSPECTS

«The concept of digital development of Cyprus 2020-2030» provides for the creation of the most favorable conditions for the emergence and development of technology companies, including in the field of gaming. Despite temporary fluctuations in the growth of the gaming industry, the

following trends contribute to the industry prospects in Cyprus:

• the gaming industry is at the point of explosive growth, which means that the market has been consistently growing for several years. Actively developing and cheaper tools access to virtual reality, metaverses. Citibank predicts a metaverse growth of $13 billion until 2030;

• digitalization of leisure. According to the Digital Economy and Society Index, 79% of the population of Cyprus regularly uses the Internet. The gaming industry has learned to adapt to any consumer, producing corresponding to the interests of each product;

• the gaming market does not exist in a confined space, it needs a certain ecosystem: business incubators for the developer communities, banking, government as well as tax infrastructure.

Proper use of state regulation, methods of stimulation of business and following current technological trends can bring Cyprus into the leaders of innovative industry of computer games. Deal activity

IN RECENT YEARS, ACCORDING TO MARKET EXPERTS, THE PORTRAIT OF THE AVERAGE GAMER HAS CHANGED –NOW IT IS A MAN – A RESIDENT OF A LARGE CITY, ABOUT 30 YEARS OLD, WITH A PERMANENT EMPLOYMENT AND AN INCOME ABOVE AVERAGE.

Wine and More are the leading Wine Retailer in Cyprus. With a team of professional Sommeliers, we select and import the Wines and Gourmet Delicacies from all over the world addition, we are the only Wine retailer with Boutiques across the Island in Limassol, Nicosia and Paphos. As a result, our products are available to the whole of Cyprus.

Whilst our Wines are imported from every region of France; we also sell Wines from Italy, Austria, Spain, Argentina, Portugal, Chile, Lebanon, New Zealand, the United States, Greece and, of course, Cyprus. Most of our Wines are imported on an exclusive basis. We also sell Vegan and Kosher Wines, plus we also have the finest collection of Champagnes, Cognacs, Armagnacs, Gins, Vodkas, Whiskies and Calvados.

All great Wines deserve to be paired with Products, which is why at all our Boutiques, you will find a dedicated Deli Section offering Cheeses from France, Italy and the UK, Foie Gras, Pâtés, Charcuterie, Chocolates, Biscuits, Truffle Products and so much more. We are also renowned for our vast selection of Hampers and Corporate Gifts.

Another essential part of the business is our Privilege Club, where the members attend exclusive events where we share our passion for Food and Wine. Leading Winemakers from across the world fly into Cyprus to present these events to our members. Today, the Privilege Club has evolved to be one of the most exclusive and popular membership organisations in Cyprus. Our members are a combination of serious wine lovers and prominent business community members.

Successful Business Magazine

SECRETS OF ESTABLISHING A SUCCESSFUL MOBILE GAMING BUSINESS

The editors of Successful Business approached Andrei Yarantsau – investor and CEO of Melsoft Games – to talk about his career and future. Andrei is ready to invest in new games, so we asked him about the criteria for selecting projects and what he considers important when creating a new game.

Andrei, what sparked your interest in investing in the games industry? Tell us about your career journey and the experiences that got you where you are today.

It all started in 2008. I built a decent career in the IT before I started thinking about other opportunities. I almost went into investment banking, however, I decided to accept an offer from Nival Network gaming company, and the rest is history!

It was a time of tremendous expansion of online game publishers. We operated high-quality foreign games and built our own gaming social network – ZZima – while developing the online game Prime World. In just three years, we managed to build a business with a dozen games and approximately 2 million customers.

A new chapter in my work began in 2011, when I joined Wargaming. The company couldn’t find a publisher for

World of Tanks. It is hard to believe now, but back then no-one thought that an online game with tanks would be popular, so the company asked me to be their game publisher. In the next four years, we released several new games, opened offices in more than 15 countries and held hundreds of events and tournaments around the world.

You’ve said 2014 was a turning point for you, what happened?

I learned about ambidextrous organizations in the LCOR course at Stanford. These companies are efficiently running huge operations, and at the same time they are exploring new directions via independent innovative structures. I wanted to apply this idea to mobile gaming in Wargaming and figure out how to create a game that becomes a hit and gets into the top grossing of mobile platforms.

Yes, Wargaming signed a deal with Melsoft in 2015, and that was the start of one of the most interesting times in my life. Over the next few years, we relaunched the Toy Defense game series, released My Cafe (the best restaurant business simulator on the market), and brought out our biggest hit Family Island (farming game with expeditions). The company has been constantly growing in terms of revenue and audience. As a result, in 2020, Melsoft was sold to an Israeli strategic investor for almost 200 times its initial valuation. This was a great achievement, something to be proud of for all leadership at Melsoft.

What projects are you working on today?

In 2022 the Melsoft’s lock-up period ends and I – along with my colleague and partner, Alex Shilyaev – are in the process of figuring out our next move. Casual and mid-core mobile games are what we are interested in, however, we don’t want to limit ourselves in any way.

When making an investment decision, there are a few things we pay close attention to:

• The game should start with casual mechanics and drag players to mid-core

• Long tail economics should be present

• The game should be able to set goals and sell “fun”

• The genre and game setting should be “evergreen”

• The game should not try to radically change the habits of the audience

• The market niche for the game should be big

Is Melsoft your most recent business venture?

SECRETS OF ESTABLISHING A SUCCESSFUL MOBILE GAMING BUSINESS

TECHNOLOGY AND INNOVATION

“ We would love to talk to people in the gaming industry who have similar interests. Especially, if there is already a game or a prototype that needs a little help to skyrocket.

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By the way, we would love to talk to people in the gaming industry who have similar interests. Especially, if there is already a game or a prototype that needs a little help to skyrocket. Please find us and connect via social networks!

What do you think is important for creating a successful game?

From a CEO’s point of view, it is important to choose the right business partner, build a strong leadership team, have a clear vision and strategy in place and regularly check on your KPIs to ensure you are on track.

I would like to share a few thoughts about choosing the right business partner. Firstly, I think the “captain’s deck” needs two partners. One person is too few to debate new ideas, while three is too many. Two is perfect.

Secondly, look for someone who is a part of the team but also has their own vision, broadening the overall picture.

Thirdly, your partner should be able to self-restore psychological stability and accept the imperfection of the world and the people around them.

Finally, you and your partner should share the same values, be curious with an open-mind and positive outlook and promote innovation by listening to your teams and their ideas.

It is known that many gaming specialists have relocated or are planning to relocate to Cyprus, but they also move away quite frequently. What drives their decision to move here, and what needs to be done to entice them to stay?

Over the past few years, I have often had to deal with relocation issues. Single employees and couples without kids are in the risk zone. In my experience, 20–30% of such employees may return home in two years’ time. I see two factors that influence their decision making. The first issue is a spouse/partner not being able to find a job and adapt to their environment. Fortunately, Cyprus has recently started giving work permits to spouses of relocated employees.

The second issue is the social pressure from family and relatives, who did not move. It is vital to include the possibility of also moving grandparents. However, it can be a challenge due to their age, health and language barrier, collecting the required documents, opening a bank account and dealing with the immigration processes. To continue building a successful gaming industry in Cyprus, I really hope the government takes into consideration streamlining the immigration system and supporting the smooth relocation of elderly family members. This will be one of the strongest stabilizing factors for relocated professionals.

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MYTHS AND REALITY IN THE GAMING INDUSTRY

In this article Andrei Yarantsau and Alex Shilyaev share a few tips and focus on lessons learned from years working as company executives in the gaming industry, they share their success story at Melsoft – a company that firmly holds a place in the top100 most successful mobile game creators in the world.

HOW IT ALL BEGAN

Year 2015 was a turning point in our careers. We launched a mobile start-up inside a big corporation. From the very beginning we wanted to have more independence, creativity and responsibility for the results, but less bureaucracy and inefficient management. Within 5 years it was sold to an Israeli strategic investor for 200 times its initial valuation. This was a huge achievement to be proud of! Some of our views on mobile game development have changed dramatically during the past few years, and we’d like to share them with you.

GAMES SHOULD ONLY BE CREATED AND DEVELOPED

BY “TWO-PIZZA”

TEAMS

In the gaming industry there is a popular idea that a mobile game should only be developed by a small team that can be fed with two pizzas. We followed this rule for our first product, where the team was 8-12 specialists during development and 40-50 after the release.

However, the rule changes once the product becomes successful with substantial sales records. Then you need to change the company structure accordingly and include departments such as Development, LiveOps, Marketing, Business Intelligence and Customer Relations to your business.

With our second product we transitioned from a “two-pizza” team to a large organization, with Development and Operations teams separated, an A/B testing team assigned to ensure conscious implementation of each new feature and a Site Reliability Engineering team assigned to monitor business metrics 24/7.

We now believe that developing and operating a successful mobile game requires a team of at least 200300 specialists.

Andrei Yarantsau, CEO, Melsoft Games

Alex Shilyaev, COO, Melsoft Games

MYTHS AND REALITY IN THE GAMING INDUSTRY TECHNOLOGY AND INNOVATION

EVERY GAME COMPANY MUST REGULARLY LAUNCH NEW GAMES

As people may think, a gaming company to stay competitive in the industry must launch a brand-new game on a regular basis. In fact, the search for a new breakthrough hit is very challenging. You can make a very creative game and not get the market fit. You can follow the latest trends and be late, or you can copy someone’s product and miss something important.

During the past few years, we have tried many different things and finally realised that the business should focus

on what it does best! For one company it can be building a strong marketing machine, for another – creating the best-in-class content production. Innovation can be applied to any part of a gaming company, not just making new games.

In our case, the company was able to focus on two products – My Café and Family Island, the prototypes of which were bought on the market. This is a classic business story – the winner is not the person who came up with the idea, but the person who was able to make it work.

‘MANAGEMENT IS EVIL’ –A SUCCESSFUL COMPANY CAN FUNCTION WITHOUT MANAGERS

What we have learned from years working within corporate environments is that company structures should have minimum number of managers to avoid developing ‘toxic’ environments due to miscommunication and internal politics. From our experience, in start-ups you do not need middle managers, instead give the responsibility to your specialists. However, as your company grows and becomes “too big to fail”, you need to start considering the high costs of errors, and to avoid these, you need to put in place a new organizational structure that includes professional middle managers. This will support sustainable growth and development of your workforce, with great business results.

WHAT QUALITIES SHOULD A MANAGEMENT TEAM HAVE?

There is a famous quote from legendary management consultant, Peter Drucker: “Culture eats strategy for breakfast”. This does not

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“ This is a classic business story – the winner is not the person who came up with the idea, but the person who was able to make it work.

MYTHS AND REALITY IN THE GAMING INDUSTRY

mean that strategy is not important, rather that a strong and empowering culture is the best route to organisational success.

Below there are qualities of leadership team members we found to be very important:

• Caring about employees. Managers put their employees first because a successful business cannot run without specialists.

• Lack of obsession about personal status and titles. For best results, managers should have healthy ambitions without ego.

• Mutual support and understanding of interdependence between managers. This saves decision-makers a significant amount of energy, which is required for innovation.

• The ability to self-recover physiologically and emotionally.

Our adaptability, resilience and agility were put to the test in 202022. Company’s vision and strategic plans changed suddenly a few times, and our leadership team was able to promptly address these changes overnight, whilst keeping our people motivated for business continuity.

HOW TO BUILD A SYSTEM OF FINANCIAL MOTIVATION FOR EMPLOYEES?

We had a profit-sharing system in place at the company for several years. This works very well in a stable business environment. However, when a company requires funds to keep expanding, the profit-sharing system is not favourable.

According to our observations, employees greatly valued unforeseen

pay raises of at least 30% and expensive gifts like new smartphones, gaming consoles, branded clothes and wearables. Thus, the ideal system of financial incentives for employees should combine above-mentioned unexpected rewards, a transparent salary and a bonus for meeting company goals.

“

A strong and empowering culture is the best route to organisational success

HR IN FINTECH

Successful Business talks with the head of HR department of Admirals Svetlana Gildebrandt about the current trends and programs in Cyprus, which are used to maintain the well-being of employees.

What is your recruitment strategy to ensure that candidates are a good fit for Admirals’ culture?

DURING THE PAST 5 YEARS, I HAVE SEEN CYPRUS TAKING THE LEAD AS ONE OF THE WORLD’S MOST IMPORTANT CONTRIBUTORS TO THE IT AND FINANCIAL SERVICES INDUSTRIES

Admirals is a team of over 400 professionals spread across 30 different countries, making us a truly global organization. Despite the kaleidoscope of cultures we nurture inside the company, the cornerstone of the interview process is alignment with company values. We need to ensure that our future teams will enjoy our active pace, find opportunities for growth and development, as well as bringing their professional expertise onboard. Our HR representatives participate in the interview process to ask relevant questions, ensuring candidates are the right culture fit. In light of the company’s rapid global expansion, our recruitment strategy is closely aligned with our business strategy, bringing specific attention to expansion within 6 hubs where we have space to sustain our growth and Cyprus (for example, in Limassol and Nicosia).

What challenges (if any) do you face in Cyprus when it comes to finding talent for your company?

Throughout our 9 years of operation in Cyprus, we have been quite successful in finding professionals with different backgrounds and expertise. Cyprus is a great place to develop a business, especially when we speak about IT, product development, finance, management and other roles that we welcome at the

company. Cypriots and residents of Cyprus contribute greatly to the enhancement of the professional landscape of the country. The taxation regulations make Cyprus financially attractive to foreign workforce, so more and more professionals consider Cyprus to pursue further job opportunities every year. So far, 2022 has proved very fruitful in terms of our expansion activities - we have doubled our presence in Cyprus, opened an office in Limassol and can confirm that Cyprus is currently the fastest growing Admirals hub. With such a rapid expansion, the key challenge is emphasizing the importance of open communication throughout the organization and securing the buy-in from our employees, which is key to staying successful and competitive in the industry.

How do you promote wellbeing activities at Admirals?

Covid-19 has highlighted employee wellbeing as a priority for HR. With the start of the pandemic, our HR team focus has been supporting our employees’ physical and mental health in remote working environments. In the first part of 2021, alongside our global virtual health week, we offered lectures to help develop resilience, adaptability and agility to sustain a healthy mental state and recommended ‘home’ exercise programmes, such as chair yoga and posture training, to support physical wellbeing.

In the second part of 2021, we introduced a hybrid working model to our employees. In 2022, as Covid-19 restrictions started to fade, Admirals introduced a ‘great sense of togetherness’ campaign, to ensure a working from home and office balance was established. We also continued investing in our people by organising various

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HUMAN RESOURCES

events promoting healthy lifestyle habits, some examples are Summer sports days, team building activities, health week and children’s day.

What are some of the benefits that employees of your company can look forward to?

Admirals is a company with Estonian roots, and for many years we remained Estonia-centric, which affected the range of benefits we were able to provide. Nowadays, with our active expansion, we are focused on improving our employee benefits packages consistently throughout the hubs in line with more diverse EU offerings. Benefits packages across Admirals hubs include reimbursement of training activities, a bonus system that is aimed at recognition of high performing team members and a high standard medical insurance (to name a few key benefits). We actively request feedback from our workforce to ensure the benefits packages are aligned with our employees’ needs, with improvements every year. Local variables are also taken into consideration, ensuring we provide appropriate and tailored benefits to our employees across all locations, including Cyprus.

As an HR professional, what do you think of the trends and the future of employment in Cyprus in the financial industry?

I am very optimistic about the future of Cyprus, being one of our leading hubs, to keep attracting talent. During the past 5 years, I have seen Cyprus taking the lead as one of the world’s most important contributors to the IT and Financial Services industries. I deeply beleive that talent attracts more talent, and as Cyprus grows its talent organically, it will continue to be more desirable as a destination for business and talent worldwide.

In my opinion, employment trends in Cyprus, are aligned with global career trends:

Tech: Automation, Artificial Intelligence and Data Analytics enable people to spend more time on meaningful activities and improve the speed and accuracy of decision making.

Benefits: Customised and tailormade benefits continue to satisfy people’s expectations.

Work-life balance: Hybrid working models remain a top choice and a norm for knowledge workers, and wellness is emerging as one of the newest - and most important - HR KPI metrics to measure.

admiralmarkets.com +357 22 222046

Svetlana Gildebrandt, head of HR Department of Admirals

CYPRUS: BOOM TIMES OR HARD TIMES, WE NEED A NEW OUTLOOK

Cyprus, as an island community and as a thriving Mediterranean economy, is going through a strange mix of boom times for some, and hard times for others. We are not alone in that, many of our EU neighbours have been through or are experiencing a similar economic shift, however, our rather small and unique economy reacts differently in Cyprus. Our size, fairly modern and nimble economic footprint, provides us the opportunity to change the script, throw out the rule book and use our current economic health to advantage. We must build a more sustainable ecosystem for homegrown local talent and the businesses that will grow up around the large international corporations that relocate here.

RELOCATION, RELOCATION, RELOCATION

sophia@petrides.consulting https://linkedin.com/in/ sophiapetrides

Relocating to Cyprus is something that a lot of companies are doing right now. This means the Migration Department reports circa 12,000 relocations of staff working for international companies. This is reflected in our economic growth – GDP is forecast to grow by around 6% in

2023. Property prices have risen faster than GDP on average over the last 5 years. Despite a slowdown in property investment since the abolition of the so-called Golden Passport route to citizenship last year, in 2022 the government introduced more favourable tax benefits for overseas companies to set up their headquarters in Cyprus and have also introduced “The Digital Nomad Scheme”,

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Sophia Petrides

Talent Retention and Executive Leadership Coach

CYPRUS: BOOM TIMES OR HARD TIMES, WE NEED A NEW OUTLOOK

enabling people to enjoy our beautiful weather and quality of life, while working for companies operating outside the country. The scheme aims to transform our business ecosystem by attracting talented individuals and entrepreneurs.

LOCAL YOUTH SKILLS ARE NOT FIT TO SUPPORT THE TECH AND IT INDUSTRY

We are nothing like the economies of Bulgaria or Latvia who are struggling to fill jobs because of a brain drain, we have a work culture challenge ahead. We have the 7th lowest Gender Pay Gap in the EU, we rank 9th for purchasing power in the EU, and we pay the 5th highest average monthly salaries in the EU. There is a myth in the minds of young people, a hangover from growing up during the economic crisis and high employment years of the last decade, that there are not enough well-paid graduate jobs in Cyprus. There is no evidence to support that view. Young Cypriots are struggling not because of lack of jobs; they are struggling as their skills are not fit to support the vast vacancies in the Tech and IT industry, created from the government campaign to attract more foreign organisations setting up their headquarters here in Cyprus within these industries. CEOs from these companies have voiced this issue at major technology conferences on the island. They want to support the Cyprus economy and hire local talent, however, the lack of talent, has pushed them to hire overseas professionals. The education system, with the support of these organisations, has to form a closer partnership. We must build joint industry-government forums to evangelize STEM careers and conduct regular visits to schools to talk to young pupils to get them excited

“

IN THE EU CYPRUS HAS THE 7TH LOWEST GENDER PAY GAP, IT RANKS 9TH FOR PURCHASING POWER, IT PAYS THE 5TH HIGHEST AVERAGE MONTHLY SALARIES.

about technology as a career path, rather than following the traditional route of becoming accountants, doctors and lawyers. This is the way to increase productivity and raise wages in line with inflation.

SAFE, WELL-PAID JOB FOR LIFE? NOT ANYMORE

Another issue, young professionals are facing is the culture. Young Cypriots want careers in large organisations such as Google or Apple, not their uncle’s shipping company, the local solicitor firm, or a holiday resort. The differentiators are decidedly unCypriot workplace benefits like talent coaching, continuing professional development and flexible working.

This is a major issue; Cypriot professionals are facing within the culture. Traditional Cypriot businesses work on close-knit networks, links between education and local industries, and family connections. You are expected to work-your-way-up, wait your turn for promotion, and stick in the same role for years. That tradition rewards loyalty with security, however this is a fast-moving, digital age where young talent is highly skilled, highly mobile and puts opportunity and experience beyond security. In the rest of the world, as LinkedIn figures remind us, graduates and emerging professionals are hopping jobs faster than ever before – moving for promotion, moving for pay, moving to finance a year of travelling, moving to explore their options. They do not want to settle down in a safe,

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well-paid job for life – which is closer to the traditional Cypriot way – they want to explore the career world, just like their American, and EU counterparts.

GOALS FOR CYPRUS –SUSTAINABILITY AND INCLUSION

In this coming decade, we know that GDP will decline, inflation will rise, and the all-important drivers of our island economy – tourism, professional services and shipping – will slow down further, paying off pandemic debts and suffering from predicted global recession ahead. This is a recipe for conditions at home that could see Cypriot talent exit these shores – unless we do something about it now. And there are a great many things we should be doing to build a resilient, sustainable workplace ecosystem for young Cypriots. Why? Because everyone knows growth for a relatively small island economy like ours is driven by domestic household consumption as much as tourism. If we want to grow our household consumption, we need population growth (statistics are showing that currently Cyprus is at 25-year low birth rate), young families, affordable housing and well-paid, high-quality jobs beyond professional services, tourism and shipping.

This objective sets out two clear goals for industry leaders in Cyprus –sustainability and inclusion at work.

SUSTAINABILITY AT WORK

Firstly, company leaders need to focus on sustainability, which really means talent acquisition and retention. Retaining talent is a huge win for reducing costs, reducing the recruitment costs of replacing job-hopping young professionals, and extracting more value from the training new hires receive. It is a boost for your bottom line, and a boost for productivity as well. It is also not rocket science to achieve better talent retention, however, it has a price – a cultural one as much as financial. It means considering employment in terms of engagement programmes.

We are all familiar with the concept of onboarding new staff. However, once they are bedded in, what’s next? How do you keep them engaged? The smart money – and companies your young executives will leave you for –will re-onboard staff at regular intervals. Re-onboarding takes the form of 30-, 60- and 90-day programmes for all workforce, assigning short term goals for the teams, awarding badges for performance, and celebrating wins as they go.

It is also a well-known statistic that training, and coaching reduces staff turnover dramatically (studies show 30-50%) – so coaching for emerging Cypriot professionals should help to encourage them to build careers here, not leave for destinations where rents are cheaper to make their wages go further.

INCLUSION IN THE WORKPLACE

Secondly, if we want our young people to benefit from these opportunities, they need to feel included. Inclusion – often paired with Diversity – is by far the most important of those two popular terms. Inclusion means feeling part of the team, feeling listened to, feeling psychologically

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TRAINING AND COACHING REDUCES STAFF TURNOVER DRAMATICALLY (STUDIES SHOW 30-50%) – SO COACHING FOR EMERGING CYPRIOT PROFESSIONALS SHOULD HELP TO ENCOURAGE THEM TO BUILD CAREERS HERE, NOT LEAVE

HUMAN RESOURCES

CYPRUS: BOOM TIMES OR HARD TIMES, WE NEED A NEW OUTLOOK

safe to speak your mind and contribute. Although, every manager hopes their team feels included, there are numerous ways where most teams can improve on that front.

A re-onboarding programme will help to build a sense of inclusion; however, it must go further than that. Celebrating team successes and goals, again, will help. But to really achieve a sense of purpose and belonging, you need to take things up a notch. Reverse mentoring is a great way to build a more inclusive workplace, pairing new hires with senior key stakeholders to help the old hands become more familiar with modern workplace culture – video chats, office Yammer networks, messaging tools – building digital tools into the workplace from top to bottom. Similarly, having younger execs representing their views at board meetings, or holding regular town halls to seek out opinions of emerging talent can be effective.

In Cyprus innovation in the workplace can be very slow in industries that are well established – like professional services or shipping – however, innovation in terms of working processes, flexible working, training, and coaching for new hires to keep them engaged and motivated to stay longer in their roles, is something every business can do, right now, and feel the benefits. Competitive salaries help, but in the modern workplace, it is all about the extras. Training, coaching and wellbeing benefits will transform your workplace, and your bottom line.

THE FUTURE FOR CYPRUS

There is a joke you might know about a big shot from Silicon Valley who complains about an Italian restaurant in Rome for opening 5 minutes late. The angry millionaire tells the owner “The USA dominates the world because we always open

“QUALITY AND HIGH PERFORMANCE DO NOT MEAN DUMPING YOUR CULTURE AND HERITAGE FOR SOMEONE ELSE’S CORPORATE CULTURE. IT IS ABOUT FINDING YOUR OWN PATH

on time!” and the restaurant owner replies “So what? We Romans used to dominate the world, but then we learned what was really important. If you make tomato sauce like mama, the world waits for you to open.” The moral of the story is quality and high performance do not mean dumping your culture and heritage for someone else’s corporate culture. It is about finding your own path.

Cyprus has proven to be hugely resilient through the financial crisis and the pandemic, and although we face headwinds like the rest of the EU, from energy prices to paying off debts, we remain in a strong position to succeed and grow, we need to learn from their workplace culture.

Author’s bio

Having worked in senior management roles for S&P 500 and FT 100 organisations in the U.K, US and UAE for 30-plus years, Sophia understands the value of having the right leadership strategy in place to build and maintain a sustainable ecosystem within organisations, to attract and retain talent for business growth. Sophia is passionate for connecting with multi-generational teams and developing their networks to bring leaders and emerging professionals closer together.

In 2020, Sophia published her first book on Amazon called Bedside Coaching™, 7 Lessons of Empowerment which uses NLP mindfulness techniques to help people develop self-efficacy. These same proven techniques are used in her coaching business, with additional workplace-oriented programmes created to boost team performance and help organisations retain talent.

CITIZENSHIP BY INVESTMENT: A MUST OR A NICE TO HAVE?

Citizenship by Investment Programs (CBI or CIP for short) are not new. They’ve been around for almost four decades. Yet over the last ten to fifteen years, they started gaining traction and attracting thousands of high-net-worth individuals, wealthy entrepreneurs and investors from around the world for a variety of different reasons. Fayez Hwalla, Managing Partner of PASSWORLD LTD, in his article talks in detail about these programs and their benefits.

Nowadays, given the developments on the global geopolitical scene and the resulting uncertainties, demand for such programs is sky rocketing. For some it’s an immediate necessity to ensure they have undisrupted access to business, education, healthcare, or lifestyle choices. For others, it’s an insurance policy or a Plan B to mitigate future risks whether on the global front, or specific to their country of origin. Accordingly, CBI has become an integral part of the toolkit of wealth managers and financial advisors when structuring clients’ global presence. Like investment diversification, the concept is rapidly evolving towards advising for citizenship and residency portfolios to ensure that clients can develop, enjoy and sustain a Global Citizen status.

WHICH COUNTRIES CURRENTLY OFFER CBI PROGRAMS?

Many countries have relevant legislation for citizenship or residency through investment programs. Not all are active and out of those that are, few can be considered successful. Our experience when it comes to CBI specifically, the five East Caribbean programs (Grenada, Dominica, St. Kitts, Antigua and St. Lucia) have a proven track record and a very good reputation. From an EU standpoint, the two most prominent are Malta and Portugal, neither of which offers typical CBI programs. Malta has an exceptional investor naturalization program with more requirements, higher investment and longer lead time. Portugal has a residency program with a pathway to permanent residency or citizenship application in five years’ time. Every

Fayez Hwalla Cert.IM Managing Partner PassWorld Ltd

month we learn about a new country ratifying legislation for new programs, yet such programs need time to evolve and prove they have the right transparency, infrastructure, and track record before we can recommend these options to our clients.

WHICH NATIONALITIES ARE TYPICALLY INTERESTED IN CIP?

Interest is picking up globally, driven by many reasons such as geopolitical conflicts and their implications, regulatory and tax reforms in certain countries taking into consideration worldwide income taxation, or successful business leaders who don’t want to be bound by the restrictions imposed by their home countries. In some cases, applicants are renouncing their original citizenship (which they don’t have to) to break free from arguably unjust treatment or reforms imposed by their governments.

WHAT ARE THE BENEFITS OF CARIBBEAN CBI PROGRAMS?

Benefits are subject to how effectively features are put to use. These features fall into three main categories: Mobility with visa-free travel to 130+ countries including UK, EU Schengen Area, Singapore, Hong Kong and even China in the case of Grenada; Wealth Preservation through diversification and legal tax optimization strategies; and Lifestyle options like access to highly rated universities in Grenada and St. Kitts, or option to reside indefinitely in any of the 13 CARICOM countries including the Bahamas.

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CITIZENSHIP BY INVESTMENT: A MUST OR A NICE TO HAVE?

Important to note that there is no requirement to reside or even visit the host country (with the exception of Antigua which requires a 5-day visit) – the whole process is managed remotely and even certificates and passports are couriered to the applicant’s chosen address.

One specific feature worth highlighting, is exclusive to Grenada citizens. Grenada has an E-2 Treaty with the United States, thus allowing its citizens to apply for an E-2 investor visa.

WHAT IS E-2 INVESTOR VISA AND WHAT ARE ITS BENEFITS?

The treaty investor visa is a nonimmigrant classification that allows a national of a US treaty country to travel and reside in the United States for up to five years for the purpose of investing a substantial amount of capital in an approved US commercial enterprise. E-2 is highly sought after by foreign nationals and investors given its substantial benefits and privileges to the visa holder and family members.

Some of these key benefits are:

• Free education in US public schools

• More affordable, in-state tuition costs at US universities

• Spouses have the right to work anywhere in the United States

• Visa can be renewed indefinitely, provided the business maintains operations

• Visa holder can spend up to 120 days in the US without being subject to worldwide income taxation

• Visa holder can sponsor specialized employees from their nation (non-family members) to work for their business.

PATHWAY TO CITIZENSHIP

In general, all Caribbean programs have two paths, either investment in a government approved real estate project (typically hospitality projects to boost tourism) or a direct nonrefundable contribution to a specific economic development fund. In the real estate option, we normally expect a 2 to 4% ROI, always depending on project performance. CBI investors are required to hold their investment for 5 years (7 in the case of St. Kitts), and then they can resell their shares to another applicant while retaining

their full citizenship status and features.

PROCESS, DUE DILIGENCE, AND TIMELINE

Application processes have been well streamlined to clarify all required documents and application forms. The documents required generally revolve around personal information, criminal records, some medical exams, and source of funds. Our processing team support the client during the document preparation phase and review each document to ensure right first-time submission. Once submitted, the CBI unit of the host country start their detailed due diligence process which includes checks against international crime databases and key intelligence agencies. Such thorough due diligence is critical, to ensure program reputation and integrity which in turn protects both investor and host country in the long term. Timeline spans between five and eight months, with some delays recently due to high volumes. CBI units are increasing capacity to cope with high demand.

WHAT’S THE INVESTMENT MAGNITUDE?

In this part of the world, CBI is perceived as a multi-million investment. This is not the case for the Caribbean. Investment depends on the program, pathway and number of dependents and their ages. To give you an example, a family of four applying for Grenada citizenship through the real estate path costs around $300k to $320k.

LAST THOUGHTS

Any successful business leader, owner, investor or entrepreneur, should take a step back from their busy schedules, and rethink their global presence and risk mitigation strategies during such volatile times and the prevailing grim global outlook. We’re one call away and look forward to extending our support on CBI and beyond.

+357 96 670 700

+357 25 011 700 77 770 700 www.passworld-cbi.com info@passworld-cbi.com

10 LIFESTYLE TRENDS IN 2023

One major trend that is expected to continue in 2023 is the focus on wellness and self-care. Consumers are becoming increasingly aware of the importance of taking care of their physical and mental health, and are seeking out products and services that can help them do so. This includes everything from fitness and exercise products, such as workout weights and yoga mats, to self-care items like essential oils and scented candles.

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OFFICE CULTURE

While hybrid working is still a priority, we’re becoming more accustomed to the day-to-day office life that we once knew so well, from the daily commute right down to office politics. But despite things returning (somewhat) to normal, there are some things that have truly changed – and making mental health and wellbeing a greater priority in the workplace is one of them. According to Deloitte’s 2022 mental health report, one-third of employees expect or would like more support for their mental health and wellbeing from their employers – and with this change in attitude from employees, companies are beginning to get on board.

DIGITAL NOMADS TO THE EXTREME

In the lifestyle in 2023, from Vietnam to Nigeria, people with a better socioeconomic level will be able to travel freely again and find pleasure in visiting places they never imagined being, such as countries in Africa and Asia. Similarly, parents within this population spectrum will choose to provide a global education to their children through travel, after two years of education at home or interrupted by the health contingency.

IN SEARCH OF SELFIMPROVEMENT

Mental health and wellness experts are still trying to help people find ways to combat negativity and lifestyle in 2023 after rates of depression and anxiety skyrocketed globally. However, we will see a continuing lifestyle trend in 2023 in which much of the population improve their skills after spending the lockdowns of the

1IN A MCKINSEY SURVEY OF ROUGHLY 7,500 CONSUMERS IN SIX COUNTRIES, 79% OF THE RESPONDENTS SAID THEY BELIEVE THAT WELLNESS IS IMPORTANT, AND 42% CONSIDER IT A TOP PRIORITY.

pandemic devoting their free time to hobbies: from cooking and hiking to playing a new musical instrument, taking online courses or learning another foreign language.

OUTDOORS ACTIVITIES

2 3 4 5

People will continue to move to greener landscapes due to the violent crime arising from the increasingly marked economic inequality, the confinement due to the health crisis of COVID-19, and the stratospheric rise in house prices in cities globally. From a day trip to a trip for several months, in general, society will look for the green landscapes and pure air of the countryside, in an attempt to find new horizons where to settle.

GO GREEN

This trend has been on the rise in recent years, sustainability is big, and it’s here to stay. Consumers are increasingly looking for green alternatives, whether that’s reusable items as opposed to single-use, or products made from sustainable materials rather than plastic or rare resources.

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PERSONALIZED WELLNESS EXPERIENCES

BIG AND BOLD

As more Gen Z individuals and ‘Zillennials’ start to become homeowners, you may see a trend of bold, contrasting colours making its way into homes. They show a preference for bright colours, specifically yellows (the colour of happiness, joy, and positivity) and greens (the colour of nature, health, and growth). Additionally, the colour purple (the colour of royalty, luxury, and spiritualism) is predicted to become more popular in 2023. Gen Z’s love the contrast of bright colours which suggests the start of a move away from the trend of minimalism where homes became varying shades of nude, white and grey.

IN 2022, THE GLOBAL WELLNESS MARKET HIT $5.59 TRILLION. BY 2025, IT’S EXPECTED TO REACH NEARLY $7 TRILLION – A 25% INCREASE.

7 8People expect personalised health and wellness. But consumers are also increasingly privacy-conscious –they’re wary of who they share their personal data with. Fifty-six percent of consumers say they don’t trust tech companies with their health information. Wellness brands are going beyond building personalized marketing campaigns and building tailor-made product offerings unique to the consumer. According to a recent study, 58% of consumers are «very interested» in personalized supplements made just for them, with younger generations like Gen Z and millennials being most interested (71%).

AGELESSNESS AGEING

6As technology helps us to grow older, the perception of ageing has radically changed. People spend billions of euros to look more youthful. The desire to look younger spurred a humongous anti-ageing industry. There are many books, supplements, videos, and courses available that provide support in fighting the signs of age. Then there are the weight loss clinics, personal coaches, nutritional advisors, and other health gurus that guide their clients in preserving youth. Anti-ageing creams and make-up cover up some of the marks of time.

ADAPTOGENS TO BOOST FOOD BENEFITS

Different kinds of foods and nutrients can affect our energy and wellbeing. Eating dark chocolate, for

WELLNESS AS A LIFESTYLE 10 LIFESTYLE TRENDS IN 2023

example, can improve your mood. (It’s science!) In 2023 people will pay more attention to adaptogens, active ingredients in plants and mushrooms that may affect how our bodies deal with stress, anxiety and fatigue. By adding adaptogens to other foods, we can boost the health benefits of those foods. For example, you may add some turmeric to a smoothie or soup because of the spice’s potential to reduce inflammation. Or consider ashwagandha, otherwise known as Indian winter cherry or Indian ginseng, which is becoming popular for its potential calming effect on how your brain responds to stress. Or don’t forget about mushroom coffee, which blends mushroom extract and ground coffee beans to help reduce stress and inflammation.

SENSEHACKING TO CHANGE THE MOOD

Sensehacking — a big wellbeing trend for 2023 — highlights the crucial role that senses play in our everyday lives. Our senses (sight, sound, touch, smell, and taste) can change how we feel almost instantly, so this trend is all about becoming happier and more productive by ‘hacking’ our senses. According to the experts, sensehacking is said to help improve your cognitive and emotional wellbeing. Easy ways to boost the senses at home include using diffusers, candles, wax melts or pillow sprays, and using colour psychology to make our environment spark creativity, and positivity and boost our mental health.

THE WELLNESS TRENDS TO WATCH OUT FOR IN 2023

9Eating the last meal before sunset. There is a shift to earlier dinner reservations (at 17.00 or 18.00) across the hospitality industry, people are more informed of the effects a late dinner has on their sleep, readiness and recovery. Expect to see a lot of wellness gurus eating early with plenty of time to digest and set themselves up for a successful sleep routine.

Low-intensity workouts. Walking really took center stage during the pandemic when gyms, studios and classes were shut down. People finally realized they can move their bodies, feel good and yield results without putting themselves through torture. Expect to see forms of lower intensity movement continue to center the conversation with long walks, mat work, pilates and mobility exercises working their way into fitness routines.

At-home beauty treatments. It’s no secret that at-home skincare routines have become increasingly popular in the last few years and the urge to preserve youthful skin is still alive and well. Consumers have more opportunities to take their beauty regimen into their own hands and have access to spa quality equipment and treatments for a fraction of the price.

10Digital detox. People are starting to realize that taking social media breaks and disconnecting from technology in general on a regular basis is not only therapeutic but also attainable as a self-care goal. People are finding they can enjoy life outside their phones more holistically and set healthier communication boundaries.

Movement snacks. More and more studies are finding that breaking up your exercise regimen into smaller movement snacks throughout the day is not only perfectly healthy, but it can also be more beneficial than forcing yourself to do one longer workout session. There is a shift in our general mindset around fitness, letting us find enjoyment and strength without the pressure of carving out a large amount of time.

Noma Nazish, forbes.com

Sources: stylist.co.uk; plethoranetwork.com; reflectdigital.co.uk; shopify.com; countryliving.com

www.sb-cyprus.com

ELENA VAEVSKAYA:

«MY MISSION IS TO HELP PEOPLE LIVE A LONG, ACTIVE, HAPPY LIFE»

NAGOMI Longevity and Healing Center is a hidden gem in the heart of Limassol. From the moment you walk in, the atmosphere feels special, there is a sense of calm coming from the luxurious healing facilities and it is a perfect place to talk about longevity with the island’s leading anti-aging specialist, Elena Vaevskaya, the Founder and CEO of NAGOMI Longevity and Healing Center of High Tech Health Technologies.

Elena, tell us a bit about when and how did your journey start?

My journey to become an expert in this field really began when I enrolled at the American Academy of AntiAging Medicine in the USA, one of the world leaders in anti-aging. At the same time, I joined the World Society of Anti-Aging Medicine, under the leadership of Dr. Thierry Hertoghe, an expert in longevity and reversing the process of aging. I also spent a lot of time attending global conferences and seminars, which inspired me to take a deep dive into the field of preventative technologies and health management.

The result of those years of study is the NAGOMI Longevity and Healing Center where we focus on the science of anti-aging and taking care of the whole body from the inside out.

What attracted you to travel and study in Japan?

My curiosity in longevity and health management took me from the USA to Japan, one of the countries with the highest life expectancies in the world. My time there played a huge influence in shaping my thinking and design for the NAGOMI Center.

In Japan they take pride in their health and treat the body as a whole. Doctors also treat each individual with a unique, personalised approach. During my time there, I met with a lot of doctors and studied under Dr.Takuji Shirasawa, author of over 300 best-selling books on anti-aging, with more than 2 million copies sold. He is the founder of the Shirasawa Anti-Aging Medical Institute, and I was privileged to travel with Dr. Shirasawa to various villages across

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Japan, which were known to have particularly high life expectancy, researching the causes of their longevity.

In addition to studying the medical side of anti-aging, I also researched the Japanese approach to health management using alternative medicines. This led me to meet the incredible Dr. Naomi Hoshiko, founder of Hoshiko Holistic clinic in Tokyo. Naomi Hoshiko used alternative therapies to cure her own cancer, and this inspired her to focus on healing methods to support the prevention and healing of certain kinds of cancer and other lifestyle-induced diseases like diabetes.

Following my time in Japan, I decided it was time to bring my expertise and the world-class technologies I had experienced, here to Cyprus, for the past 17 years I often visited the island, and finally Cyprus became my home.

HYDROGEN THERAPY PREVENTS HYPERTENSION, HYPERGLYCAEMIA, HYPERLIPIDAEMIA AND VARIOUS PREDIABETIC CONDITIONS

Tell us more about longevity and healing technologies - how do they support the lives of busy executives and people who are constantly on the go?

We all recognise the challenges of modern life, but maybe not how to deal with them effectively. If you are stressed, you usually have unbalanced sleep patterns and wake-up tired, which leads to unhealthy eating habits, too much coffee and alcohol, often leading to more stress and burnout. We use a Quantum Resonance Magnetic Field-based Healing Program, to give people a sense of rejuvenation. This technology reduces stress and boosts your immune system. It also improves transit of

oxygen and nutrients to support muscle relaxation, improves blood microcirculation and also decreases tissue inflammation.

IHHT (Intermittent hypoxic hyperoxic training) is our pride. This is amazing method of mounting air trainings works on subcellular level to rejuvenate your body – boosting mitochondria. It is a leading-edge methodology which gives excellent results, used in the healing and prevention of cardiovascular, respiratory, endocrine, and immune diseases.

The next program I recommend is the Negative Ion Treatment on the Dermio Care Plus Device. This improves blood circulation, metabolic and redox processes. Negative Ion Treatment is often used in therapies for cancer, respiratory diseases, acne and other dermatological diseases, and migraines. Dermio Care Plus uses the latest phototherapy (light therapy) technology. The patented Dermionologie methodology is efficient for people who want to restore PH balance in their tissues, which not only improves your body shape but also the appearance of your skin. Ions generated by this device – nicknamed ‘air vitamins’ – help reinvigorate and improve the health of the body without side effects.

We also see great results from Hydrogen Therapy, used to prevent hypertension, hyperglycaemia, hyperlipidaemia and various prediabetic conditions. Hydrogen Therapy is popular because it improves metabolism and sleep quality – which in turn helps with memory, brain functions and the healthy functioning of the nervous system.

Of course, these therapies are only part of the picture. In keeping with the Japanese philosophy of wholebody wellness from the inside out, we also offer individual nutrition pro-

THE BEST TIME TO START FOCUSING ON YOUR NUTRITION AND WELLBEING IS AGE 30-35. DO NOT WAIT UNTIL YOU ARE OLDER AND BEGIN TO NOTICE THE ADVERSE SIGNS OF AGING

grams, developed by Daniela Shiga who is a leading nutritionist in Japan and director of the Japanese Society of Anti-Aging Nutrition.

Who will benefit the most from your approach to health management?

My passion is to help people change their lifestyle to prevent diseases and live a long, active, happy life. In Japan, this usually begins at age 30-35 because this is the best time to start focusing on your nutrition and wellbeing – rather than waiting until you are older and begin to notice the adverse signs of aging. However, it is never too late to affect positive change and feel the benefits of a happier, healthier lifestyle.

In today’s fast paced, 24/7 Cypriot business culture and nightlife, we could all use some in-depth, scientific self-care and our centre is a good place to start.

nagomi-center.com nagomi.center@gmail.com +357 99970393 +357 25570393

ELENA VAEVSKAYA: «MY MISSION IS TO HELP PEOPLE LIVE A LONG, ACTIVE, HAPPY LIFE»

WELLNESS AS A LIFESTYLE

STARTING A HABIT OF WELL-BEING TODAY

We are living through challenging times. From inflation to the energy crisis, stock market dips, climate change and geopolitical tensions, there are many reasons why stress and anxiety are reportedly on the rise. Luckily, here in Cyprus there is another way to deal with the stress of modern life. Successful Business talks to George Tavelis – CEO of Tavelis Spa Concept, Managing Director at Sanctum Spa & Fitness Centres and President & Founder of Cyprus Spa Associationabout becoming more resilient in the face of challenging times.

As an expert on wellness in our personal lives and workplaces, is it time to start taking wellness and mental wellbeing more seriously in Cyprus than in previous decades?

For many people in Cyprus, the only thing they think about is their daily routine of waking up, going to work, and then returning home to repeat the same the next day. It is important more so now than ever, as our lives become busier and more stressful, to transform our lifestyle by creating a daily wellbeing habit.

It is not simply a matter of exercise and nutrition; we need to incorporate ‘me time’ in our diaries. Time to get some fresh air and be alone in our thoughts. What matters is to find an activity that brings joy into our lives.

At our spa & fitness centres, we do not just support successful career people; we also support the younger generation who have so much stress and anxiety in their lives. If they do not find a way to change their lifestyle, this will lead to them suffering from mental health issues.

What should our priorities be if we want to support a sustainable healthy lifestyle?

Self-awareness is a priority. One of the things we recommend to our clients is to find ways to ‘shut off’ from the outside world and do nothing. Find peace. Read a book. Meditate. We all spend too much time on social media, for example, and it does not give time for our brains to rest. Our spa & fitness centres are specifically designed to incorporate quiet spaces to ‘power down’.

Self-awareness is also about understanding how our actions and the environment around us can affect our wellbeing positively and negatively. This is why we are committed to sustainable solutions to support our client’s wellbeing. Energy, water, spa products, the food & beverages we offer, everything is sustainable. This is essential.

What do you consider to be the biggest consideration when starting a new spa and wellness project?

It is important to create exceptional experiences. We build multiple wellbeing & spas centres in many destinations, with different cultures and treatment concepts, which means every new destination has a unique story. The environment, the culture, the history, it all creates the concept that, in turn, decides which programmes are best suited for that location.

After spending a lot of time at spas, I have learned it is not about back-to-back treatments, which can actually be very stressful. It is about creating a space to fully unwind. Our latest project, Minthis Resort is a good example. It is the first destination spa in Cyprus. The concept is a place you visit to completely unwind, to escape the stress of city life - not just for a day, but for a few days to really benefit from the experience.

Of course, the experience and the story are only as good as your team. They listen to client needs and find ways to advise how to change their lifestyle to a healthier one.

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SELF-AWARENESS IS A PRIORITY. ONE OF THE THINGS WE RECOMMEND TO OUR CLIENTS IS TO FIND WAYS TO ‘SHUT OFF’ FROM THE OUTSIDE WORLD AND DO NOTHING.

We aim for our clients to always go home feeling motivated and empowered by providing personalised exercise, healthy eating, and relaxation programmes.

We also like to surprise our clients with something special, like a new soothing recovery massage treatment after a workout.

I always say that motivation and empowerment support great performance and higher self-esteem, that will lead to even higher performance. It creates a healthy cycle for success!

We have seen a huge boom in gyms in the EU, big brands and clothing companies springing up in the health and wellness space – what is the future of the industry?

People are always looking for an individual approach. It is important to stay close to your clients and learn how to help them achieve their personal goals. This is why my team is constantly attending courses to keepup with new trends and techniques in the industry. You have to lead your industry with fresh ideas, to keep clients inspired and energised. You need to keep up with demand. At Sanctum, for example, we are at the forefront of wellbeing innovation in Cyprus, and the first to become fully automated, with many other fitness centres following our lead.

You have earned huge success, what advice would you give to today’s emerging entrepreneurs?

Prepare to fail! Remember, failing does not make you a failure. All successful entrepreneurs have failed on many occasions. Failure makes you resilient, adaptable with a strong mindset to manage constant change, like we are currently facing in the world.

As a leader, you need a vision, and you need to be able to communicate this to your team clearly. It is vital you

George Tavelis has created over 80 international projects, including award-winning spas like the famous Retreat Spa at Aphrodite Hills, the Le Meridien Limassol Spa and Resort, the Euphoria Retreat in Sparta Mystras and Minthis Destination Spa at Minthis Resort, Paphos. He is also currently collaborating with Johns Hopkins Healthcare in Jeddah, Saudi Arabia, where he is developing a rehabilitation centre of excellence.

have an open-door policy, so your team feels safe to share their problems. I always tell my team, do not take your problems home, because tomorrow it will become a bigger problem. If your personal life is not in a healthy state, you cannot be successful in your business. Without my family, I would not be able to succeed in life. My home is my sanctuary where I feel relaxed and re-charge. That is why I believe that when you share your problems at work, you go home with a healthy mental state, you wake up refreshed and come to work ready to tackle a busy day.

In the service industry, you need to look after your team so that they can look after your clients with a big smile and a sense of happiness!

Relaxation at its best: KALLONI SPA

At Kalloni Spa, you will be transported from everyday life to a transformative wellness journey. Consider total peace, space, and privacy while surrounded by the enticing breeze of the Mediterranean Sea. Feel nourished in the tranquil sanctuary, thanks to the expert care of handpicked leading therapists and Kalloni’s signature Biologique Recherche & Thalgo products, that can be purchased at the Kalloni Spa Retail Boutique. The 3,000-square-meter Spa, located in Parklane,

a Luxury Collection Resort & Spa, is the only Thalassotherapy Center in Cyprus and it is dedicated to restoring spiritual balance and harmony through a holistic approach to wellness. It has 14 Treatment Rooms for Body Scrubs, Body Wraps, Couples Massages, Eye Treatments, Facials, Makeup Services, Manicures/Pedicures, Massages, Men’s Scalp & Hair Treatments, a Steam Room, a Therapy Bath, Waxing and Hair Salon.

RUSSIAN BANYA

Russian Banya Luxury Suites will give you the opportunity to experience one of the oldest Russian traditions, offering a relaxing aromatic sauna followed by a cold temperature plunge pool, a boosting Venik massage in a private relaxing environment. Feeling the adrenalin hormones released after using the cold plunge pool, stress will only be a distant memory. Venik massage experience will improve the blood circulation and relieve tension, while Venik essential oils extract will boost your immune system and aid anti-aging.

THALASSOTHERAPY is the use of SEAWATER AND sea substances AS A FORM OF THERAPY.

ITS NAME IS FROM the Greek word “Thalassa”, MEANING SEA OR OCEAN.

THALASSOTHERAPY

Kalloni Spa has developed the unique Supervised Thalassotherapy Program that includes procedures to improve the condition of the skin and overall wellbeing. The experience takes you through two outdoor or three indoor pools, each with a different temperature and salinity content. In this case thalassotherapy induces relaxation as the support from the high-density sea-water pools, allowing the body’s skeletal frame to relax completely whilst floating. It is the ideal treatment for detoxification and sheer indulgence. The treatment of Supervised Thalassotherapy Program lasts 75 minutes. There are other treatments on the thalassotherapy menu, for example: Thalgo Hydrotherapy Bath with Effervescent Crystals, Thalgo Hydrotherapy Bath with Olivine Extract, Thalgo Hydrotherapy Milk Bath. Kalloni Spa is the only Spa on the island that offers a full range of Thalassotherapy treatments.

WATSU (WATER SHIATSU MASSAGE)

This unique treatment is performed in our highdensity pool where the body is supported by the natural buoyancy of the water and the capable hands of the masseur. The treatment takes the form of mobilization and stretching movements to return the skeletal system to a natural balance, whilst applying both pressure and manipulation techniques to the meridian lines and points in the body thus encouraging the circulation of energy within.

Parklane, a Luxury Collection Resort & Spa, Limassol 11 Giannou Kranidioti Street, Limassol 4534 Cyprus +357 25 862000

INVESTMENTS IN CYPRUS: IMPACT, CHALLENGES, FORECASTS

The main subjects of the conference were Energy, IT-Fintech-NewTech, Innovations-MiCA-Blockchain, Investments Funds and Venture Investments. The event program is prepared in cooperation with Invest Cyprus, Association of innovation companies TechIsland, Cyprus International Funds Association, other professional associations and experts to create valuable content.

The program of the BEST INVEST Congress 2022 included also afternoon meetings and seminars, discussion on prospects of Cyprus-MENA countries cooperation, welcome and farewell parties and other side events aimed for better networking and information exchange.

The future of the global and Cyprus' economy as well as Cyprus oil, gas and renewable energy sources sectors was the topic at the opening session of the Best Invest Congress at Limassol's Four Seasons Hotel on Monday, October 17.

The keynote address opening the Congress dealt with recent developments in the Cyprus' and global economy and was delivered by Evgenios Evgeniou, Chairman of Invest Cyprus. Highlighting the current difficulties of the global economy, Evgeniou declared that Cyprus «is again proving to be resilient».

Despite the impact of the pandemic and the war in Ukraine on «vital sectors of the country's economy such as tourism, retailing and professional services the expectations remain favourable for a significant economic growth in 2022 and 2023» he said. He noted that the IMF had upgraded its forecast on the growth rate of the Cypriot economy in 2022 to 3.5 per cent from the 2.1 per cent that

had been expected a few months earlier, adding that it had downgraded its 2023 estimate from 3.5 to 2.5 per cent.

«Personally I remain optimistic that the growth rating for Cyprus in 2023 will be higher than the current IMF estimate» he commented. He pointed out that international rating agencies recently upgraded «our economy's outlook based on the resilience» shown to date. «Apart from prudent and targetted fiscal policies, a resilient financial system, an adaptive tourist sector, the foreign direct investments are also of paramount importance for Cyprus,» he said.

Evgenios Evgeniou, Chairman, Invest Cyprus

BEST INVEST CONGRESS

INVESTMENTS IN CYPRUS: IMPACT, CHALLENGES, FORECASTS

In an address entitled «The New Normal: Managing in an Age of Continual Crises and Instability», the cofounder of the Navigator Consulting Group Philip Ammerman offered a visionary analysis of the current situation with regard to Cyprus.

Ammerman, who is himself an investor in the island, made clear that while his remarks focused on market instability, that wasn't «necesarily negative», although it could be negative «for companies who are not prepared to adapt to it». Ammerman spoke of how «in the 'Old Normal' we had this concept that in the business cycle we have about six decades of positive GDP growth, followed by two to three years of recession; then the cycle resets and growth restarts».

Since Cyprus joined the EU and the «tremendous wave» of technology changes taking place from about 2000 onwards meant that «we are in something of a 'New Normal'», he asserted. «What we are seeing now

and [will see] in the future, both in small economies like Cyprus and larger economies like the United States, is that this is really the change point in the international economy and in our technology and that this fundamental change will last to at least 2040 and that it is going to be characterised by fundamental instability and volatility.»

The salient question that he and many other analysts are asking is what is going to be the role of a nation state in an economy that is increasingly global», where the yields are increasingly shared by a relatively smaller group of beneficiaries. He was certain that the changes «we are going to see until 2030 or 2040 would be unlike anything we have seen in our history». Examples he cited included fundamental climate changes and technologies that would alter the human life cycle, such as gene splicing. This would be fundamental «to every issue of how our society and economy is organised».

Philip Ammerman, Co-Founder, Navigator Consulting Group

THE FUTURE OF CYPRUS ENERGY PROJECTS

Prospects of investments in traditional and renewable sources of energy were discussed during the first session of the Best Invest Congress that was held in Limassol on October 17.

The discussion on energy issues was moderated by Iacovos Ghalanos, Cyprus' KPMG COO. Other experts participating included: former Cyprus' Minister of Energy Yiorgos Lakkotripis, Imperio Group co-founder Yiannis Misirlis, former DEFA and ETYFA Chairman Symeon Kassianides, Cyprus Hydrocarbon Company (CHC) Board member and University of Cyprus Natural Gas Engineering Programme Director Panos Papanastasiou and Cyprus Association of Renewable Energy Enterprises Secretary Nicos Trikkis.

According to Papanastasiou, the Ukrainian war and the current dire situation prevailing in the energy markets has resulted in increased interest in the East Mediterranean gas resources.

«The fact that Europe is desperately looking for new suppliers of gas might provide Cyprus with a great opportunity to develop its own gas field discoveries. With an appropriate investment, «Cyprus would be able to provide up to 15 per cent of Europe's gas needs,» Papanastasiou indicated.

Kassianides reminded participants of two important events that took place in recent weeks, namely the agreement between Israel and Lebanon to end their long-running dispute over their maritime border, and the inauguration of the EuroAsia Interconnector project.

The former will open the way to offshore energy exploration in the Mediterranean and enable Cyprus to finalise its own maritime border agreement with Beirut. The latter will connect the Cypriot, Greek and Israeli power grids via what will be the world's longest submarine power cable totalling over 1,200 kilometres. It will have a 2,000 Megawatt capability and allow Cyprus to export or exchange any excess of renewable energy.

«That means Cyprus will be not only an energy user but also an energy exporter which will provide it with an additional incentive to invest in renewables,» Kassianides declared. «It means it is a good time to invest in the energy sector on the island, both in gas and in renewables.»

Reviewing Investment Opportunities in the Cyprus Electricity and Renewable Energy Sources, Cyprus Association of Renewable Energy Enterprises Secretary Nicos Trikkis spoke of the promising results inherent in the recently inaugurated EuroAsia Interconnector project. «The potential for renewables in Cyprus has changed. Now we can focus more and produce for export as well. This is good news since the cost of producing energy in Cyprus, especially through photovoltaics, is the cheapest in the Europe.»

Former Cyprus' Minister of Energy Lakkotripis was quick to point out that while it was appropriate to welcome the inauguration of the interconnector project there remained the pressing issue of the need to balance the grid.

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«The grid has reached its limits. There is no more capacity. That is why you see fewer and fewer permits issued unless they carry storage as well.» The interconnector, he reminded participants, while undoubtedly a significant development, is not expected to complete the connection between Cyprus and Israel until 2027, at the earliest. «That is why something needs to be done about the grid long before that. This is our priority now.»

Property developer and Imperio Group cofounder Misirlis cited the need for green financing to help accomplish more of the improvements needed while spelling out some of the recent measures taken to upgrade airconditioning and heating systems, lighting and so on. «We definitely need green financing, something that we can find in most European countries but not yet in Cyprus. The Central Bank also needs to change provisions for commercial banks so they can introduce less expensive mortgages when they relate to green housing. Only then can we move further in this direction.»

It was up to the state to provide developers with a clear set of the relevant criteria, he said. These should spell out «what is green and what is not» and they should include «a clear set of checks so we understand clearly what we need to deliver.»

Once these parameters are in place, he added, the market will move towards green housing. Moreover, the state, he concluded, should also «provide incentives for investors.»

THE FUTURE OF CYPRUS ENERGY PROJECTS

Iacovos Ghalanos, Cyprus’ KPMG COO, Symeon Kassianides, former DEFA and ETYFA Chairman, Panos Papanastasiou, Cyprus Hydrocarbon Company (CHC) Board member and Natural Gas Engineering Programme Director at the University of Cyprus

Nicos Trikkis, Cyprus Association of Renewable Energy Enterprises Secretary, Yiorgos Lakkotripis, business advisor, former Cyprus’ Minister of Energy, Yiannis Misirlis, co-founder, Imperio Group

BEST INVEST

CYPRUS: A FAST GROWING GLOBAL TECH HUB

Cyprus is rapidly becoming a dynamic global tech hub. Increasing numbers of IT companies are relocating to the island. But is the country prepared for this influx of new businesses and people? And what does the government have to do in order not to miss this big chance to become a New Tech Industry hot destination?

These were the main questions asked during the second plenary session of the Best Invest Congress. The session, entitled «Cyprus: a Fast Growing Global Tech Hub» brought together expat business leaders already established on the island and local business community experts. It consisted of two panel discussions and was organised in collaboration with TechIsland, the non-profit IT association established in 2021 charged with turning Cyprus into a world-class destination for worldclass IT talent.

The two key discussions were moderated in turn by Tasos Yiasemides, Head of GCMS services of the KPMG and Natalia Kardash, Founder of the Successful Business Leaders' Club.

Other experts participating included Alexey Gubarev, Co-Founder of Palta, Stylianos Lambrou, CoFounder of Reflect; Petr Valov, CEO, Exness; Yannis Matsis, Managing Director of MUFG Investor Services, former minister of transport and public works Marios Demetriades, Andreas Athinodorou from CIFA, Yiangos Hadjiyannis from Invest Cyprus and Angelos Paphitis of the AGP Law Firm managing partner.

«Cyprus can be the Singapore of the Mediterranenan,» declared Petr Valov, founder of Exness, one of the world's most successful online brokerage companies, headquartered in Cyprus.

He cited the island's great location at the «crossroads of three continents», noting that it is already considered to rank high among IT destinations, albeit «not as popular as for example London, but much more popular than a couple of years ago». The many advantages offered by the country make it worthwhile for IT experts to consider relocating to the island, he said, while conceding that there are also some disadvantages.

«Rents are expensive, there are not enough private schools,» Valov allowed. Given that all these professional newcomers to the island spend up to a half a bilion a year, a «constant quality income for Cyprus, coming from abroad and spent locally», it is important for the government to look to further infrastructure development, he argued.

Palta's co-founder Gubarev agreed. «Thousands of new apartments have

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CYPRUS: A FAST GROWING GLOBAL TECH HUB

to be built on this island. And at least three-to-four new schools. Right now, Limassol is already full - there is no accommodation, no offices, no space in schools here. Paphos is also full and Nicosia is filling in. Soon the only place left will be Larnaca,» he indicated. He also pointed to a huge shortage of local IT talent on the island. «There are no local IT experts. With all the companies that moved to the island in recent years and months there is a shortage of local IT talent. This also has to be solved.»

Others agreed, urging better coooperation between the government and the IT companies. «The government needs to understand better what has to be done to satisfy their needs in order to attract them to Cyprus, Reflect's Lambrou said. It was up to the government and the IT companies concerned «to work together for the future of Cyprus,» he said.

Matsis, the Head of the Cyprus office of MUFG Investor Services [the global asset servicing arm of Mitsubishi UFJ Financial Group] sounded a bit more optmistic. His company chose Cyprus as the location for its office in the EU time zone having investigated various other options in Europe. „The Japanese are longterm thinkers and they chose Cyprus because it did offer the best quality of life", he remarked.

Ticking off the the pluses of Cyprus as a business hub, Matsis listed the beneficial corporate tax rate, low income tax, the relative ease of hiring non-EU nationals, the affordable cost of doing business, the lowest cost of living outside Greece plus the fact that English is widely spoken.

So what are the possible solutions?

This next discussion was about improvements and changes that have

to be made to transform Cyprus «into Singapore of Medinerranean», as Petr Valov CEO of Exness mentioned. Marios Demetriades, former minister of transport, communications and public works told participants that the government had been addressing some of the issues raised by previous panel and admitted that much more needs to be done. Opportunities had been identified as they emerged from the crises Cyprus has had to face within recent years, he said, and must now be exploited and built upon. «The private sector can solve many of the issues but first the government needs to come up with the right strategy. »

Tasos Yiasemides, Head of GCMS services of KPMG, Alexey Gubarev, Co-Founder of Palta; Stylianos Lambrou, Co-Founder of Reflect; Petr Valov, CEO, Exness; Yannis Matsis, Managing Director of MUFG Investor Services

Others agreed, urging better coooperation between the government and the IT companies. «The government needs to understand better what has to be done to satisfy their needs in order to attract them to Cyprus, Reflect's Lambrou said. It was up to the government and the IT companies concerned «to work together for the future of Cyprus,» he said.

Yiangos Hadjiyannis, Board Member of Invest Cyprus was of a similar mind, saying that the authorities need to pay close attention to the companies' concerns. «Bureaucracy hinders development", he opined. «We have to step up our game. We have to listen to investors. We all need to work together and have a clear vision of how we can do better.»

Angelos Paphitis of the AGP Law Firm said that while the private sector is doing its best, the onus was on the government to adapt and transform. He called on the state «to invest more into the system and change its ways», noting that the already massive gaming industry would triple in a few years. «Gaming companies are interested in coming to Cyprus but are we prepared to welcome them?», he asked. Properly developed, it is a growth market, he declared, but even now with the foundations set up, «much more has to be done.» He pointed out that gaming, currently a 200 billion euro industry, is expected to grow to 600 billion.

Andreas Athinodorou, Board Member of the Cyprus Investment Funds Association concurred, «We have to be ready [for it], and we have months, not years. We have to train people, improve banking, change regulations, provide accommodation… I don't want Cyprus to be again too little too late,» he cautioned. Answering the question about the new role of the Fund Sector in the emerging Digital Economy – in Cyprus and globally, Athinodorou reminded that there is massive number of startups and IT tech companies each individually with a high risk of success/failure. Investors are better off investing into this new world via a vehicle that evaluates correctly and pulls risk together to maximise the risk/return.

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Marios Demetriades, Business Advisor, former Minister of Transport, Communications and Public Works, Andreas Athinodorou, Board Member of the Cyprus Investment Funds Association, Yiangos Hadjiyannis, Board Member of Invest Cyprus, Angelos Paphitis, Managing Partner of the AGP Law Firm

INVESTMENTS IN INNOVATIONS AND NEW TECHNOLOGIES

The last few years the island has been making significant strides in its quest to becoming a source of internationally relevant, disruptive, scalable innovation. The evidence shows an upwards trend in fundable» innovation and the momentum within the ecosystem is pointing toward specific areas of potential interest. It will attract more private, institutional and corporate venture capital. This also changes the role and the range of activities of investment funds in Cyprus.

Philip Ammerman moderated this session with three seasoned investors: Andreas Panayi, Cofounder, Managing Director, Kinisis Ventures; Alexander Shkuratov, Co-founder Prodly, founder AvanTech Ventures, Island School; Roman Gurskiy, Games & Entertainment leader, GEM Capital.

Philip is a business consultant, angel investor and a digital entrepreneur. Andreas looks for new ideas in Cyprus and helps startups to grow, taking them to the US market. Alexander built a school in Limassol this summer (Cyprus record in speed of getting things done) and he is a successful venture investor and business leader. Roman is a recognised expert and successful investor in the gaming industry. This panel discussed Cyprus’ evolving innovation ecosystem and prospects of Cyprus becoming a regional innovation and research centre.

FINANCIAL ASPECTS OF INVESTMENT BUSINESS

The last panel at Best Invest, coordinated by Costas Stylianou, CEO of EFG Cyprus, discussed various issues, all related to the financial sphere. The conversation started with the presentation of Demetra Kalogerou, an independent financial advisor, former CySEC chairwoman. She briefed delegates on the legal framework and new developments of cryptocurrencies in Cyprus and the EU. Following this introduction, the panel discussed CySEC regulatory framework and implementation of ESMA and MiCA principles and changes in the role and range of activities of investment funds in Cyprus. The panelists (Andrey Narutskiy, CEO of Leon MFO Investments; Mihaela Grigoriou, Senior Associate Lawyer, AGP Law Firm; Chris Droussiotis, Author, Academic and Advisor, Columbia University) know the subject well, having a lot of practical experience.

«It’s vital to note that the registration of a CASP does not automatically mean passporting the services into other jurisdictions. If the crypto exchanges want to provide their services to other countries in the EU then they have to register as well to the registry in each country according to their national rules.»

«Another crucial element is that the directive introduces the travel rule for crypto assets which requires that the information on the source of the asset and its beneficiary travels with the transaction and is stored on both sides of the transfer. In this way, transfers of cryptos will be traced and identified in order to prevent money laundering, terrorist financing and other crimes. Any transaction with a value equal to or above one thousand euros must be deemed as material for the purposes of the travel value. The CASP will be obliged to provide this information to competent authorities if an investigation is conducted into AML issues.»

«Another regulation called DLT Pilot Regime will start being applied in 2023 along with changes in MIFID 2 / MIFIR. It will help evolve the cryptos that are considered financial instruments in a DLT environment and now are not covered by the existing regulatory framework. The DLT Pilot Regime will cover market infrastructures like DLT MTFs that trade and settle tokenised securities based on distributed ledger technology.»

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Demetra Kalogerou, independent financial advisor, former CySEC chairwoman

www.sb-cyprus.com

CYPRUS, MIDDLE EAST AND NORTHERN AFRICA

This working meeting brought together business leaders who aim to develop business cooperation between Cyprus and MENA countries. Together with experts, the participants discussed the prospects for strengthening existing ties and creating new ones, as well as an opportunity to create a permanent operating platform for new acquaintances and joint projects discussions.

Panelists: Abdelaziz Ghellal, Director, Galleon Shipping, Algeria. Representative of the African Union, which unites 55 African countries; Odysseas Melikides, CEO, M. Target Group, an active participant in the Crans Montana Africa Forum, Chairman of the Cyprus-Africa Business Development Committee; Chrysilios Pelekanos, Partner, Deputy Executive Director of PwC (Cyprus), Vice President of the Cyprus-Saudi Arabia Business Association.

The moderated discussion aimed to exchange views on the prospects for business cooperation between Cyprus and the countries of the Middle East and Northern Africa. Participants also discussed a possibility to organise a meeting on African business development during the next BEST INVEST Congress (29-30 May 2023) or the possibility to devote one of the working days of this event to investment opportunities in MENA countries.

Chrysilios Pelekanos, Vice President of the Cyprus-Saudi Arabia Business Association, Abdelaziz Ghellal, Representative of the African Union; Natalia Kardash, founder, Best Invest Congress, Odysseas Melikides, Chairman of the Cyprus-Africa Business Development Committee.

FOREIGNER IN CYPRUS. HOW TO EARN AND INVEST WITHOUT BREAKING LAWS?

The last event of the BEST INVEST Congress was dedicated to problems and mistakes of foreigners who relocate to Cyprus with investment or working purposes. In the seminar format, the following subjects were discussed: Bank accounts and international transactions: theory and practice; Conflict of the immigration status and source of income; Declaration of investment and business income and payment of taxes in Cyprus and the country of origin; Entrepreneurship without violating Cyprus and international laws; Favorable tax scenarios. The content was presented by Mikhail Sobolev, a tax expert, and Natalia Kardash, the founder and chairwoman of the BEST INVEST Congress.

INFORMAL COMMUNICATION OF CONGRESS DELEGATES

Vassilios Demetriades Shipping Deputy Minister to the President of the Republic of Cyprus

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Natalia Kardash, Founder, Best Invest Congress Andrey Narutskiy, CEO, Leon MFO Investments

www.sb-cyprus.com

Best Invest Congress thanks its sponsors and supporters: KPMG, LEON MFO Investments, M.Target Group, AGP Law Firm, CDA Group, Imperio Group, Porsche

27-28 SEPTEMBER 2023

B2B event for the International Legal Community Conference. Seminars. Networking.

More information and registration: www.blcyprus.com

Main topics:

1. New Commercial and Admiralty Courts in Cyprus.

In July 2023 a new Commercial Court will start its operations considering disputes exceeding two million euro. During this conference a comparison of Cyprus Commercial Court with similar establishments in England and Ireland will be presented as well as the detailed information on a newly created structure of two courts as well as finance, leasing, M&A related issues, practical implementations of changes in shipping and aviation laws.

2. Resolution of Differences and Disputes of Shareholders.

Dispute resolution mechanisms and alternative dispute resolution methods offered in Cyprus. Having dispute resolution policies in place Cyprus will help protect the ongoing operations of companies by setting out the timeframe and process for resolving the conflict.

3. Extradition Law in Cyprus.

How should Cypriot lawyers and authorities handle warrens of arrest issued by USA, Chine, Russia, Ukraine, Belarus and other countries? Legal background and common practices.

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