Gold Magazine Issue 49 by INBusiness

ISSUE 49 april 14 - may 13, 2015 PRICE €4.95 00001 >

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the international investment, finance & professional services magazine of cyprus

AUDIT, ACCOUNTING

& TAX ADVISORY FIRMS

IN CYPRUS ENTREPRENEURSHIP Chrysalis LEAP promotes the ClimateLaunchpad

INTERVIEWS Loucas Marangos Marios Panayides Maria Zavrou

MARIOS DEMETRIADES ‘Time to Act’ says the Minister of Transport, Communications & Works

Plus:

MONEY / BUSINESS ECONOMY TAX & LEGAL LIFESTYLE / OPINION

A world leader of the accountancy and finance profession

STEP CYPRUS CONFERENCE 11-12 JUNE 2015 FOUR SEASONS HOTEL, LIMASSOL www.step.org/cyprus2015

STEP CYPRUS CONFERENCE 2015 TAX & TRUSTS: THE EVOLUTION OF AN INDUSTRY Programme focus

OUR SPEAKERS:

•

The recovery and the current state of the Cyprus economy

Harris Georgiades

•

Strategic planning for Cyprus as a ﬁnancial centre

Farrer & Co

•

Recent developments in the trust world

Angelos Gregoriades

•

The OECD’s BEPS project

KPMG

•

The Russian De-offshorisation – six months after implementation

•

Fending off Creditors: The Trust Fortress

•

Structuring real estate acquisitions in the UK

Philip Marcovici TEP

•

The legitimacy of tax planning in today’s world

Ofﬁces of Philip Marcovici

•

The International Trusts (Amendment) Law 2012

David Russell QC TEP

•

Comparative perspective of funds (Luxembourg-Ireland-Malta-Cyprus)

Alexei Ryabov

•

Increasing Regulation – FATCA, CRS & AML

Geoffrey Shindler OBE TEP

•

Challenging the global baking status quo

Old Trafford Consulting

•

Welcome to the New World – Global tax transparency

Emily Yiolitis TEP

STEP Members (Local) Non Members (Local)

Euro 540 645

Minister of Finance, Republic of Cyprus

Toby Graham TEP

George Hodgson STEP Worldwide

Nicholas Jacob TEP Wragge Lawrence Graham & Co LLP

The Outer Temple Ernst & Young

Harneys

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Sponsors include

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ADVOCATES & LEGAL CONSULTANTS

Issue 49 April 14-May 13, 2015

6 EDITORIAL 8 UP FRONT 12 FIVE MINUTES WITH...

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An updated list for 2015, plus interviews with the heads of PwC Cyprus, KPMG, Deloitte and EY Cyprus on the state of the economy and its prospects.

AUDIT, ACCOUNTING

& TAX

IN CYPRUS Restructuring the many departments within the Ministry of Communications & Works for greater efficiency now and in the future is just one of Marios Demetriades’ priorities. The Minister speaks about this and the many challenges facing the present Government.

20 | THE 11TH CFO MANAGEMENT FORUM Preview of the June conference.

How Carrefour Cyprus has embraced new ways of keeping in touch with its customers.

TO ACT

ichalis Panayides, Commercial Director of Carrefour Cyprus, on how the supermarket chain has gained over 21,000 Facebook Friends in the space of a year and the importance of Social Media to its customer relations and advertising strategies.

Gold: Given that Social Media is more associated with a younger age group, are you using Facebook, etc., to attract this specific audience to different products from those you advertise via printed media, radio and TV? Michalis Panayides: It is a fact that, compared to traditional media, Social Media has managed to establish a two-way channel of communication between companies and consumers. Figures show that, although Social Media is considered primarily as a “21st century generation’’ means of communication, we are discovering that more and more Social Media users are over the age of 35. In fact in Cyprus, 36% of Facebook users are 35 or older. In addition, at 69%, Cyprus has the biggest proportion of Facebook users in terms of its population. Observing these general trends, Car-

THE CORRECT COMBINATION OF ONLINE AND OFFLINE COMMUNICATION DELIVERS THE BEST RESULTS

OF SOCIAL

MEDIA By John Vickers

Gold: What are the advantages of using Social Media to a company like Carrefour? M.P.: It is obviously expected that the lead-

relationship of interaction and reliability with our Facebook Friends. At the same time, we give them all the necessary information on our supermarket offers as well as useful information about our stores. Advertisements, videos and interesting post contests complement our Facebook page material, giving our clients the opportunity to play and win. Finally, a dedicated team is always there to address and reply to any question or request of our fan page followers.

er in the retail sector will successfully keep ahead of developments, making the best of all available communication channels. We are confident that the correct combination of online and offline communication delivers the best results and reinforces the relationship of credibility and confidence that we are building with our clients on a long-term basis. Undoubtedly, Social Media has the ability to multiply our messages, our presence and the capability to directly reach a wide audience.

Gold: How long have you been using Social Media as a marketing tool for Carrefour and what have the results been so far? M.P.: Even though we have only a Social Media presence since last year, we managed to gain more than 21,000 friends! We are very proud of this because, by offering an interesting and pleasant profile, Carrefour Cyprus’ Facebook page is among the Top 5 Facebook pages in Cyprus in terms of engagement.

Gold: Have you increased your marketing/advertising budget to include Social Media or have you cut spending on other media such as print, radio and TV? M.P.: The introduction of Social Media to Carrefour’s communication policy constituted a strategic decision for the company. A significant investment has therefore been made to this end. However, television remains the “king” of the media and that is why it continues to enjoy the “lion’s share”!

Gold: So presumably Facebook is the main social media site you use. Are there any others? M.P.: Our main presence in Social Media

Gold: Although there is no significant cost involved in marketing your products to a large number of people through Social Media, any campaign obviously needs a great deal of planning. How far

68 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

40 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

Gold: What has been the Marinopoulos Group’s experience of Social Media marketing/advertising in other countries? M.P.: The Social Media presence of Marinopoulos S.A. constitutes an integral part of our communication plan in Greece, Cyprus and the Balkans. Maintaining Social Media accounts in all the countries where the company operates, Marinopoulos is constantly building a direct and effective communication channel with consumers. Besides Cyprus and Greece, the company maintains Facebook Fan Pages in Bulgaria, Albania and FYROM. Every page uses the official language of the country while keeping the local element as a point of reference, thus constituting a substantial channel of communication with the consumers. The successful Social Media presence of Marinopoulos S.A. in Greece is reflected in the constant increase in visitor numbers to all its official accounts (Facebook, Instagram, YouTube, Twitter). The company has implemented a digital and online strategy, based on its expertise, since May 2012, with the creation of its official Greek page on Facebook. With a style and content suitably adapted to each platform, Marinopoulos S.A. communicates on a daily basis with hundreds of thousands of consumers. It informs the public about current offers and campaigns, actions and events, organises competitions and creates seasonal, interactive games, while at the same time gives useful, everyday advice. For Marinopoulos S.A., constantly reinforcing a daily “live” two-way relationship with the company’s customers was and will always be a top priority and a determining factor of its communication strategy.

THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

Gold 69

How Carrefour Cyprus has embraced new ways of keeping in touch with its customers.

THE 11TH CFO MANAGEMENT

FORUM

4 JUNE 2015 | HILTON PARK HOTEL, NICOSIA, CYPRUS

“I must say that I was surprised,” he admits, “because I only learnt about it two or three hours before it was announced. I felt that it was a great honour and I was happy to be taking over a technocratic ministry. As a technocrat myself, I believed that it suited me fine.” Given that, like most government ministries in Cyprus, the Ministry of Communications & Works covers a vast number of sectors, such an appointment would probably have seemed a daunting prospect to most people but to Demetriades that was not the case. “No, it wasn’t daunting but it was certainly very challenging,” he recalls. “The problem is not so much the number of areas we cover but the way we operate in the sense that there haven’t really been any changes to the ministries and in the way we run the Government since 1960.”

THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

4 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

INTERCONNECTION By Dr. George Mountis

Gold 41

On the following pages, nine VM [OL ÄYTZ PU [OL ;VW SPZ[ WYLZLU[ [OLPY JVYWVYH[L WYVÄSL HUK ZLY]PJLZ PU NYLH[LY KL[HPS WYLJLKLK I` PUMVYTH[PVU MYVT [OL 0UZ[P[\[L VM *OHY[LYLK (JJV\U[HU[Z PU ,UNSHUK and Wales (ICAEW).

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SUPPLEMENT

49 | The Leading Audit, Accounting & Tax Advisory Firms in Cyprus

CONFERENCE

MY ONLY AMBITION AT THIS MOMENT IS TO DO MY BEST HERE. I HAVE NO POLITICAL AMBITIONS

By John Vickers, Photograph by Jo Michaelides

28 | MAKING USE OF SOCIAL MEDIA

RESTRUCTURING THE MANY DEPARTMENTS WITHIN THE MINISTRY OF COMMUNICATIONS & WORKS FOR GREATER EFFICIENCY NOW AND IN THE FUTURE IS JUST ONE OF MARIOS DEMETRIADES’ PRIORITIES. THE MINISTER SPEAKS TO GOLD ABOUT THIS AND THE MANY CHALLENGES FACING THE PRESENT GOVERNMENT.

arios Demetriades is one of four current ‘younger generation’ government ministers appointed by President Nicos Anastasiades. Born in 1971 and with a background in banking and studies in business, finance and economics, his only involvement in party politics involved being a member of the Finance Committee of the Democratic Party (DIKO) and, until his appointment as Minister of Communications and Works in March 2014, he had never held a public position. So how did he feel just over a year ago when the call came from the Presidential Palace?

CLEANING THE CLOSET... By Pavlos Loizou

THE LEADING AUDIT, ACCOUNTING & TAX ADVISORY FIRMS IN CYPRUS

is on Facebook. Studies have shown that it is one of the country’s most popular social networks. We also have a presence on YouTube, promoting all the company’s ads. Finally, our clients’ response to Carrefour Cyprus’ mobile app, which allows them to browse all our offers and leaflets and to prepare their shopping list, has been impressive. So far, 10,000 customers have downloaded and used the app.

XXXX

TIME

DEALING WITH THE BANKS’ PROBLEMS By Dr. George Theocharides 24

special promotional feature

refour Cyprus recognised that Social Media offers a unique opportunity not only to inform our clients and consumers on a daily basis, but also to develop a two-way relationship of dialogue and trust. Gold: How is your Social Media advertising different from that in other media? M.P.: The competitive advantage of Social Media is that it constitutes a very powerful communication tool which allows you to come even closer to your audience by ‘speaking their language’. Through daily stories, optimistic and cheerful messages, clever recipe ideas, we have developed a

ICAEW PRESENTS

SPECIAL PROMOTIONAL FEATURE

MAKING USE

14| TIME TO ACT

PEEK AROUND THE CORNER! IT’S COMING! By Kyriakos Iordanou

ADVISORY FIRMS

FEATURES

+ OPINION

he 11th CFO Management Forum, which takes place on 4 June 2015 at the Hilton Park Hotel in Nicosia, will offer expert insights from key speakers from Cyprus and abroad who will discuss the latest trends affecting CFOs. CFOs are constantly being challenged these days to reduce costs, increase productivity, manage cash flow, and stay on top of increasing regulations. In addition to this, their role as strategic partners with the company CEO is gaining greater importance. The Forum, therefore, aims to equip CFOs with the knowledge necessary for them to handle these increased demands and developments. The Forum is divided into five sessions: The first (Leadership and Strategy) will discuss, among other things, the role of the CFO as a strategic leader. The second session (Cash flow management) will look at maximizing cash flow from receivables and working capital management. Session Three (Finance/Debt management and restructuring/ Mergers and Acquisitions) will deal with a number of important issues, including operational

efficiency and corporate turnaround, strategies for successful Mergers and Acquisitions and company valuations. Case studies of debt restructuring in corporations will also be presented as part of this session. A key presentation on ‘Financing business expansion and creating shareholders value via private equity investments’ will be given by Alexander Shkuratov, Managing Director of Pride Capital, a firm that specializes in equity investments in private, fast-growing companies. Pride Capital aims to acquire a controlling or significant minority interest in the equity of fast-growing companies. Working in partnership with owner-entrepreneurs who want to bring their businesses to the next level, management and other stakeholders, we look to implement projects to improve shareholder value through two main directions: private equity investments and creation of shareholder value as a partner. Internal Audit Strategies and Practices are the focus of Session Four while the fifth and final session focuses on technology. Among the topics to be covered are ‘The CFO as a technologist’, ‘Big data, cloud, new analytic tools: Where do CFO & CIO meet?’ and ‘Cyber Security and the CFO: An Inside Look at the Financial and Business Challenges Caused by Next Generation Cyber Attacks’.

KEY SPEAKERS FROM CYPRUS AND ABROAD WHO WILL DISCUSS THE LATEST TRENDS AFFECTING CFOS Given that top finance professionals are continually looking for ways to maximize their cost savings and reallocate investments that generate cash flow and revenue growth, the final session explores in ‘Capturing ROI from your IT investment portfolio’ how CFOs can partner with their IT leadership to fund vital new initiatives that can unlock increased value for their business and reduce risk at a substantially lower cost.

Organizer: IMH Sponsors: Bank of Cyprus, EY, Logicom Solutions, TFI Markets Supporter: General Insurance of Cyprus Communication Sponsors: IN Business Magazine and InBusinessNews.com For further information contact IMH: Tel: 22505555, Fax: 22679820 website: wwwimhbusiness.com email: events@imhbusiness.com

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EDITORIAL

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THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

AUDIT, ACCOUNTING

& TAX ADVISORY FIRMS

IN CYPRUS ENTREPRENEURSHIP Chrysalis LEAP promotes the ClimateLaunchpad

INTERVIEWS Loucas Marangos Marios Panayides Maria Zavrou

MARIOS DEMETRIADES ‘Time to Act’ says the Minister of Transport, Communications & Works

PLUS: MONEY / BUSINESS ECONOMY TAX & LEGAL LIFESTYLE / OPINION

A WORLD LEADER OF THE ACCOUNTANCY AND FINANCE PROFESSION

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Effy Pafitis, Kyriakos Demetriou CONTRIBUTORS TO THIS ISSUE

Mariana Antonescu, Rakis Christoforou, Kyriakos Iordanou, Andrew Lumley-Holmes, Pavlos Loizou, George Mountis, Dr. George Theocharides ART DIRECTION

Anna Theodosiou SENIOR DESIGNER

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our years ago this month, a new publication appeared on the newsstands across Cyprus. The very first issue of Gold, which described itself as ‘The International Investment, Business & Finance Magazine’, included a cover story entitled ‘The Art of Wealth Preservation’, an interview with the then Minister of Finance, Charilaos Stavrakis, among its many articles and features. Twelve months later, with Issue 13, we adjusted our strapline to ‘The International Investment, Finance & Professional Services Magazine of Cyprus’, partly in acknowledgment of the fact that we placed great emphasis on the professional services sector, which we believed to be the one that would thrive and withstand the pressures of the global financial crisis. We also wished to clarify that this was and is a Cypriot magazine. Some 36 issues later (you are reading No. 49), our focus continues to be on professional services but, from next month as we reach the milestone of 50 issues of Gold,we shall be expanding our coverage to take in other sectors of the economy. More about the new-look magazine in May. For now, we celebrate our fourth birthday with a cover story that first appeared in 2013. Gold’s listings have always been a popular feature and we decided that it was time to update the one in which we rank the Top 50 audit, accounting & tax advisory firms on the island. At the same time, two years after the Government signed the Memorandum of Understanding with the Troika of international lenders on a €10 million bailout package, and with lots of positive developments as far as the current performance of the economy is concerned, this issue of the magazine presented the perfect opportunity to give a platform to the heads of the Cyprus offices of the so-called Big Four accounting firms. We therefore asked them for their expert views on the economy and the professional services sector as it stands today and on how they expect it to be in 2016. You can read what they have to say in the four interviews that are interspersed within the listing that starts on page 31. Last month’s cover story was an exclusive interview with the Minister of Finance, Harris Georgiades. This month we speak to his colleague Marios Demetriades, who is responsible for the about-to-be-renamed Ministry of Transport, Communications & Works. In a wide-ranging discussion that befits such a ministry, the Minister offers his views on shipping, aviation, postal services, privatisation and more, as well as providing an insight to his personal ideas and ambitions (page 14). We also talk to Maria Zavrou, President of the recently-founded Cyprus-South Africa Business Association (page 12), to Marios Panayides, Commercial Director of Carrefour Cyprus(page 28), and to Alexandros Charalambides, co-founder of Chrysalis LEAP (page 74), as well as gaining a more personal picture of LoucasMarangos, CEO of TFI Markets in the popular and revealing feature ‘A Day in the Life’ (page 90). Finally, one more piece of advance information about the forthcoming 50th issue of Gold is that we shall not be shying away from politics. English-speaking residents of Cyprus are often bewildered by the statements of the country’s party leaders and the members of the House of Representatives, not to mention the often incomprehensible behaviour of those in senior government positions, trade union leaders and local authority officials. I have frequently used this page to criticise them but, as more and more scandals are revealed, as conflicts of interests are uncovered and as we appear to be moving towards a possible settlement of the longstanding Cyprus Problem, we shall endeavour to shed more light on certain situations that we previously considered outside our sphere of interest. No-one can afford the luxury of not knowing what the politicians are doing anymore, including Gold. Thank you for your support and encouragement over the last four years. I am sure that you will enjoy and approve of the new, improved version of your favourite publication on 14 May.

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Bank of Cyprus launches Premier Club

Michael Dobbs Tim Potier Colin Wright

Record-breaking sales for alternative assets

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UP FRONT

CYPRIOT CANDIDATE FOR TOP IMO JOB VISITS ARGENTINA

ast month, Andreas Chrysostomou, one of four declared candidates vying to become Secretary-General of the International Maritime Organization (IMO) this year, visited Argentina, one of 40 countries he is touring to garner support for his bid. Speaking at the Argentine Navy’s Nautical School, Chrysostomou, Acting Director of the Department of Merchant Shipping in Cyprus, said that, if he wins July’s elections, he will work for the London-based IMO to continue being the central and only global regulator for the shipping sector. “We don’t need unilateral or

regional action. We need one global organisation to regulate what is probably the most globalized industry in the world,” he said. Asked whether he would follow the same line of outgoing Secretary-General Koji Sekimizu, who has urged European countries to continue sending their navies to protect ships from pirates, especially in the vicinity of Somalia, Chrysostomou YLJHSSLK [OH[ PU H ZOPW Å`PUN [OL *`WYPV[ ÅHN ^HZ [OL ÄYZ[ [V Z\ɈLY H WPYH[L H[[HJR MVY YHUZVT “This is 2015 and the situation is the same, as piracy proliferates in the area,” he said. “I think the only solution is to provide the ships with guards.”

CO-OP CENTRAL BANK’S €41.2 MILLION PROFIT

he Co-op Central Bank YLNPZ[LYLK H UL[ WYVÄ[ MVY 2014 of €41.2 million, despite a rise in provisions for bad debts, which reached €2.97 billion. Loans that have not been serviced for over 90 days reached €6.7 billion, or 51.1% of the of the loan portfolio. Net revenue for the Co-op banks rose to €392.3 million compared with €377.8 million in 2013. Deposits, however, fell to €12.4 billion compared with €13.5 billion PU ^OPSL HWWYV_PTH[LS` Á TPSSPVU ÅV^LK PU[V [OL JV VWZ following their success in the European Central Bank’s stress tests in October. CCB Chairman Nicholas Hadjiyiannis described 2014 HZ HU PTWVY[HU[ `LHY MVY [OL JV VWZ ^OPJO LUKLK ¸^P[O ZPNUPÄJHU[ WYVÄ[HIPSP[` Z\WWVY[LK I` H YVI\Z[ IHSHUJL ZOLL[ ^P[O HKLX\H[L WYV]PZPVUZ H Z[YVUN JHWP[HS IHZL HUK HTWSL SPX\PKP[`¹ 8 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

EBRD to Invest €200 million in Cyprus

he European Bank for Reconstruction and Development (EBRD), the EU’s development bank, plans to pump about €200 million into the Cyprus financial and energy sectors in 2015, as part of its €600 million programme until the end of the decade. EBRD Vice President Phil Bennett, in Cyprus on an official visit, said that a review of private sector projects is at its final stage with a focus on investments in the financial sector, energy, privatisations and the provision of finance

to projects by individual companies. President Anastasiades described the EBRD’s role as “crucial” as its investments will help reinstate confidence in the Cyprus economy, sending out positive signals to the international markets and foreign investors. “The EBRD’s experience and know-how in areas where there is a vacuum in financing, such as the restructuring of banks and the support to small to medium sized enterprises (SMEs), significantly contributes to the recovery of economies where the bank is present and active,” he said.

NICOSIA GETS SCIENCE CAFÉ

OL ÄYZ[ 5PJVZPH :JPLUJL *HMt PZ UV^ VWLU I\[ P[ PZ UV VYKPUHY` JHMt ;OPZ PZ a location where people can meet and inform themselves on European Union programmes and developments in the ÄLSK VM ZJPLUJL OLUJL [OL Z\WWVY[ VM the Ministry of Education, the Ministry of Communications and Works and Nicosia Municipality. ;OL JHMt PZ SVJH[LK VU 2PU`YHZ :[YLL[ behind the House of Representatives. Its main purpose is to improve communication among students, schools, research institutes, industry and civil society on issues of science and technology. It will provide information on research and studies being undertaken on the environment, health and security.

THE MARSHALL ISLANDS Corporate Registry

AEGEAN AND

GERMANIA

LAUNCH

NEW ROUTES

egean Airlines launched a new daily Larnaca-London Heathrow flight on 29 March, filling the gap created by the closure of Cyprus Airways. Two days later, the Berlin-based airline Germania began weekly flights from Larnaca to Munich and on 1 April the first of five flights to Berlin, Hamburg, Dusseldorf and Erfurt left Paphos International Airport.

DHL CYPRUS LOGISTICS CENTRE FOR OLD LARNACA AIRPORT

HL Cyprus has announced the establishment of a modern logistics centre at the old Larnaca Airport, enabling the company to better manage imports and exports for its local clients and international associates. The facilities comprise an HYLH VM ZX\HYL TL[YLZ SHPK V\[ LZWLJPHSS` for the management and distribution of shipTLU[Z ^P[O [OL UL^ +/3 ÅLL[ VM ]LOPJSLZ ;OL UL^ MHJPSP[PLZ ^PSS PUJS\KL VɉJLZ ZWHJL MVY [OL service of associates and customers, and a training centre. According to Dinos Ioannides, DHL Express Cyprus Country Manager, “This strategic move is based on our belief that through investment in development and the continuous improvement of our services, we are contributing to the competitiveness of our customers. With the provision of safe, timely and reliable services we are strengthening our position in the market.”

EMIRATES Enhances In-Flight

Wi-Fi Offering mirates has enhanced its in-flight Internet connection offering, now offering free Wi-Fi on 106 of its aircraft, with two to three more aircraft being installed with Wi-Fi connectivity every month. After updating the service in early February 2015 with a simpler sign-on process on top of other software updates, Emirates has seen a further 25% increase in uptake. The airline continues to invest over US$20 million annually on installing and operating in-flight connectivity systems, a company statement reports, which enable onboard Wi-Fi services. Currently, Wi-Fi service is available on all of Emirates’ 59 Airbus A380 aircraft and 47 of its Boeing 777 aircraft. On over 60% of the installed fleet, the first 10MB data is free – sufficient for an update on social media accounts or texting via instant messaging apps. Thereafter, and for the rest of the fleet, users can obtain 500MB of data for a token $US 1 charge. Passengers on board Emirates also can stay connected with mobile phones services offered on over 75% of the fleet, and in-seat email, telephone and SMS services on every aircraft. All of Emirates’ 37 dedicated airport lounges around its global network, offer complimentary Wi-Fi connectivity. Emirates operates a daily scheduled flight between Dubai and Cyprus and onwards to Malta.

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UP FRONT

the ten RICHEST PEOPLE IN THE WORLD

Last month, Forbes magazine published its annual list of the richest people in the world, which once again is topped by Bill Gates, who has held the title for 16 of the past 21 years. His fortune has grown by $3.2 billion since last year to $79.2 billion. Carlos Slim Helu of Mexico comes in again at No. 2 while revered American investor Warren Buffet takes back the No. 3 spot from Spain’s Amancio Ortega (now No. 4). Buffett was the list’s biggest gainer, up $14.5 billion to $72.7 billion, thanks to Berkshire Hathaway’s rising share price. Here are the Top Ten:

1. BILL GATES (AGE 59) Cofounder, Bill & Melinda Gates Foundation Net worth: $79.2 billion

Gates, who has been steadily selling his shares in Microsoft for at least 15 years, unloaded one third of his remaining stake over the 12 months to February 2015. It included a gift of shares worth $1.5 billion to The Bill & Melinda Gates Foundation in November 2014.

3. WARREN BUFFETT (AGE 84)

4. AMANCIO ORTEGA (AGE 78)

CEO, Berkshire Hathaway Net Worth: $72.7 billion

Founder of Zara Net Worth: $64.5 billion

Warren Buffett’s diversified holding company, Berkshire Hathaway, bought battery maker Duracell from Procter & Gamble in November 2014 for $4.7 billion. In February, Berkshire Hathaway was the fourth most valuable public company in the US.

Spaniard Amancio Ortega is the world’s richest retailer. During the Spanish financial crisis, he gained $45 billion as his shares of Inditex defied the rest of the Spanish stock market. In the last decade, he has taken billions in Inditex dividends.

7. DAVID KOCH (AGE 74) Executive Vice President, Koch Industries Net Worth: $42.9 billion

New York City’s richest resident David Koch shares control of Koch Industries with his older brother Charles. The Metropolitan Museum of Art in New York dedicated the David H. Koch Plaza in September 2014.

8. CHRISTY WALTON (AGE 60) Co-Chair, Children’s Scholarship Fund Net Worth: $41.7 billion

The richest woman the world, inherited her wealth when her husband John Walton died in a plane crash in 2005. The bulk of her holdings are in WalMart, the huge retailer founded by her father-in-law and his brother in 1962.

10 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

2. CARLOS SLIM HELU (AGE 75) Honorary Chairman, América Movil Net Worth: $77.1 billion

In June 2014, Slim spent $5.6 billion to buy out AT&T’s 8.3% stake in pan-Latin American wireless carrier America Movil -- by far his most valuable asset. This year, he became the largest shareholder of The New York Times.

5. LARRY ELLISON (AGE 70) CEO and Founder, Oracle Net Worth: $54.3 billion

6. CHARLES KOCH (AGE 79) CEO, Koch Industries Net Worth: $42.9 billion

Ellison founded database software firm Oracle in 1977 and has overseen its tremendous growth -- revenues in 2014 grew to $38.3 billion. He owns every hotel room on the Hawaiian island of Lanai, which he bought in 2012.

Charles and David Koch continue to add to their empire, spending more than $5 billion on acquisitions in 2014. Charles has been chair of Koch Industries, now the second-biggest private company in America.

9. JIM WALTON (AGE 67)

10. LILIANE BETTENCOURT (AGE 92)

Chairman and CEO, Arvest Bank Group, Inc. Net Worth: $40.6 billion

Main shareholder in L’Oreal Net Worth: $40.1 billion

Jim Walton, a board member of WalMart, is the youngest child of the superstore’s founder. The company generated $473 billion in 2014. Arvest Bank posted net profits of nearly $130 million in 2013.

The richest woman in Europe grew even richer in 2014 thanks to a deal in which she purchased an additional 8% stake in the cosmetics empire from Nestle, raising her and her family’s stock to 33%.

GAS CONTRACT EXTENSIONS

rench energy giant Total has agreed to continue its exploration of Cyprusâ&#x20AC;&#x2122; Exclusive Economic Zone (EEZ), following the signing last month of a new contract with the Government. In January, Total had stated its intention to terminate its operations on the island, due to its inability to locate drilling target areas in blocks 10 and 11 of the islandâ&#x20AC;&#x2122;s Exclusive Economic Zone (EEZ) after signing two production sharing contracts with the Ministry in 2013. The new agreement

will see Total continue to explore the islandâ&#x20AC;&#x2122;s hydrocarbon reserves in order to further assess the prospect of commercial exploitation of Block 11. Meanwhile the Government and the President himself have played down the significance of the results of drilling by the Eni/OGAS consortium in Block 9 of Cyprusâ&#x20AC;&#x2122; EEZ. President Anastasiades said that he was not disappointed by the fact that two wells have failed to reveal the presence of commercially viable amounts of natural gas, noting similar cases in Norway where

â&#x20AC;&#x153;three drillings were unsuccessful but the fourth one revealed the richest fieldâ&#x20AC;?. Eni/KOGAS was contractually obligated to drill at least four wells but following a second miss, the consortium has submitted a request to proceed with the re-evaluation of its geological model, the results of which it believes will be very helpful for the continuation of the research programme. Due to the falling oil prices, the company has already made cutbacks and, with nothing to show its shareholders after spending $300m here, observers believe that it will want to move on to more promising prospects elsewhere. It is likely that the Government will grant an extension to the contract, as happened with Total. Cyprusâ&#x20AC;&#x2122; proven gas reserves so far amount to 4.5 trillion cubic feet discovered in Block 12 by Texas-based Noble Energy, which is due to submit its development strategy for the gas field shortly.

SPORTS TOURISM REVENUE EXCEEDS

â&#x201A;Ź30 MILLION IN 2013

ccording to a CTO study, revenue from foreign visitors who participate in, train or view sporting events amounted to â&#x201A;Ź30.5 million in 2013. The study found that 20,803 foreigners visited Cyprus in 2013 for sports tourism, with the sports surveyed including football, cycling, swimming, KP]PUN [YHJR HUK Ă&#x201E;LSK The majority (34%) visited Cyprus for football, followed by diving (21%), cycling (17%), and swimming (15%). They stayed in Cyprus on average for 11.2 nights, and originated mainly from Russia, the UK, Germany, Sweden, France, and Finland. The main destinations for football teams were Agia Napa and Larnaca, while Paphos was the main

destination for swimming teams. Cyclists preferred Larnaca and Limassol, while divers were primarily visiting Larnaca. The CTO pays particular attention to sports tourism, recognizing that between February-April each year thousands of people visit Cyprus for this reason, which helps alleviate the problem of seasonability in the tourism industry. Meanwhile, tourist arrivals were up 7.7% in January and February 2015 compared to the same period last year. :WLJPĂ&#x201E;JHSS` ]PZP[VYZ HYYP]LK PU [OL Ă&#x201E;YZ[ [^V months of the year compared with 85,903 in the

same period in 2014. The Chairman of the Cyprus Tourism Organisation, Angelos Loizou, said that the increase was due to greater numbers of visitors from the UK, Germany, France, Holland, Belgium and Scandinavia. All these markets had been in decline over the past decade as Russia replaced Germany as the islandâ&#x20AC;&#x2122;s second biggest market after the UK. The fall in the value of the rouble has left the Russian market uncertain this year, forcing the islandâ&#x20AC;&#x2122;s tourism authorities to go back to the traditional markets to make up an expected 25% loss from Russia, from where arrivals totalled 640,000 last year compared to around 800,000 Britons. In 2000, some 1.5 million tourists to Cyprus were from the UK.

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INTERVIEW

five minutes with...

Maria Zavrou

President of the Cyprus-South Africa Business Association

hat is the CyprusSouth Africa Business Association (CYSABA) and what was the impetus behind its establishment? The CYSABA was established in June last year under the auspices of the Cyprus Chamber of Commerce and Industry (CCCI). Our aim is to promote, expand and encourage economic and trade relations between the Cypriot and South African business communities and to stimulate business, trade and investment relations between the two countries. This Association has been a vision of mine for many years. South African culture is very exciting; the country’s people – much like Cypriots – are very warm and hospitable and their economy presents many opportunities for enhanced cooperation with ours. I grasped the opportunity to officially form the CYSABA last year, when I had some South Africans redomiciling to Cyprus; it was the perfect opportunity to make this vision a reality. How challenging has it been? I must tell you that it took me the better part of one year to set it up. During this time, I embarked on extensive research into the respective markets, evaluated prospects for cooperation and identified specific opportunities. I then contacted people with experience of doing business in South Africa, convinced them of the necessity of such an organisation and persuaded them to contribute to its establishment. Several of them are now on

our Board of Directors. Of course, I also had to convince the CCCI of the significance of the CYSABA in order to gain authorization for its founding. I must stress that this is a very new market for Cyprus. South Africa is a rather far away, as you know, but that doesn’t mean we can’t achieve close cooperation. Given that geographical distance, how far do current business relations extend between the two countries? There are a number of South African businesses with a presence in Cyprus, the most notable being Ocean Basket and MTN. Moreover, almost 1,000 Cypriot South Africans have repatriated to the island, many of whom are still doing business in South Africa. There is a community of approximately 30,000 Cypriots still living in the country and I am confident that with the assistance of the Cyprus Tourism Organisation, the Cyprus Investment Funds Association and the Cyprus Investment Promotion Agency, we will succeed in fully implementing our business plan and attracting further South African businesses to the island. How has the CYSABA been received so far? Its reception has been very positive – surprisingly so! I set up the Association with just fifteen members; Since then, more and more people have shown interest. Indeed, from one informal event alone – held on the occasion of High Commissioner Petros Nacouzis’ visit to Cyprus last October – we had an additional 30

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people join us as members. Five months later, we held our first official networking event in Nicosia. During that event, you announced that the CYSABA will be organising a Business Forum in South Africa later this year. Yes. We will be organising the Forum this October in Johannesburg, Cape Town and Durban. It will explore previously untapped opportunities for further cooperation between the two countries and we will inform selected members of the South African professional community about the economic environment in Cyprus and highlight the unique advantages of doing business on the island. We have already received Government approval for this and the Cyprus Tourism Organisation has also been very supportive of the idea. What are your future plans for the Association? We have made a recommendation to the CCCI that the Association should have a presence at next month’s EXPO Cyprus, so as to inform visitors about our objectives and what we have accomplished so far. In order to facilitate incoming tourism, I intend to invite some South African journalists to Cyprus to tour the island and experience the true beauty of the country. I am committed to having at least 150 members by the conclusion of my Presidency of the Association. I don’t know if I will succeed but I will do my very best, that’s for sure.

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Facing challenges in rapidlychanging markets?

TIME TO ACT

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“I must say that I was surprised,” he admits, “because I only learnt about it two or three hours before it was announced. I felt that it was a great honour and I was happy to be taking over a technocratic ministry. As a technocrat myself, I believed that it suited me fine.” Given that, like most government ministries in Cyprus, the Ministry of Communications & Works covers a vast number of sectors, such an appointment would probably have seemed a daunting prospect to most people but to Demetriades that was not the case. “No, it wasn’t daunting but it was certainly very challenging,” he recalls. “The problem is not so much the number of areas we cover but the way we operate, in the sense that there haven’t really been any changes to the ministries and in the way we run the Government since 1960.”

INTERVIEW

MY ONLY AMBITION AT THIS MOMENT IS TO DO MY BEST HERE. I HAVE NO POLITICAL AMBITIONS

THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

Gold 15

INTERVIEW

He recently visited Ireland where he had a meeting with the Minister of Transport, Tourism & Sport, which also covers a broad area of activities, but, he says, the Irish work in a different way and their government departments have much more autonomy than their Cypriot equivalents. “I believe that the restructuring that we’re going through now – studies are being carried out for every single ministry – is a great opportunity to make the necessary changes to ensure that we work more efficiently, especially in a ministry like mine which covers a wide range of activities,” he explains, noting his optimism that “something good is going to come out of this process.” Has it been a huge learning experience after being made responsible for areas as diverse as antiquities and aviation? It’s a steep learning curve, he admits, but he believes that for anyone coming from the private sector, as he does, taking over a technocratic ministry has an advantage because, he says, “We learn fast”. As a result, it was a challenge but he believes that he was “able to grasp most of the issues” in the first three months of being a minister. Of more than ten departments, the one that, to an outsider at least, appears to be a somewhat incongruous part of the Ministry of Communications & Works, is the Department of Antiquities. When I suggest that it would more logically belong to the Ministry of Education & Culture, Demetriades not only agrees but reveals that as part of the current restructuring process, the Government is “definitely looking at moving it to the Ministry of Education & Culture.” What else is being planned? Apart from moving the Department of Antiquities, he says, the idea is to give more autonomy to certain departments. He gives the example of the Postal Services. “A study is currently being carried out, which will lead to it becoming either a private company belonging to the Government or maybe a semi-government organisation – preferably the first. In this way it will be able to operate much more efficiently.” So why not privatise it? “I am definitely in favour of making the department autonomous and converting it into a company that belongs to the Government,” the Minister says, adding that “At this point in time we are not ready to privatise it. Once we give it the necessary autonomy and it starts operating as an independent entity, this question will obviously need to be visited.” Another department that is undergoing changes is the Department of Civil Aviation. A study on separating out the Air Traffic Control services to a private company belonging to the Government has been completed and the Government is currently involved in negotiations with the Air Traffic Controllers themselves since they will be transferred to the new company. “Hopefully everything will be completed by the end of May,” says Demetriades, “and I will then take the proposed legislation to the Council of Ministers, which will submit it to the House of Representatives. I think that this is definitely the way forward; it’s how most countries in the European Union do it and I believe it will contribute to reducing delays in our FIR,” he says. “As for the rest of the Department,” he goes on, “we have just received the final study by Eurocontrol on converting it into an Authority

with the necessary flexibility and autonomy to perform its duties better. Again, this is what most other countries have done. To give you just one example, some years ago the equivalent department in Israel underwent a very successful transformation and the improvement to its services has been tremendous.” I ask Marios Demetriades if he foresees a time when the dispute over Nicosia’s FIR will be resolved or if he believes that, of necessity, it will have to wait for an overall settlement of the Cyprus Problem. “I don’t think it can be easily resolved without an overall solution,” he says. “This is the reality and I don’t see any chance of resolving it before there is a complete political solution. The same applies to the Turkish embargo on Cyprus-flagged vessels. Of course, you never know. Something unexpected might come up but at the moment I don’t see any solution to this specific problem.” This does not mean that the Government is not making its own efforts, he notes. In June, Demetriades will be meeting the EU Transport Commissioner for the second time and, he says, “It will obviously be one of the issues we’ll discuss.” Given the extremely important contribution of shipping to the economy, it is not surprising that the Minister devotes a considerable amount of time and effort to the sector, visiting companies in Cyprus every three months as well as meeting with shipowners and related organisations in Greece and the UK. Demetriades explains that he intends to introduce changes regarding shipping within the ministry as part of a project that he has named ‘Time to Act’. “We have a very good product as far as shipping is concerned,” he says, “and when we introduced the tonnage tax, for example, we were very competitive. But then other countries copied us and now we are at a disadvantage due to the Turkish embargo and the crisis of the last couple of years, which affected the shipping companies based in Cyprus.” Convinced that more needs to be done for shipping, when he took over the ministry last year, he brought the private and public sectors together on a committee that prepared the terms of reference for a study carried out by EY. “Based on this and on a number of longstanding recommendations from the Department, I have taken a proposal to the Council of Ministers which, I believe, contains some very good measures that will assist in improving the situation regarding the flag and the locally-based companies. I am again talking to the private sector on how to implement the recommendations of the EY study,” he explains. Shipping is one area in which most people are agreed that the Minister could do with some help and the idea of appointing an UnderSecretary for Shipping has been floating around since before Nicos Anastasiades became President. However, Marios Demetriades is not convinced that such an appointment is necessary. “This model is not used anywhere in the European Union,” he says, noting that the only country with a Deputy Minister for Shipping is Greece and that his responsibilities extend to the country’s ports and the coastline, so that is a different model too.“What our competitors have done better than us,” Demetriades explains, “is to adopt the model of a flexible and autonomous Department of Shipping and this is precisely what we need too. Rather than trying to reinvent the wheel, we should

RATHER THAN TRYING TO REINVENT THE WHEEL, WE SHOULD BE COPYING OR ADAPTING TRIED AND TESTED GOOD MODELS

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INTERVIEW

THE WAY OUR PORTS OPERATE HAS TO BE JUDGED ON RESULTS AND THE RESULT IS NOT SATISFACTORY AT ALL be copying or adapting tried and tested good models.” Foreign consultants are currently working on the restructuring of the department, placing greater emphasis on business development, and the idea is to convert it into an Agency or an Authority as is the case in other countries, including Cyprus’ main competitors. Still on shipping–related issues, I ask the Minister how the privatisation of the Cyprus Ports Authority is progressing. He begins by saying that this is “something that should have been done 10-15 years ago,” adding that Cyprus has missed a lot of opportunities over the years, including the one to become a major transhipment centre within the EU, unlike Malta, which brought in a private investor to run its ports and today is moving 3.3 million TEU per year while Cyprus is moving just 300,000 TEU per year. “The way our ports operate has to be judged on results,” he says, “and the result is not satisfactory at all.” On the specific issue of privatisation, he stresses that “We are not selling the ports; we’re keeping the infrastructure, which is a very successful model adopted by most countries. Private investors can run the operations much more efficiently than we can.” The Minister declares himself optimistic about the process and notes that there has already been strong investor interest from a number of large organisations. Things are also becoming clear as regards the future of Larnaca Port, which Demetriades describes as “a long story that is finally coming to an end”, which means agreement with the consortium that will take over the port and the marina and make the necessary investment in both. Whereas Limassol is a multi-purpose port and it will have all the commercial activities, Larnaca Port will be mainly used for cruise ships, with a limited number of commercial activities. Of all the activities overseen by his ministry, Marios Demetriades believes that transport is the most important, so much so that the name is being changed to the Ministry of Transport, Communications & Works. He is aware of the fact that Cyprus has the lowest use of public transport in the EU and accepts that “we are not where we should be” on this issue. Some years ago, agreements were drawn up with the bus companies and a target was set of 10% bus use by 2020. “It’s actually around 3-4%, which is disappointing,” the Minister concedes. “We need to do more about public transport, which is why, as soon as I came in, I set up a dedicated team to deal with the bus agreements and to find ways of improving the bus system. We face all kinds of problems such as old technology or no technology at all – some buses are 40 years old, which is unacceptable – and other issues with the operating companies, which we are trying to solve.” This year automatic ticketing (smart ticketing) will be introduced, as will a GPS system for buses so that passengers have more information. The Government also intends to buy or lease at least 100 new buses and give them to the companies. “We need to upgrade the service so that more people use it, and to improve the infrastructure, the bus stations and more,” Demetriades says, but he is forced to recognise that “We need to be realistic: a change in mentality is required.” He explains that while students, soldiers, foreign visitors, tourists and older people use the buses, “We have failed to persuade the average Cypriot who prefers to use his own car. It will be a slow process but the potential is there and there is definitely a lot of room for improvement.” Is he one of those who thinks that Cyprus is too small for a train ser-

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vice or its towns too small for a tram system? Not exactly. “If we had looked into the possibility of setting up a train service 20 years ago it might have been possible,” he says, adding that “Today the cost is much greater. To build a line between Nicosia and Limassol or Larnaca would require more than €1 billion. A study has been carried out on the introduction of trams in Nicosia at a cost of about €230 million. The consultants say that with a small subsidy the system might be viable. Let’s wait and see!” In March, Marios Demetriades completed his first year as Minister of Communications & Works. I ask if it has been what he expected, better or worse. “It’s certainly been a lot of hard work – I mean 15 hours per day work – but I have to admit that I find it very challenging,” he replies.“I have to credit the President with the fact that he has brought some young people into his Government and so we all need to make sure that we live up to his expectations.” He acknowledges that being a minister at this particular time is “quite hard”, noting that there is no escaping the critics. “People are always ready to criticize. You might do 100 good things but if you do something wrong they will pick it up and give you a hard time. This is our reality but we live in difficult times and people have lost their trust in government so we need to work much harder than before.” Demetriades says that he has learnt to ignore the criticism but he admits that “In the beginning it was annoying, especially to someone like me coming from the private sector where I had never been under the spotlight. It was quite difficult at first but I’ve improved the way I react to negative comments and I’m trying to improve even more.” For all the difficulties that come with the job, the Minister is very positive. “What I find very exciting is the fact that I have been given an opportunity to make changes that will affect the way others work in the future,” he explains. “I’m very committed to what I’m doing. I’ve set my objectives and I intend to carry them out. I set myself a three-year horizon when I started since I believe that the only way to achieve targets is to set time limits for them.We owe it to the people to make things better. They may not realise it but the work at this ministry touches their everyday lives in a very direct way.” Asked if he has thoughts beyond his current position, Demetriades is quite clear: “My only ambition at this moment is to do my best here. I have no political ambitions and, for example, I don’t intend to run for parliament when I finish my work here.” Has he thought about what he would do in the case of a cabinet reshuffle or, more significantly, a solution to the Cyprus issue? “Let’s hope there’s a solution to the Cyprus issue and there are lots of opportunities for everybody,” he says at once. He knows that a reshuffle could take place at any time and he is realistic enough not to state that he would never accept another public post (“We should never say never”) but he is refreshingly honest about one thing: “If I were to be here by the end of this Government and I was to be asked to stay for a second term, I would say no as a matter of principle. I don’t believe in the permanency of ministers and there are plenty more talented people who can do the job. So once my work is finished here, I expect that I will go back to the private sector.” For now, however, Marios Demetriades has his sights fixed firmly on his ministry and on the fact that it is now ‘time to act’.

CONFERENCE

THE 11TH CFO MANAGEMENT

FORUM

4 JUNE 2015 | HILTON PARK HOTEL, NICOSIA, CYPRUS

discuss, among other things, the role of the CFO as a strategic leader. The second session (Cash flow management) will look at maximizing cash flow from receivables and working capital management. Session Three (Finance/Debt management and restructuring/ Mergers and Acquisitions) will deal with a number of important issues, including operational efficiency and corporate turnaround, strategies for successful Mergers and Acquisitions and company valuations. Case studies of debt restructuring in corporations will also be presented as part of this session. A key presentation on ‘Financing business expansion and creating shareholders value via private equity investments’ will be given by Alexander Shkuratov, Managing Director of Pride Capital, a firm that specializes in equity investments in private, fast-growing companies. Pride Capital aims to acquire a controlling or significant minority interest in the equity of fast-growing companies. Internal Audit Strategies and Practices are the focus of Session Four while the fifth and final session focuses on technology. Among the topics to be covered are ‘The CFO as a technologist’, ‘Big data, cloud, new analytic tools: Where do CFO & CIO meet?’ and ‘Cyber Security and the CFO: An Inside Look at the Financial and Business Challenges Caused

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KEY SPEAKERS FROM CYPRUS AND ABROAD WHO WILL DISCUSS THE LATEST TRENDS AFFECTING CFOS by Next Generation Cyber Attacks’. Given that top finance professionals are continually looking for ways to maximize their cost savings and reallocate investments that generate cash flow and revenue growth, the final session explores in ‘Capturing ROI from your IT investment portfolio’ how CFOs can partner with their IT leadership to fund vital new initiatives that can unlock increased value for their business and reduce risk at a substantially lower cost. Organizer: IMH Main Sponsor: EY Sponsors: Bank of Cyprus, Logicom Solutions, TFI Markets Supporter: General Insurance of Cyprus Communication Sponsors: IN Business Magazine and InBusinessNews.com For further information contact IMH: Tel: 22505555, Fax: 22679820 website: wwwimhbusiness.com email: events@imhbusiness.com

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OPINION

Peek Around the Corner! It’s Coming! Cyprus needs to be proactive if it is to survive as an international business centre

he end of 2014 brought about two major developments affecting Cyprus, one with the consent of the government and the other externally driven. I refer, of course, to the signing of the FATCA agreement with the USA and to the law passed in Russia regarding the repatriation of profits of Russian companies, a.k.a. “deoffshorisation”, respectively. Both of these developments aim at enhancing compliance and transparency by national tax residents in those countries, irrespective of where they may trade, do business or have financial assets and companies. It should not be seen as a mere coincidence that two global financial and business powerhouses have proceeded simultaneously with such measures, which raise concerns in all other countries. After all, both nations are pursuing the protection of their own interests. One should also have in mind other developments that are already visible on the international business horizon. The G20 countries, the OECD and the EU are also coming up with stricter compliance and transparency measures. The Base Erosion and Profit Shifting (BEPS) project, for instance, and Country-by-Country reporting are measures that will affect Cyprus, increasing the need for advanced disclosure. On 18 March 2015, the European Commission presented its Tax Transparency Package, in which a key element is a proposal to introduce the automatic exchange of information between Member States on their tax rulings. Moreover, the revised European Directive for Anti-Money Laundering provides for a public register of the ultimate beneficial owners of companies and funds. As the voices calling for substance grow louder, tax planning practices are coming under greater scrutiny as, it is argued, aggressive tax planning can lead to tax avoidance, making it a predicate offence. The state of play in the international business arena is changing, with secrecy and anonymity coming under attack. Compliance will soon be

Compliance will soon be mandatory for business, professionals, regulators and governments

By Kyriakos Iordanou

mandatory for business, professionals, regulators and governments. What is the take-away for Cyprus? Inescapably, as it is a destination for international business, Cyprus falls into the loop of these developments. The issue, however, is what we can do in order to mitigate any potential adverse effects and how we can gain competitive advantages over other jurisdictions. The starting point is for everybody – government, banks and professionals – to realise and comprehend the upcoming changes. Banks and professionals need to proceed with the proper maintenance of their clients’ files and follow KYC and Customer Due Diligence procedures religiously. Administrative Service Providers need to advise their clients of the necessity to demonstrate substance and a real presence on the island. This, of course, requires open minds, proper training and knowledge of the sector. At the same time, the government needs to take immediate action and pursue legislative measures in order to tackle the issues raised. To start with, the concepts of “tax residence” and “beneficial owner” need to be clearly defined and explained. In addition, other government departments should engage in an immediate campaign to identify all other factors related to the ease of doing business on the island and significantly improve them, by streamlining procedures, reducing bureaucracy and facilitating those who continue or will opt to use Cyprus as their base for carrying out their international business. Although the new developments will probably bring about operational difficulties and increased overheads, while requiring greater diligence and care, this is a one-way street. All the stakeholders mentioned above need to combine minds, resources and a willingness to work towards goal congruence. Should we fail to do so, the present and future of Cyprus as an international business centre will be placed in jeopardy. So, let’s refrain from imitating the ostrich, raise our heads and peek around the corner to see what’s coming. There is no need to wait for the postman to knock on our door!

info: Kyriakos Iordanou is the General Manager of the Institute of Certified Public Accountants of Cyprus (ICPAC). 22 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

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OPINION

Dealing with the Banks’ Problems The role of securitization

ne of the main problems that our banking sector is facing is the incredibly excessive amount of non-performing loans (NPLs) on the banks’ balance sheets, representing almost 50% (about €28 billion) of their total loan portfolio. A number of recommendations/suggestions have been proposed on how to deal with this longstanding issue and a lot of pressure has been exerted on the banks’ management to restructure these problematic loans (unfortunately restructuring until autumn 2014 was only about 12% of the total NPL portfolio). Recently, the Governor of the Central Bank of Cyprus (CBC) stressed that reducing the level of NPLs in the banking sector was her Number One priority. One thing is certain: there are no magic solutions that will make this problem go away. One suggestion, which was part of the latest Memorandum of Understanding with the Troika and is now under review, has to do with securitization and the selling of loans to third parties. Securitization is a framework in which some illiquid assets (loans/mortgages in our case) of a corporation/bank are transformed into a package of securities backed by these assets. The process starts with the pooling of loans (in our case, NPLs and non-NPLs) to create a large loan portfolio that would be of interest to large institutional investors. The loans are standardized to make it easier to predict the cash flows from the pool (same maturity, interest rate, amount of loan, etc.) and are also guaranteed (for a fee) by government or private entities against default and for the timely payment of the cash flows (credit and liquidity enhancements). Special purpose vehicles (SPVs) are then formed to construct the pool of assets and issue the mortgage (or asset)-backed securities. The reason for the existence of these vehicles is to place some separation between the originators and the pool of assets (if the originator, i.e. the bank, defaults, it will not affect the pool of loans held by the SPV). The parties investing in these securities are essentially buying “bonds” that entitle them to a share of the cash paid by the borrowers on their mortgages.

There are no magic solutions that will make this problem go away

By Dr. George Theocharides

Securitization is not new. It emerged in the US in the 1970s when mortgage originators (banks) sold the loans to agencies which pooled them and created marketable mortgage-backed securities (MBS). Prior to the global financial crisis, there was an unprecedented expansion in the mortgage market (especially the subprime) due to securitization that offered lots of benefits to society. However, the crisis of 2007-2009 and the bust in the US housing market highlighted the dangers associated with such a mechanism. In the case of Europe, securitization is not so widely accepted, perhaps because of a lack of relevant knowledge and experience. However, in many countries with problematic banks and a need for deleveraging, we now see an expanded usage of securitization which, I believe, will grow further with time. Securitization has the effect of improving liquidity in the mortgage market, spreading the level of risk, increasing the amount of credit available in the economy, and making it easier or more affordable to own a house. Certainly, this was the impact in the US prior to the crisis. Furthermore, the banking sector benefits by having the capability to deleverage and offload problematic loans from the banks’ balance sheets, which makes them healthier. However, there are risks involved that should certainly be taken into serious account by the lawmakers and regulating bodies. One is that the added complication of securitization will make it more difficult to apply the necessary flexibility and creativity to assist borrowers facing difficulty. Furthermore, the interests of borrowers might not align with the interests of the other participants (investors, servicers). Even if it is to the benefit of the borrower to have a modification of the loan agreement at times of difficulty, the terms of the securitization agreement or the interests of the other participants might prohibit them from pursuing such an approach. My view is that we should not prohibit securitization, which, if used properly, can have multiple benefits, bringing much-needed liquidity and credit to the economy, and helping resolve the issues in our banking sector. However, prior to utilizing such a mechanism, the right legal framework should be put in place and the regulating body (CBC) should provide efficient supervision.

info: Dr. George Theocharides is an Associate Professor of Finance at Cyprus International Institute of Management (CIIM)

and the Director of the MSc in Financial Services.

24 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES

MARIOS

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OPINION

Cleaning the Closet... ...and looking beyond the horizon

t has taken me three weekends to tidy up the room known as ‘the study’ (where no studying was ever done). Weekend one was taken up looking at the overflowing boxes and cluttered shelves, bemused by the array of ‘useful things’ that I had gathered over the years. Tired of looking, I went for a long lunch break and forgot about tidying up altogether. Weekend two involved moving around some of the big stuff; some boxes with junk which went straight to the bin, coats that hadn’t been worn in years were donated, etc. Proud of my achievement, I had lunch and then napped for a bit. The third weekend was the hardest; I had to deal with boxes with memorabilia from my elementary school, my grandfather, etc., as well as putting together a new bookcase. With a heavy heart, I decided that there was no point in holding on to my grandfather’s stamp collection, as someone else could enjoy it. As for the bookcase, I gave up after 20 minutes and called a friend to save the day (and my pride). This three-stage process is mainly a psychological journey, rather than one of outright laziness (or so I have managed to convince myself). Stage 1 is assessing the situation, thinking that it’s too much to handle, giving up, and hoping that the problem will go away. Stage 2 is all about achieving some easy wins and early milestones; these offer a sense of achievement and encouragement to move forward with the task at hand. The final stage involves making harder decisions, dealing with things with which you have a personal or emotional involvement and accepting that, in some cases, you need help to accomplish certain tasks. Cyprus’ banks are currently one third of the way into Stage 2, whilst the Greek banks have just started putting together the necessary mechanisms that will allow them to get a handle on their non-performing loans (NPLs) and real estate owned (REO). The majority of Cyprus banks have set up internal departments or teams that are focused on loan restructurings and managing distressed positions. Staff in these units require not only specialised skills (i.e. real estate, banking, accounting, etc.) but also a different way of think-

Not all problems are the same and decisions need to be taken quickly

info: Pavlos Loizou is a Partner, Greece & Cyprus, in Resolute Asset Management 26 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES

By Pavlos Loizou

ing when dealing with the task at hand. It’s not about going through a structured process but about solving a problem; not all problems are the same and decisions need to be taken quickly and sometimes with imperfect information. It is expected that, by the end of the year, we will see the first signs of the effectiveness of the aforementioned units, as the banks have been dealing with their bigger exposures for a while now. Sorting out smaller exposures will be time-consuming and inefficient, so banks will likely develop three routes: pre-agreed loan restructuring frameworks, a consensual resolution of NPL exposures (i.e. accepting to be paid upfront a smaller amount than the face value of the loan), and converting (consensually or otherwise) NPLs to real estate (i.e. accepting the collateral as repayment or partial repayment of a loan). What is the endgame? Cyprus banks have close to 50% NPLs and Greek banks a reported 34% (probably higher now, due to the more recent economic turbulence). At these levels they are more like asset management companies of distressed positions, rather than traditional banks. As banks, companies and households continue deleveraging, economic growth and demand will remain stifled, as demand will be more closely linked to actual earnings rather than credit. This means that consumption of goods, services and real estate will remain at the same subdued levels as now. It also means that companies will be forced to consolidate and will face less competition, resulting in higher profit margins. The abundance of liquidity in the system, mainly as a result of quantitative easing, will result in asset price inflation of income-producing assets, such as government bonds, shares and yielding real estate. Bond yields are already at a historical low, whilst stock markets are breaking one record after another. Real estate is closely following, with markets in Western Europe already providing yields at or below those experienced during the euphoric period of 2004-2007. Lower consumption. Consolidation of companies. Less competition. Asset price inflation on income producing assets. Regardless of your relative position, these are all sources of social tension; and tension requires a release.

MAKING USE

SPECIAL PROMOTIONAL FEATURE

How Carrefour Cyprus has embraced new ways of keeping in touch with its customers.

OF SOCIAL

MEDIA

28 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

refour Cyprus recognises that Social Media offers a unique opportunity not only to inform our clients and consumers on a daily basis, but also to develop a two-way relationship of dialogue and trust. Gold: How is your Social Media advertising different from that in other media? M.P.: The competitive advantage of Social Media is that it constitutes a very powerful communication tool which allows you to come even closer to your audience by ‘speaking their language’. Through daily stories, optimistic and cheerful messages, clever recipe ideas, etc., we have developed

is indeed on Facebook. Studies have shown that it is one of the country’s most popular social networks. We also have a presence on YouTube, promoting all the company’s ads. Finally, our clients’ response to Carrefour Cyprus’ mobile app, which allows them to browse all our offers and leaflets and to prepare their shopping list, has been impressive. So far, 10,000 customers have downloaded and used the app. Gold: What are the advantages of using Social Media to a company like Carrefour? M.P.: It is obviously expected that the lead-

THE CORRECT COMBINATION OF ONLINE AND OFFLINE COMMUNICATION DELIVERS THE BEST RESULTS a relationship of interaction and reliability with our Facebook Friends. At the same time, we give them all the necessary information on our supermarket offers as well as useful information about our stores. Advertisements, videos and interesting post contests complement our Facebook page material, giving our clients the opportunity to play and win. Finally, a dedicated team is always there to address and reply to any question or request from our fan page followers.

Gold: How long have you been using Social Media as a marketing tool for Carrefour and what have the results been so far? M.P.: Even though we have only a Social Media presence since last year, we have managed to gain more than 21,000 friends. We are very proud of this because, by offering an interesting and pleasant profile, Carrefour Cyprus’ Facebook page is among the Top 5 Facebook pages in Cyprus in terms of engagement.

Gold: Facebook is obviously the main social media site you use. Are there any others? M.P.: Our main presence in Social Media

Gold: Although there is no significant cost involved in marketing your products to a large number of people through Social Media, any campaign obviously needs a great deal of planning. How far

ahead do you prepare such campaigns? M.P.: Even though Social Media is characterised by its immediacy and high speed, proper planning based on strategy is essential. We have a comprehensive annual action plan, which is evaluated and updated with any adjustments needed every six months. At the same time, we ensure that our analytical diary of posts is planned carefully on a monthly basis, so that we are always up-to-date, thus meeting and satisfying the daily communication needs of page visitors. Gold: What has been the Marinopoulos Group’s experience of Social Media marketing/advertising in other countries? M.P.: The Social Media presence of Marinopoulos S.A. constitutes an integral part of our communication plan in Greece, Cyprus and the Balkans. Maintaining Social Media accounts in all the countries where the company operates, Marinopoulos is constantly building a direct and effective communication channel with consumers. Besides Cyprus and Greece, the company maintains Facebook Fan Pages in Bulgaria, Albania and FYROM. Every page uses the official language of the country while keeping the local element as a point of reference, thus constituting a substantial channel of communication with the consumers. The successful Social Media presence of Marinopoulos S.A. in Greece is reflected in the constant increase in visitor numbers to all its official accounts (Facebook, Instagram, YouTube, Twitter). The company has implemented a digital and online strategy, based on its expertise, since May 2012, with the creation of its official Greek page on Facebook. With a style and content suitably adapted to each platform, Marinopoulos S.A. communicates on a daily basis with hundreds of thousands of consumers. It informs the public about current offers and campaigns, actions and events, organises competitions and creates seasonal, interactive games, while at the same time gives useful, everyday advice. For Marinopoulos S.A., constantly reinforcing a daily “live” two-way relationship with the company’s customers was and will always be a top priority and a determining factor of its communication strategy.

THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

Gold 29

OPINION

Interconnection The restoration of the health of the banking system is vital and necessary for the sustainable recovery of the real estate market.

he stability of the Cypriot banking system has always been highly correlated to the real estate sector, as the lending practices of local financial institutions have amplified both the upturn and the downturn of the Cyprus real estate market. On the one hand, the large credit expansion of 2006-2008 was instrumental in fuelling the overheating of the property market during that period, and on the other, when demand from domestic and foreign investors collapsed post-2008 and prices took a significant hit, the banking sector was faced with an unprecedented situation due to the skyrocketing of non-performing loans (NPLs) collateralised by real estate, resulting in an extreme lack of credit which, in turn, amplified the fall in demand for real estate. Loan origination currently remains at extremely low levels and the ability of buyers to buy property is consequently limited and property prices remain depressed. This is what is often described as the “cyclical” effect of the lending criteria and policies employed by the Cypriot banks. It is obvious now that, during the inexorable rise in property prices during the period 2004-2008, banks in Cyprus “underestimated” the credit risks implicit in mortgage loans. This may be attributed to various reasons, including a lack of sophisticated risk assessment systems, reliable data and information. The main reason, however, is that continuous increases in property prices created a false sense of security in the banks, which in turn led to the rapid credit expansion in the island’s housing market. This is the classic ‘myopic expectations’ view, which is one of the main factors driving cyclical movements in real estate markets. These myopic expectations kept property prices increasing rapidly up to Q3 of 2008, but they also kept prices falling after the beginning of the global financial crisis as international investors stepped back in expectation of a further deterioration in demand and prices. The sharp decline in property prices and the depreciation of mortgaged properties led to a significant deterioration in the loan portfolios of domestic banks and increased the credit risk and bank capital requirements. The shortage in the supply of credit by the banks reduced the demand

info: Dr. George Mountis is Managing Partner, Delfi Partners & Company 30 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES

Myopic expectations kept property prices increasing rapidly up to Q3 of 2008

By George Mountis

for properties by users and investors alike, further reinforcing the downward trend in property prices. The demand for properties has become more vulnerable to price fluctuations because of the influence of the banking system. Theoretically, the decision to grant a loan must be based on long-term projections regarding the future value of the financed property until the repayment of the loan. Also, the repayment ability of the borrower has to be assessed and seriously considered. The lack of adequate information for assessing and evaluating prevailing market trends and possible future prices, however, prevents a correct evaluation of requests for mortgage loans. Funding decisions are, as a result, primarily based on the prices of similar properties at the time of the loan request. Experience in international markets indicates that property prices are subject to considerable fluctuations, which may or may not coincide with the “economic cycles”. Due to the strong link between credit availability and effective real estate demand, these fluctuations are amplified and become much more intense due to the policies applied by credit institutions when these are of a cyclical nature. For this reason, monitoring recent trends and assessing the most likely medium term-movements in property prices should be of direct interest to the monetary and supervisory authorities. As the recent experience of the domestic financial crisis has shown, the sharp decline in property prices can have a severe impact on the banking sector and the real economy of the country. It is no surprise that, under these circumstances, both the authorities and the banks are now reviewing their credit rating systems and their methods of monitoring mortgages/properties so as to better manage their portfolios. Overall, the experience of the past seven years has shown that the banking and real estate sectors in Cyprus are strongly interlinked and that the restoration of the health of the banking system is vital and necessary for the sustainable recovery of the real estate market. We expect that the passing of the foreclosures law will pave the way for the gradual recovery of the banking sector and mark the beginning of the bottoming-out process in the Cyprus property market within the next 24 months.

ICAEW PRESENTS

50 TOP

AUDIT, ACCOUNTING

& TAX

ADVISORY FIRMS

IN CYPRUS

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A WORLD LEADER OF THE ACCOUNTANCY AND FINANCE PROFESSION N

COVER STORY

PwC

01.

PwC Cyprus focuses on Assurance & Advisory and Tax & Legal services, adapting the expertise of more than 900 professionals in Cyprus and the power of the PwC network of 195,000 experts in 157 countries to its clients' specific needs, helping them make the difference. In a demanding and challenging business environment, PwC’s diverse teams of experts support you to create the value you are looking for by providing specialised solutions based on quality. NUMBER OF EMPLOYEES: 923 CEO: Evgenios C. Evgeniou NUMBER OF PARTNERS: 40 HEAD OFFICE: Julia House, 3, Themistocles Dervis St., 1066 Nicosia TEL: (+357) 22555000 FAX: (+357) 22555001 E-MAIL: via the website WEBSITE:www.pwc.com.cy

KPMG LIMITED

02.

KPMG is a global network of professional firms providing audit, tax and advisory services through 162,000 outstanding professionals working together to deliver value in 155 countries worldwide. KPMG in Cyprus traces its origins back to 1948 and is one of the largest audit and advisory organisations in the country. From 6 offices throughout the island, more than 750 professionals work closely with clients of all sizes active in all industries. NUMBER OF EMPLOYEES: 770

MANAGING DIRECTOR: Andreas Christofides CHAIRMAN: Angelos Gregoriades NUMBER OF PARTNERS: 43 HEAD OFFICE: 14, Esperidon St., 1087 Nicosia TEL: (+357) 22209000 FAX: (+357) 22678200 E-MAIL: nicosia@kpmg.com.cy WEBSITE: www.kpmg.com/cy

DELOITTE

E-MAIL: info@bakertillyklitou.com WEBSITE: www.bakertillyklitou.com

03.

With more than 550 professionals in its Nicosia, Limassol and Larnaca offices, Deloitte is one of the largest professional services organisations in Cyprus and a member firm of the Deloitte global network that employs more than 210,000 people in over 150 countries. It provides a full range of audit, tax, consulting, financial advisory and wealth advisory services to a diverse client portfolio and an integrated services offering addressed primarily to the international business community. NUMBER OF EMPLOYEES: 550+ CEO & MANAGING PARTNER: Christis M. Christoforou NUMBER OF PARTNERS: 28 HEAD OFFICE: 24, Spyrou Kyprianou Avenue, 1075 Nicosia TEL: (+357) 22360300 FAX: (+357) 22360400 E-MAIL: infonicosia@deloitte.com WEBSITE:www.deloitte.com/cy

BAKER TILLY

05.

EY is a global leader in assurance, tax, transaction and advisory services, employing 190,000 people worldwide. The firm combines leading practices, methodologies and tools, together with fresh thinking, tailoring its services to its clients’ business needs. In Cyprus, where the firm’s origins date back to the 1930s, EY has an excellent reputation amongst the local business community as a high quality provider of professional services from offices in Nicosia and Limassol. NUMBER OF EMPLOYEES: 220 MANAGING DIRECTOR: Andreas Demetriou NUMBER OF PARTNERS: 12 HEAD OFFICE: Jean Nouvel Tower, 6, Stasinou Avenue, P.O. BOX 21656, 1511 Nicosia TEL: (+357) 22209999 FAX: (+357) 22209997 E-MAIL: ey.cyprus @cy.ey.com WEBSITE: ey.com/cy

04.

Baker Tilly is a leading firm of auditors, accountants and business advisors in Cyprus and the Balkans. Some 20 directors and more than 360 people offer services of the highest standards to more than 6,000 businesses operating both nationally and internationally. Baker Tilly operates through offices in Cyprus, Bulgaria, Romania, Moldova and Greece and all these firms are independent members of Baker Tilly International, the 8th largest accounting network in the world by fee income, represented by 154 firms with 693 offices in 133 countries, with a global fee income of $3.6 billion and 27,000 people worldwide. NUMBER OF EMPLOYEES: 360+ CHIEF EXECUTIVE OFFICER: Marios Klitou NUMBER OF PARTNERS: 20 HEAD OFFICE: Corner of C. Hatzopoulou St. & 30, Grivas Dighenis Ave., 1066 Nicosia TEL: (+357) 22458500 FAX: (+357) 22751648

32 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

CONSULCO GROUP

06.

Founded in 1993, it is now the largest independent corporate service provider in Cyprus. With a staff of more than 200 professionals (accountants, lawyers, tax specialists, banking and finance experts) fluent in 15 languages, the firm’s expertise includes corporate tax compliance and international tax advisory, company registration, accounting and administration services, VAT compliance and Trust administration. In 2004, Consulco became a correspondent firm of RSM International. NUMBER OF EMPLOYEES: 200+ MANAGING DIRECTORS: Marios Hadjiroussos, Dimitry Khenkin NUMBER OF PARTNERS: 3

HEAD OFFICE: 73, Metochiou St., 2407 Nicosia TEL: (+357) 22361300 FAX: (+357) 22752597 E-MAIL: info@consulco.com WEBSITE: www.consulco.com

K. TREPPIDES & CO LTD

07.

A pioneer in providing audit, tax, accounting, legal, consulting and financial advisory services to international companies in Cyprus, the firm was established in 1985 and has continued to grow as the sector has expanded. Constantly reinventing itself to ensure that it remains at the forefront of the market, it is currently one of the leading regulatory compliance advisory firms on the island with a significant share of CySEC licensed investment firms. NUMBER OF EMPLOYEES: 170 MANAGING DIRECTOR: Kikis Treppides NUMBER OF PARTNERS: 5 HEAD OFFICE: Treppides Tower, 9, Kafkasou St., Aglandjia, 2112, Nicosia TEL: (+357) 22678944 FAX: (+357) 22681887 E-MAIL:info@treppides.com WEBSITE: www.treppides.com

GRANT THORNTON CYPRUS

08.

Grant Thornton Cyprus is a leading business adviser that helps dynamic organisations to unlock their potential for growth. The firm offers a full range of assurance, tax, specialist advisory and outsourcing services to clients ranging from public companies and multinationals to private businesses across a broad spectrum of industries. As part of a $4.7 billion global organisation of member firms with 40,000 people in over 130 countries, Grant Thornton Cyprus has the scale to meet its clientsâ&#x20AC;&#x2122; changing needs, but with the insight and agility that helps them to stay one step ahead. NUMBER OF EMPLOYEES: 127 MANAGING DIRECTOR: Stavros Ioannou NUMBER OF PARTNERS: 12

HEAD OFFICE: 41-49, Agiou Nicolaou St., Nimeli Court, Block C, Engomi, Nicosia TEL: (+357) 22600000 FAX: (+357) 22600001 E-MAIL: main@cy.gt.com WEBSITE: www.gtcyprus.com

BDO LTD

09.

BDO Ltd is the Cyprus member firm of BDO International, the 5th largest accountancy network in the world, which employs more than 60,000 people in 1,328 offices in 151 countries. More than 100 professionals in Cyprus offer a wide range of audit, tax, accounting and advisory services to companies of all sizes. BDO combines the personal characteristics of a local firm with the expertise, worldwide network and strength of a large-scale global player. NUMBER OF EMPLOYEES: 100+ MANAGING DIRECTORS: Karlos Zangoulos, Rois Potamitis NUMBER OF PARTNERS: 8 HEAD OFFICE: 236, Strovolos Avenue 2048, Strovolos, P.O.Box 25277, 1308, Nicosia TEL: (+357) 22495707 FAX: (+357) 22495717 E-MAIL: info@bdo.com.cy WEBSITE :www.bdo.com.cy

COMBINING THE PERSONAL CHARACTERISTICS OF A LOCAL FIRM WITH THE EXPERTISE, WORLDWIDE NETWORK AND STRENGTH OF A LARGE-SCALE GLOBAL PLAYER.

MGI GREGORIOU & CO

10.

Established in 1973, the firm is recognised as one of the leading accounting, auditing, tax and business advisors in Cyprus with offices in all towns. It services clients listed on international stock exchanges, High Net Worth Individuals from all over the world, and reputable and prestigious companies active in all industries in Cyprus. NUMBER OF EMPLOYEES: 85 DIRECTORS: Gregoris Petsas, Nicholas Gregoriou, Loria Gregoriou, Marios Anastasi, Marcos Marcou HEAD OFFICE: Greg Tower, 7, Florinis St., 1065 Nicosia TEL: (+357) 22451555 FAX: (+357) 22451556 E-MAIL: nicosia@gregoriou.com WEBSITE: www.gregoriou.com

HORWATH DSP

11.

Horwath DSP Limited is a member of Crowe Horwath International, one of the top 10 global accounting networks. The Crowe Horwath network consists of more than 150 independent accounting and advisory services firms in over 100 countries around the world. Established in 1987, Horwath DSP Limited is an accountancy firm with offices in Nicosia and Limassol, offering audit, tax, risk and advisory solutions to a diverse clientele in the local market and abroad. NUMBER OF EMPLOYEES: 85 MANAGING DIRECTOR: Yiannis Demetriades NUMBER OF PARTNERS: 5 HEAD OFFICE: 8, Stassinos Avenue, 1st Floor, Photiades Business Centre, 1060 Nicosia TEL: (+357) 22755656 FAX: (+357) 22452055 E-MAIL: mailbox@crowehorwath.com.cy WEBSITE: www.crowehorwath.com.cy

A WORLD LEADER OF THE ACCOUNTANCY AND FINANCE PROFESSION N THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

Gold 33

COVER STORY

VIEW FROM THE TOP

EVGENIOS C. EVGENIOU, CEO, PwC CYPRUS How would you describe the present state of the Cyprus economy? What are your predictions regarding GDP growth in 2015-2016? *`WY\Z OHZ [HRLU ZPNUPÃ&#x201E;JHU[ Z[LWZ [V YLZ[VYL JVUÃ&#x201E;KLUJL PU [OL LJVUVT` HUK [OL IHURPUN ZLJ[VY HUK ^L OH]L LU[LYLK [OL Z[HIPSPaH[PVU WOHZL /V^ L]LY MVY [OL Z[H[L [V YLNHPU HJ JLZZ [V [OL PU[LYUH[PVUHS THY kets and to return to invest ment grade rating, more needs [V IL KVUL ,]LU TVYL PTWVY [HU[S` [OL JV\U[Y` ULLKZ [V ILJVTL MVY^HYK SVVRPUN HUK Z[HY[ PTWSLTLU[PUN YLMVYTZ [V JYLH[L HU LU]PYVUTLU[ [OH[ MVZ[LYZ LU[YLWYLUL\YZOPW PU UV]H[PVU HUK H[[YHJ[Z HUK MH JPSP[H[LZ PU]LZ[TLU[Z 0 L_WLJ[ [OH[ PU .+7 JOHUNL ^PSS IL HYV\UK aLYV ^P[O NYV^[O YL [\YUPUN PU ;OL JOHSSLUNL PZ [V WYVJLLK ^P[O [OL JOHUNLZ [OH[ HYL ULJLZZHY` [V ZL[ [OL MV\UKH[PVUZ MVY Z\Z[HPUHISL YLZWVUZPISL NYV^[O HUK QVI JYLH[PVU Which sectors of the economy are, in your opinion, the most resilient and therefore the most likely to see growth in the next two years? -VSSV^PUN [OL JYPZPZ JSPTH_ [V\YPZT HUK WYVMLZZPVUHS ZLY ]PJLZ JVU[YPI\[LK [V H ZTHSSLY YLJLZZPVU [OHU VYPNPUHSS` L_ WLJ[LK /V^L]LY ^L ZOV\SKUÂ»[

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34 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

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remain attractive and relevant HZ H I\ZPULZZ HUK Ã&#x201E;UHUJPHS ZLY]PJLZ O\I Many observers believe that private sector debt (both corporate and domestic) is the biggest problem facing the economy and one reason why growth is likely to be small and slow to arrive. Do you share this view? ;V W\[ [OPUNZ PU[V WLYZWLJ[P]L [OL OPNO SL]LS VM KLI[ Â¶ W\ISPJ HUK WYP]H[L Â¶ PZ H THQVY JOHS SLUNL MVY [OL ,\YVWLHU HUK >VYSK LJVUVTPLZ 0U *`WY\Z [OL ZPaL VM WYP]H[L KLI[ YLSH[P]L [V .+7 HUK [OL OPNO SL]LS VM UVU WLYMVYTPUN SVHUZ HYL OVSK PUN IHJR LJVUVTPJ YLJV]LY` ,UHJ[PUN HU HWWYVWYPH[L SLNHS MYHTL^VYR MVY PUZVS]LUJ` HUK MVYLJSVZ\YLZ ^PSS HSSV^ IVYYV^ LYZ HUK SLUKLYZ [V ^VYR [OPZ V\[ 0[ ^PSS IL JOHSSLUNPUN HUK P[ ^PSS [HRL [PTL )\[ ^L ZOV\SK TV]L IL`VUK [OPZ ;OL JV\U[Y` ULLKZ H NYV^[O HNLUKH [OH[ aims to restore its productive JHWHJP[`" NYV^[O IHZLK VU PU UV]H[P]L I\ZPULZZ PKLHZ NVVK management and transpar LU[ NV]LYUHUJL )L`VUK [OL traditional sectors, we need to explore opportunities in [LJOUVSVN` YLUL^HISLZ ^HZ[L THUHNLTLU[ HUK WOHYTHJL\ [PJHSZ SL]LYHNPUN [OL JV\U[Y`Â»Z agricultural resources in an PUUV]H[P]L ^H` ;OH[Â»Z ^O` H[ 7^* ^L HJ[P]LS` Z\WWVY[ PUP[PH [P]LZ [OH[ MVZ[LY LU[YLWYLUL\Y ZOPW HUK PUUV]H[PVU >L HYL RUV^SLKNL WHY[ULYZ VM [OL *` WY\Z )\ZPULZZ (UNLSZ (ZZVJPH [PVU HUK ^L Z\WWVY[ [OL *`WYPV[ ,U[LYWYPZL 3PUR What are the other main structural problems of the economy and how can they be resolved? ,JVUVTPJ YLJV]LY` ^PSS WYPTHY PS` YLZ\TL MYVT I\ZPULZZ HJ[P] P[` HUK PU]LZ[TLU[Z *`WY\Z YHURZ [O PU [OL >VYSK ,JV UVTPJ -VY\TÂ»Z .SVIHS *VT WL[P[P]LULZZ 0UKL_ HUK [O in

[OL >VYSK )HUR +VPUN )\ZPULZZ YHURPUN >L ULLK [V THRL [OL ULJLZZHY` JOHUNLZ [V TV]L \W PU IV[O VM [OLZL YHURPUNZ )\ZPULZZLZ HUK PU]LZ[VYZ ULLK [YHUZWHYLU[ WYLKPJ[HISL HUK LM Ă&#x201E;JPLU[ SPJLUZPUN HUK YLN\SH[VY` WYVJLK\YLZ >L ZOV\SK JYLH[L HU LJVZ`Z[LT [OH[ MVZ[LYZ LU [YLWYLUL\YZOPW HUK PUUV]H[PVU 0[ÂťZ KPZHWWVPU[PUN [OH[ `V\UN *`WYPV[Z ^P[O PUUV]H[P]L PKLHZ MLLS [OL ULLK [V TV]L LSZL ^OLYL [V JVTTLYJPHSPaL [OLT ;OL Z[H[L ZOV\SK WYLZZ HOLHK ^P[O [HYNL[LK PUMYHZ[Y\J[\YL PU]LZ[TLU[Z [OH[ ^PSS IVVZ[ [OL LJVUVT`ÂťZ WYVK\J[P]L WV[LU [PHS 3VVRPUN [V [OL SVUN [LYT ^L ZOV\SK YLMVYT [OL LK\JH [PVU Z`Z[LT MVY V\Y JOPSKYLU [V IL LX\PWWLK ^P[O [OL ZRPSSZ HUK JVTWL[LUJPLZ MVY NSVIHS JVTWL[P[PVU PU [OL st JLU[\Y` 0U [OPZ JVU[L_[ 7^* ^PSS Z\W WVY[ [OL 1\UPVY (JOPL]LTLU[ 7YVNYHTTL [OH[ IYPUNZ LU[YL WYLUL\YZOPW [V V\Y ZJOVVSZ HUK NP]LZ HU VWWVY[\UP[` [V *`WYPV[ JOPSKYLU [V JVTWL[L H[ H ,\YV WLHU SL]LS -PUHSS` [OL WYP]H[L ZLJ[VY ZOV\SK HKVW[ TVKLYU management practices, sound NV]LYUHUJL HUK ILJVTL TVYL PUUV]H[P]L What are the main challenges facing the professional services sector and, in particular, services to international investors and High Net Worth Individuals? Can we expect growth in this important sector? *`WY\Z OHZ Z\Y]P]LK [OL JYPZPZ HZ H I\ZPULZZ HUK Ă&#x201E;UHUJPHS ZLY]PJLZ O\I HUK [OL WYVMLZ ZPVUHS ZLY]PJLZ ZLJ[VY OHZ KLT VUZ[YH[LK HKTPYHISL YLZPSPLUJL /V^L]LY ^L ZOV\SK UV[ SVZL ZPNO[ VM [OL MHJ[ [OH[ KLZWP[L [OL WYVNYLZZ JVUĂ&#x201E;KLUJL PU [OL *`WY\Z LJVUVT` OHZ UV[ ILLU M\SS` YLZ[VYLK HUK [OPZ PZ ULJ LZZHY` MVY PU[LYUH[PVUHS I\ZP ULZZ 0U HKKP[PVU [OL JV\U[Y` needs to adapt to international developments to remain com WL[P[P]L HUK YLSL]HU[ ;OLYL PZ

H ULLK MVY H Z[YH[LNPJ YL]PL^ VM [OL J\YYLU[ WVZP[PVU HUK [OL M\[\YL VM *`WY\Z HZ H I\ZPULZZ HUK Ă&#x201E;UHUJPHS ZLY]PJLZ O\I [V IL JHYYPLK V\[ >P[O H W\ISPJ WYP]H[L ZLJ[VY WHY[ULYZOPW H JVTWYLOLUZP]L Z[YH[LN` HUK HU HJ[PVU WSHU MVY [OL ZLJ[VY ZOV\SK IL KL]LSVWLK \ZPUN V\[ZPKL L_WLY[Z 0YLSHUK PZ KV PUN [OPZ J\YYLU[S` HUK P[ÂťZ [PTL [OH[ *`WY\Z KPK P[ HZ ^LSS Global trends regarding transparency and exchange of information, BEPS, etc. are changing the international tax landscape. Will Cyprus ILULĂ&#x201E;[ HZ H Q\YPZKPJ[PVU MYVT these changes? Can the country become an impor[HU[ Z\IZ[HUJL Q\YPZKPJ[PVU in which international comWHUPLZ ZL[ \W M\SS` Ă&#x2026;LKNLK VÉ&#x2030;JLZ& *SLHYS` [OLZL JOHUNLZ ^PSS JVU [PU\L >OPSZ[ [OL` HYL JOHSSLUN PUN [OL` JYLH[L VWWVY[\UP[PLZ HUK ^L ULLK [V JHWP[HSPaL VU [OLT ;OPZ YLX\PYLZ JVU[PU\ PUN VU [OL WH[O VM X\HSP[` compliance and transparency, LUZ\YPUN [OH[ [OL SLNHS YLN\SH [VY` HUK [H_ MYHTL^VYRZ HYL YLSL]HU[ PU [OL JVU[L_[ VM PU[LY UH[PVUHS KL]LSVWTLU[Z HUK [OH[ *`WY\Z PZ H ^LSJVTPUN WSHJL [V ZL[ \W HUK VWLYH[L H I\ZPULZZ (SS [OLZL HUK TVYL ^PSS IL HK KYLZZLK PU [OL Z[YH[LNPJ YL]PL^ MVY [OL M\[\YL VM *`WY\Z HZ H I\ZPULZZ HUK Ă&#x201E;UHUJPHS ZLY]PJLZ O\I [OH[ 0 WYVWVZL HUK [OL YL MVYTZ [OH[ ^PSS PTWYV]L *`WY\Z YHURPUNZ PU NSVIHS JVTWL[P[P]L ULZZ HUK KVPUN I\ZPULZZ ^PSS LUZ\YL [OH[ *`WY\Z PZ HU H[[YHJ [P]L Z\IZ[HUJL Q\YPZKPJ[PVU Gold magazine is of the view that Cyprusâ&#x20AC;&#x2122; services to international investors are too dependent on Russian and Ukrainian business and that we should be looking to develop new geographical and sectoral markets. Do you agree with this opinion and, if so, what new markets should

the country be seeking to develop? >OPSZ[ JVU[PU\PUN [V Z[YLUN[OLU V\Y I\ZPULZZ YLSH[PVUZ ^P[O 9\ZZPH *`WY\Z ZOV\SK WVZP [PVU P[ZLSM HZ H O\I MVY V[OLY THYRL[Z ;V KL]LSVW [OL M\UKZ PUK\Z[Y` MVY >LZ[LYU PU]LZ[ TLU[Z HU \WKH[LK KV\ISL [H_ [YLH[` ^P[O [OL <: PZ ULLKLK ;V WVZP[PVU *`WY\Z HZ H O\I MVY PU]LZ[TLU[Z PU (MYPJH MYVT *OPUH [H_ HUK PU]LZ[TLU[ [YLH [PLZ ^P[O [OVZL JV\U[YPLZ HYL ULLKLK >P[O 0UKPH [OLYL PZ H Z[HSLTH[L [OH[ ULLKZ [V IL YLZVS]LK ;OL M\UKZ PUK\Z[Y` PZ \UKLY KL]LSVWTLU[ HUK [OL WYP]H[L ZLJ[VY [OYV\NO *0-( PZ THRPUN H ZPNUPĂ&#x201E;JHU[ PU]LZ[

The state should press ahead with targeted infrastructure investments that will boost the economyâ&#x20AC;&#x2122;s productive potential TLU[ PU [OPZ LÉ&#x2C6;VY[ >L OH]L ZHMLN\HYKLK [OL PU[LSSLJ[\HS property regime and we need [V KL]LSVW [OL PUMYHZ[Y\J[\YL HYV\UK [OPZ /LUJL [OL ULLK MVY H JVTWYLOLUZP]L Z[YH[LNPJ YL]PL^ HUK HJ[PVU WSHU Are you happy with the performance and results of PwC Cyprus for 2014? What are `V\Y Ă&#x201E;YTÂťZ WSHUZ MVY 2016? 0U [OL Ă&#x201E;UHUJPHS `LHY LUKLK VU 1\UL -@Âť ^L HJOPL]LK YL]LU\LZ VM Ă TPSSPVU >L YLTHPULK JSVZL to our clients and our teams Z[H`LK MVJ\ZLK VU KLSP]LYPUN X\HSP[` ZLY]PJLZ ;OL -@Âť Ă&#x201E;UHUJPHS WLYMVYTHUJL PZ [OL

YLZ\S[ VM V\Y JSPLU[ZÂť JVUĂ&#x201E;KLUJL PU \Z HUK [OL OHYK ^VYR HUK JVTTP[TLU[ VM V\Y WLVWSL 0UKLWLUKLU[ THYRL[ Z\Y]L`Z HUK V\Y YLZ\S[Z JVUĂ&#x201E;YT V\Y SLHKLYZOPW WVZP[PVU /V^L]LY ^L HYL UV[ JVTWSHJLU[ 6U [OL JVU[YHY` ^L HYL JVU[PU\ ously striving to improve and [V L_JLLK ^OH[ PZ L_WLJ[LK VM \Z 3VVRPUN HOLHK ^L ^PSS continue investing in people so HZ [V OH]L [OL L_WLY[PZL [V WYV vide solutions and add value [V V\Y JSPLU[Z ^P[O X\HSP[` HUK KLWLUKHIPSP[` >L ^PSS HSZV JVU tinue to actively support and PU]LZ[ PU [OL KL]LSVWTLU[ VM *`WY\Z HZ H I\ZPULZZ O\I HUK PU Z\WWVY[PUN I\ZPULZZ LU[YL WYLUL\YZOPW HUK PUUV]H[PVU We would assume that domestic advisory services are on the rise, as many Cypriot companies seek advice on M&As, corporate restructurings, etc. Please comment on `V\Y Ă&#x201E;YTÂťZ L_WLY[PZL HUK potential in this area. >L OH]L ILLU HK]PZVYZ PU H U\TILY VM ZPNUPĂ&#x201E;JHU[ [YHUZ HJ[PVUZ ^P[O PU]VS]LTLU[ MYVT [HYNL[ PKLU[PĂ&#x201E;JH[PVU [V JVTWSL[PVU HUK WVZ[ transaction support, in due diligence, independent I\ZPULZZ YL]PL^Z HUK JVTWHU` restructuring assignments in several sectors, including Ă&#x201E;UHUJPHS ZLY]PJLZ OVZWP[HSP[` and leisure, telecoms and con Z[Y\J[PVU >L OH]L H KLKPJH[LK +LHSZ *VYWVYH[L -PUHUJL HUK )\ZPULZZ 9LZ[Y\J[\YPUN WYHJ [PJL )L`VUK [OPZ Z\JO HZZPNU TLU[Z YLX\PYL H IYVHK ZWLJ [Y\T VM L_WLY[PZL PUJS\KPUN JOHUNL THUHNLTLU[ Z[YH[LN` HUK VWLYH[PVUHS LÉ&#x2C6;LJ[P]LULZZ corporate governance, tax and SLNHS JV\WSLK ^P[O PUK\Z[Y` RUV^SLKNL 6\Y ZPNUPĂ&#x201E;JHU[ WYLZLUJL PU *`WY\Z ^P[O V]LY WLVWSL HUK [OL JVUULJ[P] P[` ^P[O V\Y NSVIHS UL[^VYR NP]LZ \Z H \UPX\L WVZP[PVU [V HKK ]HS\L PU Z\JO HZZPNUTLU[Z

A WORLD LEADER OF THE ACCOUNTANCY AND FINANCE PROFESSION N THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

Gold 35

COVER STORY

MOORE STEPHENS CYPRUS

12.

Moore Stephens International is one of the world’s major accounting and consulting networks with 299 independent firms in 101 countries. For over 30 years, Moore Stephens Stylianou & Co has been providing customers with innovative, high quality services from traditional assurance services to large consultancy projects, international tax planning, information technology and business strategy. NUMBER OF EMPLOYEES: 75 MANAGING PARTNER: George Stylianou NUMBER OF PARTNERS: 7 HEAD OFFICE: Iris Tower, Office 602 58, Archbishop Makarios III Ave., 1076 Nicosia TEL: (+357) 22717777 FAX: (+357) 22717766 E-MAIL: info@mscyprus.com WEBSITE: www.mscyprus.com

P.G. ECONOMIDES & CO

13.

P.G.Economides & Co Limited is a Limassol-based accounting and audit company established in 1972. The company specialises in auditing and accounting services, international tax planning and VAT. A member of various local and international professional bodies and networks of accountants and auditors, the company also maintains its own fullyfledged office in Bucharest, Romania. NUMBER OF EMPLOYEES: 70 MANAGING DIRECTOR: Petros Economides NUMBER OF PARTNERS: 5 HEAD OFFICE: 30, Gr. Xenopoulou St.,3106 Limassol TEL: (+357) 25559000 FAX: (+357) 25559001 E-MAIL: audit@pgeconomides.eu WEBSITE: www.pgeconomides.eu

HLB AFXENTIOU

NEXIA POYIADJIS

HLB Afxentiou Ltd. is one of the largest accounting and advisory organisations in Cyprus and is a member firm of the HLB International network, which employs 13,400 people in over 100 countries. 65 staff work from the Nicosia, Limassol and Larnaca offices, providing premium quality professional services to a wide range of businesses from small owner-managed businesses to large multinational groups and companies listed in the Stock Exchange. NUMBER OF EMPLOYEES: 70 MANAGING DIRECTOR: Costas Afxentiou NUMBER OF PARTNERS: 5 HEAD OFFICE: Palaceview House, Prodromos St. & 2, Zenonos Kitieos St., 2064 Nicosia TEL: (+357) 22002700 FAX: (+357) 22002800 E-MAIL: nicosia@hlb.com.cy WEBSITE: www.hlb.com.cy

Nexia Poyiadjis is a prominent Nicosia partnership of Chartered Accountants and business consultants with a history dating back to 1969. Over the last five decades Nexia Poyiadjis has become established as one of Cyprus’ major national firms in the fields of audit and assurance, business advisory and consulting, business restructuring and insolvency, taxation and wealth management services. It has offices in Nicosia, Limassol and Kakopetria. It is the exclusive member firm in Cyprus of Nexia International, one of the larger and longest-established global networks of independent accounting and consulting firms. NUMBER OF EMPLOYEES AND ASSOCIATES: ≈ 70 MANAGING DIRECTOR: Yiannakis Poyiadjis NUMBER OF PARTNERS: 3 (+1 director) Head Office: 2, Sophoulis St., Chanteclair House, 8th Floor, 1096 Nicosia TEL: (+357) 22456111 FAX: (+357) 22666276 E-MAIL:np@nexia.com.cy WEBSITE:www.nexia.com.cy

14.

16.

JOANNIDES + CO

15.

Established in 1980, it is a member of AGN International Ltd., a worldwide association of independent accounting and consulting firms. One of the largest accounting firms in Cyprus, it is a leading provider of distinctive, high-quality professional audit, taxation, accounting, management consultancy, corporate finance and IT services to clients from its offices in Nicosia, Limassol and Larnaca. The firm’s stated objective is to add significant value to its clients’ business performance. NUMBER OF EMPLOYEES: 70 MANAGING DIRECTOR: Lefkios Joannides NUMBER OF PARTNERS: 3 HEAD OFFICE: 13, Agiou Prokopiou St., 2406 Engomi. Nicosia TEL: (+357) 22556556 FAX: (+357) 22556300 E-MAIL: cy@joannides.com.cy WEBSITE: www.joannides.com.cy

PKF SAVVIDES & CO LTD

17.

PKF International is an international network of independent firms of accountants and business advisors, currently represented in Cyprus by two member firms, PKF Savvides & Co Ltd in Limassol (established in 1979) and PKF ATCO Ltd in Nicosia (established in 1998). Both firms provide audit, tax and consultancy services to clients ranging from small businesses, start-ups and sole entrepreneurs to public companies and multinationals, many of which are engaged in international operations. NUMBER OF EMPLOYEES: 62 MANAGING DIRECTOR: Christos Antoniou NUMBER OF PARTNERS: 6 HEAD OFFICE: Meliza Court, 4th, 5th and 6th floor, 229, Archbishop Makarios III Ave., 3105 Limassol TEL: (+357) 25868000 FAX: (+357) 25587871

E-MAIL: info@pkf.com.cy WEBSITE:www.pkf.com.cy

NUMBER OF PARTNERS: 3 HEAD OFFICE: 5, Chytron St., 4th floor, 1302 Nicosia TEL: (+357) 22699222 FAX: (+357) 22699004 E-MAIL: info@eurofast.eu WEBSITE: www.eurofast.eu

INTERTAX AUDIT

18.

InterTaxAudit is a Nicosiabased firm of professional qualified Auditors, Tax Consultants and Business Advisors. Founded in 2002, it has since undergone substantial expansion and now offers a range of services including statutory audit, international tax planning and management consultancy services. Its clients are mostly international business companies of varying size, origin and activity. NUMBER OF EMPLOYEES: 60+ CEO: Aris Theophanous NUMBER OF PARTNERS: 4 HEAD OFFICE: Navarino Business Centre, 18, Navarinou St., Agios Andreas, 1100 Nicosia TEL: (+357) 22400400 FAX: (+357) 22400401 E-MAIL:Info@intertaxaudit.net WEBSITE:www.intertaxaudit.com

EUROFAST GLOBAL

19.

Eurofast is a regional business advisory organisation operating in South-East Europe and the Eastern Mediterranean, employing over 200 people in the region. It has fully-fledged offices in Nicosia, Athens, Thessaloniki, Sofia, Bucharest, Belgrade, Podgorica, Tirana, Skopje, Zagreb, Pristina, Banja Luca, Sarajevo, Cairo, Alexandria, Tbilisi, Moscow, Kiev and Beijing. Eurofast has become a “one stop shop” for international investors wanting to enter the region offering a wide range of services including but not limited to tax, legal, M&A, payroll, employment solutions, transfer pricing, financial and consulting services. NUMBER OF EMPLOYEES: 50 MANAGING DIRECTOR: Chris Damianou

D.I. ROSS & CO LTD (DI Ross)

20.

This Limassol-based independent firm of Chartered Certified Accountants and registered Chartered Tax Advisers was founded by Demetris Ioannides, who also founded Deloitte, Cyprus in 1988. The firm employs a team of around 51 qualified accountants, economists, mathematicians and university graduates. DI Ross places great emphasis on delivering a seamless service and on training younger personnel through a structured programme for further development and qualifications. NUMBER OF EMPLOYEES: ≈50 MANAGING PARTNER: Demetris Ioannides NUMBER OF PARTNERS / DIRECTORS: 4 HEAD OFFICE: Eftapaton Court, 256, Archbishop Makarios III Ave., 3105 Limassol TEL: (+357) 25857700 FAX: (+357) 25340734 E-MAIL: info@di-ross.com WEBSITE: www.di-ross.com

PEK LTD

21.

The firm was established in 1997 by a group of qualified professionals whose complementary skills and long experience have enabled them to deliver quality auditing, accounting, taxation, consultancy, corporate, trust administration, shipping, insolvency and recovery services. Over the past 18 years, PEK has expanded its portfolio of international and local companies as a result of the quality of service on offer and

the trust its clients place in the firm. NUMBER OF EMPLOYEES: 44 MANAGING DIRECTORS: Andreas Efthyvoulou, Kyriacos Koutsoftas NUMBER OF PARTNERS: 2 HEAD OFFICE: Central Court, 3rd Floor, 17, Demosthenis Severis Ave., 1080 Nicosia TEL: (+357) 22865000 FAX: (+357) 22865001 E-MAIL: info@pek-cy.com WEBSITE: www.pek-cy.com

IOANNOU & THEODOULOU LTD

22.

Founded in the early 1990s, the firm has established an excellent reputation in the local and international markets for its high professional standards. Its long experience in dealing with a broad range of businesses and industries is enhanced by its membership of the International Association of Independent Accountants, K.S International, currently represented by more than 165 offices around the world. The firm offers professional guidance and advice to clients on all business and financial matters. NUMBER OF EMPLOYEES: 40 MANAGING DIRECTORS: Michael Ioannou, Christos Theodoulou NUMBER OF PARTNERS: 5 HEAD OFFICE: 4, Pindou St., 2409 Engomi, Nicosia TEL: (+357) 22318734 FAX: (+357) 22493123 E-MAIL: info@ith.com.cy WEBSITE: www.ith.com.cy

OFFERING HIGH-QUALITY PROFESSIONAL SERVICES AND TAILOR-MADE SOLUTIONS THAT MEET THE MOST COMPLICATED OF CLIENTS’NEEDS

A WORLD LEADER OF THE ACCOUNTANCY AND FINANCE PROFESSION N

COVER STORY

VIEW FROM THE TOP

ANDREAS CHRISTOFIDES,

MANAGING DIRECTOR, KPMG How would you describe the present state of the Cyprus economy? What are your predictions regarding GDP growth in 2015-2016? (Z P[ PZ L]PKLU[ MYVT Ã&#x201E;UHUJPHS PUKPJH[VYZ [OL *`WY\Z LJVUVT` PZ KVPUN T\JO IL[[LY [OHU HU[PJP WH[LK 6UL L_HTWSL PZ [OL MHJ[ [OH[ H Ã&#x201E;ZJHS Z\YWS\Z VM VM .+7 ^HZ YLJVYKLK PU [^V `LHYZ LHYSPLY [OHU L_WLJ[LK ;OL NYHK\HS YL[\YU VM JVUÃ&#x201E;KLUJL [V [OL LJVUVT` PZ HSZV THUPMLZ[LK I` [OL KLJSPUL PU [OL THYRL[ `PLSK VM [OL *`WY\Z [LU `LHY NV]LYUTLU[ IVUK ^OPJO OHZ MHSSLU ILSV^ YLJVYKPUN H MV\Y `LHY SV^ 4VYLV]LY [OLYL OHZ ILLU H SLZZ ZL]LYL KL[L YPVYH[PVU VM LJVUVTPJ HJ[P]P[` [OHU WYVQLJ[LK 0U WHY[PJ\SHY HS[OV\NO [OL ;YVPRH WYVQLJ[LK H JVU[YHJ[PVU PU HUK [OL 4PUPZ[Y` VM -PUHUJL H JVU[YHJ[PVU [OL LJVUVT` VUS` JVU[YHJ[LK I` 0[ PZ HU[PJP WH[LK [OH[ [OL *`WY\Z LJVUVT` ^PSS YL[\YU [V NYV^[O PU ^OLU [OLYL TH` L]LU IL H ULN SPNPISL WVZP[P]L NYV^[O PU .+7 ;OL Ã&#x201E;ZJHS PUKPJH[VYZ ZOV^ [OL PTWYV]LTLU[ I\[ OLYL HYL Z[PSS H SV[ VM JOHSSLUNLZ Z\JO HZ [OL SL]LS VM 5VU 7LYMVYTPUN 3VHUZ 573Z [OL SHJR VM Ã&#x201E;UHUJPUN MVY I\ZPULZZLZ [OL WV[LU[PHS ULNH [P]L PTWHJ[ VU [OL WYVMLZZPVUHS ZLY]PJLZ HUK [V\YPZT ZLJ[VYZ VM [OL J\YYLU[ ZP[\H[PVU PU 9\ZZPH HUK [OL KLÃ&#x2026;H[PVU VM [OL YV\ISL HUK KLSH`Z [OH[ HYL L_WLYPLUJLK PU Z[Y\J[\YHS YLMVYTZ Which sectors of the economy

are, in your opinion, the most resilient and therefore the most likely to see growth in the next two years? 7YVMLZZPVUHS ZLY]PJLZ [OL [V\Y PZT ZLJ[VY HUK ZOPWWPUN OH]L L_OPIP[LK YLZPSPLUJL K\YPUN [OL Ã&#x201E;UHUJPHS JYPZPZ ^OPSL [OL JVU Z[Y\J[PVU PUK\Z[Y` PZ Z[HIPSPaPUN ;OL U\TILY VM WYVWLY[` ZHSLZ JVU[YHJ[Z Z\ITP[[LK [V [OL 3HUK 9LNPZ[Y` 6É&#x2030;JL OHZ PUJYLHZLK ZPUJL SHZ[ `LHY ZVTL[OPUN OLSWLK I` [OL YL]PZLK JYP[LYPH MVY NYHU[PUN JP[PaLUZOPW [OYV\NO PU]LZ[TLU[ (S[OV\NO YLNPZ[YH [PVUZ VM JVTWHUPLZ ^LYL ML^LY PU [OL Ã&#x201E;YZ[ [^V TVU[OZ VM [OHU PU [OL JVYYLZWVUKPUN WLYPVK SHZ[ `LHY 0 ILSPL]L [OH[ WYVMLZ sional services will continue to IL VUL VM [OL THQVY JVU[YPI\[VYZ [V .+7 >L OH]L ZLLU PU]LZ[VYZ MYVT UL^ THYRL[Z SPRL *OPUH HUK (MYPJH ^OPSL ^L JVU[PU\L [V LUOHUJL [OL SPZ[ VM Ã&#x201E;UHUJPHS WYVK\J[Z [OH[ *`WY\Z VÉ&#x2C6;LYZ ;OLYL PZ H YHWPKS` NYV^PUN PU ]LZ[TLU[ M\UKZ THYRL[ K\L [V [OL PUJYLHZL PU NSVIHS ^LHS[O HUK [OL YPZL VM TPKKSL JSHZZ HUK PU]LZ[VY IHZL PU LTLYNPUN THYRL[Z *`WY\Z PZ HU H[[YHJ [P]L M\UKZ Q\YPZKPJ[PVU K\L [V its legal and regulatory system as well as its tax regime, and HJ[P]L LÉ&#x2C6;VY[Z HYL ILPUN THKL [V H[[YHJ[ PU]LZ[TLU[ :OPWWPUN ^PSS continue to expand and once [OL ;\YRPZO LTIHYNV VM *`WY\Z Ã&#x2026;HNNLK ZOPWZ PZ SPM[LK P[ ^PSS IL JVTL OPNOS` KL]LSVWLK ;V\YPZT MHJLZ JOHSSLUNLZ I\[ 0 ILSPL]L [OH[ [OLYL ^PSS VUS` IL Â¶ PM HU` Â¶ H ZTHSS KLJYLHZL PU [OL YL]LU\LZ

38 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

MYVT [OPZ ZLJ[VY JVTWHYLK [V 6M JV\YZL H SV[ VM KL]LSVWTLU[Z HYL L_WLJ[LK PU [OL Ã&#x201E;LSKZ VM LU ergy and natural gas, especially PU SPNO[ VM [OL PTWVY[HU[ HNYLL TLU[Z ZPNULK YLJLU[S` IL[^LLU *`WY\Z HUK ,N`W[ Many observers believe that private sector debt (both corporate and domestic) is the biggest problem facing the

We need to address the problem of bureaucracy and red tape to enhance GHÅ¦EKGPE[ CPF transparency and remain competitive

economy and one reason why growth is likely to be small and slow to arrive. Do you share this view? 7YP]H[L KLI[ PZ VM [OL JV\U[Y`Â»Z .+7 HUK 573Z HTV\U[ [V TVYL [OHU OHSM VM [OL SVHU WVY[MVSPVZ VM [OL JYLKP[ PUZ[P[\[PVUZ )\ZPULZZLZ OH]L YLHJOLK [OLPY KLI[ JHWHJP[` HUK [OLYL PZ H NYLH[ ULLK [V KLSL]LYHNL" [OLYLMVYL P[ PZ ]LY` PTWVY[HU[ [V H[[YHJ[ LX\P[` MVY

LPNU PU]LZ[TLU[Z ;OL PUHIPSP[` VM I\ZPULZZ [V YLJLP]L HKKP[PVUHS SVHU Ã&#x201E;UHUJPUN \UKLYTPULZ [OL LÉ&#x2C6;VY[Z [V YL[\YU [OL LJVUVT` [V NYV^[O ;OL NVVK UL^Z PZ [OH[ PU[LYLZ[ YH[LZ VU SVHUZ HYL ILPUN YLK\JLK I\[ [OL ZHTL HWWSPLZ [V KLWVZP[ PU[LYLZ[ [VV (KKYLZZPUN [OL WYVISLT VM 573Z LÉ&#x2C6;LJ[P]LS` PZ JY\JPHS MVY [OL YLZ[VYH[PVU VM [OL JV\U[Y`Â»Z JYLKP[^VY[OPULZZ HUK MVY HJOPL]PUN LJVUVTPJ NYV^[O ;OL T\JO H^HP[LK PTWSLTLU[H[PVU VM [OL MVYLJSV Z\YL SH^ HUK [OL HKVW[PVU VM [OL PUZVS]LUJ` MYHTL^VYR ^PSS ZPNUPÃ&#x201E;JHU[S` JVU[YPI\[L [V [OPZ HZ [OL` ^PSS WYV]PKL PUJLU[P]LZ [V IV[O IVYYV^LYZ HUK SLUKLYZ [V JVVWLYH[L PU YLK\JPUN 573 L_WVZ\YL What are the other main structural problems of the economy and how can they be solved? *`WY\Z ULLKZ [V LUOHUJL P[Z JVTWL[P[P]LULZZ HUK [V [OPZ LUK [OLYL HYL M\Y[OLY Z[Y\J[\YHS WYVISLTZ [OH[ ULLK [V IL HK KYLZZLK PUJS\KPUN [OL YLMVYT VM [OL W\ISPJ HKTPUPZ[YH[PVU [OL OLHS[O ZLJ[VY [OL MVYLJSVZ\YL HUK PUZVS]LUJ` MYHTL^VYR HUK [OL WYP]H[PZH[PVU VM Z[H[L V^ULK JVYWVYH[PVUZ 4HU` VM [OL Z[Y\J [\YHS YLMVYTZ YLX\PYLK I` [OL 4LTVYHUK\T VM <UKLYZ[HUKPUN HYL WSHUULK MVY [OL WLYPVK Â¶ LHYS` Most importantly, we need to HKKYLZZ [OL WYVISLT VM I\YLH\ JYHJ` HUK YLK [HWL [V LUOHUJL LÉ&#x2030;JPLUJ` HUK [YHUZWHYLUJ` HUK YLTHPU JVTWL[P[P]L ^P[O V[OLY Ã&#x201E; UHUJPHS JLU[YLZ ;OPZ JHU HSZV IL HJOPL]LK [OYV\NO [OL HKVW[PVU VM H M\SS L NV]LYUTLU[ WVY[HS ;OL PTWSLTLU[H[PVU VM H VUL Z[VW ZOVW MVY WV[LU[PHS PU]LZ[VYZ TH` HSZV OLSW H[[YHJ[ HKKP[PVUHS PU]LZ[TLU[Z What are the main challenges facing the professional services sector and, in particular, services to international investors and High Net Worth Individuals. Can we expect growth in this important sector?

;OL THPU JOHSSLUNLZ MHJPUN [OL WYVMLZZPVUHS ZLY]PJLZ ZLJ[VY HYL maintaining our competitiveness HZ H Ã&#x201E;UHUJPHS ZLY]PJLZ JLU[YL HUK HIZVYIPUN HU` WV[LU[PHS ULNH[P]L PTWHJ[ VM [OL J\YYLU[ economic situation in Rus ZPH HUK [OL KL]HS\H[PVU VM [OL YV\ISL *`WY\Z OHZ HJJLZZ [V HUK JSVZL YLSH[PVUZ ^P[O U\TLY V\Z Q\YPZKPJ[PVUZ HUK P[ OHZ HSZV Z[YP]LK [V HJJVTTVKH[L [OL JVUZ[HU[S` JOHUNPUN ULLKZ VM PU[LYUH[PVUHS PU]LZ[VYZ HUK /PNO 5L[ >VY[O 0UKP]PK\HSZ 0UJLU[P]LZ HYL VÉ&#x2C6;LYLK [V [OLZL PUKP]PK\HSZ [V PU]LZ[ PU *`WY\Z HUK WYVTV[L MVYLPNU PU]LZ[TLU[ PU *`WY\Z PU JS\KPUN [OL H[[YHJ[P]L JYP[LYPH MVY NYHU[PUN *`WYPV[ JP[PaLUZOPW I` L_JLW[PVU [V MVYLPNU PU]LZ[VYZ /V^L]LY ^L OH]L [V IL VUL Z[LW HOLHK >L ULLK [V OH]L a clear vision and to continu V\ZS` LUOHUJL [OL X\HSP[` HUK [OL WVY[MVSPV VM ZLY]PJLZ HUK Ã&#x201E;UHUJPHS WYVK\J[Z WYV]PKLK ;OL M\UKZ PUK\Z[Y` [Y\Z[Z HUK [OL (04 VM [OL *`WY\Z :[VJR ,_JOHUNL JHU HZZPZ[ KL]LSVWPUN V\Y ZLJ[VY Global trends regarding transparency and exchange of information, BEPS, etc. are changing the international tax SHUKZJHWL >PSS *`WY\Z ILULÃ&#x201E;[ HZ H Q\YPZKPJ[PVU MYVT [OLZL changes? Can the country become an important subZ[HUJL Q\YPZKPJ[PVU PU ^OPJO international companies set \WM\SS` Ã&#x2026;LKNLK VÉ&#x2030;JLZ& *`WY\Z ^HZ HJJ\ZLK VM TVUL` SH\UKLYPUN WYPVY [V [OL KLJPZPVUZ VM 4HYJO >L HYL [OL VUS` JV\U[Y` [V OH]L \UKLYNVUL H YL]PL^ VM [OL WYVJLK\YLZ I` H WYP]H[L JVTWHU` ;OL YLZ\S[Z VM [OPZ YL]PL^ ^LYL ZH[PZMHJ[VY` HUK did not correspond to allega [PVUZ YHPZLK PU [OL ,\YVWLHU HUK PU[LYUH[PVUHS WYLZZ ;OL WYVJLK\YLZ MVSSV^LK PU *`WY\Z I` SVJHS Ã&#x201E;YTZ HKTPU PZ[YH[VYZ Ã&#x201E;K\JPHY` JVTWHUPLZ HUK IHURZ HYL ]LY` Z[YPJ[" L]LY` [YHUZHJ[PVU PZ ZJY\[PUPaLK ^OPJO creates an additional administra

[P]L I\YKLU (Z WHY[ VM [OL ,\YVWLHU <UPVU HUK [OL ,\YVZ`Z[LT *`WY\Z WYV]PKLZ H ZHML WSHJL MVY [OL LZ[HISPZOTLU[ VM I\ZPULZZLZ ^PZOPUN [V YLSVJH[L MYVT JV\U [YPLZ ]PL^LK HZ [H_ OH]LUZ )LZPKLZ [OL [H_ HK]HU[HNLZ HUK [OL OPNO X\HSP[` VM P[Z WYV MLZZPVUHS ZLY]PJLZ *`WY\Z OHZ H ^LSS KL]LSVWLK [LSLJVTT\ UPJH[PVUZ Z`Z[LT P[ SPLZ H[ [OL JYVZZYVHKZ VM [OYLL JVU[PULU[Z and, despite current develop TLU[Z THPU[HPUZ H OPNO Z[HU KHYK VM SP]PUN 0[ PZ L_WLJ[LK [OH[ TVYL MVYLPNU V^ULK JVT WHUPLZ ^PSS LZ[HISPZO [OLPY I\ZP ULZZLZ PU *`WY\Z Gold magazine is of the view that Cyprusâ&#x20AC;&#x2122; services to international investors are too dependent on Russian and Ukrainian business and that we should be looking to develop new geographical and sectoral markets. Do you agree with this opinion and, if so, what new markets should the country be seeking to develop? )V[O 9\ZZPHU HUK <RYHPUPHU I\ZPULZZ HYL PTWVY[HU[ [V *` WY\Z /V^L]LY HZ Z[H[LK PU [OL ,\YVWLHU *VTTPZZPVUÂ»Z ^PU[LY MVYLJHZ[ MVY ^L OH]L [V IL WYLWHYLK ZPUJL ULNH[P]L economic developments in 9\ZZPH ^PSS ULNH[P]LS` HÉ&#x2C6;LJ[ L_WVY[ NYV^[O PU ([ [OL ZHTL [PTL *`WY\Z HSZV OHZ Z[YVUN SPURZ ^P[O V[OLY Q\YPZKPJ[PVUZ LZWLJPHSS` PU [OL .\SM (MYPJH *OPUH HUK [OL 4PKKSL ,HZ[ HUK PZ JVUZ[HU[S` HKHW[PUN [V HJJVTTVKH[L [OL ULLKZ VM KP]LYZL THYRL[Z I` VÉ&#x2C6;LYPUN H[[YHJ[P]L SLNHS HUK [H_ YLNPTLZ HUK [OYV\NO KV\ISL [H_ [YLH[PLZ ^P[O H KP]LYZL YHUNL VM JV\U[YPLZ Are you happy with the performance and results of KPMG MVY & >OH[ HYL `V\Y Ã&#x201E;YTÂ»Z plans for 2015-2016? ;OL LJVUVTPJ JYPZPZ ULNH[P]LS` HÉ&#x2C6;LJ[LK V\Y JSPLU[Z HUK LZ

WLJPHSS` [OVZL VWLYH[PUN PU [OL *`WY\Z THYRL[ PU ÔPJO ^L HYL THYRL[ SLHKLYZ >L Z[VVK UL_[ [V our clients and employees and, at [OL ZHTL [PTL ^L [VVR TLHZ\YLZ [V YLK\JL VWLYH[PUN JVZ[Z ;OL WLYPVK HM[LY 4HYJO ^HZ ]LY` KPÉ&#x2030;J\S[ >P[O [OL OLSW VM [OL )VHYK and our employees, KPMG is WLYMVYTPUN ZH[PZMHJ[VYPS` HUK [OYV\NO P[Z ZVJPHS YLZWVUZPIPSP[` WYVNYHTTL PZ HSZV OLSWPUN SVJHS JVTT\UP[PLZ 6\Y WSHU MVY [OL JVTPUN `LHYZ PZ to develop existing services and PU]LZ[ PU UL^ SPULZ VM ZLY]PJLZ PU YLZWVUZL [V [OL ULLKZ VM [OL THYRL[ 0U ^L \UKLY[VVR ZPNUPÃ&#x201E;JHU[ WYVQLJ[Z YLSH[PUN [V [OL Ã&#x201E;UHUJPHS ZLJ[VY >L OH]L H M\SS` VWLYH[PVUHS KLWHY[TLU[ MVY -(; *( HUK MVY [OL PUZVS]LUJ` MYHTL ^VYR ZV HZ [V IL HISL [V YLZWVUK X\PJRS` [V WV[LU[PHS JSPLU[Z We would assume that domestic advisory services are on the rise, as many Cypriot companies seek advice on M&As, corporate restructurings, etc. 7SLHZL JVTTLU[ VU `V\Y Ã&#x201E;YTÂ»Z expertise and potential in this area. 274. VÉ&#x2C6;LYZ H ^PKL YHUNL VM HK]PZVY` ZLY]PJLZ ÔPJO ^LYL KL]LSVWLK WYPVY [V [OL J\YYLU[ NYV^PUN KLTHUK 6\Y (K]PZVY` KLWHY[TLU[ OHZ NYVÛ ZPNUPÃ&#x201E; JHU[S` V]LY [OL SHZ[ ML^ `LHYZ ;OL ZLY]PJLZ VÉ&#x2C6;LYLK YHUNL MYVT internal audit, risk & compliance services to transactions and YLZ[Y\J[\YPUN Ã&#x201E;UHUJPHS YPZR THU HNLTLU[ HZ ^LSS HZ WLYMVYTHUJL HUK [LJOUVSVN` >L \UKLY[HRL THYRL[ HUK Ã&#x201E;UHUJPHS MLHZPIPS P[` Z[\KPLZ Z\JO HZ Z[YH[LNPJ market assessment and com WYLOLUZP]L Ã&#x201E;UHUJPHS HUHS`ZPZ to assess potential investment YL[\YUZ MVY KPÉ&#x2C6;LYLU[ WYVQLJ[Z PU KPÉ&#x2C6;LYLU[ [HYNL[ THYRL[Z 4VYL V]LY ^L VÉ&#x2C6;LY ]HS\H[PVU ZLY]PJLZ and deal structuring services, WYVQLJ[ JVUJLW[\HSPaH[PVU HUK investment planning, as well as WYVQLJ[ THUHNLTLU[ HUK I\ZP ULZZ WSHUZ

A WORLD LEADER OF THE ACCOUNTANCY AND FINANCE PROFESSION N THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

Gold 39

COVER STORY

RSM CYPRUS LTD

23.

RSM Cyprus is a member of RSM International, ranked as the 7th largest network of independent accounting and consulting firms worldwide with more than 700 offices in 104 countries. The Nicosia-based firm provides audit, tax and consultancy services to private and public enterprises with local and international orientation requiring the complete spectrum of services provided by Certified Public Accountants and Business Consultants. RSM Cyprus also has offices in Greece (Athens, Thessaloniki) and Albania (Tirana). NUMBER OF EMPLOYEES (IN CYPRUS, GREECE AND ALBANIA): 36 MANAGING DIRECTOR: Athos Stylianou NUMBER OF PARTNERS/ BOARD MEMBERS: 1 HEAD OFFICE: Kennedy Business Center 12-14 Kennedy Ave (Office 505) 1087 Nicosia TEL: (+357) 22751140 FAX: (+357) 22751145 E-MAIL: info@rsmi.com.cy WEBSITE:www.rsmi.com.cy

UHY ANTONIS KASSAPIS LTD

24.

Established in 1991 and based in Nicosia, it is the Cyprus member firm of UHY International, the worldwide association of independent accounting and consulting firms. It provides services that include auditing, accounting and bookkeeping, taxation, international tax planning, management consultancy, investment advice, VAT preparation & submission, preparation of budgets, cash flow forecasts and other specialist services, including international and offshore business consultancy and a full range of corporate and fiduciary services. NUMBER OF EMPLOYEES: 35 MANAGING DIRECTOR: Antonis Kassapis NUMBER OF PARTNERS: 3 HEAD OFFICE: Frigogel Building, 89, Kennedy Ave., Office 201, 1077 Nicosia

TEL: (+357) 22379210 FAX: (+357) 22379212 E-MAIL: info@uhy.com.cy WEBSITE: www.uhy.com.cy

ALLIOTT PARTELLAS KILIARIS

25.

The firm, which was founded in 1994, is the Cyprus member firm of the Alliott Group, a worldwide alliance of accountants, auditors, tax consultants and lawyers, represented in more than 70 countries by 160 member firms. Its range of services includes company registrations and administration, bookkeeping, tax advice and international tax planning, and auditing. Based in Nicosia, it caters to the needs of clients around the world through its Alliott Group membership. NUMBER OF EMPLOYEES: 30 MANAGING DIRECTOR: Antonis Partellas NUMBER OF PARTNERS: 2 HEAD OFFICE: 77, Strovolos Ave., Strovolos Center, Office 201, 2018 Strovolos, Nicosia TEL: (+357) 22875111 FAX: (357) 22765611 E-MAIL: info@pkcy.com WEBSITE: www.pkcy.com

YIALLOURIDES & PARTNERS LTD, CHARTERED ACCOUNTANTS

26.

Since its establishment in 1999, the firm has experienced solid growth, thanks to the comprehensive and practical solutions it offers. Working in association with a broad network of international accounting, legal and consultancy firms, it is thus able to provide professional assistance and consulta-

40 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

tion to companies and organisations in all key business locations worldwide. Its clients range from small businesses to large public companies in various economic sectors, both local and international. The Company is a member of the Institute of Chartered Accountants of England and Wales (ICAEW) and of the Institute of Certified Public Accountants of Cyprus (ICPAC). NUMBER OF EMPLOYEES: 30 MANAGING DIRECTOR: George Yiallourides NUMBER OF DIRECTORS: 3 HEAD OFFICE: 4, Sotiri Tofini St., Audeh Headquarters, Offices 102 & 103, 4102 Limassol TEL: (+357) 25443132 FAX: (+357) 25878948 E-MAIL: info@ayca.com.cy WEBSITE: www.ayca.com.cy

D. MARINOU & CO AUDITORSACCOUNTANTS

27.

The well-established, medium size Larnaca-based accounting firm offers a comprehensive range of professional services including accounting, audit, tax, management, consultancy and financial advisory services to a wide range of companies and individuals. Its clients are public and private businesses operating across a wide range of markets both locally and internationally. It is an ACCA accredited training firm and is committed to the provision of high-quality services to all clients and associates. NUMBER OF EMPLOYEES: 27 MANAGING DIRECTORS: Demetris Marinou NUMBER OF PARTNERS: 4 HEAD OFFICE: 81, Grivas Dighenis Ave., 1st & 2nd floor, 6043 Larnaca TEL: (+357) 24663400 FAX: (+357) 24663409 E-MAIL: marinoud@cytanet.com.cy

AUDITPRO SERVICES LTD

28.

The Nicosia- and Larnacabased firm, which is also a member of GMN International, has been in business for more than 20 years and supports clients in creating the value they are looking for by building relationships founded on trust and providing solutions based on quality.The firm offers a full range of services, including audit & assurance, accounting, corporate & tax compliance, as well as business and tax consulting. NUMBER OF EMPLOYEES: 26 MANAGING DIRECTORS: Michael LarkosPanayiotis Kolokotronis NUMBER OF PARTNERS: 3 HEAD OFFICE: 1, 28th October Avenue, Engomi Business Centre, Block B, Office 104, 2414 Engomi, Nicosia TEL: (+357) 22444000 FAX: (+357) 22591922 E-MAIL: info@auditproservices.com WEBSITE: www.auditproservices.com

DINOS ANTONIOU & CO LTD

E-MAIL: office@dfkcy.com WEBSITE: www.dfkcy.com

30.

This Limassol-based firm offers a comprehensive range of professional services including audit, tax, investment appraisal and consultancy services to a significant number of local and international businesses. Established in 1994, it has expanded locally and to EU and Eastern European countries. The firm’s high-calibre team of auditors and experienced personnel offers high-quality professional services and tailor-made solutions that meet the most complicated of clients’ needs. It is a member of TCS Global. NUMBER OF EMPLOYEES: 25 MANAGING DIRECTOR: Marios Efthymiou NUMBER OF DIRECTORS: 3 ASSURANCE DIRECTOR: Tasos Anastasiou Tax Director: Maria Spyrou HEAD OFFICE: 9, Vassilis Michaelides St., Limassol TEL: (+357) 25824545 FAX: (+357) 25824060 E-MAIL: marios@dinoscpa.com WEBSITE: www.dinoscpa.com

COSTAS TSIELEPIS & CO

29.

The Limassol-based chartered accountancy firm offers a comprehensive range of professional services including audit, tax and business consultancy. Its clients are public and private businesses operating across a wide range of markets both locally and internationally. Drawing from over 35 years of experience and knowledge, the firm prides itself on offering its diverse clientele personal, confidential and professional services. NUMBER OF EMPLOYEES (IN CYPRUS): 25 MANAGING DIRECTOR: George Tsielepis NUMBER OF PARTNERS/BOARD MEMBERS: 4 HEAD OFFICE: 205, 28th October Str., Louloupis Court, 1st floor, 3035 Limassol TEL: (+357) 25871000 FAX: (+357) 25373737 E-MAIL: info@tsielepis.com.cy WEBSITE: www.tsielepis.com.cy

DFK DEMETRIOU TRAPEZARIS LTD

31.

Established in 1992, this medium-sized accounting firm offers high-quality services to local and international clients. In addition to its Nicosia office, it also has a presence in Bucharest, Romania. The firm is a member of DFK International, one of the world’s leading associations of independent accounting firms and business advisors which brings together strong national firms of public accountants to enable them to provide services of the highest professional standards to their clients. Demetris Demetriou, partner and co-founder of the firm, is currently serving as president of DFK International. NUMBER OF EMPLOYEES: 22 MANAGING DIRECTOR: Demetris Demetriou NUMBER OF PARTNERS: 3 HEAD OFFICE: 59-61, Acropolis Ave., Office 202, 2012 Nicosia TEL: (+357) 22879300 FAX: (+357) 22491375

MICHALIS AVRAAM & PARTNERS LTD

32.

Established in 1996, this public practice firm of accountants and business consultants specialises in the provision of audit, tax, insolvency, restructuring and business dispute resolution services to a wide range of businesses, including government, non-profit organisations and owner-managed clients (public and private companies, sole traders, partnerships) in the local and international markets. Clients operate across a range of industries including financial services, general and retail trade, services companies, shipping and transport, tourism and manufacturing. NUMBER OF EMPLOYEES (IN CYPRUS): 21 MANAGING DIRECTOR: Michalis Avraam BOARD MEMBERS: 2 HEAD OFFICE: 8, Dighenis Akritas Avenue Office 403, 1045 Nicosia TEL: (+357) 22346080 FAX: (+357) 22346020 E-MAIL: info@amicha.com WEBSITE: www.amicha.com

APPLYING A HANDS-ON APPROACH IN SATISFYING ITS CLIENTS’ NEEDS AS WELL AS CONTINUOUSLY ADDING VALUE THROUGH THE DELIVERY OF TOP TIER PROFESSIONAL SERVICES

A WORLD LEADER OF THE ACCOUNTANCY AND FINANCE PROFESSION N THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

Gold 41

COVER STORY

VIEW FROM THE TOP

CHRISTIS M. CHRISTOFOROU, CEO, DELOITTE How would you describe the present state of the Cyprus economy? What are your predictions regarding GDP growth in 2015-2016? What are the other main structural problems of the economy and how can they can be solved? 0[ PZ H MHJ[ [OH[ H NYLH[ KLHS OHZ ILLU HJOPL]LK ZPUJL [OL [PTL VM [OL ,\YVNYV\W»Z KLJP ZPVU PU 4HYJO \U[PS UV^ 4LHZ\YLZ HUK PUP[PH[P]LZ OH]L ILLU [HRLU HUK THU` SLN PZSH[P]L JOHUNLZ OH]L ILLU PTWSLTLU[LK (SS VM [OLZL OH]L JVU[YPI\[LK [V [OL Z\IZ[HU[PHS PTWYV]LTLU[ [V [OL JV\U[Y`»Z W\ISPJ ÄUHUJLZ ;VKH` [OL ÄZ JHS KLÄJP[ PZ SLZZ [OHU VM .+7 HUK [OL W\ISPJ KLI[ ILSV^ VM .+7 ;OLZL PUKPJH[VYZ HYL UV^ THUHNLHISL ^OPJO TLHUZ [OH[ ^L OH]L Z\JJLLKLK PU JVUZVSPKH[PUN [OL ÄZJHS ZP[\ H[PVU 5VUL[OLSLZZ KLZWP[L [OPZ ÄZ JHS PTWYV]LTLU[ ^L OH]L UV[ seen corresponding results PU [OL YLHS LJVUVT` ^OPJO PZ JOHYHJ[LYPZLK I` \ULTWSV` TLU[ VM H SHJR VM SPX\PKP[` OPNO PU[LYLZ[ YH[LZ [OL THPU [LUHUJL VM OPNO SL]LSZ VM UVU WLYMVYTPUN SVHUZ HZ ^LSS HZ VM I\ZPULZZ HUK OV\ZLOVSK KLI[ YLK\JLK LU[YLWYLUL\YZOPW SLZZ JVTWL[P[P]LULZZ L[J 0U V\Y ]PL^ [OL LTWOHZPZ ZOV\SK UV^

IL WSHJLK VU YLZVS]PUN [OLZL WYVISLTZ VM [OL YLHS LJVUVT` HUK PTWSLTLU[PUN [OL YLX\PYLK YLMVYTZ ;OL Z[H[L VM [OL LJVU VT` PU HUK IL`VUK ^PSS [O\Z KLWLUK VU V\Y HIPSP[` [V YLZVS]L [OL WYVISLTZ VM [OL YLHS LJVUVT` ;OL VUS` ^H` [V KLHS ^P[O [OLZL WYVISLTZ PZ [OYV\NO YL[\YUPUN [OL LJVUVT` [V NYV^[O -VY [OPZ [V OHWWLU ^L ULLK [V WYVJLLK YHWPKS` ^P[O ZWLJPÄJ HJ[PVUZ HUK PUP[PH[P]LZ JVUJLYUPUN [OL PTWSLTLU[H[PVU VM THQVY HUK ZPNUPÄJHU[ PUMYH Z[Y\J[\YL WYVQLJ[Z [OL H[[YHJ [PVU VM MVYLPNU PU]LZ[TLU[Z HUK [OL WYVTV[PVU VM YLMVYTZ HUK Z[Y\J[\YHS JOHUNLZ HJYVZZ [OL LU[PYL LJVUVTPJ ZWLJ[Y\T Which sectors of the economy are, in your opinion, the most resilient and therefore the most likely to see growth in the next two years? 6U [OL IHZPZ VM [OL PUKPJH[VYZ ^L OH]L [VKH` ^L L_WLJ[ WVZP [P]L NYV^[O PU [OL ZLJ[VYZ VM [V\YPZT WYVMLZZPVUHS ZLY]PJLZ exports and in certain areas YLSH[LK [V [OLZL ZLJ[VYZ ;OLYL YLTHPUZ H X\LZ[PVU THYR V]LY [OL KPYLJ[PVU [OH[ YLHS LZ[H[L TH` [HRL NP]LU [OL ZOHYW MHSS P[ OHZ L_WLYPLUJLK PU YLJLU[ `LHYZ ^OPSL [OL WYPTHY` HUK ZLJVUKHY` ZLJ[VYZ VM [OL economy are expected to move WVZP[P]LS`

42 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

What are the main challenges facing the professional services sector and, in particular, services to international investors and High Net Worth Individuals. Can we expect growth in this important sector? +LZWP[L [OL LɈLJ[Z VM [OL ÄUHU

cial crisis, consultancy services JVU[PU\L [V THRL H ZPNUPÄJHU[ JVU[YPI\[PVU [V I\ZPULZZ HUK [V [OL JV\U[Y`»Z LJVUVT` 0[ PZ [Y\L [OH[ [OL SHZ[ [^V `LHYZ OH]L ILLU KPɉJ\S[ PU L]LY` HZWLJ[ ;OL THYRL[ PU ZLY]PJLZ [V SVJHS I\ZPULZZLZ ^HZ HUK remains under great pres Z\YL ;OL THYRL[ PU ZLY]PJLZ to international companies, KLZWP[L [OL WYLZZ\YL PZ ZOV^ PUN H YLZPSPLUJL [OH[ OHZ JVTL HZ H WSLHZHU[ Z\YWYPZL [V \Z 5VUL[OLSLZZ YPZR PU [OL ZLJ[VY YLTHPUZ L_[YLTLS` OPNO ^P[O [OL ZP[\H[PVU JHWHISL VM [HR PUN H [\YU MVY [OL ^VYZL H[ HU` TVTLU[ (Z YLNHYKZ [OL H[ [YHJ[PVU VM MVYLPNU PU]LZ[TLU[ [OL WPJ[\YL [OH[ ^L HYL NL[ [PUN MYVT V\Y JVU[HJ[Z PZ [OH[ Z[YVUN PU[LYLZ[ L_PZ[Z /V^L]LY [OL PTWSLTLU[H[PVU VM HU PU

]LZ[TLU[ YLX\PYLZ [PTL HUK JVUZ[HU[ LÉ&#x2C6;VY[Z ;OPZ PZ [OL Z[HNL H[ ^OPJO ^L J\YYLU[S` Ă&#x201E;UK V\YZLS]LZ P L WLYZ\HKPUN PU]LZ[VYZ [V WYVJLLK ^P[O [\YU PUN [OLPY PU]LZ[TLU[ PU[LYLZ[ PU[V ZVTL[OPUN TVYL [HUNPISL ( THQVY KL]LSVWTLU[ PU [OL YLZ[YPJ[PVU VU [OL TV]LTLU[ VM JHWP[HS HIYVHK VJJ\YYLK VU 4HYJO ;OL 4PUPZ[LY VM -PUHUJL YHPZLK [OL [OYLZOVSK [V Ă TPSSPVU WLY HJJV\U[ WLY TVU[O >OPSL [OPZ PZ H SPMLSPUL MVY 7LUZPVU M\UKZ HUK V[OLY PU]LZ [VYZ ^OV JHU UV^ PTWSLTLU[ investment policies, it also pro ]PKLZ MVY HU PUJYLHZL PU JVTMVY[ MVY PU[LYUH[PVUHS PU]LZ[VYZ [V YL \ZL *`WY\Z HZ H WSH[MVYT MVY -VYLPNU +PYLJ[ 0U]LZ[TLU[ -+0 (Z MVY [OL JVUZ\S[HUJ` Ă&#x201E;YTZ 0 JVUZPKLY [OH[ ^L OH]L HSS THKL JOHUNLZ HUK HKHW[LK V\Y HJ[P]P[PLZ PU Z\JO H ^H` HZ [V KLHS LÉ&#x2C6;LJ[P]LS` ^P[O [OL JOHS SLUNLZ IYV\NO[ HIV\[ I` [OL JYPZPZ Global trends regarding transparency and exchange of information, BEPS, etc. are changing the international tax landscape. Will Cyprus ILULĂ&#x201E;[ HZ H Q\YPZKPJ[PVU MYVT these changes? Can the country become an impor-

On the basis of the indicators we have today, we expect positive growth in the sectors of tourism, professional services, exports and in certain areas related to these sectors

[HU[ Z\IZ[HUJL Q\YPZKPJ[PVU in which international comWHUPLZ ZL[ \WM\SS` Ă&#x2026;LKNLK VÉ&#x2030;JLZ& *`WY\Z OHZ HSS [OL WYLYLX\PZP[LZ [V ILJVTL [OL YLHS I\ZPULZZ JLU[YL [OH[ P[ KLZLY]LZ [V IL >P[O ULHYS` `LHYZ VM L_WLYP ence in serving international PU]LZ[VYZ [OL JV\U[Y` OHZ H KL]LSVWLK ZLY]PJLZ ZLJ[VY VM MLYPUN [VW X\HSP[` WYVMLZZPVUHS HUK Ă&#x201E;UHUJPHS ZLY]PJLZ ^P[O HU LZ[HISPZOLK PUMYHZ[Y\J[\YL [OH[ THRLZ *`WY\Z HU PU]LZ[VY MYPLUKS` SVJH[PVU MVY ZL[[PUN \W M\SS` Ă&#x2026;LKNLK VÉ&#x2030;JLZ ^P[O ZPNUPĂ&#x201E;JHU[ Z\IZ[HUJL -\Y[OLY TVYL *`WY\Z OHZ UV ZOVY[ HNL VM OPNO X\HSP[` LK\JH[LK WYVMLZZPVUHSZ ^OV JHU WSH` HU PTWVY[HU[ YVSL PU [OLZL ZL[ \WZ HUK PU [OL KL]LSVWTLU[ VM H I\ZPULZZ MYPLUKS` LU]PYVUTLU[ [V Z\WWVY[ [OL KH` [V KH` YL X\PYLTLU[Z VM Z\JO VWLYH[PVUZ 0U HKKP[PVU *`WY\Z LUQV`Z KH`Z VM Z\UZOPUL H `LHY H OPNO Z[HUKHYK VM SP]PUN PU[LYUH[PVUHS ZJOVVSZ HUK V[OLY MHJ[VYZ [OH[ WSH` HU PTWVY[HU[ YVSL PU [OL KLJPZPVU VM [VW L_LJ\[P]LZ [V YLSVJH[L [V *`WY\Z ;OLYLMVYL [V HUZ^LY `V\Y X\LZ[PVUZ! @LZ 0 [Y\S` ILSPL]L [OH[ *`WY\Z ^PSS ILULĂ&#x201E;[ MYVT [OL NSVIHS JOHUNLZ HUK `LZ *`WY\Z JHU ILJVTL HU PTWVY[HU[ Z\IZ[HUJL Q\YPZ KPJ[PVU MVY PU[LYUH[PVUHS JVT WHUPLZ [V ZL[ \W M\SS` Ă&#x2026;LKNLK VÉ&#x2030;JLZ Âś ^L Q\Z[ ULLK [V THRL Z\YL ^L WH]L [OL ^H` I` LUZ\YPUN [OL YPNO[ SLNPZSH[P]L provisions and administrative WYHJ[PJLZ Gold magazine is of the view that Cyprusâ&#x20AC;&#x2122; services to international investors are too dependent on Russian and Ukrainian business and that we should be looking to develop new geographical and sectoral markets. Do you agree with this opinion and, if so, what new

markets should the country be seeking to develop? 0[ HWWLHYZ MYVT [OL KH[H VM [OL 9LNPZ[YHY VM *VTWHUPLZ [OH[ interest in registering new com WHUPLZ PU *`WY\Z YLTHPUZ OPNO 0YYLZWLJ[P]L VM ZTHSS TVU[OS` Ă&#x2026;\J[\H[PVUZ [OL [YLUK PZ WVZP [P]L HUK [OPZ ZOV^Z JVUĂ&#x201E;KLUJL PU [OL *`WY\Z LJVUVT` (Z 0 OH]L HSYLHK` UV[LK OV^L]LY [OL ZP[\H[PVU YLTHPUZ PU Ă&#x2026;\_ ;OL 9\ZZPH <RYHPUL JVUĂ&#x2026;PJ[ ,< ZHUJ[PVUZ HNHPUZ[ 9\ZZPH HUK 7YLZPKLU[ 7\[PUÂťZ YLHJ [PVU ^P[O KL VÉ&#x2C6;ZOVYPZH[PVU HYL YLHZVUZ LUV\NO [V WYL]LU[ \Z MYVT ILPUN JVTWSHJLU[ HUK H[ [OL ZHTL [PTL [V LUJV\YHNL \Z [V SVVR [V V[OLY THYRL[Z Z\JO HZ *OPUH [OL 4PKKSL ,HZ[ HUK LSZLÔLYL Are you happy with the performance and results of Deloitte for 2014? What are your Ă&#x201E;YTÂťZ WSHUZ MVY & 0U V\Y Ă&#x201E;YT HJOPL]LK TVYL [OHU YLZWLJ[HISL NYV^[O ÔPJO PZ HU LZWLJPHSS` WSLHZPUN YLZ\S[ NP]LU [OL LJVUVTPJ HUK competitive circumstances in ÔPJO ^L VWLYH[L HUK H ]HS\ HISL PUKPJH[VY VM V\Y M\[\YL ;OL [PTLZ HOLHK ÔPSZ[ THYYLK ^P[O \UJLY[HPU[` SVVR M\SS VM WYVTPZL MVY +LSVP[[L HUK [OPZ 0 H[[YPI\[L to our willingness to adapt, PU]LZ[ HUK SLHYU ÔPSZ[ ZPT\S[H ULV\ZS` WYHJ[PJPUN V\Y ZOHYLK ]HS\LZ PU JVTIPUH[PVU ^P[O V\Y T\S[P KPZJPWSPUHY` HWWYVHJO HUK ZLY]PJL KPÉ&#x2C6;LYLU[PH[PVU 6\Y WSHUZ MVY [OL M\[\YL HYL YVV[LK PU +LSVP[[LÂťZ NSVIHS Z[YH[LN` HUK V\Y NSVIHS ]PZPVU [V ILJVTL [OL Â¸<UKPZW\[LK leader in service provisionâ&#x20AC;?, [OL Â¸Ă&#x201E;YZ[ JOVPJL VM [OL TVZ[ ZV\NO[ HM[LY JSPLU[Z HUK [HSLU[Âš MHTV\Z MVY [OL JHSPIYL VM V\Y WLVWSL HUK YLZWLJ[LK MVY [OL L_JLW[PVUHS X\HSP[` VM V\Y ^VYR 6\Y Â¸(Z 6ULÂš Z[YH[LN` ^P[O MVJ\ZLK HUK [HYNL[LK THYRL[ PU]LZ[TLU[ ^PSS OLSW \Z ZLJ\YL

HUK ^PKLU V\Y SLHKLYZOPW WVZP [PVU PU V\Y THYRL[ (SS [OLZL strategies guarantee respon ZPISL THUHNLHISL HUK Z\Z[HPU HISL NYV^[O MVY V\Y Ă&#x201E;YT We would assume that domestic advisory services are on the rise, as many Cypriot companies seek advice on M&As, corporate restructurings, etc. Please comment VU `V\Y Ă&#x201E;YTÂťZ L_WLY[PZL HUK potential in this area. 3H[LS` K\L [V [OL Ă&#x201E;UHUJPHS JYPZPZ HUK [OL OPNO SL]LYHNL VM THU` I\ZPULZZLZ PUKP]PK\HSZ ^L OH]L PUKLLK ^P[ULZZLK HU increase in M&A or corporate YLZ[Y\J[\YPUN HJ[P]P[` 6U [OL 4 ( MYVU[ ^L HJ[ LP[OLY MVY [OL I\`LY VY [OL ZLSSLY -VY [OL I\` LY I\` ZPKL ZLY]PJLZ ^L VÉ&#x2C6;LY H [HYNL[ ZJYLLUPUN HWWYVHJO Ă&#x201E;UHUJPHS TVKLSSPUN HUK I\ZP ness valuation, due diligence YL]PL^Z Ă&#x201E;UHUJPHS YLZ[Y\J[\YPUN ULNV[PH[PVU Z\WWVY[ YL]PL^ VM :HSL 7\YJOHZL (NYLLTLU[Z HUK WVZ[ TLYNLY PU[LNYH[PVU ZLY]PJLZ -VY [OL ZLSSLY ZLSS ZPKL ZLY]PJLZ ^L VÉ&#x2C6;LY ]LUKVY K\L KPSPNLUJL Ă&#x201E;UHUJPHS HUK [H_ PUMVYTH[PVU TLTVYHUK\T L[J KLHS THY keting and structuring,support during negotiations and trans HJ[PVU JSVZPUN Z\WWVY[ -VY JVYWVYH[L YLZ[Y\J[\YPUN ^L OH]L ILLU LUNHNLK I` LP[OLY IHURZ VY [OLPY JSPLU[Z KPYLJ[S` VY IV[O [V WLYMVYT PUKLWLUKLU[ I\ZPULZZ YL]PL^Z VM [OL [YV\ISLK I\ZPULZZLZ JVTWHUPLZ ^P[O H ]PL^ [V HZZPZ[PUN [OL SLUKLY HUK [OL JSPLU[ [V Ă&#x201E;UK H ]PHISL YLZ[Y\J[\YPUN WYVWVZP[PVU 6\Y ZLY]PJLZ PU]VS]L [OL WYLWHYH[PVU VM ZWLJPHSPZLK Z[\KPLZ YLWVY[Z [OH[ NLULYH[L [YHUZWHYLUJ` HIV\[ [OL JVTWHU`ÂťZ I\ZPULZZ WSHU P[Z J\YYLU[ WLYMVYTHUJL HUK SPX\PKP[` Z[H[\Z YLZ[Y\J[\Y PUN TLHZ\YLZ HUK P[Z HIPSP[` [V YLJV]LY Z\Z[HPUHISL WYVĂ&#x201E;[HIPSP[` HUK SPX\PKP[`

A WORLD LEADER OF THE ACCOUNTANCY AND FINANCE PROFESSION N THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

Gold 43

COVER STORY

DELIVERING A SEAMLESS SERVICE AND ON TRAINING YOUNGER PERSONNEL THROUGH A STRUCTURED PROGRAMME

REANDA CYPRUS LIMITED

33.

Reanda Cyprus Limited is the Cyprus member firm of Reanda International, a leading international network of independent accounting and consulting firms based in Asia. The firm’s services include statutory audit, tax, corporate & financial advisory, internal audit, business valuations and restructurings. The core objective of the firm is to apply a hands-on approach in satisfying its clients’ needs as well as to continuously add value through the delivery of top tier professional services. NUMBER OF EMPLOYEES (IN CYPRUS): 20 MANAGING DIRECTORS: See below NUMBER OF PARTNERS/BOARD MEMBERS: 3 (Adonis Theocharides, Charilaos Hadjiioannou, Phivos Theocharides) HEAD OFFICE: Eirini Tower, 27, Evagorou St., 6th Floor, Office 61, 1066 Nicosia TEL: (+357) 22670680 FAX: (+357) 22670681 E-MAIL: info@reandacyprus.com WEBSITE: www.reandacyprus.com

KPSA

34.

KPSA Chartered Accountants is a professional and independent firm that is committed to delivering an expert and professional service by blending technical, practical and business expertise to each engagement. The ethos of the firm

is to maintain strong relationships with clients, treating them as unique, and to provide them with technically strong advice within a timely timeframe. NUMBER OF EMPLOYEES: 19 MANAGING DIRECTOR: Nicos Kastellanis NUMBER OF PARTNERS: 3 HEAD OFFICE: 15, Themistocles Dervis St., 1st floor, 1066 Nicosia TEL: (+357) 22445500 FAX: (+357) 22672000 E-MAIL: info@kpsa.com.cy WEBSITE: www.kpsa.com.cy

NUMBER OF EMPLOYEES (IN CYPRUS): 18 MANAGING DIRECTOR: Nicholas Shiakallis NUMBER OF PARTNERS/BOARD MEMBERS: 1 HEAD OFFICE: 8, Katsoni Street, 1st Floor, Agioi Omologites, 1082 Nicosia TEL: (+357) 22319990 FAX: (+357) 22813826 E-MAIL: info@shiakallis.com WEBSITE: www.shiakallis.com

KRESTON PROIOS PAPAKYRIACOU & PARTNERS LTD

35.

Founded in 1993, this Nicosia-based firm of Chartered Certified Accountants, with corresponding offices in Athens, offers quality professional services to the business community. Its stated mission is to offer a real alternative to the large traditional accounting firms by providing a dynamic, progressive, partner-led approach to accounting practices and business services. NUMBER OF EMPLOYEES (IN CYPRUS): 18 MANAGING DIRECTOR: Sozos Papakyriacou NUMBER OF PARTNERS/BOARD MEMBERS: 2 HEAD OFFICE: 28, Sofoulli St., Chanteclair Building, Office 406, 1096 Nicosia TEL: (+357) 22676660 FAX: (+357) 22664311 E-MAIL: info@papaky.com.cy WEBSITE: www.papaky.com.cy

SHIAKALLIS & CO AUDIT SERVICES LTD

36.

This growing, reputable firm of accountants, established in 2000, offers professional audit, accounting, tax, business consultancy and international business management services to a broad range of companies registered in Cyprus, of local and foreign interests.

37.

The firm has been offering auditing, accounting, taxation and consultancy services to a range of local and international clients since 1965. It is a member of Kreston International Ltd., currently the 13th largest network of independent accounting firms in the world, a member of the Forum of Firms, with offices in 100 countries manned by over 20,000 professional and support staff. NUMBER OF EMPLOYEES (IN CYPRUS): 15 MANAGING DIRECTOR: Nicos Drymiotis NUMBER OF PARTNERS/BOARD MEMBERS: 1 HEAD OFFICE: Corner of Nikis Ave. & Kastoros St., 2080 Nicosia TEL: (+357) 22490094, FAX: (+357) 22490494 E-MAIL: info@krestonproios.com WEBSITE: http://krestonproios.com

KYRIAKIDES, SAVVIDES & ASSOCIATES LTD

38.

This fast growing, reputable firm of accountants provides professional audit, accounting, tax, business consultancy and international business management services to a broad range of local and international clients. The firm has experienced one of the highest growth rates in the sector thanks to the extensive range of high-quality, tailor-made professional services it offers to its clients. NUMBER OF EMPLOYEES: 14 MANAGING DIRECTOR: Elias Kyriakides NUMBER OF PARTNERS: 2 HEAD OFFICE: 5, Spatharikou St., 4004 Mesa Geitonia, Limassol

TEL: (+357) 25343477 FAX: (+357) 25343484 E-MAIL: ksa.pre@ksa.com.cy WEBSITE: www.ksapre.com

E-MAIL: info@euroaudit.com.cy WEBSITE: www.euroaudit.com.cy

43.

M. PAPADAKIS & CO A CHRYSANTHOU & CO. LTD

39.

An award-winning independent firm of Cyprus accountants and auditors, it was set up in 1980 and has an impressive track record of servicing both family-owned businesses and large corporations with cross-border operations and investments. The company’s aim is to provide clients with a personalised service of the highest quality. NUMBER OF EMPLOYEES: 12 MANAGING DIRECTOR: Anastasios Chrysanthou NUMBER OF PARTNERS: 2 HEAD OFFICE: 20, Vasilissis Friederikis St., El Greco House, 3rd Floor, 1066 Nicosia TEL: (+357) 22675900 FAX: (+357) 22670498 WEBSITE: www.acco.com.cy E-MAIL: info@acco.com.cy

G. C. EUROAUDIT

40.

This firm provides professional, technical, consulting and business services to clients in a wide range of industries. Passionately committed to delivering a service that is innovative, flexible and holistic, it recognises that every client’s needs are different. It promises that, wherever there is a commercial advantage to be gained for its clients, Euroaudit will find it. NUMBER OF EMPLOYEES: 12 MANAGING DIRECTOR: George Christou NUMBER OF PARTNERS: 2 HEAD OFFICE: Frosia House, 2nd Floor, Office 202, Corner of Evagorou & 1, Menandrou St., 1066 Nicosia TEL: (+357) 22667734 FAX: (+357) 22667175

A.G. GEORGHIOU LTD

41.

This firm of Certified Public Accountants, established in 1985, provides audit, accounting and tax advisory services to a large number of local and international clients, taking advantage of Cyprus’ favourable tax regime in order to maximize their worldwide profits. The firm’s internal controls and procedures ensure a high quality of service. NUMBER OF EMPLOYEES: 11 MANAGING DIRECTOR: Michael Papadakis NUMBER OF PARTNERS: 2 HEAD OFFICE: Maria House, 5th floor 1, Avlonos St., 1075 Nicosia TEL: (+357) 22100488 FAX: (+357) 22767543 E-MAIL: info@papadakis.com.cy WEBSITE: www.papadakis.com.cy

M. LOUCAIDES LTD

42.

The firm, which provides high-standard professional accounting services including auditing, financial management and consultancy, is one of the fastest-growing accounting and business advisory firms in Cyprus. The firm helps its clients meet their targets and it also provides specialized services such as corporate recovery and insolvency. NUMBER OF EMPLOYEES (IN CYPRUS): 11 MANAGING DIRECTOR: Marios Loucaides NUMBER OF PARTNERS/ BOARD MEMBERS: 1 HEAD OFFICE: 11, Grigoris Afxentiou St., Centro Imperio, 2nd floor, Mesa Geitonia, 4003 Limassol TEL: (+357) 25583253 FAX: (+357) 25584514 E-MAIL: info@mpl-loucaides.com WEBSITE: www.mpl-loucaides.com

This Nicosia-based firm of qualified accountants and auditors was founded in 1993. It specializes in setting up both local and International business companies in Cyprus, as well as providing all the necessary services for their smooth operation. It also provides international tax planning, intellectual property services, secretarial services, ship and shipping management, computerization and management consultancy services. NUMBER OF EMPLOYEES: 10 MANAGING DIRECTOR: George Georghiou NUMBER OF PARTNERS: 1 HEAD OFFICE: 16, Annis Komninis St., 1060 Nicosia TEL: (+357) 22769100 FAX: (+357) 22769101 E-MAIL: a.g.georghiou.co@cytanet.com.cy WEBSITE: www.aggeorghiou.com.cy

KYPRIANIDES, NICOLAOU & ECONOMIDES LTD

44.

Based in Limassol, the firm specialises in the provision of audit, accounting and tax services tocompanies and individuals. It offers a wide range of additional services to its large number of clients both in Limassol and abroad, including consulting services, company registrar services and international tax planning. The stated mission of the firm is to provide the best and most efficient advice and service to its clients. NUMBER OF EMPLOYEES: 10 MANAGING DIRECTOR: George Economides NUMBER OF PARTNERS: 2 HEAD OFFICE: 4, Evagoras Papachristoforou St., Themis Court, 3rd floor, Office 301, Limassol 3030 TEL: (+357) 25352802 FAX: (+357) 25360483 E-MAIL: info@kne.com.cy WEBSITE: www.kyprianides.com

A WORLD LEADER OF THE ACCOUNTANCY AND FINANCE PROFESSION N

COVER STORY

VIEW FROM THE TOP

ANDREAS DEMETRIOU, CEO, EY CYPRUS

How would you describe the present state of the Cyprus economy? What are your predictions regarding GDP growth in 2015-2016? (M[LY [OYLL `LHYZ VM YLJLZZPVU [OL *`WYPV[ LJVUVT` OHK HWWLHYLK on course to return to very mod LZ[ NYV^[O PU /V^L]LY [OL YLJV]LY` ^PSS UV^ SPRLS` IL KLMLYYLK \U[PS HZ [OL THPU KYP]LYZ VM NYV^[O Â¶ [V\YPZT HUK V[OLY ZLY]PJLZ Â¶ MHJL JVU[PU\PUN WYVISLTZ ^P[O [OL YLJLZZPVU PU 9\ZZPH HUK [OL YLZ[YHPU[ VU W\I

SPJ ZWLUKPUN PZ ^LPNOPUN VU [OL LJVUVT` (JJVYKPUN [V [OL SH[LZ[ EY Eurozone Forecast *`WY\Z ^PSS ZLL H JVU[YHJ[PVU VM PU HM[LY H MHSS SHZ[ `LHY ;OL L_WLJ[LK YLSH_H[PVU VM I\KNL[ WYLZZ\YLZ MYVT onwards will allow investment [V HJJLSLYH[L ([ [OL ZHTL [PTL L_WVY[Z HUK [V\YPZT ZOV\SK ILNPU [V ZOV^ Z[YVUNLY PTWYV]LTLU[ HZ L\YVaVUL KLTHUK WPJRZ \W Z[LHKPS` HUK [OL 9\ZZPHU LJVUV T` YL[\YUZ [V NYV^[O ;OLZL MHJ [VYZ ZOV\SK SLHK [V H MHSS PU \ULT

46 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

ployment and a rise in personal PUJVTL OLSWLK HSZV I` SV^LY M\LS prices, in turn leading to rising WYP]H[L JVUZ\TW[PVU (Z H YLZ\S[ .+7 NYV^[O MVYLJHZ[ H[ PU YPZPUN [V PU Which sectors of the economy are, in your opinion, the most resilient and therefore the most likely to see growth in the next two years? ;OL YLJLZZPVU ^HZ TPSKLY [OHU PUP[PHSS` MLHYLK THPUS` K\L [V [OL YLZPSPLUJL VM [OL NVVKZ HUK ZLY vices sector, particularly tourism, Ã&#x201E;UHUJPHS HUK I\ZPULZZ ZLY]PJLZ ;OL PZSHUKÂ»Z [V\YPZT PUK\Z[Y` PZ H THQVY JVU[YPI\[VY [V [OL LJVUVT` HJJV\U[PUN MVY VM .+7 PU /V^L]LY V\Y [V\YPZ[ WYVK\J[ ULLKZ [V IL \W graded so as to remain attractive HUK JVTWL[P[P]L ;OL JYLH[PVU VM an integrated casino resort will OLSW I\[ T\JO TVYL ULLKZ [V IL KVUL IV[O I` [OL WYP]H[L HUK [OL W\ISPJ ZLJ[VYZ PM [V\YPZT PZ [V HJOPL]L P[Z M\SS WV[LU[PHS -PUHUJPHS HUK I\ZPULZZ ZLY]PJLZ HUK ZOPWWPUN OH]L JVU[PU\LK [V NYV^ K\YPUN [OL YLJLZZPVU JHWP[HSPaPUN VU [OL THU` JVTWL[P [P]L HK]HU[HNLZ [OH[ ^L VÉ&#x2C6;LY [V PU[LYUH[PVUHS I\ZPULZZLZ )\[ ^L JHUUV[ KLWLUK VU [OLZL ZLJ[VYZ HSVUL (Z H JV\U[Y` ^L ULLK [V develop and implement a more Z\Z[HPUHISL LJVUVTPJ TVKLS VUL [OH[ LUJV\YHNLZ PUUV]H[PVU HUK LU[YLWYLUL\YZOPW HUK JHWP[HSPaLZ VU *`WY\ZÂ» THU` JVTWL[P[P]L HK vantages, including its educated ^VYRMVYJL ,< TLTILYZOPW HUK [OL [H_ HUK SLNHS YLNPTLZ -VY L_ ample, in addition to tourism and I\ZPULZZ ZLY]PJLZ *`WY\Z JHU IL H YLNPVUHS OLHS[O HUK LK\JH[PVU O\I HUK H ZPNUPÃ&#x201E;JHU[ YLNPVUHS WSH`LY PU [OL LULYN` ZLJ[VY Many observers believe that private sector debt (both corporate and domestic) is the biggest problem facing the economy and one reason why growth is likely to be small and slow to arrive. Do you share this view?

,_JLZZP]L IVYYV^PUN HUK [OL OPNO WYVWVY[PVU VM UVU WLYMVYTPUN SVHUZ YLTHPU H KYHN VU [OL LJVU VT` ;V HJOPL]L NYV^[O `V\ ULLK PU]LZ[TLU[ ;OL Ã&#x201E;ZJHS ZX\LLaL HNYLLK ^P[O [OL ;YVPRH HUK [OL WYLZZ\YLZ VU IHUR SPX\PKP[` HYL YLZ[YPJ[PUN PU]LZ[TLU[Z /V^L]LY H TVYL M\UKHTLU[HS PZZ\L PZ [OL SV^ JVUÃ&#x201E;KLUJL VM JVUZ\T LYZ PU]LZ[VYZ HZ H YLZ\S[ VM [OL WYVSVUNLK YLJLZZPVU [OL SVZZ VM HZZL[Z HUK [OL SHJR VM WYVNYLZZ PU ZVS]PUN [OL *`WY\Z 7YVISLT What are the other main structural problems of the economy and how can they be solved? ;OL NV]LYUTLU[ OHZ PUP[PH[LK JLY[HPU PTWVY[HU[ YLMVYTZ Z\JO HZ \UPM`PUN [OL YL]LU\L HKTPUPZ [YH[PVU HUK Z[YLUN[OLUPUN [H_ JVS SLJ[PVU LUOHUJPUN Ã&#x201E;ZJHS THUHNL TLU[ I` HSSV^PUN TLKP\T [LYT I\KNL[ MVYT\SH[PVU WLYMVYTHUJL IHZLK I\KNL[PUN HUK Ã&#x201E;ZJHS YPZR THUHNLTLU[ 0[ PZ HSZV L_WSVYPUN VWWVY[\UP[PLZ MVY [OL IL[[LY \[PSPaH [PVU VM Z[H[L V^ULK HZZL[Z >OPSL Ã&#x201E;ZJHS JVUZVSPKH[PVU ULLKZ [V JVU[PU\L [V LUZ\YL [OL Z\Z[HPU HIPSP[` VM W\ISPJ Ã&#x201E;UHUJLZ ^L HSZV ULLK Z[Y\J[\YHS YLMVYTZ [V WYV TV[L LJVUVTPJ NYV^[O ;OL W\ISPJ ZLJ[VY Z[PSS ^VYRZ ]LY` T\JO HZ P[ ^HZ KLZPNULK H ML^ KLJHKLZ HNV ;OLYL PZ [VV T\JO YLK [HWL PU NV]LYUTLU[ HUK [OL W\ISPJ MLLSZ [OH[ [OLYL PZ PULÉ&#x2030;JPLUJ` ^HZ[HNL HUK SHJR VM HJJV\U[HIPSP[` ;OL SLNHS Z`Z [LT PZ HSZV ]LY` ZSV^ :[Y\J[\YHS YLMVYTZ HYL ULLKLK [V PTWYV]L NV]LYUHUJL HUK [OL LÉ&#x2030;JPLUJ` VM NV]LYUTLU[ [OYV\NO TVKLYUPZH [PVU VM [OL HKTPUPZ[YH[PVU HUK Z`Z[LTZ HUK I` PTWSLTLU[PUN L NV]LYUTLU[ :[PT\SH[PUN LTWSV`TLU[ PZ HU \YNLU[ WYPVYP[` MVY L[OPJHS HUK LJVUVTPJ YLHZVUZ ( Z[HISL HUK I\ZPULZZ MYPLUKS` LU]PYVUTLU[ PZ likewise necessary to encourage IV[O SVJHS HUK MVYLPNU PU]LZ[TLU[ HUK [O\Z HJOPL]L Z\Z[HPUHISL NYV^[O What are the main challenges facing the professional ser-

vices sector and, in particular, services to international investors and High Net Worth Individuals (HNWIs). Can we expect growth in this important sector? *`WY\Z PZ HSYLHK` HU LZ[HISPZOLK I\ZPULZZ JLU[YL MVJ\ZLK VU WYV ]PKPUN WYVMLZZPVUHS ZLY]PJLZ HJ JV\U[PUN SLNHS HUK Ă&#x201E;K\JPHY` HZ ^LSS HZ IHURPUN ZLY]PJLZ [V JVY WVYH[PVUZ ^P[O T\S[P Q\YPZKPJ[PVUHS Z[Y\J[\YLZ /V^L]LY ^L HYL ^LSS ILOPUK JVTWL[P[P]L Q\YPZKPJ[PVUZ Z\JO HZ 3\_LTIV\YN 4HS[H HUK 0YLSHUK PU WYV]PKPUN ^LHS[O THU HNLTLU[ ZLY]PJLZ [V /5>0Z ;OL YLN\SH[VY` MYHTL^VYR MVY M\UKZ was only recently introduced and [OLYL PZ Z[PSS H SPTP[LK JOVPJL VM Ă&#x201E;UHUJPHS Ă&#x201E;YTZ ZWLJPHSPaPUN PU [OPZ ZLJ[VY >L ULLK [V JVUZPKLY ^H`Z VM THRPUN V\Y ZLY]PJLZ [V /5>0Z TVYL H[[YHJ[P]L I` SVVRPUN H[ [OL WYHJ[PJLZ VM V[OLY Q\YPZKPJ[PVUZ HUK X\PJRS` HKVW[PUN [OVZL RL` MLH[\YLZ [OH[ THRL [OLT Z\J JLZZM\S >L HSZV ULLK [V WYV]PKL PUJLU[P]LZ MVY M\UK THUHNLYZ [V TV]L [V HUK ^VYR PU *`WY\Z 0M ^L HJ[ KLJPZP]LS` HUK X\PJRS` 0 HT JVUĂ&#x201E;KLU[ [OH[ ZLY]PJLZ [V [OL M\UKZ ZLJ[VY HUK /5>0Z ^PSS WYV]L HZ Z\JJLZZM\S HZ [OL PU[LY UH[PVUHS I\ZPULZZ ZLY]PJLZ ZLJ[VY Global trends regarding transparency and exchange of information, BEPS, etc. are changing the international tax SHUKZJHWL >PSS *`WY\Z ILULĂ&#x201E;[ HZ H Q\YPZKPJ[PVU MYVT [OLZL changes? Can the country become an important substance Q\YPZKPJ[PVU PU ^OPJO PU[LYUHtional companies set up fullyĂ&#x2026;LKNLK VÉ&#x2030;JLZ& ;OL PU[LYUH[PVUHS [H_ SHUKZJHWL PZ JOHUNPUN PU H IPN ^H` >OPSL ZVTL ]PL^ [OL KL]LSVWTLU[Z PU PU[LYUH[PVUHS HUK ,\YVWLHU SLNPZSH[PVU PU [OL HYLHZ VM [H_ HUK [YHUZWHYLUJ` HZ H [OYLH[ ^L JVUZPKLY [OH[ [OL` HSZV WYLZLU[ an opportunity to improve our competitive position and make *`WY\Z HU L]LU TVYL PTWVY[HU[ PU[LYUH[PVUHS I\ZPULZZ JLU[YL

;H_ KL]LSVWTLU[Z HYL L_WLJ[LK [V IYPUN H YLK\J[PVU PU [OL U\T ILY VM Â¸IYHZZ WSH[LÂš JVTWHUPLZ PU *`WY\Z ^OPJO VWLYH[L [OYV\NO SVJHS Â¸UVTPULLZÂš 9LHS Z\IZ[HUJL PZ RL` MVY YL[HPUPUN [OL [H_ ILU LĂ&#x201E;[Z >L LUJV\YHNL V\Y JSPLU[Z [V ZL[ \W M\SS` Ă&#x2026;LKNLK VÉ&#x2030;JLZ PU *`WY\Z [HRPUN HK]HU[HNL VM [OL SV^LY JVZ[Z VM KVPUN I\ZPULZZ PU *`WY\Z 0[ PZ LZ[PTH[LK [OH[ VWLYH[PUN JVZ[Z HYL [OYLL [V Ă&#x201E;]L [PTLZ SV^LY PU *`WY\Z [OHU PU V\Y JVTWL[P[VYZ 5L[OLYSHUKZ 3\_LT IV\YN HUK :^P[aLYSHUK *`WY\Z JHU HUK ^PSS ILULĂ&#x201E;[ MYVT JOHUNLZ [V [OL PU[LYUH[PVUHS [H_ SHUKZJHWL PM ^L HYL IVSK LUV\NO [V SVVR H[ [OL SVUN [LYT HUK TV]L [V X\PJRS` PTWSLTLU[ [OL ULJLZ ZHY` JOHUNLZ PU V\Y [H_ HUK V[OLY SLNPZSH[PVU

[YLH[` UL[^VYR HUK [OLZL LÉ&#x2C6;VY[Z need to continue as tax costs HYL VUL VM [OL ZPNUPĂ&#x201E;JHU[ MHJ [VYZ JVUZPKLYLK I` PU[LYUH[PVUHS PU]LZ[VYZ ^OLU ZL[[PUN \W [OLPY PU[LYUH[PVUHS Z[Y\J[\YLZ /VWLM\SS` H KLHS ^PSS IL Z[Y\JR [OPZ `LHY ^P[O [OL 0UKPHU NV]LYU TLU[ V]LY [OL YLULNV[PH[PVU VM [OL KV\ISL [H_H[PVU [YLH[` ;OLYL PZ HSZV ZPNUPĂ&#x201E;JHU[ KLTHUK MYVT 0ZYHLSP I\ZPULZZLZ \ZPUN *`WY\Z HZ H WSH[MVYT MVY [OLPY JYVZZ IVYKLY VWLYH[PVUZ HUK OH]PUN H KV\ISL [H_ [YLH[` ^P[O 0ZYHLS ^PSS M\Y[OLY IVVZ[ I\ZPULZZ ^P[O [OH[ JV\U[Y` 0U HKKP[PVU [V UL^ NLVNYHWOPJHS ZLNTLU[Z ^L JVUZPKLY [OH[ [OLYL PZ ZPNUPĂ&#x201E;JHU[ WV[LU[PHS MVY NYV^[O PU ZLY]PJLZ [V [OL M\UKZ PUK\Z[Y` HUK [Y\Z[LL ZLY]PJLZ

Gold magazine is of the view that Cyprusâ&#x20AC;&#x2122; services to international investors are too dependent on Russian and Ukrainian business and that we should be looking to develop new geographical and sectoral markets. Do you agree with this opinion and, if so, what new markets should the country be seeking to develop? 0U]LZ[TLU[Z PU 9\ZZPH THPUS` HUK <RYHPUL [OYV\NO *`WY\Z ^LYL [OL IPNNLZ[ JVU[YPI\[VYZ [V [OL NYV^[O VM [OL WYVMLZZPVUHS I\ZPULZZ ZLY]PJLZ PUK\Z[Y` V]LY [OL WHZ[ `LHYZ ;OL ZSV^KV^U PU [OL 9\ZZPHU LJVUVT` HUK [OL Â¸KL VÉ&#x2C6;ZOVYPaH[PVUÂš KYP]L HYL L_WLJ[LK [V J\Y[HPS [OL NYV^[O VM I\ZPULZZ ^P[O 9\ZZPH 6\Y HPT ZOV\SK IL [V THPU[HPU V\Y SLHKLY ZOPW WVZP[PVU HZ [OL THPU WSH[MVYT MVY PU]LZ[TLU[ PU[V 9\ZZPH HUK LUJV\YHNL [OL ZL[[PUN \W VM SVJHS VÉ&#x2030;JLZ MVY [OL HJ[P]L THUHNL TLU[ VM [OLZL PU]LZ[TLU[Z HZ ^LSS HZ V[OLY I\ZPULZZ ]LU[\YLZ I` *0: PU]LZ[VYZ ;OL ZOPM[ PU NSVIHS LJVUVTPJ WV^LY HUK ^LHS[O TLHUZ [OH[ ^L ZOV\SK HSZV IL JVUZPKLYPUN UL^ THYRL[Z SPRL (MYPJH [OL 4PKKSL ,HZ[ HUK 3H[PU (TLYPJH ;OL .V]LYUTLU[ OHZ KVUL H NVVK QVI VM L_WHUKPUN [OL KV\ISL [H_

Are you happy with the performance and results of EY Cyprus for 2014? What are your Ă&#x201E;YTÂťZ WSHUZ MVY & 0U ^L SH\UJOLK [OL UL^ ,@ IYHUK HUK MVYT\SH[LK HTIP[PV\Z WSHUZ [V HJOPL]L THYRL[ SLHKPUN NYV^[O OH]L [OL ILZ[ IYHUK MVY L_JLW[PVUHS JSPLU[ ZLY]PJL HUK IL [OL LTWSV`LY VM JOVPJL 0U ^L L_WHUKLK V\Y I\ZP ness and transaction advisory ZLY]PJL JHWHIPSP[PLZ HUK [V[HS Z[HÉ&#x2C6; U\TILYZ PUJYLHZLK I` 0U 5V]LTILY ^L TV]LK PU[V H UL^ VÉ&#x2030;JL PU 5PJVZPH VÉ&#x2C6;LYPUN Z[H[L VM [OL HY[ MHJPSP[PLZ VÉ&#x2030;JL ZWHJL HUK LX\PWTLU[ 3HZ[ `LHY LUKLK ^P[O ]LY` ZH[PZMHJ[VY` YL Z\S[Z HUK 0 HT ]LY` WYV\K VM V\Y WLVWSLÂťZ LÉ&#x2C6;VY[Z ;OL UL_[ [^V `LHYZ ^PSS ZLL H [YHUZMVYTH[PVU VM [OL *`WYPV[ LJVUVT` HUK ^L HYL RLLU [V IL WHY[ VM [OL JOHUNL HUK JVU[YPI\[L [V I\PSKPUN H IL[[LY ^VYRPUN ^VYSK PU *`WY\Z >L JVU[PU\L [V W\YZ\L our strategic priorities, including JYLH[PUN OPNO WLYMVYTPUN [LHTZ HUK ^PUUPUN PU [OL THYRL[ ;OPZ ^PSS M\Y[OLY PTWYV]L V\Y IYHUK HUK market position and create more VWWVY[\UP[PLZ MVY HSS V\Y WLVWSL We would assume that domestic advisory services are on

Structural reforms are needed to improve governance and VJG GHĹŚEKGPE[ of government through modernisation of the administration and systems and by implementing e-government the rise, as many Cypriot companies seek advice on M&As, corporate restructurings, etc. 7SLHZL JVTTLU[ VU `V\Y Ă&#x201E;YTÂťZ expertise and potential in this area. ;OL YLJLZZPVU HUK IHURPUN JYPZPZ OH]L IYV\NO[ PUJYLHZLK KLTHUK MVY JVYWVYH[L VWLYH[PVUHS HUK KLI[ YLZ[Y\J[\YPUN ZLY]PJLZ 6\Y SVJHS ;YHUZHJ[PVU (K]PZVY` :LY ]PJLZ ;(: [LHT PUJS\KLZ L_WLY[Z PU ]HS\H[PVUZ HUK I\ZPULZZ TVK elling, due diligence, and restruc [\YPUN ZLY]PJLZ >L HSZV JHWP[HSPaL VU [OL L_WLY[PZL VM ,@ ;(: WYVMLZZPVUHSZ PU ,\YVWL ,@ÂťZ ;(: WYHJ[PJL ^HZ UHTLK [OL (JJV\U[HUJ` -PYT VM [OL @LHY PU ,\YVWL MVY [OL MV\Y[O [PTL PU Ă&#x201E;]L `LHYZ I` 4LYNLYTHYRL[ HU independent mergers and ac X\PZP[PVUZ PU[LSSPNLUJL HUK KH[H WYV]PKLY ;OL 4LYNLYTHYRL[ 4 ( (^HYKZ HYL [OL TVZ[ JV]L[LK HJJVSHKLZ PU [OL KLHS PUK\Z[Y` HJYVZZ ,\YVWL ,@ WYL]PV\ZS` ^VU [OL (JJV\U[HUJ` -PYT VM [OL @LHY H^HYK PU HUK ;(: OHZ HK]PZLK VU H U\T ILY VM PTWVY[HU[ HUK OPNO WYVĂ&#x201E;SL WYVQLJ[Z PU *`WY\Z 6\Y \UPX\L [Y\S` PU[LNYH[LK ,\YVWLHU Z[Y\J [\YL Âś HZ WHY[ VM H TVYL IYVHKS` PU[LNYH[LK NSVIHS I\ZPULZZ Âś LU HISLZ \Z [V KLSP]LY ZLHTSLZZ ZLY vice and strategic advice across IVYKLYZ ;O\Z ^L HYL HISL [V IYPUN [V V\Y SVJHS JSPLU[Z PUZPNO[Z MYVT SLHKPUN PU[LYUH[PVUHS L_WLY[Z [OL ILZ[ RUV^SLKNL HUK Z[YVUNLZ[ ZLJ[VY JVU[LU[

A WORLD LEADER OF THE ACCOUNTANCY AND FINANCE PROFESSION N THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

Gold 47

COVER STORY

H.N.NEO – AUDIT SERVICES LTD

45.

Established in Cyprus in 1975, it deals mainly with the auditing and accounting of small and medium size companies, partnerships and individuals. It provides a full range of professional services, in particular Audit & Assurance, Accounting & Book Keeping, Taxation, Management, Consulting and other related services to individual and corporate clients both locally and internationally. NUMBER OF EMPLOYEES: 10 MANAGING DIRECTOR: Hercules Neophytou, FCCA. NUMBER OF SHAREHOLDERS/BOARD MEMBERS: 2 HEAD OFFICE: Anexartisias & Kyriakou Matsi St., Roussos Limassol Tower, 8th Floor, 3040, Limassol P.O. Box 50181, P.C. 3601, Limassol TEL: (+357) 25353792 FAX: (+357) 25377205 E-MAIL: info@hnaudit.com WEBSITE: www.hnaudit.com

EKKESHIS & IERODIAKONOU

46.

A member of the Tax Representation Alliance (TRA), it is an independent provider of quality compliance, audit, tax and advisory services to a wide range of businesses, ranging from sole entrepreneurs to large multinational groups. NUMBER OF EMPLOYEES: 8 MANAGING DIRECTORS: Christos Ierodiakonou, Constantinos Ekkeshis NUMBER OF PARTNERS: 2 HEAD OFFICE: 39, Themistocles Dervis St., 1st floor, 1066 Nicosia, 1066 Nicosia TEL: (+357) 22466470 FAX: (+357) 22766470 E-MAIL: info@eicyprus.com WEBSITE: www.eicyprus.com,www. tax-representative-alliance.org

ANDERSEN BUSINESS AUDIT SERVICES LIMITED

47.

It provides a full range of assurance, taxation, accounting and consultancy services, all tailored to clients’ needs, and is committed to helping clients’ businesses reach their true potential and providing value adding services, exceeding compliance needs. Direct partner involvement throughout the delivery of all the firm’s services ensures attention and quality service. It specializes particularly in the Russian market. NUMBER OF EMPLOYEES: 6 MANAGING DIRECTOR: Christodoulos Aspromallis NUMBER OF BOARD MEMBERS: 1 (Christodoulos Aspromallis) OFFICE ADDRESS: Anexartisias & 3, Kyriakou Matsi St., Roussos Limassol Tower, 10th Floor, 3040, Limassol TELEPHONE: (+357) 25373635 FAX: (+357) 25373634 E-MAIL: info@andersenaudit.com WEBSITE: www.andersenaudit.com

PASTELLOPOULOU, KARLETTIDES LTD

48.

A firm committed to quality and customer care, it specialises in the provision of accounting, auditing, tax and consultancy services. The firm’s aim is to provide both local and international clients with the highest quality level and, at the same time, maintain its professional and business ethics. In November 2010, the firm was awarded the prestigious ACCA Quality Checked Award, confirming the firm’s commitment to quality. NUMBER OF EMPLOYEES: 5 MANAGING DIRECTORS: Maria Pastellopoulou NUMBER OF PARTNERS: 2 HEAD OFFICE: 39, Themistocles Dervis St., Office 504, 1066 Nicosia TEL: (+357) 22761670 FAX: (+357) 22768030 E-MAIL: info@pkcca.com.cy

48 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

YIASSEMIDES & CO

49.

The main services provided by the firm, established in 1990, include audit, taxation, business consulting and financial advisory. It also offers a host of specialised services to a wide range of corporations, partnerships, non-profit organisations and individuals, and is well-known for its expertise in the business issues and tax laws. NUMBER OF EMPLOYEES: 5 MANAGING DIRECTORS: Costas Yiassemides FCCA NUMBER OF PARTNERS: 2 HEAD OFFICE: 14, Costi Palama St., 2121 Aglandjia, Nicosia TEL: (+357) 99627851 FAX: (+357) 22260966 E-MAIL: info@yiassemides.com WEBSITE: www.yiassemides.com

A.A. XENOPHONTOS & ASSOCIATES LTD

50.

The firm was named Full Service Accountancy Firm of the Year in Cyprus by business magazines M&A Today in 2015, ACQ5 in 2014, Corporate INTL in 2014 and 2012, and Global Accountancy Experts in 2013. It offers accounting, auditing, tax planning and compliance services, financial studies (feasibility/viability studies, business plans), payroll services, VAT, trusteeship/nominee services and more. NUMBER OF EMPLOYEES: 2 MANAGING DIRECTOR: Andreas Xenophontos NUMBER OF PARTNERS: 1 HEAD OFFICE: 79, G. Kranidiotis Ave., 2nd Floor, Office 204, 2231 Latsia, Nicosia TEL: (+357) 70000066 FAX: (+357) 22483211 E-MAIL: info@xenophontos-associates. com WEBSITE: www.xenophontos-associates.com

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A WORLD LEADER OF THE ACCOUNTANCY AND FINANCE PROFESSION THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

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The modular structure of the ACA and flexible tuition options (classroom, distance, online) allow you to tailor your students’ training around your business needs. You can ensure students are not out of the office at busy times. Modules can be studied in any order, which means you can match what your students are learning to their area of work. Frequent exam sittings (computer-based for the six Certificate Level

Find out more at icaew.com/trainACA

modules) ly respected also enable and gives “Being amongst the first firms to be apultimate students a proved to provide ACA training in Cyprus, we flexibility strong founhave been very pleased with the calibre of for timing dation in our people holding and training towards the exams. all areas of ACA qualification and the excellent relationA new accounting, ship we have formed with the ICAEW over part-time finance and the years. ACA tuibusiness. “We consistently find that ICAEW Chartered tion proThe integratAccountants, due to the multi-faceted, gramme ed approach dynamic nature of the qualification, deliver the quality service levels required by both will also of the ACA our global and local clients. By speaking be availmeans stuthe right language, with the right levels of able from dents gain a personal and soft skills intertwined, our July 2015. combination professionals are globally mobile, with the Employof technical ability to help us to achieve our aspiration ers benefit knowledge, to be the undisputed leaders in service from our professional provision.” focus on skills and Janet Ioannou providing practical Director, Audit Services, Deloitte Ltd, greater flexexperience Cyprus ibility and throughout efficiency their trainthroughout ing. This the authorisation and review proapproach results in consistently cess. Authorisation is straightforhigh first-time pass rates and ward and free, with our dedicated equips our members with the business development team on skills they need to perform at hand for support when you need the highest level in accountancy it. Student reviews are carried out finance and business. on a six-monthly basis and training records are hosted online and can all be accessed in one place. ICAEW is here to support you Students take the responsibility in recruiting the top talent for for updating their training file, your business. ICAEW Trainwith employers only needing to ing Vacancies is a quick and complete a single sign-off at the simple tool that is free to all of end of ACA training. our authorised training employers. The portal is a great way for you to extend your reach to students of all backgrounds in Cyprus and promote roles ranging from graduate vacancies to internship and work experience placements. The ACA qualification is wide-

WHAT MAKES THE ACA DIFFERENT?

• The employer authorisation process and ACA training agreement provides structure, ensuring that all students receive the highest quality and standard of training possible. • Exam questions are not just academic, but reflect practical, work-based situations meaning students put theoretical learning into practice. • Learning materials are written by ICAEW examiners, meaning students are only examined on what appears in the learning materials. • Ethics and professional scepticism is integrated throughout ACA training and examined as part of all 15 ACA modules.

RECRUIT THE BEST

DEVELOP ACCOUNTANCY, FINANCE AND BUSINESS PROFESSIONALS

CONTACT INFORMATION:

Address: ICAEW, Chartered Accountants’ Hall, Moorgate Place, London, EC2R 6EA, UK Tel: (+44) 1908 248 250 Fax: (+44)1908 248 260 e-mail: Kate.Holroyd-Smith@ icaew.com Website: www.icaew.com

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• Management Services • Technical Training (IFRS, Tax, Corporate Restructuring)

AWARDS/ ACCREDITATIONS/ ACHIEVEMENTS

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BAKER TILLY aker Tilly is a leading firm of auditors, accountants and business advisors in Cyprus and the Balkans. Its 20 directors and more than 360 people offer services of the highest standards to more than 6.000 businesses operating both nationally and internationally. Baker Tilly operates through offices in Cyprus (Nicosia, Limassol and Larnaca), Bulgaria (Sofia), Romania (Bucharest), Moldova (Chisinau) and Greece (Athens, Salonica). Synergy, determination and professionalism are among the key ingredients that enable our teams to successfully handle all assignments. Whatever the size of the project, we can provide an experienced individual or team to meet each client’s specific needs.

Baker Tilly firms in Cyprus, Romania, Bulgaria and Moldova as well as Baker Tilly Greece, are independent member firms of Baker Tilly International. Baker Tilly International is the 8th largest accounting network in the world by fee income and is represented by 154 firms with 693 offices in 133 countries, with a global fee income of $3.6 billion and 27,000 people worldwide (June 2014). Through our membership with the Baker Tilly International network, we are able to draw resources and expertise to help our clients overcome challenges and to address their complex business needs.

OUR SERVICES

We strive to provide services of the highest standards in the areas of audit, accountancy, tax and business advisory services to both local and international clients operating in a wide range of industries and geographical areas. In order to achieve this, we lever-

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age both our in-house knowledge and expertise and the wealth of resources available to us through our international network. We understand the importance of staying close to our clients, listening to their concerns and offering support and advice in all areas of their business. Understanding our clients’ operations and gaining an in-depth knowledge of their activities is a key component to our service approach. Our team of experts is ready to help with a range of services in the following areas: • Audit and Assurance • Financial Due Diligence • Tax Consulting Services • International tax planning and transfer pricing services • VAT Compliance and Advisory Services • Business Accounting Services • Consulting and Business Advisory Services • Public Sector Projects • Working Capital Management • Debt restructuring

• Cyprus Special Exports Award for Services 2011 (Cyprus) • “ICPAC Quality Checked” Certificate (Cyprus) • Eligibility to Audit World Bank Finance Projects (Romania, Bulgaria, Moldova) • ISO certificate for financial audit and related activities (Romania) • ICAEW-Approved Training Practice • ACCA- Approved Employer – Trainee development Platinum level • ACCA- Approved CPD Employer

WORKING WITH BAKER TILLY

Our ambition is to be a leading firm in all the countries where we operate and remain focused on delivering exceptional client service. We have a dynamic management team with the right vision and skills to realise this ambition. We are servicing clients of all sizes operating in almost every industry. Regardless of their size or their geographical location, we aim to devote to our clients the highest level of personal attention and partner involvement, in order to meet and exceed their expectations.

CONTACT INFORMATION:

Address: Corner of C. Hatzopoulou Street & 30, Grivas Dighenis Ave., 1066 Nicosia Tel: (+357) 22458500 Fax: (+357) 22751648 e-mail: info@bakertillyklitou.com Website: www.bakertillyklitou. com

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special promotional feature THE LEADING AUDIT, ACCOUNTING & TAX ADVISORY FIRMS IN CYPRUS

BDO LTD DO Ltd is amongst the largest accounting and professional services firms in Cyprus, employing over 100 people in our offices in Nicosia and Limassol. We are a member of BDO International Ltd, the world’s 5th largest accountancy network with almost 60,000 people working out of 1,328 offices in 151 countries. Through a unique combination of international strength and local excellence, we provide custom-made solutions and integrated quality services to individuals and enterprises, ranging from the small ownermanaged businesses to large groups with international activities. Our distinctive reputation for building close personal relationships with our clients is built upon our commitment to all our stakeholders that what matters to them matters to us. We work with our clients to define what exceptional client service means to them and we aim always to bring insight and up-to-date thinking to help them meet their objectives.

At BDO Ltd we invest in quality people, building teams of professionals who continuously share knowledge and experiences with our global network, and who are motivated to meet the current demanding challenges and needs of our clients. Our goal is to offer a personalized service, becoming your trusted advisors, assisting you to meet all your legal and regulatory requirements, allowing you to focus on the areas of their business which are key to profitable growth. Our partners can assist you in improving the control and visibility of your global and regional compliance, accounting and reporting operations, identifying risks pro-actively and helping you safeguard your business.

OUR SERVICES

We offer a wide range of professional services including:

ASSURANCE SERVICES:

• Statutory audit • Internal audit • Governance services • Control Assurance • IFRS reporting and technical support

TAX COMPLIANCE SERVICES:

• Preparation and filing of

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corporate tax returns • Appeals against tax assessments issued by the Inland Revenue • Negotiations with the Inland Revenue • Obtaining rulings from the Inland Revenue • Preparation and filing of VAT • Obtaining VAT rulings • Personal Tax Compliance

TAX ADVISORY SERVICES:

• International tax planning • Efficient repatriation of funds • Loss utillisation • Cross-border financing and treasury solutions • Restructuring services

FINANCIAL ADVISORY SERVICES:

• Mergers and Acquisitions, including negotiations support to help maximize the offered value • Acquisition due diligence • Vendor due diligence reports • Sale and purchase agreement advice • Valuations and fair value opinions • Preparation of business plans, feasibility studies and financial projections • Restructuring of businesses • Assessing of the available sources of finance and restructuring of finance • Design and development of business strategies. • Developing and recommending optimal capital structure

GLOBAL CORPORATE COMPLIANCE AND SUPPORT SERVICES: • Establishment of corporate vehicles • Corporate statutory compliance • Bookkeeping, accounting and financial reporting • Payroll outsourcing • Expatriate and relocation services • Company administration

FUND SERVICES

• Incorporation services • Administrative agent • Registrar agent • Domiciliation and client communications agent

CONTACT INFORMATION: NICOSIA Members of the Board: KARLOS ZANGOULOS (IN CHARGE OF OFFICE) PANICOS CONSTANTINOU TERRY KIELY CHRISTOS TSIKOURIS

Address: 236, Strovolos Avenue, 2048, Strovolos P.O. Box 25277, 1308 Nicosia, Cyprus Tel: (+357) 22495707 Fax: (+357) 22495717 e-mail: info@bdo.com.cy Website: www.bdo.com.cy

LIMASSOL

Members of the Board: ROIS POTAMITIS (IN CHARGE OF OFFICE) YIANNIS KAPETANIOS ANDREAS SAVVA CHRISTOS ANDREOU Address: 146, Archbishop Makarios III Avenue, Alpha House, 4th floor, P.O. Box 51681, 3507 Limassol, Cyprus Tel: (+357) 25735450 Fax: (+357) 25735455 e-mail: limassol@bdo.com.cy Website: www.bdo.com.cy

“It’s complicated. That’s why we’re bringing in BDO.” BDO Advisory Services

BDO’s advisory professionals provide high-level strategic guidance to clients when they need it most. From litigation and dispute resolution, to business restructuring and risk management, our wide-ranging service offerings help clients navigate challenges and strengthen their businesses – whatever their needs may be.

$ELOITTE ,IMITED

Working together with our clients As One Always one Step Ahead 4HE SUCCESS OF OUR FIRM IS DEFINED BY THE STRENGTH OF THE RELATIONSHIPS WE HAVE WITH OUR CLIENTS (ELPING THEIR BUSINESSES SUCCEED IS AT THE CORE OF EVERYTHING WE DO

eloitte, with more than 550 professionals operating out of offices in Nicosia, Limassol and Larnaca, is one of the largest professional services organisations in Cyprus, providing a full range of services to a diverse client portfolio. Our services include audit, tax, consulting, financial advisory, wealth advisory and an integrated services offering addressed primarily to the international business community, focusing on accounting and payroll, tax compliance and the formation and administration of companies, partnerships and trusts. As part of the Deloitte global network, with more than 210,000 people in over 150 countries, we have the advantage of a global sharing of knowledge with a local adaptation and personal approach, built on the solid foundations of more than 55 years of successful operation on the island. Our plans for the future are rooted in Deloitteâ&#x20AC;&#x2122;s global 2020 strategy and our global vision, to become the â&#x20AC;&#x153;Undisputed leader in service provisionâ&#x20AC;? the â&#x20AC;&#x153;first choice of the most sought-after clients and talentâ&#x20AC;?, famous for the calibre of our people and respected for the exceptional quality of our work. Our â&#x20AC;&#x153;As Oneâ&#x20AC;? strategy, with focused and targeted market investment, will help us secure and widen our leadership position in our market.

with business knowledge and industry expertise to help our clients exceed their expectations. Our wide range of professional services includes:

emphasis on business tax, personal tax, indirect tax (including VAT), global employer services (including solutions for high net wealth individuals) and cross-border tax.

â&#x20AC;˘Audit & ERS In todayâ&#x20AC;&#x2122;s changing global economy, businesses need trusted advisors. Because our audit professionals take time to understand our clientsâ&#x20AC;&#x2122; business and needs, we help them identify major risks and opportunities over and above performing the traditional financial reporting function. We offer our clients a broad range of audit and enterprise risks services.

â&#x20AC;˘Integrated Services Our Integrated Services team provides a broad range of professional services which are tailored to support both international and local clients with offices in Cyprus and also clients who elect to outsource specific accounting and administration processes.

Our audit services include statutory audits of financial statements, non-statutory audits and other attest opinions, International Financial Reporting Standards (IFRS) services and governance services. Our ERS services include internal audit, IT audit and control assurance. Deloitte Audit is the latest generation of Deloitteâ&#x20AC;&#x2122;s transformed audit platform, which is purposefully designed to address the complexities of modern businesses, incorporating new methodologies, content, and technologies to ensure relevant, high quality audits in a constantly changing environment.

Our core services Delivering outstanding service to all clients is our top priority. We, at Deloitte, offer our clients a broad range of fully integrated services in areas that include Audit, Tax, Consulting and Financial Advisory.

â&#x20AC;˘Tax & Legal The provision of taxation services is core to Deloitteâ&#x20AC;&#x2122;s business both in Cyprus and in the international arena. Deloitte has one of the largest teams of taxation experts in Cyprus, providing a full range of business and personal taxation services.

Our client service teams, under the leadership of a Lead Client Service Partner, help create powerful business solutions for organisations operating all over the world. This integrated approach combines insight and innovation

Our Tax & Legal services team keeps our clients up to speed on the developments that may affect their business, help them interpret their significance and integrate tax considerations into their strategy, with special

Our team of highly trained and suitably qualified accounting professionals, recognise the specific needs of our clients and offer an extensive range of accounting and administrative services, providing the necessary assistance and professional support to enable our clients to operate their business enterprises smoothly and efficiently. Our integrated services include accounting and payroll, contract administrative and other, tax compliance and formation & administration of companies, partnerships and trusts. â&#x20AC;˘Consulting Services Our consultants help our clients improve business performance and increase shareholder value. We combine expert business strategy and financial skills with the ability to deliver major business change programmes. Our consulting services include human capital services, strategy transformation schemes, technology specific solutions and actuarial & insurance solutions. â&#x20AC;˘Wealth Advisory Services Our wealth advisory team has the resources and capabilities to deal with all aspects of the financial affairs of high net worth clients under one roof and to look after the clientâ&#x20AC;&#x2122;s finances on a long term basis.

Our team provides practical and imaginative wealth management solutions combining sound investment advice, with tax efficient structures and long term succession planning. In addition our team provides transaction advice, international advice as well as family office services. Our investment fund services team which includes investment, tax, wealth management, accounting, audit, corporate finance and consulting specialists provides tailor made multi-disciplinary solutions to investment funds. The team can assist with the formation of a fund, ongoing tax consulting and compliance, audit, investment compliance and the raising and introduction of capital. •Financial Advisory Services Our Financial Advisory Services professionals provide strategic and financial advisory services to clients throughout every phase of the economic cycle. By managing our service offerings, we can extract synergies, from our deep specialisation to provide added value to our clients.

- Energy & Resources - Shipping - Consumer Business - Travel, Hospitality and Leisure - Technology, Media & Telecommunications - Public Sector - Real Estate & Construction - International Business People and Talent The power of Deloitte is its people, and the future of the organisation lies on their continued delivery of exceptional service and innovation. Our aim at Deloitte is to be the first choice of the most sought after talent. To achieve this, we focus on three priorities: make explicit our employer value proposition, build a true coaching culture, and focus on our differentiators - flexibility, diversity, mobility and performance excellence.

Corporate Social Responsibility At Deloitte, corporate responsibility is the heart of everything we do: our approach to quality, leadership, talent and our clients. Our business is built on the quality of our work, on strong ethical principles and integrity, on an understanding of our impact on wider society and the trust placed in us by our clients. We understand that our business has wide and farreaching impacts and that being responsible in every aspect of the way we conduct our work is crucial to our own long-term success. We are already renowned for the quality of our clients, for our own business performance, for the influence we have and how we set the agenda on matters that transcend our business self-interest. We want to continue to build on our reputation and be regarded as the responsible business.

Our firm’s continuous investment in its people is recognised by local and international bodies and organisations. Some of our firm’s most recent achievements, of which we are particularly proud are:

Contact Information Our Financial Advisory Services team provides corporate finance, M&A transaction and valuation services, feasibility & reorganisation studies. The team also undertakes forensic and dispute resolution services and advice on grants & incentives. Industries Understanding the implications of the services we provide is one of the ways we insure success. Multifunctional industry groups representing each of our service areas create client specific solutions that add value across an organisation. Our main industry groups include: - Financial Services - Oil & Gas

We are the first organisation in Cyprus to be reaccredited with the Investors in People-Gold. Investors in People (IIP) Gold & International Champion

ISO Certification 9001

Our firm became accredited as an Equal Opportunities Employer under the Framework of the Program “Actions for reducing the compensation gap between male and female employees”

Nicosia: 24 Spyrou Kyprianou Ave, CY 1075 Nicosia Tel.: 22 360300, Fax: 22 360400 E-mail: infonicosia@deloitte.com Limassol: Maximos Plaza, Tower 1, 3rd floor 213 Arch. Makarios III Avenue, CY 3030 Limassol Tel.: 25 868686, Fax: 25 868600 E-mail: infolimassol@deloitte.com Larnaca: Patroclos Tower, 4th floor 41 - 43 Spyrou Kyprianou, CY 6051 Larnaca Tel.: 24 819494, Fax: 24 661222 E-mail: infolarnaca@deloitte.com

www.deloitte.com/cy

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DI ROSS & CO LTD

I Ross & Co Ltd is an independent and innovative firm of Chartered Certified Accountants and Chartered Tax Advisers in Cyprus. The roots of the firm are associated with those of Meritservus, being an offshoot of Deloitte Cyprus and today a leading advisory specialized in corporate administration, trusts and other business services. This makes it one of the island’s longest-standing chartered accountancy firms.

Meritservus, DI Ross and Meritkapital, a CySEC licensed investment firm, all belong to one group of companies affiliated by common management and ownership. Demetris Ioannides, the group’s Chairman and Managing Director, founded Deloitte Cyprus and served as its Managing Partner until 2005. Under his leadership, and in coordination with the economics and fiscal departments of the University of Vienna, Deloitte was instrumental in reforming the tax regime of Cyprus ahead of the island’s EU accession. In 2005, he led Meritservus through a successful management buyout whilst its associate DI Ross would facilitate client needs for accounting and

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related services. DI Ross aims to provide an all encompassing service solutions ranging from financial and management accounting, tax advice and IFRS reporting to valuations, financial prospectuses and other business consulting services. Our firm is dedicated to its four bedrock principles of synergy, professionalism, responsiveness and culture.

SYNERGY: We are believers in the saying that “the whole is greater than the sum of its parts”. We are in the enviable position whereby, under the same roof, three affiliated companies work together in a

manner that allows information, expertise and knowledge to be shared for the mutual benefit of our clients. A client has a single point of contact in Cyprus as his needs are being catered for in a structured and efficient way.

PROFESSIONALISM: With respect to staffing, we place emphasis on recruiting, professional qualifications and development, junior mentoring and review and assessment processes. With respect to our work offering and delivery, we try to apply layered yet effective review processes and internal and externally generated quality controls. Keeping

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close to our clients helps us understand their needs and go that extra mile to accommodate them, whilst sustaining a high level of ethics and professional conduct.

RESPONSIVENESS: Clients who choose our firm over others rely on our competent advice and fast bespoke service. By monitoring staffing capacity and service response time, as well as up keeping buoyant adequacy in our staff-to-client ratio, we try to ensure that each client receives a personalized service.

CORPORATE CULTURE: There are tested building blocks that create the framework necessary for a constructive culture to spread. One is how the new focus on culture is presented and given context. The second is role modelling, leading by example, consistently. Thereafter blocks are centred on incentives and policies that emphasize cultural values and, lastly, empowerment in people who are tasked to lead and enforce the new culture. Having in mind this due process, we invest in a healthy, young and adaptive culture that is possibly a main driving force behind a satisfied client base.

SERVICES

Our group is one of the few to offer specialized and integrated services in almost all financial sectors. The core services of DI Ross can be divided into three main categories: tax, accounting and business and management consulting. As Chartered Tax Advisers qualified by the UK Chartered Institute of Taxation, our tax services include domestic and international tax planning, tax compliance and transactional advisory on mergers & acquisitions, group reorganizations and trusts formations as well as assistance with tax investigations. Our accounting team will assist with the maintenance of proper books and records, management accounting and special purpose reports, the preparation of standalone and consolidated financial statements in accordance with IFRSs and companies law, VAT & VIES reporting and advice as well as payroll services. We service not only corporate but also partnerships, trusts and alternative investment funds. For the latter we have developed expertise in net asset value calculations and reporting to facilitate redemptions and entries into variable capital fund structures.

Our business and management consulting team is commissioned for financial due diligence projects, feasibility studies, budgeting assignments, assistance with capital raising and project valuations for growth businesses. We can also assist with advising on financial qualifications related to immigration programs by investment as well as other prerequisite criteria.

HOW WE DIFFER

What makes us different is that we have over 30 years of experience in helping businesses grow, reporting professionally on performance and financial position, and complying with all statutory reporting laws. Our group is large enough to be a leader in the offering of a range of services but with a small company boutique ethos that pays clients the attention that each one deserves. We are committed to developing creative and customized solutions and we therefore have a strong IT team that works with our users to adopt and develop new technology for maintaining effective in-house processes. This aids us in providing a full range of professional services cost effectively. We also feel that it is extremely

important to professionally educate ourselves continually, so as to improve our technical expertise, financial knowledge and service to our clients. As a demonstration of our focus on people, we have been awarded Platinum Approved Employers by the UK Association of Chartered Certified Accountants (ACCA), the highest level accreditation issued by the ACCA. We are also Authorised Training Employers by the Institute of Chartered Accountants in England and Wales (ICAEW). Concluding, at DI Ross we take pride in our achievements in the industry, becoming one of the most recognised names in terms of quality and the range of services offered, attracting a clientele from a broad spectrum of industries, activities and nationalities, as well as establishing a pool of highly skilled and qualified individuals offering value financial services.

CONTACT INFORMATION: Address: Eftapaton Court, 256, Archbishop Makarios III Ave., 3105 Limassol Postal: PO Box 53180, 3301 Limassol Tel: (+357) 25857700 Fax: (+357) 25340734 e-mail: info@di-ross.com Website: www.di-ross.com

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A TRULY GLOBAL ORGANISATION

GRANT THORNTON CYPRUS WHO WE ARE

We are Grant Thornton Cyprus, one of the leading accounting practices in Cyprus. Founded in 1942, we became a member firm within Grant Thornton International Ltd in 1982. With offices in Nicosia and Limassol and with more than 120 people, we apply strong technical guidance and breadth of experience to ensure that clients receive a truly different experience.

OUR SERVICES

The firm offers a full range of assurance, tax, specialist advisory and outsourcing services to clients ranging from public companies and multinationals to private businesses across a broad spectrum of industries.

WHAT MAKES US DIFFERENT?

We aim to be the leading business adviser to dynamic organisations around the world by unlocking their potential for growth. This means looking at all aspects of the business at the same time. Financial measures, process efficiency, new ways of working and stakeholder relationships must grow in harmony to fully achieve your objectives. Dynamic organisations know they need to apply both reason and instinct to decision-making. At Grant Thornton, this is how we advise our clients every day. They expect us to get to the heart of the matter fast, to provide clarity and discover

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fresh opportunities. We do that by combining our technical knowledge and sector expertise with an indepth understanding that can only come from asking insightful questions and listening to every detail.

OUR CULTURE

We have created a culture of openness and transparency, where all of our people can make a difference. Our CLEARR values – Collaboration, Leadership, Excellence, Agility, Respect and Responsibility – underpin our culture and how we do business. They are embedded throughout our business and set the parameters of how we expect people to behave with their colleagues, with clients and the world at large.

Grant Thornton is a leading business adviser that helps dynamic organisations to unlock their potential for growth. Our brand is respected globally as one of the major global accounting organisations recognised by capital markets, regulators and international standard-setting bodies. Growth is central to our strategy. In 2014, we announced record combined global revenues of US$4.7 billion for the 12 months ending 30 September 2014. Grant Thornton led the six major global accounting organisations in reported revenue growth rate in 2012 and again in 2013. We were the fastest-growing large accounting organisation and we are constantly evolving and developing alongside our clients. As a global organisation of member firms with 40,000 people in over 130 countries, we have the scale to meet your changing needs, but with the insight and agility that helps you to stay one step ahead. Privately owned, publicly listed and public sector clients come to us for our technical skills and industry capabilities but also for our different way of working. Our partners and teams invest the time to truly understand your business, giving real insight and a fresh perspective to keep you moving. Whether a business has domestic or international aspirations, Grant Thornton can help you to unlock your potential for growth.

CONTACT INFORMATION:

Address: 41-49, Agiou Nicolaou Street, Nimeli Court, Block C, 2408 Engomi, Nicosia, P.O.Box 23907, 1687 Nicosia, Cyprus Tel: (+357) 22600000 Fax: (+357) 22600001 e-mail: main@cy.gt.com Website: www.gtcyprus.com/

www.gtcyprus.com

Reason says: choose the largest advisor Instinct says: choose the right advisor

Business decisions are rarely black and white. Dynamic organisations know they need to apply both reason and instinct to decision making. We are Grant Thornton and it’s what we do for our clients every day. Contact us to help unlock your potential for growth. ©2014 Grant Thornton (Cyprus) Ltd. All rights reserved. Grant Thornton International and the member ﬁrms are not a worldwide partnership. Services are delivered independently by member ﬁrms.

special promotional feature THE LEADING AUDIT, ACCOUNTING & TAX ADVISORY FIRMS IN CYPRUS

HORWATH DSP LIMITED Member Crowe Horwath International stablished in 1987, Horwath DSP Limited is an accountancy firm with offices in Nicosia and Limassol, offering audit, tax, risk and advisory solutions to a diverse clientele in the local market and abroad. Horwath DSP Limited is a member of Crowe Horwath International, one of the top 10 global accounting networks. The Crowe Horwath network consists of more than 150 independent accounting and advisory services firms in over 100 countries around the world.

E THE TEAM

With 5 partners, 80 professionals and over 2,500 clients, Horwath DSP is one of the leading accountancy firms in Cyprus. The firm employs some of the most highly-trained, educated and experienced individuals in Cyprus who are able to provide the highest level of client service. All key members of the team are either qualified ACA or ACCA who fully appreciate the need of adding value to the service offered to the client as well as the importance of delivering on time.

MAIN SERVICES

Horwath DSP takes pride in providing a timely, comprehensive service of the highest standard. The firm specialises in international tax planning and structuring and 85% of its clients are overseas clients. It offers its local and international clients the following services:

x $8',7 $1' $6685$1&( The firm specialises in performing audits in accordance with the ISA and in reporting under the IFRS. All key members of the firm have considerable experience in a wide range of markets.

x ,17(51$7,21$/ 7$; PLANNING & STRUCTURING Cyprus is an international financial centre and many foreign investors use Cyprus companies for their international business. The firm provides compliance, advisory and restructuring support to foreign corporations and individuals.

x 9$7 $'9,&( $1' COMPLIANCE

Value Added Tax (VAT) is a very complicated tax, which is constantly evolving. It is difficult for tax practitioners within the European Union to keep abreast of changes, and it is an extremely difficult tax for those outside the EU

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to master. EU cross-border transactions present many challenges but we are wellqualified to help clients with all their cross-border and other EU VAT challenges.

x &25325$7( &2168/7,1* Cyprus companies are regularly involved in international business and Horwath DSP has acquired expertise in assisting clients with their international transactions.

x 6+,33,1* 6(59,&(6 As a member of Crowe Horwath International, Horwath DSP is connected with offices in the world’s major shipping centres, such as Hamburg and Singapore, and can therefore assist clients worldwide. The firm has recently been involved in major and innovative refinancing projects of shipping groups and therefore has all the up-to-date necessary knowledge and experience to advise and assist clients during these difficult times for the shipping industry.

x 3529,6,21 2) %86,1(66 SERVICES

The firm has a dedicated and experienced team providing its Cyprus and overseas clients with the following services: Bookkeeping Accounting Payroll

Tax and VAT compliance Social insurance advice and compliance Advice on finance and management controls Preparation of financial statements to International Financial Reporting Standards Preparation of consolidated financial statements Specialised financial reports for management or third parties Forensic accounting Wealth administration services

x (17(535,6( 5,6. MANAGEMENT

ERM is a comprehensive process of assessing the company’s business risks and controls and enabling boards to evaluate their current systems of internal control against leading practice and industry benchmarks. The firm’s team of experts is committed to providing the highest quality service, applying a team-based, structured approach tailored to the specific needs of each client.

CONTACT INFORMATION:

Address: 8, Stassinos Avenue, 1st Floor, Photiades Business Centre, 1060, Nicosia, P.O.Box 22545, 1522 Nicosia, Cyprus Tel: (+357) 22755656 Fax: (+357) 22452055 e-mail: mailbox@crowehorwath. com.cy Website: www.crowehorwath. com.cy

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special promotional feature THE LEADING AUDIT, ACCOUNTING & TAX ADVISORY FIRMS IN CYPRUS

prestigious business area near the embassies of the United States of America, the Russian Federation and Egypt. We always aim at adding significant value to the business performance of our clients whilst maintaining high-quality client care.

Our objective is to

deliver services tailored to our clients’ needs and requirements that meet or exceed those requirements. We always adopt a proactive, practical and forward-looking approach to meet the challenges of a rapidly changing international regulatory and business environment.

Our approach

JOANNIDES + CO.

oannides + Co. is a leading firm of public accountants and management consultants with offices in Nicosia, Limassol and Larnaca, providing distinctive, high-quality

professional services as Auditors, Accountants, Tax and Business Advisors. The firm was founded in 1980 and is a member of the Institute of Certified Public Accountants of Cyprus and AGN International, which is a worldwide association of independent accounting and consulting firms.

64 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

Since our establishment, we have experienced continuous growth and successfully expanded our client base, to the extent that we are currently one of the largest accounting firms in Cyprus, with more than 70 staff members. Joannides + Co.’s headquarters are located in modern, purpose- built offices in the

at the outset is to analyse and fully understand the capacity in which each individual client operates and to establish its relevant corporate or personal business needs. We then consider cross-border business, tax planning, wealth protection and foreign property ownership issues, to identify the most beneficial options available to the client, such as setting up companies, trusts or other relevant structures, both in Cyprus and in other jurisdictions as appropriate.

CORE SERVICES

• Audit and Assurance • International Tax Planning • International Business Services • Management Consultancy • Information Technologies Services • European Union Funding

AUDIT AND ASSURANCE

• Accounting • Statutory Audit • Listing on the Cyprus Stock exchange • Management Financial Reporting • Prospectus work for public issues • Internal audit services We are committed to providing a comprehensive service, designed to enhance the efficiency and profitability of our clients’ operations. This approach gives both management and shareholders the assurance that their company is on a sound business footing. We work closely with our clients when deciding the scope of their audit and keep them informed of our findings throughout the process. For international clients, we are determined to deliver a service specifically tailored to the requirements of both the international and local regulations which affect them.

INTERNATIONAL TAX PLANNING

The establishment of Cyprus as an international business centre necessitates expert advice for both local and international tax affairs. For many years, Joannides + Co. has been working on the concept that international businesses need international advice. Our tax professionals are specialists with extensive experience, who can provide practical assistance to clients with local and international tax requirements.

SERVICES PROVIDED BY OUR TAX DEPARTMENT INCLUDE:

• Corporate and personal tax services, advice and planning • Preparation, submission and agreement of tax returns with the Inland Revenue • Client representation before the Commissioner • Capital gains tax services • International tax advice • Double tax treaty services • VAT services • Social insurance contribution services We keep our clients informed on recent tax law changes and new planning ideas by frequently organising tax seminars and through the publication of newsletters.

INTERNATIONAL BUSINESS SERVICES

Cyprus has developed into an ideal centre for the establishment of international companies. For over 34 years, our firm has been servicing the needs of international companies in Cyprus. Our specialist consultants are amongst the best on the Island in serving the varied and very often complicated requirements of international clients.

OUR SERVICES INCLUDE:

• Company administration services • Assisting in the application for residency and work permits for expatriate personnel • Assisting in finding suitable office accommodation • Assisting in finding suitable

personnel • Performing company searches on behalf of clients

MANAGEMENT CONSULTANCY

Our professional team provides clients with a wide range of management consulting services. However large or small their consulting needs, we provide the level of service required. No matter what the particular business discipline, the reasons for using our firm remain much the same. Few businesses, whatever their size, can maintain, in-house, the full range of specialised management skills which are necessary to operate and compete effectively in a rapidly changing, and very competitive business environment. Our consultants’ original approach to a new project, coupled with the impartial and objective view they bring to assignments, provides solutions which deliver real benefits, often well in excess of original expectations.

INFORMATION TECHNOLOGY SERVICES

Our IT professionals are specialists with extensive experience and can provide practical assistance to clients with specific IT requirements.

OUR SERVICES INCLUDE:

• IT strategy studies • Computerisation feasibility studies • Preparation of user requirement specifications • Defining computer hardware

and software requirements • Project management (system selection, implementation, contractual advice, systems integration) • Undertaking ERP Implementations • Training

EUROPEAN UNION FUNDING

Since Cyprus is a member of the European Union, opportunities to obtain funding that will assist businesses are available. We offer a complete service to assist clients in obtaining the funds they need.

THIS INCLUDES:

• Research on industry funding schemes • Preparation of necessary documentation • Follow-up to obtaining funds

OUR CLIENTS

The clientele of Joannides + Co. comprises successful organisations from all sectors of the economy, ranging from sole traders to large multinational organisations. Our large and diverse client portfolio includes well-known names from the industrial, commercial and financial world.

CONTACT INFORMATION:

Office address: 13, Agiou Prokopiou Str. 2406 Egkomi, Nicosia, Cyprus Mail address: P.O.Box 25411 Nicosia 1309, Cyprus. Telephone: +357 22 556 556 Facsimile: + 357 22 556 300 e-mail: cy@joannides.com.cy Website: http://www.joannides. com.cy

THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

Gold 65

special promotional feature THE LEADING AUDIT, ACCOUNTING & TAX ADVISORY FIRMS IN CYPRUS

NEXIA POYIADJIS he foundations of the firm were laid in 1969 when the late Joseph Pavlou Poyiadjis, a UK Chartered Accountant, started his own accountancy practice as a sole practitioner, operating from Nicosia under the name of â&#x20AC;&#x153;J. Pavlouâ&#x20AC;?. In 1976 he was joined by his younger brother and now Senior Partner of the Firm John Pavlou Poyiadjis, also a UK Chartered Accountant. In 1980, the firm was renamed Nexia Poyiadjis Chartered Accountants, being the exclusive member of Nexia International in Cyprus,

one of the largest and longest established international networks of independent, high-quality accounting and consulting firms.With over 23,000 professionals and 570 offices in 105 countries, Nexia International gives us strong links in major cities around the world and helps organisations and individuals with an international outlook to maximize and sustain their potential. We are the leading providers of Audit and Assurance, Taxation, Accounting, Debt, Restructuring, Liquidations and Advisory Services to publicly listed companies, regulated financial entities, owner-managed businesses, professional practices, not-forprofit companies and private

66 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

individuals. One of the strongest areas of specialist knowledge and expertise, where our firm has a clear competitive advantage, is within the financial services industry. These include Audit and Assurance, Tax, Compliance, Advisory and Restructuring services to Cyprus regulated investment firms, funds and banks. We currently service some of the best- known and most prestigious clients in the industry. Our teams consist of people from different backgrounds with a wide range of interests and areas of specialization, thus enabling us to apply the highest level of expertise to every deliverable and adding value to the services offered to our clients.

We provide a supportive, rewarding and vibrant environment where our people have many opportunities to grow and succeed. We are very proud that this is reflected in our accreditation with the Investors in People (IIP) standard, an important and official recognition of the best practices we follow in the area of Human Resource Management and Development. At Nexia Poyiadjis, we believe that you should expect something special from your business advisors. Being a dynamic team and constantly growing as a firm, we continue to improve our knowledge and skills for the benefit of our clients. Clear thinking, in-depth understanding and a vision for excellence are primary objectives at our firm. All the above and more are delivered with superior service, integrity and commitment to all our clients.

CONTACT INFORMATION: Head Office Address: 2, Sophoulis Street, Chanteclair House, 8th Floor, 1096 Nicosia, Cyprus Tel: (+357) 22456111 Fax: (+357) 22666276 e-mail: np@nexia.com.cy Website: www.nexia.com.cy Limassol Office Address: Lophitis Business Center , 249, 28th October Avenue, Mezzanine floor, 3035 Limassol, Cyprus Tel: (+357) 25371414 Fax: (+357) 25371415 e-mail: np@nexia.com.cy Website: www.nexia.com.cy Kakopetria Office Address: 14, Photiadou Street, Kakopetria, Cyprus Tel: (+357) 22924024 Fax: (+357) 22922429 e-mail: np@nexia.com.cy Website: www.nexia.com.cy

special promotional feature THE LEADING AUDIT, ACCOUNTING & TAX ADVISORY FIRMS IN CYPRUS

and professionalism are selected. • Teamwork is second nature. RSM partners know each other very well, so we can get things done quickly for our clients. • Agility is instinctive. Clients shouldn’t see the work behind the scenes, just the results, regardless of the number of countries or disciplines involved. • Stability is key. Clients tend to stay with RSM member firms for the long-term. They appreciate our understanding of their business and dedication to making things happen. ([OVZ :[`SPHUV\ ¶ 4HUHNPUN 7HY[ULY

OUR PEOPLE

RSM CYPRUS SM Cyprus is a strategic partner for dynamically developing companies with local and international orientation, seeking the complete spectrum of services provided by Firms of Certified Public Accountants and Business Advisors. Our philosophy is directly connected with our ability to affect the development and the future of our clients in a positive way, something that is based on our experience, our specialization and on the high level of our services. We are a member of RSM International, one of the largest networks of independent accounting and consulting firms worldwide. At the last count, RSM had over 700 offices in 110 countries around the world, with more than 33,500 people. RSM Cyprus has offices in Nicosia, Athens, Thessaloniki and Tirana.

The RSM brand is a promise to clients that we will listen and endeavour to understand their needs and determine how we can add value for their future success. The firm has long experience in some of the most important business sectors and industries such as shipping, raw materials, public sector, energy, commerce, food and beverages, technology and telecoms.

OUR VALUES

To ensure that you always receive the highest quality service, we aim to uphold the following principles: • Excellence comes as standard. Rigorous quality control procedures ensure the highest possible standards across the network. • Trust is assured. Short lines of communication mean you will always have swift access to partner-level advice. • Quality is paramount. Around the world, only member firms that match our standards of quality, integrity

68 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

Α significant part of the success of RSM Cyprus is directly related to the high quality of its supplied services along with the specialization of its key people. RSM Cyprus consists of welltrained executives, with a high level of specialization in their sectors and extensive experience in the field of economic and business activity. Athos Stylianou, our Managing Partner, is a member of the Institute of Certified Public Accountants of Cyprus, a member of the Greek Institute of Certified Public Accountants and a member of the Chartered Association of Certified Accountants. He is a past Chairman of the British Hellenic Chamber of Commerce, a past President of the Association of Certified Accountants and Auditors of Greece and a past Chairman of the Round Table Greece. Before setting up our firm, he was the Managing Partner of Deloitte Haskins & Sells and Ernst & Whinney in Athens.

OUR SERVICES

RSM Cyprus combines the benefits of the international network of RSM International, together with the in-depth knowledge and experience

of the local economic and financial business environment. Our people have the experience and the know-how to provide the full spectrum of professional services according to our clients’ needs.

THE FIELDS OF SPECIALIZATION OF RSM CYPRUS ARE THE FOLLOWING: • Audit and Assurance • Risk Management Services • Transaction Services • Corporate Finance • Advisory Services • Accounting and Tax Services • Human Capital Services

RSM INTERNATIONAL: LEAD SPONSOR OF THE EUROPEAN BUSINESS AWARDS

RSM is the lead sponsor for the European Business Awards. This is the eighth year in which RSM has supported the Awards programme. The European Business Awards have been spotlighting the most innovative and successful European businesses since 2007. Entrants are judged on three main criteria: success, innovation and ethics. Awards are presented in ten categories, including the RSM Entrepreneur of the Year Award. As a lead sponsor, RSM member firms are able to nominate the companies that enter for the Awards, as it has done in the past eight years. Entries for the 2015-16 Awards programme are open until July 1st 2015. Companies interested in entering the awards for free can contact us at info@rsmi. com.cy

CONTACT INFORMATION: Address: Kennedy Business Center,12-14, Kennedy Avenue, 1087 Nicosia Tel: (+357 22751140) Fax: (+357) 22751145 e-mail: info@rsmi.com.cy Website: www.rsmi.com.cy

700 offices

We have over around the world, so you don’t have to leave yours. Can you help me expand internationally?

Anywhere and everywhere?

And I don’t even have to leave the country?

Absolutely.

We’re very well connected.

Not unless you’re planning a holiday.

RSM Cyprus is a member of RSM - a worldwide audit, tax and advisory network with over 700 ofﬁces in over 100 countries. Who better to help you realise your international ambitions. Connected for success.

To find out more connect to www.rsmi.com.cy RSM Cyprus Kennedy Business Center, 12-14 Kennedy Avenue, 1087 Nicosia, Cyprus T +357 22 751140 F +357 22 751145 E info@rsmi.com.cy NICOSIA · ATHENS · THESSALONIKI · TIRANA RSM Cyprus is a member of the RSM network. Each member of the RSM network is an independent accounting and advisory firm each of which practices in its own right. The RSM network is not itself a separate legal entity of any description in any jurisdiction. The RSM network is administered by RSM International Limited, a company registered in England and Wales (company number 4040598) whose registered office is at 11 Old Jewry, London EC2R 8DU. The brand and trademark RSM and other intellectual property rights used by members of the network are owned by RSM International Association, an association governed by article 60 et seq of the Civil Code of Switzerland whose seat is in Zug. © RSM International Association, 2015.

t h

N I C O S I A

(&2120,& C O N G R E S S

{April 14 – May 13, 2015}

ISSUE

+ BOOK REVIEWS MONEY: Winners: And How They Succeed By Alastair Campbell 75 BUSINESS: Startupland: How Three Guys Risked Everything to Turn an Idea into a Global Business By Mikkel Svane 81

{money}

72 | 5 Stocks for Retirement Suggestions for your long-term portfolio. 73 | MEPs put an end to opaque card payment fees Lower costs should benefit both retailers and shoppers. 74 | Taking a LEAP into Entrepreneurship How a local accelerator and its competitions are helping Cyprus economy.

78 | Global Organisations Face Looming Crisis in Retention of Employees Lack of employee engagement is the top issue, says Deloitte survey. 80 | Why Your Business Needs a Mobile App Five reasons for keeping ahead of the game.

TAX & LEGAL: Data Protection: A Practical Guide to UK and EU Law By Peter Carey 85 LIFESTYLE: The Girl on the Train By Paula Hawkins

{economy}

82 | Another Year of Contraction EY predicts delayed economic recovery, due in part to Russian developments.

76 | Preventing Financial Misstatement and Fraud The crucial role of the Audit Committee.

84 | Advance Cross-border Rulings and Pricing Arrangements The European Commission’s Proposals.

{business}

ECONOMY: Hall of Mirrors: The Great Depression, The Great Recession, and the Uses – and Misuses – of History By Barry Eichengreen 83

{tax&legal}

{lifestyle}

86 | Castles in the Air No More Buying or renting out a castle or a palace is perfectly possible if you are in a position to be able to splash some cash. 90 | A Day In The Life Loucas Marangos

THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES OF CYPRUS

Gold 71

investment

5 Stocks FOR RETIREMENT {MONEY}

By Andrew Lumley-Holmes

hether you are already retired or just starting to save for the future, having good-quality investments to provide growth and income is a must for any successful retirement strategy. The quality of your investment decisions can have a huge effect on your quality of life, so companies with healthy balance sheets, dominant market positions, and reliable cashflows should form the core of every investor’s portfolio.While a stock portfolio should contain at least 20 holdings, these five stocks are a good start for your longterm portfolio, to be bought and held for the investment gains and income they have to offer.

Google, a global information technology leader, specializes in how people access and interact with information. Google provides the leading search engine, along with many online services such as Gmail, Adsense, and Chrome, in over 50 countries with unique domain names for each country. Internet advertising is the fastest growing segment of the advertising market but it still only represents 8% of total US advertising dollars, suggesting considerable room for further growth. To tap these opportunities, Google has used the profits from its paid search business to support innovative projects such as Google Editions, Google Maps and the Android market. It also has a long and growing list of products in many other areas of computer applications.

THE QUALITY OF YOUR INVESTMENT DECISIONS CAN HAVE A HUGE EFFECT ON YOUR QUALITY OF LIFE

The Anglo-Dutch consumer goods group boasts an impressive portfolio of brands across personal care (Lux and Dove), foods (Knorr and Hellmann’s), home care (Cif and Surf), and refreshment (Lipton and Heartbrand). In fact, it has 14 brands that each boast more than €1 billion in sales a year, and its total annual sales amount to €50 billion. Unilever sells its Fast Moving Consumer Goods (FMCG) in 190 countries to two billion consumers, and over half of those sales are in emerging markets (a characteristic that sets Unilever apart from many of its competitors). This should mean that, as long as the company’s brand appeal remains intact, its cash flow should be relatively resilient, regardless of economic conditions.

Say the name “Reckitt Benckiser” to most people and you’ll probably draw a blank expression. Mention Neurofen, Dettol, Strepsils and Durex, however, and millions of people around the world will instantly know the products you’re talking about – household names that you’ll find in homes and supermarkets across the globe. Big brands can be a long-term investor’s best friend and instead of depleting in usefulness each year, they become more embedded in our lives and thus more valuable. Few things command the same kind of

protection for consumer demand as a successful brand and Reckitt’s product portfolio is up there with the best. Roughly 40% of its sales are in emerging markets, a proportion that I expect to increase in the coming years.

When building a strong core for your retirement portfolio, big can be beautiful, because large companies should have the geographic and product diversification to weather most storms. And in the spirits business, they don’t come any bigger than Diageo. People continue to buy alcohol in good times and bad, often viewing it as a small luxury and willing to spend on brand names, of which Diageo has lots: Johnnie Walker, Smirnoff, Bailey’s, Captain Morgan and Guinness are some of the headliners. Diageo’s products are sold in 180 markets around the world. Although Diageo’s dividend yield is lower than most blue chips, its payout has been growing nicely recently, up by 7.5% per year over the last five years.

Saving for retirement is all about building up an insurance policy against the uncertainty of the future. Unfortunately, we can’t predict with that amount of precision. However, as science helps us live better for longer, it does seem likely we’ll be using more and more pharmaceutical products.As one of the largest pharmaceutical companies in the world, GlaxoSmithKline will benefit from demographic trends in developed economies like Europe and the US, as well as the rising wealth and demand for modern healthcare in emerging markets. Over the past four years, GlaxoSmithKline has increased its focus on emerging markets, streamlined operations in its slower growing markets, and refined its all-important research and development programme.

info: Andrew Lumley-Holmes is an independent financial adviser with Finsbury Private Wealth Management. e-mail: andrew.holmes@finsbury-group.com or (+357) 96418652. 72 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

bank cards

MEPs PUT AN END TO OPAQUE CARD PAYMENT FEES

{MONEY}

within the card scheme”. • For smaller domestic debit card transactions, member states may also set a maximum fixed fee of €0.05 per transaction, after the five year transition period. • For credit card transactions, fees will be capped at 0.3% of transaction value and member states can set a lower fee cap for domestic credit card transactions.

LOWER COSTS SHOULD BENEFIT BOTH RETAILERS AND SHOPPERS

he fees that banks charge retailers to process shoppers’ payments will be capped, under uniform EU-wide rules, following a vote in the European Parliament in early March. The cap, which will apply to both cross-border and domestic card-based payments, should result in lower costs for card users. ‘‘This legislation, combined with the upcoming Payment Services Directive, will establish a level playing field for payments across Europe. It should enhance fee transparency, stimulate competition and enable both retailers and users to choose the card schemes that offer them the best terms,” said Spanish MEP Pablo Zalba, who steered the proposal through Parliament. The legislation was passed by 621 votes to 26, with 29 abstentions. Today, interchange fees for card-based payments, paid by the retailer’s bank to the bank that issued the card, are not transparent and differ among EU countries, where in some cases they are subject to legislation and in others to decisions by national competition authorities. These fees are charged by banks belonging to card schemes such as Visa and MasterCard (so-called four-party schemes, involving an issuing bank, a retailer’s bank, the retailer and the card user) which together control the lion’s share of the

RETAILERS

ARE CHARGED

FOR EVERY CARD TRANSACTION AND

ADD THE COSTS

TO THE PRICES OF THE GOODS

OR SERVICES THEY OFFER

market. Retailers are charged for every card transaction and add the costs to the prices of the goods or services they offer.

TRANSPARENT FEE-CAPPING RULES FOR CROSS-BORDER AND DOMESTIC RETAIL PURCHASES:

• For cross-border debit card transactions, the agreed fee cap is 0.2% of the transaction value. • For domestic debit card transactions, at Parliament’s request, the same 0.2% cap will apply after a five-year transition period in which EU member states may cap fees at 0.2% of the “annual weighted average transaction value of all domestic transactions

LOWER COSTS SHOULD BENEFIT BOTH RETAILERS AND SHOPPERS

Today retailers are often obliged to accept all cards at conditions set by the card issuers. Under the new rules, retailers who choose a card scheme will have to accept only cards within that scheme that are subject to these fee-capping rules. If they exercise this right, then shoppers may find that retailers accept a smaller range of cards, but capped fees should result in lower costs for both retailers and shoppers. The new rules will not apply to so-called “three-party” card schemes such as Diners and American Express (involving only one bank) provided the card is both issued and processed within the same scheme. Commercial cards used only to pay business expenses will also be exempt. After three years, the rules will also apply to three-party card schemes that licence other parties to issue cards and thus circumvent the law by effectively operating as fourparty ones. The capping rules do not affect ATM cash withdrawals. Following the European Parliament’s vote, the rules need to be officially endorsed by the Council of Ministers before they can take effect, six months after the legislation enters into force. This means that the new rules should be effective before the end of this year.

THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

Gold 73

startups

{MONEY}

Taking a LEAP into Entrepreneurship HOW A LOCAL ACCELERATOR AND ITS COMPETITIONS ARE HELPING CYPRUS ECONOMY By Kyriakos Demetriou

midst the ongoing economic crisis, it is encouraging to see young people promoting entrepreneurship and innovation, two things that the Cyprus economy needs if it is to attract investment and be revived. This is exactly what a group of six young Cypriots aim to do through their accelerator, Chrysalis LEAP and the ClimateLaunchpad competition they are holding for the second year, promoting green technologies and sustainability. Gold spoke to Alexandros Charalambides (below) – one of the six Chrysalis LEAP founders, along with Eloiza Savvidou, Paris Thomas, Stylianos Yiatros, Deano Symeonides, and Stelios Procopiou – about the group’s experiences, achievements and aims. The idea of forming a cleantech accelerator, he told us, first started in 2003 when, as a young university graduate, he and some friends won a business competition in London and Cyprus but there was no followup for the project.

“This was an academic-style competition,” he said, “and the fact that we had nowhere to go with the idea after we won led me to identify the need for an accelerator that would basically do what its name says – accelerate an idea to a business. And this is exactly what Chrysalis LEAP is doing.” Chrysalis LEAP was actually formed in 2012 in Cyprus, and is an entirely private initiative by the six individuals who have invested their own time and resources in it. The following year – with the financial crisis affecting Cyprus – it held its first competition. “Although we knew that the economic situation was going to make things hard for both the economy and us after the financial meltdown, we decided that it was a move we either had to make there and then or not at all,“ he said, adding that “We were justified in the end, managing to train five teams that stood out, one of which secured funding of more than €200,000 from various sources for its project.” Not only was the competition a great success but the EU, through Climate-KIC, a key initiative promoting innovation and entrepreneurship in cleantech and environmental technologies, approached Chrysalis LEAP and the collaboration began on the 2014 CleanLaunchpad (now renamed ClimateLaunch-

74 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

pad) competition. “We held the competition and in the end we trained 10 teams that stood out, three of which managed to secure funding of more than €200,000 for their projects,” Charalambides said. This year, the competition is running in 26 European countries and Chrysalis LEAP is organising it in Cyprus and Greece. “What we will basically do is run a mini-accelerator programme in the two countries, with the support of PwC,” Charalambides explained. Entry to the competition is very simple and free for all. The 10 best teams will undergo a two-day boot-camp where they will learn the basics in order to structure their idea so that it makes good business sense. “They will be taught the business side of things and they will examine whether they have a viable product, and how to present what they are offering so as to be able to secure funding,” Charalambides noted. Following that, the teams will have six coaching sessions in which they will develop their idea further and, at the end of July, the ten teams will present their proposals to a panel and an audience. The three best ideas will then represent Cyprus in the EU finals in Amsterdam the first week of September. If any of the three is selected among the top eight in

Two-day bootcamp in Kalopanagiotis

National Final Winners

CHRYSALIS LEAP’S VISION IS A LONG-TERM ONE Europe, they will join the Climate-KIC accelerator in order to develop their idea into a business, receiving up to €95,000 in funding and 18 months of schooling. It is important to note that Chrysalis LEAP’s vision is a long-term one. “Maybe we will make our mark in 10 or 15 years’ time, in the sense that our accelerator will become big enough so that anyone in our region who wants to be trained in the business or technology aspect of cleantech can do it in Cyprus,” Charalambides told Gold. This will be just one of the benefits to the Cyprus economy, he went on, with teams being trained and mentored in Cyprus and thus benefiting the whole ecosystem – hotels, conference centres, etc. “Some of the teams we train will set up a business, which means that they will be registered in Cyprus, they may have factories manufacturing their products, they’ll hire people, they will need assistance from law offices and accountants, they’ll open bank accounts and they may attract foreign and local investors. This is the real benefit to an economy of such accelerators and the kind of competitions we are holding.” This particular accelerator’s relatively short path has not been without obstacles. Since Chrysalis LEAP is an entirely private initiative, it has not approached the public sector for funding. For Alexandros Charalambides, the main difficulty has thus been convincing the right people in the private sector to back and sponsor the initiative. This year PwC Cyprus has offered its support, in recognition of its understanding of the role that entrepreneurship will play longterm in the revival of the Cyprus economy. The state, however, is supportive of this initiative and ClimateLaunchpad in Cyprus

will come under the auspices of both the Minister of Education & Culture and the Minister of Energy, Commerce, Industry & Tourism. Chrysalis LEAP has enjoyed twofold success during its three years of existence. Of the 15 teams it has trained, four have managed to secure funding and a success rate of over 25% is considered very encouraging. Furthermore, it has been invited by Climate-KIC to participate in their programme and, of the 25 partners participating in the programme, Chrysalis LEAP is the only one that is not an official member of the Climate-KIC family and the only one running a competition in two countries. Accelerators and the processes they initiate cannot be forced, Charalambides commented. “What we have is a bottom-up approach. There may be a lot that can be changed in the system, such as the government promoting investment laws and providing investors with incentives, or universities adding classes on entrepreneurship to their curricula, so that

THE MAIN DIFFICULTY HAS BEEN CONVINCING THE RIGHT PEOPLE IN THE PRIVATE SECTOR TO BACK AND SPONSOR THE INITIATIVE students see the advantages of entrepreneurship, and more accelerators being formed, but this will not happen overnight. It is a slow process but eventually people will start finding out about these programmes.” As for Chrysalis LEAP, the founders want to expand it. “We expect to be full members

of Climate-KIC soon, said Charalambides, “and this will allow us to run additional programmes and not just ClimateLaunchpad. Then, we will be able to bring our expertise to our own products, which we shall develop and in Cyprus and abroad.”

BOOK REVIEW WINNERS AND HOW THEY WINNERS: SUCCEED BY ALASTAIR CAMPBELL (HUTCHINSON, 2015) R.R.P. £20.00 (£13.60 FROM AMAZON.CO.UK)

ow do sports stars excel, entrepreneurs thrive, or individuals achieve their ambition? Is their ability to win innate? Or is the winning mindset something we can all develop? Drawing on the wisdom of an astonishing array of talented people – from elite athletes to top managers, from rulers of countries to rulers of global business empires – Alastair Campbell uses his forensic skills, as well as his own experience of politics and sport, to get to the heart of success. He examines how winners tick. He considers how they build great teams. He analyses how they deal with unexpected setbacks and new chalSLUNLZ /L Q\KNLZ ^OH[ [OL ]LY` KPɈLYLU[ worlds of politics, business and sport can learn from one another and he sets out a blueprint for winning which blends business insights from leading writers and businessmen with sporting and political practice into a treasure trove of invaluable advice. Resilience, fortitude and a ‘never say die’ attitude are not natural gifts but Campbell suggests that we can HSS NHPU HUK \ZL [OLT [V NYLH[ LɈLJ[

THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

Gold 75

fraud prevention

PREVENTING

{BUSINESS}

FINANCIAL

MISSTATEMENT

AND FRAUD

THE CRUCIAL ROLE OF THE AUDIT COMMITTEE

By Rakis Christoforou

ypically, financial misstatement and, possibly, fraud start small, intended as “just an immaterial adjustment or omission” to improve corporate results. But as the need to maintain improved results continues, the need to maintain deception also continues. Financial statement fraud usually involves the senior management of public companies, who are in a unique position to perpetrate such fraud by overriding controls. As a consequence, the role of the Board of Directors, Audit Committees, external and internal auditors is critical in properly addressing financial misstatements and any override of controls. In a negative economic environment where targets are much harder to achieve, increased pressure is imposed at corporate level for better results, thereby creating incentives for financial misstatement and fraud. But these can also occur at lower levels of management when corporate middle managers may claim that they did not realize that they were committing fraud but saw themselves as simply doing what was expected of them by senior management. Middle managers and other employees committing this type of fraud may not be doing it for direct personal gain but because senior management has created the impression that manipulation (or omission of adjustment/action) is needed in the best interests of all.

THE ROLE OF THE BOARD OF DIRECTORS AND AUDIT COMMITTEES When faced with a material financial misstatement or fraud, it is more likely that

senior management either knew about it, should have known about it, or has caused it by putting pressure on lower level employees. Such behaviour may be rationalized as: “We were sure that business was going to turn around in the near future, we were protecting company jobs in this way, we did not intend to cause any harm to anybody, including investors,” etc. Senior management has the primary responsibility for the financial reporting process and for implementing controls to deter and detect financial misstatement and fraud. At the same time, the Board, Audit Committees, internal and external auditors have complementary and interconnected roles in delivering high-quality financial statement reports to the investing public and other interested counterparties. The Board and Audit Committees are responsible for the oversight of the company’s business operations and control environment. The Audit Committee, in particular, is responsible for overseeing not only the financial statement reporting process but also the company’s external auditors and the internal audit function. In this respect, the Board and Audit Committee members of public companies are expected to be of high moral standing, well-educated and experienced in their line of business and to have a sound understanding of the company’s business and its industry. At the same, they are expected to put less trust in senior management, perform their own due diligence on significant issues and challenge management actions and decisions. In other words, Board members should be sceptical and ask questions about critical company matters.

THE AUDIT COMMITTEE’S MOST IMPORTANT ROLE IS TO SET THE TONE AT THE TOP THE CRITICAL ROLE OF THE AUDIT COMMITTEE Audit Committee members should also have a working understanding of International Financial Reporting Standards (IFRS) in order to be in a position to challenge senior management with questions about risks that could potentially create incentives for financial misstatement. Such questions should be addressed to senior management, external and internal auditors. Audit Committee members are expected to play an active role when dealing with significant financial statement reporting issues. The Audit Committee should be in a position to utilize both internal and external auditors in order to properly evaluate the effectiveness of management’s actions with regard to financial reporting matters. Even though its role is not directly involved in the management of the company, its role and responsibility are to oversee financial reporting activities and procedures. At the same time, the Audit Committee should be in a position not only to understand the issue of exposure to management override of controls but also to take remedial action and mitigate the possibility of any override. To conclude, the Audit Committee’s most important role is to set the tone at the top, making it clear to other Board members, senior company management, internal and external auditors that they should be doing the right thing at all costs by strictly following financial reporting standards, irrespective of how such action could affect the company’s reported financial results.

info: Rakis Christoforou BBA, CPA/ABV/CFF, MCSI, ACFE was the first Certified Public Accountant (CPA) in Cyprus to be Accredited in Business Valuation (ABV)

and Certified in Financial Forensics (CFF). 76 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

employment

GLOBAL ORGANISATIONS

{BUSINESS}

FACE LOOMING CRISIS IN RETENTION OF EMPLOYEES

lack of employee engagement is the top issue currently facing 87% of HR and business leaders (up from 79% last year), according to Deloitte’s third annual Global Human Capital Trends 2015: Leading in the New World of Work report released last month. Yet, the majority of organisations are still failing to take action to improve their culture, potentially jeopardizing future growth. In the survey, conducted among more than 3,300 HR and business leaders in 106 countries, the number of leaders who cited engagement as being “very important” doubled from 26% last year to 50%. Some 60% of those surveyed said they do not have an adequate programme with which to measure and improve engagement, indicating a lack of preparedness for addressing this issue. Only 12% of HR and business leaders have a programme in place to define and build a strong culture while only 7% rated themselves as excellent at measuring, driving, and improving engagement and retention. “As demand for talent picks up, the balance of power in business is rapidly shifting from the employer to the employee,” said Josh Bersin, principal and founder of Bersin by Deloitte. “Moreover, workers are becoming more mobile, contingent and autonomous, and as a result, harder to manage and engage. In this new world of work, organisations need to re-imagine the way they manage people and

LACK OF EMPLOYEE ENGAGEMENT IS THE TOP ISSUE, SAYS DELOITTE SURVEY come up with new, out-of-the-box ideas to make themselves relevant.” Leadership gaps – last year’s most critical issue – continued to top the agenda for HR and business leaders, 86% of whom cited it as a top issue this year. However, the number of respondents who said this was a “very important” issue jumped from 38% to 50%. Recognizing the fact that a general lack of skills is likely to impede business growth, 85% of HR and business leaders ranked learning and development as a top issue, compared to 70% last year, making this the third most critical issue in this year’s survey. Meanwhile, 80% of respondents cited workforce skills as a top issue (up from 75% last year), and 35% rated the lack of skills in HR as a “very important” problem, up from 25% last year. “There are significant shifts happening in the global workplace that business must actively manage,” said Brett Walsh, global human capital practice leader, Deloitte Touche Tohmatsu Limited. “In addition to workers’ changing expectations from employers, skills needed on the job are changing faster than ever. Organisations are quickly falling behind on developing the right skills across all levels. There’s an urgent need for organisations to re-evaluate their learning programmes and treat leadership development as a long term investment, rather than a discretionary training spend item when times are favourable.” In addition to the challenges of employee engagement and leadership, the Deloitte report shows that companies are struggling to lower workplace stress, simplify business processes, and reduce complexity. In fact, 66% of respondents believe their employees are “overwhelmed” by today’s work environment; and 74% cite workplace complexity as

78 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

IN THIS NEW WORLD OF WORK, ORGANISATIONS NEED TO RE-IMAGINE THE WAY THEY MANAGE PEOPLE a significant problem. While more than half of the surveyed organisations have some type of simplification programme, 25% have no plans to implement one. “Simplification is a new theme emerging from this research,” said Bersin. “Engaging and supporting employees today requires fresh design thinking about how work gets done.” The Deloitte report reveals that analytics is one of the areas where organisations face a significant capability gap. Three quarters of respondents cited talent analytics as an important issue, but just 8% believe their organisation is “strong” in this area – almost exactly the same as in 2014. “HR and people analytics has the potential to transform the way we hire, develop, and manage our people,” said Jason Geller, principal, Deloitte Consulting LLP, and national managing director of the US human capital practice. “Leading organisations are already using talent analytics to understand what motivates employees and what makes them stay or leave. These insights help drive increased returns from talent investments, with huge consequences for the business as a whole.” Deloitte research shows that it will take several years for businesses to develop and absorb talent analytics technology, and “the sooner HR teams start working on building this capability, the better positioned they will be to address future talent issues,” concluded Geller.

mobile technology

{BUSINESS}

€€

By Mariana Antonescu

oday, most people own a Smartphone, the device that has revolutionised almost every aspect of our daily lives including communication, information access and consumerism. According to one report, app usage makes up 47% of In[LYUL[ [YHɉJ HUK PM `V\ [OPUR [OH[ mobile apps in Cyprus are solely for the big names like The Mall

of Cyprus, you are wrong. More and more small and midsize businesses are following the mobile trend, unKLYZ[HUKPUN [OH[ HU LɈLJ[P]L TVIPSL strategy involves more than just a mobile-friendly website. In fact, these days you’ll notice that many small businesses have their own dedicated TVIPSL HWW IL P[ [OL JVɈLL ZOVW VY the beauty spa. These companies

80 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

have understood that mobile technology has changed the way to reach customers and they are ahead of the game when it comes to taking their marketing to the next level by using apps as extensions of their products. So, what could an app do for your business?

and much more. Through push notifications, businesses get even closer to direct interaction and can easily remind customers about their products and services whenever it makes sense. A national chain can easily send city- or region-specific notifications about special offers based on what users in that area are interested in; a restaurant can boost loyalty by sending a special offer to customers who have visited in the past year but not in the last two months; a store can announce a sale on sunglasses when sunny weather is predicted.

IMPROVE CUSTOMER SERVICE AND SUPPORT:

A MOBILE APP

HELPS BUSINESSES INCREASE REVENUE LARGELY BY

INCREASING EFFICIENCY

IMPROVE CUSTOMER ENGAGEMENT: A crucial part of any business is maintaining strong relationships with clients. It can be difficult to achieve in practice, but you need to deliver great service in order to keep and grow your customer base. This is where the mobile world can help you. A chat feature in your mobile app, for example, can connect you directly to your clients, providing them with real-time customer service. Apps can also include a feature to book appointments and set reminders. Another important aspect of utilisng a mobile app is that it enables you to collect valuable information and feedback about consumer behaviour. By requesting a quick survey or asking customers to join your business’s mailing list, you can gain insight into their location, interests and preferences. This feedback can be crucial to continually improving your business.

CREATE A DIRECT MARKETING CHANNEL: One of the biggest benefits of a mobile app is that it helps businesses increase revenue largely by increasing efficiency. Instead of advertising to a broad spectrum, users can be narrowly targeted as apps can provide newsfeeds, general information, search features, user accounts, prices, booking forms

Making it simpler and more efficient for your customers to get in touch with your company, and offering them tools to make their life easier while using your products or services, can be a great reason to develop a mobile app. Ryanair has an app that allows members to search for cheap flights on their iPhone and get the lowest prices to hundreds of destinations within Europe, to add services to an existing booking, check-in for flights and get a boarding pass sent direct to their mobile phone. This makes customers’ lives easier and is a value-add to the existing service.

STAY VISIBLE: Once a customer downloads your app, it will constantly appear on their device. This ensures your brand’s visibility every time they look at their phone or tablet. For this reason, mobile apps should be frequently updated. One way to make sure that loyal customers are receiving information about new products, promotions, or upcoming events is by enabling push notifications. You can also include mobile app exclusive discounts or specials to make sure that customers check the app often.

CULTIVATE CUSTOMER LOYALTY: With all the ‘noise’ out there – banners, flashing signs, billboards, newspaper ads, coupons, flyers, websites and more – it is easy to lose your impact on customers. It’s time to go back to making a true and sincere connection with your customers and making them loyal to your product and/or service. By personalising your services, you create a unique experience for customers and keep them coming back. Likewise, by connecting mobile apps to social media, you can obtain customer feedback through

the app straight from their social media channels. Specialised service and a focus on what’s important to individual customers will set your business apart. Convinced yet? I hope so. Apps are undoubtedly a valuable tool in business advertising but they must be handled properly in order to successfully promote the company. Competition is fierce in the app arena and success is determined by how you market your app. You must constantly promote it on your website, on social accounts, and probably through advertising, too. You should also consider how the app will improve upon your existing website and services, how much it will cost and what your competitors are doing. If you decide that your app really will add something in the way of functionality, novelty and usefulness, go for it.

B BOOK RREVIEW STARTUPLAN HOW THREE STARTUPLAND: GUYS RISKED EVERYTHING TO TURN AN IDEA INTO A GLOBAL BUSINESS BY MIKKEL SVANE (JOHN WILEY & SONS, 2015) R.R.P. £17.99 (£15.58 FROM AMAZON.CO.UK)

he book is a well-written and very personal look back at the amazing success story of Zendesk, which began as an idea shared by three friends in a loft in Copenhagen and culminated in the company’s Wall Street IPO last year. Zendesk Inc. is now one of the hottest enterprise software companies in the world, still growing rapidly with customers in 150 countries. But its success was anything but predestined. The book is both autobiVNYHWO` HUK ¸[PWZ [YPJRZ¹ N\PKL! ÄYZ[ HUK foremost it’s a suspenseful chronicle of the journey of Mikkel Svane and his co-founders that lets the reader witness some of the many ups and downs which “startupland” has in store for entrepreneurs, but it also contains a lot of actionable advice for others. Written with great passion and honesty, this is highly recommended for anyone who aspires to become an entrepreneur or for anyone who likes a good old-fashioned fairytale about how three guys had a great idea and managed to turn it into a $2 billion company.

info: Mariana Antonescu MBA is a business consultant with a special interest in the field of Social Media Marketing. www.mari10.blog.com THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

Gold 81

cyprus

{ECONOMY}

ANOTHER Year of Contraction EY PREDICTS DELAYED ECONOMIC RECOVERY, DUE IN PART TO RUSSIAN DEVELOPMENTS

he recovery expected in the Cypriot economy is now likely to be deferred until 2016, in particular due to the impact of the deep recession expected in Russia. In its latest Outlook for Cyprus, EY has lowered its forecast of GDP growth in 2015, noting that the main drivers of growth – tourism and other services – face continuing problems. Here are the main conclusions of the report: After three years of recession, the Cypriot economy had appeared on course to return to growth in 2015, helped by lower oil prices, but the impact of the deep recession expected in Russia on tourism and the banking sector will defer the recovery until 2016. Although the quarterly drop in GDP slowed to 0.3% in Q3 last year, a larger fall of 0.7% in Q4 meant that the contraction in 2014 overall was 2.4%. And due to mounting external headwinds, EY’s forecast for 2015 GDP is now for a decline of 0.4%, compared with the 0.3% growth seen in its December report. The problems in Russia will weigh on the improvement in exports of goods and services, which cut Cyprus’ current account deficit to just 0.5% of GDP in 2014, a sharp fall from almost 7% in 2012 and double-digit deficits in 2008–10.

EXPORTS AND TOURISM SHOULD BEGIN TO IMPROVE MORE STRONGLY AS EUROZONE DEMAND PICKS UP STEADILY AND THE RUSSIAN ECONOMY RETURNS TO GROWTH Another factor weighing on the economy will be restraint on public spending as the bailout conditions imposed by the International Monetary Fund (IMF) and the European Union (EU) in 2013 force the Government to target a return to primary budget surplus in 2016. As a result, investment growth will remain subdued in 2015, rising by just 1% after a rise of nearly 6% in 2014, but declines in the five years prior to that. At the same time, consumer demand remains subdued, held down by the need for fiscal austerity, and the high unemployment rate, which is expected to remain close to 16% this year. Private consumption is forecast to be broadly unchanged for a second successive year in 2015. However, the relaxation of budget pressures from 2016 will allow an acceleration of investment growth. At the same time, exports and tourism should begin to improve more strongly as eurozone demand picks up steadily and the Russian economy returns to growth. These factors should lead to a fall in unemployment and a rise in personal in-

82 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

comes, helped also by low world oil prices, in turn leading to stronger private consumption growth. As a result, GDP growth is seen at 1.1% in 2016, picking up to 2.5% in 2019. But the growth forecast is fairly subdued due to the severity of the 2008-09 recession and the brevity of the recovery that followed it before the renewed downturn in 2011. GDP (in real terms) in 2014 was still some 10% below the pre-crisis 2008 level, and the latter is not expected to be regained until 2020. Moreover, in the short term, the risks to our forecast remain on the downside. The recession in Russia and the steep fall in the rouble have cast doubt over the prospects for exports of goods and services from Cyprus in the near term. The island’s tourism industry, which accounts for over 10% of GDP, relies heavily on Russian visitors, who normally make up 25% of the total number of tourists to the island (second only to those from the UK) and some 30% of revenues for the sector. Overall tourist arrivals rose by 1.5% in 2014 but, as the situation in Russia worsened toward the end of the year, the number of Russian visitors to Cyprus fell by over 18% from a year earlier for November and December. And with the economic climate in Russia worsening, local industry sources suggest that Russian arrivals could fall by 15%-20% this year, after rising by almost 5% in 2014. There should be some offset from a higher number of visitors from the UK (up 5% on the year in December but down by 2% in

2014 overall) where growth and incomes are rising faster and the weakness of the euro will encourage foreign holidays to eurozone countries. Visitor numbers from Greece have also started to pick up as its economy begins to improve but the continued sluggish recovery seen in the eurozone as a whole means there will be little overall boost to exports of goods and services from this source. Given the problems facing tourism and the slow growth of merchandise exports to the EU, the improvement in Cyprus’ current account deficit will probably stall this year as revenues falter. The sharp fall in oil prices will help to curb the import bill, however, meaning that the external deficit will persist at around 0.4% of GDP in the coming years. Imports will outgrow exports once output starts to recover, reflecting the limited scope for substituting externally sourced consumergoods and energy. Offshore oil and gas could improve the external balance (and help to meet tightening EU emission targets) but commercial supplies are unlikely to come onstream in the forecast period, especially given doubts about the returns on investment in energy projects due to the sharply lower oil price profile now expected. The recession in Russia will also hit the Cypriot banking sector further. Close ties between the two countries meant that up to a third of all bank deposits in Cyprus were of Russian origin. When the crisis hit in 2013, Russians withdrew large amounts from the banking system. The current problems in Russia mean that companies there have been instructed to reshore some of their assets from the island as capital controls are gradually removed, which will also have implications for government tax revenues in Cyprus. In addition, there may be complications for the banking sector due to the latest developments in Greece. This means that the banking sector will remain a drag on the economy, with its capacity to lend still held down by the level of non-performing debt, which accounts for more than 50% of total lending despite some restructuring. So even though three of Cyprus’

THE SHARP DROP IN REAL INCOMES IN THE PAST TWO YEARS WILL ALSO CONSTRAIN THE RATE OF RECOVERY IN DOMESTIC BANK DEPOSITS EVEN WHEN TRUST IN THE SYSTEM IS FULLY RESTORED

biggest four banks passed the EU stress tests last October, and the fourth was required to raise a modest level of capital, the gradual pickup in GDP growth that EY is forecasting means that the level of bad debts will fall only slowly in 2015-17 and will deter any rapid resumption of credit growth to non-financial businesses. Moreover, the sharp drop in real incomes in the past two years will also constrain the rate of recovery in domestic bank deposits even when trust in the system is fully restored, with non-resident deposit growth held back until the Russian economy starts to grow again in 2016. The €10 billion IMF and EU support programme remains broadly on track because of continued success in meeting fiscal deficit reduction targets. And there is €1 billion in the financial support programme intended to cover the capital needs of the banking system that will not be used for this purpose (although, on the other hand, the December tranche of IMF funding has been withheld because of the failure to implement an agreed foreclosure rule). The budget deficit narrowed to 5.4% of GDP in 2013, and EY estimates that it fell to 3% in 2014, well within the target ceiling of 4.25% of GDP. The primary deficit – which excludes debt repayments – is officially projected at just 1.6% of GDP in 2015 before swinging into a surplus of 1.2% of GDP in 2016. After briefly talking of a move into primary surplus this year, the finance ministry has recognized that “austerity fatigue” is mounting (a factor that may gather momentum following the outcome of January’s election in Greece). As a result, the Government has promised to find room for targeted spending increases in 2015, to maintain social programmes and ensure full use of EU cofunding for various projects. Eurozone membership has meant that Cyprus needs internal wage and cost reductions to reignite exports and rebalance the current account, which is estimated to have posted a deficit equal to just 0.5% of GDP in 2014, down from 10% in 2010. Average hourly wages were down 3.8% on the year in Q3, extending the reduction seen since Q4 2012. And together with an unemployment rate still around 16%, this will maintain the squeeze on household spending. These cost reductions and weak consumer demand brought inflation down sharply in 2013 and then resulted in an average decline of 0.3% in 2014 (on the EU-harmonized basis). The annual inflation rate picked up to almost 1% at the start of Q3 last year, lifted by indirect tax increases, but then fell back

as oil prices plunged and in December was -1%. And given the trend in the eurozone and the lagged impact of lower oil prices, there may be further weakness in the early months of 2015. As a result, EY has lowered its forecast of inflation in 2015 to just 0.4%. But it still expects a gradual pickup to about 2% in 2018-2019, above the eurozone average, pushed up by VAT increases this year and then by gradually rising oil prices and strengthening domestic demand. This expected rise should promote investment and consumption recovery without provoking higher wage pressures because of the lingering threat from unemployment, which EY expects to decline only slowly to 15.5% in 2016 and then 13.8% in 2017.

B BOOK RREVIEW HALL ALL OF MIRRO MIRRORS: THE GREAT DEPRESSION, THE GREAT RECESSION, AND THE USES – AND MISUSES – OF HISTORY BY BARRY EICHENGREEN R.R.P. £20.00 (£13.60 FROM AMAZON.CO.UK)

he Great Depression and the Great Recession are arguably the two great economic crises of the past hundred years and while there are accounts of both episodes, no one has yet attempted a sustained comparative analysis. Eichengreen presents a brilliant dual-track account of the two crises and their consequences, weaving the stories together rather than telling them in sequence. He describes the two bubble-fuelled build-ups, then the onset of JYPZPZ [OL Z\IZLX\LU[ ÄUHUJPHS HUK LJVnomic and collapse, the policy response HUK ÄUHSS` [OL YLJV]LY` 6UL [OLTL VM [OL book is that, while contemporary policymakers did learn lessons from the Great Depression, they could have done better. To be sure, this more recent crisis was better managed than the earlier one but, the author argues, a wiser collective response HM[LY ^V\SK OH]L Z[H]LK VɈ [OL painfully slow growth that subsequently plagued the United States and Europe. Rich with anecdotes and portraits of the ÄUHUJPLYZ ^OV [^PJL OLSWLK [V IYPUN [OL US banking system to its knees, the book is highly readable.

THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

Gold 83

information exchange

{TAX&LEGAL}

EUROPEAN COMMISSION PROPOSAL ON ADVANCE

CROSS-BORDER RULINGS AND PRICING ARRANGEMENTS

usinesses have traditionally viewed tax planning as legitimate on the grounds that they use legal arrangements to reduce their tax liabilities. However, tax planning has become more elaborate in recent years, developing across jurisdictions and shifting taxable profits towards states with beneficial tax regimes. This “aggressive” form of tax planning can take a multitude of forms, such as taking advantage of the technicalities of a tax system or of mismatches between two or more tax systems for the purpose of reducing or avoiding tax liabilities. Its consequences include double deductions (e.g. the same expense is deducted in both the state of source and

TAX AVOIDANCE, TAX FRAUD AND TAX EVASION HAVE AN IMPORTANT CROSSBORDER DIMENSION the state of residence) and double non-taxation (e.g. income is not taxed in either its state of source or in the recipient’s state of residence). Such practices are in many cases assisted by the rulings issued by national administrations, which confirm to a company how a specific transaction will be taxed under existing legislation and therefore provide legal certainty for the structure put in place. Even though Member States are obliged to ensure that they issue tax rulings in compliance with existing EU and national law, a lack of transparency regarding such rulings may impact on other countries which have links with the beneficiaries of the rulings. Tax avoidance, tax fraud and tax evasion have an important cross-border dimension. Globalisation and the increasing mobility of taxpayers can make it difficult for Mem-

84 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

ber States to assess tax bases properly. This phenomenon can affect the functioning of taxation systems and entail tax avoidance and tax evasion and thus jeopardise the functioning of the Internal Market. Member States can only address this problem effectively if they agree to take common action. For this reason, improving administrative cooperation among tax administrations is a key objective of the Commission’s strategy. Council Directive 2011/16/EU was adopted to replace an earlier Directive dealing with assistance between Member States (Council Directive 77/799/EEC), as a response to the need for enhanced administrative cooperation in the field of taxation. The purpose of the latest proposal is to ensure that Directive 2011/16/EU provides for comprehensive and effective administrative cooperation between tax administrations by providing for the mandatory automatic exchange of information regarding advance cross-border rulings and advance pricing arrangements, a particular type of advance cross-border ruling used in the area of transfer pricing. Tax-driven structures, which lead to a low level of taxation of income in the Member State issuing the ruling, may leave only low

amounts of income to be taxed in other Member States involved, thus eroding their tax bases. The proposal requires Member States to automatically exchange basic information about advance cross-border rulings and advance pricing arrangements with all other Member States. This is based on the principle that it is other Member States which are best placed to assess the potential impact and relevance of such rulings, rather than the Member State giving the ruling. In appropriate cases the Member States receiving the information can request further more detailed information. The proposal has been specifically designed to allow the automatic information exchange on rulings to build on the existing rules in Directive 2011/16/EU relating to the practical arrangements for exchanging information including the use of standard forms. It is also in line with international developments at the level of the OECD and its work on BEPS. During 2012, the Code of Conduct Group for Business Taxation reviewed developments in Member States’ procedures regarding tax rulings. The Group identified the types of cross-border rulings on which information should be exchanged spontaneously and recommended the development of a “Model Instruction” that could be used as a reference by the Member States for internal application. The Model Instruction specified that information on cross-border rulings should be sent spontaneously in accordance with Article 9 of Directive 2011/16/EU, at the latest one month after the ruling is issued. It also required Member States to ensure proper communication channels on this subject and good quality training and guidance for those issuing rulings. It also provided guidance on the content of the information to be provided spontaneously. However, this Model Instruction is not legally binding. There is, in practice, little information exchange between Member States on their advance tax rulings or transfer pricing arrangements even where these have an impact on other countries. Therefore a more systematic and binding approach to information exchange on rulings appears necessary within the EU so as to ensure that, where one Member State issues an advance tax ruling or transfer pricing arrangement, any other Member State affected is in a position to take any necessary corresponding action. On 18 March 2015, the European Commission published its proposal to amend

THERE IS, IN PRACTICE, LITTLE INFORMATION EXCHANGE BETWEEN MEMBER STATES ON THEIR ADVANCE TAX RULINGS OR TRANSFER PRICING ARRANGEMENTS the Directive on administrative cooperation between Member States (Directive 2011/16/EU) introducing a mandatory automatic exchange of information on advance cross-border rulings and advance pricing arrangements. The disclosure requirement, which the Commission hopes will be in place by 1 January 2016, includes not only rulings and pricing arrangements which will be issued after that date, but also rulings and pricing arrangements issued less than ten years ago that are still in force. The Directive on administrative cooperation already obliges Member States to ‘spontaneously’ exchange tax rulings which are foreseeably relevant to tax administrations and collection in any relevant other Member State. The proposal extends this obligation, requiring national tax authorities to share information every three months on all of their advance cross-border tax rulings (defined in the proposal as “any communication or other instrument or action of similar effect, given by or on behalf of a Member State, regarding the interpretation or application of its tax laws”, automatically with all other 27 tax authorities and the Commission, following this standard format: • Name of taxpayer and group • A description of the issues addressed in the tax ruling • A description of the criteria used to determine an advance pricing arrangement • Identification of the Member State(s) most likely to be affected • Identification of any other taxpayer likely to be affected (not: natural persons). The proposal is part of a wider Tax Transparency Package put forward by the Commission, which also includes the following initiatives: • Assessing possible new transparency re-

quirements for multinationals • Reviewing the Code of Conduct on Business Taxation • Quantifying the scale of tax evasion and avoidance • An Action Plan on Corporate Taxation before the summer to focus on measures ‘to make corporate taxation fairer and more efficient within the Single Market’, including a re-launch of the CCCTB and ideas for integrating BEPS at EU level • Repeal of the EU Savings Directive, which now redundant since the Directive on Administrative Cooperation covers the same types of income.

BBOOK O RREVIEW DATA PROTEC PROTECTION: A PRACTICAL GUIDE TO UK AND EU LAW BY PETER CAREY (OUP OXFORD, 2015)

R.R.P. £85.00 (£85.00 FROM AMAZON.CO.UK)

he brand new fourth edition of [OPZ PU]HS\HISL OHUKIVVR VɈLYZ practical solutions to issues arising in relation to data protection law within the UK and EU. It has been fully updated and expanded to include new cases and guidance, and additional material on new technologies. There are new chapters on behavioural advertising, privacy impact assessments and (WWZ ^OPSL ZPNUPÄJHU[ \WKH[LZ OH]L ILLU made to the CCTV chapter, and there is new information on social media and the Leveson Report. Each chapter contains considerations of the likely impact of the proposed European General Data Protection Regulation through analysis of the draft regulation published by the European Commission in 2012, and last year’s amendments proposed by the European Parliament. The book has been adopted as [OL RL` [L_[ MVY [OL 7YHJ[P[PVULY *LY[PÄJH[L 0U +H[H 7YV[LJ[PVU [OL SLHKPUN X\HSPÄJH[PVU MVY [OVZL ^OV ^VYR ^P[OPU [OL ÄLSK VM KH[H protection. Containing useful examples of situations which arise in practice, it is ideal for businesses who need to come to grips with data protection law as a matter of compliance.

THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

Gold 85

luxury real estate

{LIFESTYLE}

Castles

IN THE AIR NO MORE

86 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

FOR MOST PEOPLE, THE IDEA OF LIVING IN A CASTLE IS THE STUFF OF DREAMS, FAIRYTALES, FANTASIES OR PERHAPS, FOR THE MORE ACADEMICALLY MINDED, MEDIAEVAL HISTORY. BUT AS IS HAPPENING IN SO MANY AREAS, THINGS ARE NOT WHAT THEY USED TO BE. BUYING OR RENTING OUT A CASTLE OR A PALACE IS PERFECTLY POSSIBLE IF YOU ARE IN A POSITION TO BE ABLE TO SPLASH SOME CASH. By Effy Pafitis

n he beauty of the Palace of Versailles, some say, is unparalleled. The stately royal château, once home to France’s most memorialised monarch, King Louis XIV, has inspired architects far and wide to replicate its splendour. Moreover, it has planted the desire to possess such a grand residence in the hearts of many. To this day, the demand for opulent estates remains high. As inventories continue to rise – as does the strength of the dollar – the price of these castles and châteaux throughout Europe has conveniently seen a significant decline in recent years, making these historical locations more affordable for the ultra-wealthy. Though “affordable” is relative, professional real estate brokers reveal that luxury properties – castles and mansions in particular – across Europe have become 25%40% cheaper for purchasers from the USA compared to just one year ago. This has allegedly lured a new wave of American buyers to the “remote” lands of Ireland, France, Spain and Italy, where there are castles a-plenty, says Mark Harvey, Partner at real estate firm Knight Frank, who specializes in French residential sales. Indeed, the number of Americans both seeking and purchasing in France has tripled in recent years, now accounting for some 10% of the firm’s French sales. “The interest is huge right now,” Harvey told CNBC, adding that the summer calendar is quickly filling with a showings schedule for US buyers. The supremely exclusive property portfolio of these profound residences includes listings such as the €11 million Carpentras 18th century chateau in Provence, France.

Restored with modern amenities, the estate boasts in excess of 16,000 square feet of living space, hosting seven bedrooms, a grand entrance hall, reception rooms, a dining room, kitchen, library and master bedroom suite with an adjoining dressing room. It sits on more than 86 acres with two hunting pavilions, a guest house, outbuildings, an orangery, a swimming pool and a tennis court. One year ago, the château would have been priced at US$15 million. Its $11.7 million price today equates to an effective price cut of more than $3 million. “Many high net worth individuals are buying homes as a hard asset,” says Jay Belson, CEO of SRE Investing, a full service luxury real estate investing firm based in Beverly Hills, Calif. Thus, with the wealth of the world’s richest people at an all-time high this year – according to Forbes – the market for palatial properties is larger than ever. Indeed, prime property in Paris is now offered at around $2,000 per square foot, according to Harvey. This is highlighted against the $2,700 per square foot for prime property in Manhattan, according to estimates from Jonathan Miller of appraisal firm Miller Samuel. “Americans are looking at prices in Paris compared to New York, Miami or San Francisco and discovering it’s a good

THE PRICE OF THESE CASTLES AND CHATEAUX HAS SEEN A SIGNIFICANT DECLINE IN RECENT YEARS

THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

Gold 87

luxury real estate

value,â&#x20AC;? Harvey says. The renowned multinational auction house Sothebyâ&#x20AC;&#x2122;s has several listings in Paris that appeal to Americans seeking a pied-Ă -terre, including a three bedroom house in the 17th arrondissement that features regal high ceilings and breathtaking views for $1.7 million. The currency developments arenâ&#x20AC;&#x2122;t the only factor aiding the evolved â&#x20AC;&#x2DC;American Dreamâ&#x20AC;&#x2122; of living as the likes of King Louis XIV. With weaker economies throughout Europe and more of the USAâ&#x20AC;&#x2122;s

wealthy relocating to lower-tax jurisdictions, inventories for high-end real estate have been rising, and prices have been falling. In Ireland, the Lisselan Estate in County Cork, a castle listed by Knight Frank, came on the market in June 2014 at â&#x201A;Ź9 million. The price was curtailed to â&#x201A;Ź6.95 million in December of the same year. Between the price reduction and currency change, the effective fall in price was approximately $5 million. It is not, however, just castles and pieds-Ă -terre. Many American corporations and institutional investors have infiltrated Europe, seeking com-

Castles

FOR RENT 1. Balfour Castle, Shapinsay Island

Balfour Castle was the creation of two KPZ[PUN\PZOLK TLU" +H]PK )HSMV\Y [OL [O 3HPYK VM )HSMV\Y HUK ;YLUHI` HUK +H]PK Bryce, the pre-eminent Scottish architect of his generation and leading exponent of the Scottish Baronial style. A rare example of a calendar house originally planned with 7 turrets, 12 external doors, 52 rooms and 365 sections of window, the castle Âś SVJH[LK VUL VM [OL 6YRUL` 0ZSHUKZ VÉ&#x2C6; the north coast of mainland Scotland â&#x20AC;&#x201C; is H]HPSHISL MVY Ă WLY ^LLR

3. ChĂ˘teau Saint Philippe, French Alps, St Jean de la Porte, France

4. Castle Wasserburg, Wachau Valley, Austria

6É&#x2C6;LYPUN ILKYVVTZ HUK 13 bathrooms, this chĂ˘teau is located on 17 acres of private land, nicely situated for easy day trips to Switzerland, Provence, the French 9P]PLYH HUK 0[HS` *OH\É&#x2C6;L\Y service, concierge private JOLM HUK Z[HÉ&#x2030;UN HSS H]HPSable. The price tag? â&#x201A;Ź17,370 per week.

:VTL RT ^LZ[ VM =Penna, Wachau is known as one of the most beautiful locations throughout Austria, home to a plethora of decadent historical residences. Indeed, the history of Castle Wasserburg dates back as far as the 12th century. Today, its 10 bedrooms and 7 bathrooms are available for rent from â&#x201A;Ź13,200 per week.

5. Aldourie Castle, Loch Ness, Scotland

2. Castle Oliver, Ballyhoura Mountains, Ireland )\PS[ PU *HZ[SL 6SP]LY PZ ZL[ HTVUN the dramatic scenery of the breathtaking Ballyhoura Mountains, located between the Irish cities of Cork and Limerick. The castle, which features 9 bedrooms and 9 bathrooms, is home to the countryâ&#x20AC;&#x2122;s largest wine cellar, with a capacity of 55,000 bottles. The residence is available for â&#x201A;Ź28,000 per week.

This historic castle and estate is situated on the southern shore of Loch Ness, close to the city of Inverness, capital of the Scottish Highlands. (SKV\YPL VÉ&#x2C6;LYZ NYHUKL\Y and comfort, beauty and tranquility in a breathtaking setting. With 15 bedrooms and bathrooms, this castle was the winner of HHA/Sothebyâ&#x20AC;&#x2122;s UK Restoration of the Year Award in 2011. From â&#x201A;Ź13,200 per week.

88 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

6. ChĂ˘teau de Challain, Challain-laPotherie, France

Situated in the quaint village of Challain-la-Potherie, the chĂ˘teau features a marriage of breathtaking 19th Century architecture and modern, luxurious amenities. Available for private rent from â&#x201A;Ź10,500 per week, it is a preferred location for opulent wedding ceremonies and parties.

mercial real estate opportunities and other investments, given the attractive values, Harvey adds. Many of these are also seeking real estate investments for themselves. ÂŤYou see many of them moving money out of US equities and into euro equities,Âť he confides. ÂŤWhen you look at the buying power of the dollar and expectations of a better economic cycle in Europe, real estate is a good play.Âť Those without the budget to purchase a reduced regal residence, however, shouldnâ&#x20AC;&#x2122;t fret. ChĂ˘teaux and castles for rent are available throughout the region. Below left, we list the most opulent, located in Europe:

BOOK REVIEW THE GIRL ON THE TRAINÂ BY PAULA HAWKINSÂ (DOUBLEDAY, 2015)

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aving been sacked from her job, Rachel leaves for â&#x20AC;&#x2DC;workâ&#x20AC;&#x2122; every day and returns on her usual train, keeping up the pretence that she is employed and coping. The train always pauses at the same signal and Rachel uses that time every day to glimpse a couple she sees every day, creating her own imaginary (and perfect) life for them. One day, she sees something that doesnâ&#x20AC;&#x2122;t add up and thinks that what she has witnessed may be vitally important to a police investigation. She has no idea of the danger she is about to bring upon herself... The story PZ [VSK MYVT [OYLL KPÉ&#x2C6;LYLU[ ]PL^WVPU[Z LHJO NP]PUN H ZSPNO[S` KPÉ&#x2C6;LYLU[ ]LYZPVU since the characters are complex and Ă&#x2026;H^LK TLHUPUN [OH[ [OL` SPL JOLH[ HUK KLJLP]L ZV UV[OPUN PZ YLHSS` HZ P[ Ă&#x201E;YZ[ appears and, more importantly, nobody PZ HZ [OL` Ă&#x201E;YZ[ ZLLT +VUÂť[ IL W\[ VÉ&#x2C6; by the comparisons you may have read between this and Gone Girl. This absorbing and gripping psychological thriller will have you hooked until the very last page.

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A Day in the Life

Loucas Marangos The CEO of TFI Markets on science Ă&#x20AC;FWLRQ KLV DOO WLPH IDYRXULWH URFN DOEXP DQG WKH QHHG IRU Ă H[LELOLW\ DW work. â&#x20AC;&#x153;I live in Nicosia with my wife and three sons â&#x20AC;&#x201C; twins and a two-year-old â&#x20AC;&#x201C; and I get up at 6 oâ&#x20AC;&#x2122;clock sharp every day, including weekends. Two or three times a week I go running for 30 minutes to an hour, so by the time I get home breakfast is over and the twins have left for school. I take the youngest one to nursery and then go to work around 9am. Although there is a certain daily routine â&#x20AC;&#x201C; I walk through the various departments and chat with people, check the markets on the screens, go through my e-mails â&#x20AC;&#x201C; there is always a new challenge so it is never a boring day in the office. For example, in January, when the Swiss franc/euro peg was abandoned I was at Heathrow Airport and I had to spend the entire flight back to Cyprus knowing that something huge had happened but unable to get an update, which was not good. At high school I liked economics and physics and my goal was to get a scholarship to go university. I studied Finance, came back and did an MBA, and I got involved with TFI, starting in a middle management position and moving up over the years. I have been here since Day One and we have always been flexible, changing our strategic direc-

tion numerous times in these 15 years. To me, the ability to adapt is the cornerstone of success. We live in an environment where things are constantly changing and we have to be flexible, both on a corporate as well as a personal level. This company has been through various transformations. I really feel that the team here â&#x20AC;&#x201C; itâ&#x20AC;&#x2122;s not just me â&#x20AC;&#x201C; has shaped its present form. We handle corporate clients and their needs for hedging, as well as third party payments and currency conversions so we operate much more like a small bank treasury. Our people are very capable and itâ&#x20AC;&#x2122;s a joy to work with them. The job itself is a neverending learning process that requires constant decision-making. It can be very stressful but itâ&#x20AC;&#x2122;s very rewarding to look back and see what we have accomplished. On the downside, the main disadvantage is that itâ&#x20AC;&#x2122;s very difficult to switch off. Even when on holiday, I need at least a week before work starts to move into the background. Two or three times a week I will also exercise after work so most days I get home between 7pm and 8pm. Dinner is a family affair and I am fortunate that my wife is a very good cook because I never do any cooking! I do read a lot and I particu-

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90 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

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larly enjoy science fiction novels. I have recently read Altered Carbon by Richard Morgan and The Player of Games by Iain M. Banks, which were both outstanding, but the best book I have ever read is American Gods by Neil Gaiman. I like music and I have compiled a long playlist â&#x20AC;&#x201C; about 6 hoursâ&#x20AC;&#x2122; worth â&#x20AC;&#x201C; of my favourite songs from high school up to now and at breakfast every Sat-

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urday we listen to tracks from the list. I mostly like rock music (as a kid I was into heavy metal) and my vote for the best rock album ever goes to Master of Puppets by Metallica. I still get goosebumps when I hear something from it though I donâ&#x20AC;&#x2122;t listen to that kind of music anymore. I recently rebought Script for a Jesterâ&#x20AC;&#x2122;s Tear by Marillion, which shows just how good those guys were. I like more obscure classics too, such as Pampered Menial by Pavlovâ&#x20AC;&#x2122;s Dog. Great music! Travelling for pleasure has been on hold since we had the little one but if I could go somewhere it would be a nature reserve in Africa. I want to take the kids there to see animals in the wild because I think that this is something that wonâ&#x20AC;&#x2122;t be there when they grow up. I do feel that childrenâ&#x20AC;&#x2122;s lives are much more complicated now and I am sorry that my children are not able to live the life that I did when I was their age. At weekends we try to get out of the house and spend time with friends or take a day trip somewhere. I think that we have all become dependent on our need to work and, like most people, I would like to have more time to myself but I canâ&#x20AC;&#x2122;t complain. Actually the happiest people I know lead very simple lives, which goes to show that there is always room for improvement when it comes to work/life balance but I would definitely say that I have a happy life.â&#x20AC;?

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