Gold Magazine Issue 43

ISSUE 43 october 14 - NOVember 13, 2014 PRICE €4.95

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the international investment, finance & professional services magazine of cyprus

care of business CIBA

cyprus international

businesses association

How CIBA looks after the interests of international companies in Cyprus

AFX CAPITAL MARKETS LTD. AGENCE FRANCE-PRESSE LTD. AGRIMATCO LTD. AI GLOBAL INVESTMENTS (CYPRUS) PCC LTD. AKER SOLUTIONS CYPRUS LTD. ALBATROSS ADJUSTERS LTD. ALFA CAPITAL HOLDINGS (CYPRUS) LIMITED ALPHATEC LTD. AMATHUS PUBLIC LTD. AMDOCS DEVELOPMENT LTD. ANCHOR SECONDARY MANAGEMENT LTD. ANDREAS NEOCLEOUS & CO LLC. ARAB JORDAN INVESTMENT BANK A.P. KYPROS SATELLITES LTD. ASBIS AVANTI HYLAS 2 CYPRUS LTD. AVG ECOMMERCE CY LIMITED AVTOVAZBANK CYPRUS BRANCH BAKER TILLY KLITOU & PARTNERS LTD. BANK OF CYPRUS LTD. BANQUE BEMO S.A.L. BARCLAYS BANK PLC BERNHARD SCHULTE SHIPMANAGEMENT (CYPRUS) LTD. BERYTUS MARINE INSURANCE & REINSURANCE LTD. BOUDICA TRUST CO. LTD. BULL (CYPRUS) LTD. BYBLOS BANK S.A.L. CHARTAC MANAGEMENT SERVICES LTD. CHEMIKALIEN SEETRANSPORT (CYPRUS) LTD. CHRISTODOULOS G. VASSILIADES & CO. LLC COLUMBIA SHIPMANAGEMENT LTD. C.P. PALEMA LTD. CYPRUS INTERNATIONAL INSTITUTE OF MANAGEMENT (CIIM) CYWORLD WEALTH LTD. D.D. FIDELITY ASSOCIATES LTD. DEEP SEA SUPPLY MANAGEMENT (CYPRUS) LTD. DELOIITE LIMITED DENGERIS HOLDINGS LIMITED EY CYPRUS LTD EPICOR SOFTWARE CYPRUS LTD. EUROBANK CYPRUS FANARIA MERCHANTS & MARINE CO. LTD. FBME BANK LTD. FILEMINDERS LTD. FMI SHIPMANAGEMENT LTD. FOREXTIME LTD. FRASER MACKINLAY INVESTMENT SERVICES FXPRO FINANCIAL SERVICES LTD BLOBAL BUSINESS NETWORK INTERNATIONAL LTD. GMM GLOBAL MONEY MANAGERS LTD. G.P. GLOBAL LIMITED GROME MARKETING (CYPRUS) LTD. GRS GLOBAL RECRUITMENT SOLUTIONS LTD. HELLENIC BANK PUBLIC CO. LTD. HEMSLADE TRADING LTD. HILLTAKE LIMITED HIVE MANAGEMENT SERVICES LTD. HOLBORN EUROPEAN MARKETING COMPANY LTD. IBCS TRADING AND DISTRIBUTION COMPANY LTD. IBL BANK SAL INTER IKEA DISTRIBUTION LTD. INTER KADDOUH TRADING LTD. INTERPAPER LTD. INTERSHIP BAVIGATION COMPANY LTD. IRONFX GLOBAL LTD. ITERA GROUP LTD. JORDAN AHLI BANK PLC. JORDAN KUWAIT BANK PLC. JT INTERNATIONAL COMPANY (CYPRUS) LTD. KANNAVA, KITROMILIDOU & CO LLC KAPAL (CYPRUS) LTD. KARDEX SYSTEMS LTD. KAZOULIS GLOBAL LOGISTICS LTD. KKCG S.E. KPMG LTD KRONOSPAN HOLDINGS PLC MAESTRO SHIPMANAGEMENT LTD. MARLOW NAVIGATION COMPANY LTD. MARTRACON SHIPMANAGEMENT LTD. MERCK SHARP & DOHME CYPRUS LTD. MUSKITA HOTELS LTD. NATIONAL BANK OF GREECE (CYPRUS) LTD. NCR (MIDDLE-EAST) LTD. NEST INVESTMENTS HOLDINGS (CYPRUS) LTD. OPUS GROUP HOLDINGS LTD. P. COMMERCIAL CREDIT MANAGEMENT LTD. PEDERSEN & PARTNERS (CYPRUS) LTD. PIRAEUS BANK (CYPRUS) LTD. P. KALOPETRIDES & CO LTD. PINE MANAGEMENT LTD. PKF SAVVIDES & CO LTD. PROFSERVE LTD. PWC CYPRUS PROTOPAPA, DEMETRIOU & CO. LLC PRUDENS LTD. REEDEREI NORD LTD. REUTERS MEA LTD. RCB BANK LTD SAFT NIFE M.E. LTD. S.C. JOHNSON COMPANY LTD. S. DROUSSIOTIS REAL ESTATES LTD. SATLINK SATELLITE COMMUNICATIONS LTD. SEATANKERS MANAGEMENT COMPANY LTD. SEAWARD MANAGEMENT LTD. SHAMROCK SHIPPING & TRADING LTD. SODEXO CYPRUS LTD. SOFTIMPACT LTD. SONGA OFFSHORE S.E. SOVEREIGN TRUST (CYPRUS) LTD. SPECTEC LIMITED STEELNET LTD. SUPERNOVA CONSULTING LTD. SYNOT INTERNATIONAL LIMITED TAMOIL OVERSEAS LTD. TFI MARKETS LTD. TRADING POINT OF FINANCIAL INSTRUMENTS LTD. TRANSBUNKER TRADING LTD. TRICAN WELL SERVICE (CYPRUS) LTD. TRIDENT TRUST COMPANY (CYPRUS) LTD. TRUST INTERNATIONAL INSURANCE CO. (CYPRUS) LTD. TSYS CARD TECH SERVICES LTD. UAL ALLIANCE LTD. UNICOM MANAGEMENT SERVICES (CYPRUS) LTD. UNITEAM MARINE LTD. USM MANAGEMENT CYPRUS LIMITED VISTRA (CYPRUS) LTD. VTT VASILIKO LTD. WCV WORLD CAPITAL VENTURES CYPRUS LIMITED WINDSOR BROKERS LIMITED WORLD VISION INTERNATIONAL

+ ANDREAS DEMETRIOU, GEORGE IOULIANOS, PHIDIAS PILIDES

CYPRUS

Österreichischer Lloyd Seereederei Steaming Ahead

INTERVIEWS

Wes Porter Frixos Savvides George Stylianou

LIFESTYLE

Europe’s most glamorous ski resorts

Plus:

MONEY / BUSINESS ECONOMY TAX & LEGAL LIFESTYLE / OPINION

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Issue 43 October 14- November 13, 2014

6 EDITORIAL 8 UP FRONT 14 FIVE MINUTES WITH…

Taking

care

+ OPINION

CIBA:

cover story

A NEW VITALITY

By Ric Todd

22

SMALL IS BEAUTIFUL Michael Roth

71

OF BUSINESS

28

How CIBA looks after the interests of international companies in Cyprus.

Problem Solving Frixos Savvides on the Association’s past,,

72 | INVESTMENT EXPERT CONFERENCE 2014

present and future role.

56

30

74

Emergo Wealth presented last month’s Investment Expert Conference in Nicosia. We report on what was said.

74 | GETTING IT RIGHT Five big social media mistakes to avoid

SPECIAL

64 FEATURES

18 | READY FOR TAKEOFF Interview with Wes Porter, CEO of Hermes Airports

24 | THE WAY FORWARD George Ioulianos, General Manager of the Cyprus Fiduciary Association, talks about the progress made by the sector since it became officially regulated.

56 | A CYPRUS PENSION SYSTEM FOR THE 21ST CENTURY Aon Hewitt anticipates that major benefits to the country will arise from Cyprus-based financial institutions offering occupational pension arrangements.

18 60 | WHO’LL STOP THE RAIN? Bill Hancock and Pavlos Loizou share their views of the Cypriot real estate market and what it will take to unravel the current predicament.

ADVERTISING SUPPLEMENT 35 | MEMBER COMPANIES OF CIBA

64 | CCCI BUSINESS LEADER AWARDS Phidias Pilides (CCCI) and Andreas Demetriou (EY) on the forthcoming Business Leader Awards.

66 | FROM THE ASHES OF RECESSION TO THE BRAND OF SUCCESS Jonathan Gabay led a very successful Brand Congress in Nicosia last month.

68 | STEAMING AHEAD Interview with Capt. Eberhard Koch, Chairman, CEO and Managing Partner of Österreichischer Lloyd Seereederei (Cyprus) Ltd.

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

76 78 80 84 86

{money} {business} {economy} {tax & legal} {lifestyle}

EDITORIAL

All This and Regulation Too

ISSUE 43 OCTOBER 14 - NOVEMBER 13, 2014 PRICE €4.95

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BUSINESSES ASSOCIATION

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O

ne of best things that EU membership brought Cyprus more than a decade ago was a massive transformation in the global perception of what the island represented. From being seen (and used) as a rather dodgy tax haven, it quickly became a respected international business centre, attracting companies active in a broad range of sectors and glad to find themselves in a country with an attractively low tax regime, excellent legal and accounting services, a sizeable pool of well-educated human resources and, of course, fine weather and a relatively laid-back way of life. All this – and regulation too!

We are all aware of the fact that many things came crashing down 18 months ago but, fortunately, Cyprus seems to engender confidence and loyalty in foreign companies and individuals. As Frixos Savvides, President of the Cyprus International Businesses Association (CIBA), told Gold (page 30), “With certain people we have a chemistry,” adding that “We Cypriots have to pay for our mistakes but foreign investors and foreign companies are not to blame for our sins. It is essential that we regain their trust.”

This month’s cover story looks at the activities of CIBA, which was set up at the end of 1993 and is still going strong, representing the international business community and speaking on its behalf with successive governments and parliaments. The fact that it is still having to deal with the same problems more than two decades after its foundation may suggest that it has failed to make progress but it actually says much more about the failure of 20 years of government to simplify the rules and regulations that are meant to make foreign companies feel secure but, in fact, are more likely to steer them in the direction of Malta. Today, in particular, when every amateur economist in Cyprus will glibly tell you that we need foreign investment if the economy is to be restarted and led to growth, there is still too much bureaucracy, not enough English-language information for international companies and an apparent unwillingness to welcome investors with open arms, something that characterise our competitors. Much work remains to be done and it is to be hoped that associations like CIBA are able to make a difference so that we see actions to go with the fine words that we frequently hear about the value of foreign investment and international business.

Since March 2013, we have also been hearing constantly about the need to restore confidence in investors and the various ways in which this can be achieved. This issue of Gold features several interviews in which the subjects have a clear vision of what can be done in their particular field of interest. Capt. Eberhard Koch, Chairman, CEO and Managing Partner of Österreichischer Lloyd Seereederei (Cyprus) Ltd., for example, believes that the Government should and can do much more to promote one of its most successful and lucrative sectors – shipping – and has specific proposals for this (page 68). Elsewhere, George Ioulianos of the Cyprus Fiduciary Association argues that a greater effort aimed at accommodating international business is required, whether this means greater efficiency by state services, more Double Tax Treaties or issuing more official information in English (page 24).

We also present two brief reviews of the island’s economy by EY and KPMG which indicate that things are looking up. One of the reasons for this is that Cyprus has been forced to accept that regulation and transparency are not only necessary but essential if we are to maintain progress. It is also one way to keep international companies on the island and we cannot afford to lose them.

John Vickers, Chief Editor john@imhbusiness.com

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+ ANDREAS DEMETRIOU, GEORGE IOULIANOS, PHIDIAS PILIDES

SHIPPING

INTERVIEWS

LIFESTYLE

Österreichischer Lloyd Seereederei Steaming Ahead

Wes Porter Frixos Savvides George Stylianou

Europe’s most glamorous ski resorts

PLUS:

MONEY / BUSINESS ECONOMY TAX & LEGAL LIFESTYLE / OPINION

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ANASTASIADES praises Cyprus shipping SAXO BANKâ&#x20AC;&#x2122;S SEPTEMBER VOLUMES RISE BY 51%

A

ddressing a working lunch hosted by the Cyprus Union of Ship Owners in Athens, President Nicos Anastasiades said that the Government is committed to further strengthening the Cyprus Ship Registry. He described the local industry as â&#x20AC;&#x153;one of the most important pillars supporting the islandâ&#x20AC;&#x2122;s economy.â&#x20AC;? Referring to the continuing Turkish embargo of Cyprus-flagged ships, Anastasiades stressed that Cyprus will continue its efforts to have these restrictions are lifted, adding that Cyprus would rank even higher in international shipping if Turkey fulfilled its obligations.

Saxo Bankâ&#x20AC;&#x2122;s volumes during the month of September increased sharply, rising by more than 51% in nominal terms to $321 billion when compared to the previous month. The figure is also 46%higher compared to September last year. Average daily volumes increased by more than 44% to $14.6 billion, while the new paradigm on the foreign exchange market has delivered a broad-based rebound in trading activity. Saxo Bank is the first major retail trading venue to publish its official volume numbers after having seen strong growth on the institutional side of business with KCG Hotspot, ICAP plcâ&#x20AC;&#x2122;s EBS and the CME Group all reporting dramatically higher activity in September.

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

EBRD Looks to Enhance Cyprus Investment

T

he European Bank for Reconstruction and Development (EBRD) is eyeing fresh deals in Cyprusâ&#x20AC;&#x2122; banking sector and planning to install at least one independent director on the board of its first investment in the country, Bank of Cyprus. Speaking at a Reuters summit, Lucyna StanczakWuczynska, who took up the post of regional Director of Financial Institutions at the EBRD earlier this month, hinted the bank was closing in on a second deal just over a month after sealing its first. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re looking at the entire banking sector in Cyprus,â&#x20AC;?

Stanczak-Wuczynska said on Tuesday when asked where the ERBD could be involved next. She said the range of options also included providing specialist loan facilities and credit lines in the country, although she appeared to rule out taking a stake in the Co-operative Central Bank (CCB). â&#x20AC;&#x153;For co-operative banks, there are always challenges with shareholder composition and possible equity participation you can build into them. But we plan to stay involved in the financial sector.â&#x20AC;? Having taken what she described as a â&#x20AC;&#x153;big ticketâ&#x20AC;? â&#x20AC;&#x201C; â&#x201A;Ź100 million, a near 5% stake in Bank of Cyprus in the inaugural deal in July â&#x20AC;&#x201C; the EBRD now plans to get an independent director installed. â&#x20AC;&#x153;We are looking forward to seeing the change in the bank,â&#x20AC;? she said. â&#x20AC;&#x153;And we would like to propose an independent supervisory board member.â&#x20AC;?

Antara Palace Crowned ‘Most Prestigious Engagement Party Venue’

€80 Million Luxury Hotel Investment in Larnaca Larnaca is anticipating a capital injection in the form of an €80 million luxury hotel complex, to be built on the Phinikoudes seafront promenade. The project has been approved by the Municipal Council, and is set to be financed by Russian investors.

The agreement stipulates, furthermore, that a substantial amount of money will go towards the renovation of the seafront area. Construction is expected to begin towards the end of 2015. Larnaca Municipality will receive €5 million from the sale of a plot that will be used as part of the construction space, with this money expected to be contributed toward a fund establishing a new open-air market.

A

ntara Palace, an ultra-exclusive, luxury five-star boutique hotel and spa at Polis Chrysochous, was honoured with the award for “Most Prestigious Engagement Party Venue” at the Prestigious Star Awards held last month at the Oriental Club in London.

“To win this award in only less than 12 months since opening amongst the other tough competitors is really an achievement for Antara Palace,” an official release stated.

‘INVEST IN

A large number of Cyprus-based investors and consultants met an official delegation of the leading free zone of the UAE, the Ajman Free Zone (AFZ) and explored the lucrative investment opportunities available in Ajman. The seminar, led by

AJMAN’

In its category, Antara Palace beat international venues such as The Waldorf Astoria in New York, 170 Queens Gate in London and The Westin Sydney in Sydney, Australia. “It is a great honour for us that Antara Palace has received the Most Prestigious Engagement Party Venue award. We are proud that both the public and the experts chose Antara Palace. We would like to thank all of you who supported us and congratulate the winners in the other categories as well!” said Nora Csige, Co-Founder of Antara Palace.

senior officials, highlighted the incentives and benefits to the local community. The comprehensive range of tax incentives, state-of-the-art facilities as well as the administrative support offered by the AFZ, all proved of particular interest to Cyprus business representatives seeking to expand their trade and investment horizons. Mahmood Al Hashemi, General Manager AFZ, confirmed that Cyprus is one of the biggest potential markets for bilateral trade and hence the Free Zone was here for the 2nd time to meet investors and the business community. The first such investment summit was organised in November last year and received great positive interest from investors.

STYLIANIDES IMPRESSES

C

ypriot Commissioner-designate Christos Stylianides, assigned the portfolio of Humanitarian Aid and Crisis Management by Presidentelect Jean-Claude Juncker, made an excellent impression at his hearing on 30

September thanks not only to his commitment to the task but – somewhat strangely – to what various observers described as his “remarkable resemblance to movie star Omar Sharif”.

In his initial statement, Stylianides said it was a privilege for him to be assigned the humanitarian aid portfolio and, in his presentation, he showed his commitment to the field, paying tribute

to the current holder of the post, Bulgaria’s Kristalina Georgieva who managed to transform the portfolio into a showcase for the benefits of EU action in the world.

Stylianides started receiving congratulations while the hearing was still ongoing. In particular, Georgieva posted a photo of herself watching the hearing from her office.

She said that he was “speaking from the heart” and called him “strong and convincing”.

LIMASSOL MARINA

AT MONACO YACHT SHOW

For the fourth consecutive year, Limassol Marina participated in the Monaco Yacht Show last week, alongside internationally renowned operator, Camper & Nicholsons Marinas. The CEO and Marketing & PR Manager of Limassol Marina Ltd shared news of the recent opening of the waterfront development’s dining facilities, shopping area, spa and fitness. This year’s show took place on 24-27 September at Monaco’s Port Hercules. Fast growing a reputation as the most exciting new destination in the Mediterranean, Limassol Marina can accommodate 650 yachts up to 115m. It also boasts luxury apartments with uninterrupted sea views and villas with direct access to the beach or private berths for yachts up to 60m attached to their garden

THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

Gold 9

UP FRONT

Minthis Hills Inauguration

P

resident Nicos Anastasiades officially inaugurated the Minthis Hills Golf Resort at Tsada, Paphos, last month, following the completion of the first phase of the project.

In addition to an 18-hole championship golf course, Minthis Hills will eventually include a luxurious spa, a village square, a health club, an equestrian centre, a tennis academy and over 500 private residences, making it one of the most exclusive and luxurious residential golf resorts in the eastern Mediterranean.

Game Changers for the Professional Services Sector

T

he 6th Cyprus Professional Services Conference To International Business took place at the Hilton Park Hotel in Nicosia on 24 September. Under the banner “Game Changers for the Professional Services Sector”, it gathered the most updated knowledge and expertise from organisations and professionals around the world, and combined it with local knowledge and practice in order to analyse ongoing changes to the professional services sector. Main Sponsor: Bank of Cyprus. Sponsors: Amicorp, Cablenet, Lamda Group, Powersoft, TFI Markets. Organisers: IMH and Gold Magazine. Communication Sponsors: Gold News Daily Newsletter and Goldnews portal. Supported by: Cyprus Fiduciary Association, Cyprus Investment Funds Association, Cyprus Investment Promotion Agency, The Institute of Certified Public Accountants of Cyprus, Advanced diploma in international taxation.

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