GOLD Magazine Issue 58

Gold

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Expertise Solutions Value

ISSUE 58 January 17, 2016 PRICE €3.00

t h e

b u s i n e s s

m a g a z i n e

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c y p r u s

Gold ISSUE 58 | january 17,

The Beauty

2016 | the beauty business in cyprus

Business in Cyprus

We support you to create the value you are looking for by providing specialised solutions based on quality. Together we build relationships based on trust and we say things as they are, to assist you to deal with issues that tomorrow will prove important. We adapt our expertise and the power of our global network to your specific needs helping you make the difference.

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Key Players, Market Trends, Consumer Behaviour REFORM MOVEMENT

British High Commissioner Ric Todd on reform in the EU & Cyprus

EXCHANGE RATE FICTIONS

Devaluation shocks are on the way

INTERVIEWS Christian Jacob Andrew Pyne Frixos Savvides

WHAT’S ON Art, Theatre, Music, Opera, Film & More

SHIPPING AGENCY

WAREHOUSE AND DISTRIBUTION LOGISTICS

MERCHANDISING

CUSTOMS CLEARANCE AND BONDED WAREHOUSING

SHIPS PROVISIONS AND SUPPLIES OPERATION

DOMESTIC EXPRESS COURIER

INTERNATIONAL EXPRESS COURIER

ÌCXM@LHBÌ@MCÌΌDWHAKDÌNQF@MHR@SHNMÌ SG@SÌis progressing and growing.

The G.A.P. Vassilopoulos Group was founded in 1964 and is listed on the Cyprus Stock Exchange. The Group employs over 1,000 people and operates through a network of 3,000 offices and associates throughout Cyprus, in the UK, the Netherlands, Belgium, Luxembourg and Israel.

The Group is a modern and flexible organisation operating in the services industry. It provides a broad range of services in the Transport & Logistics sector, the Financial sector and the Hospitality & Consumer sector.

INSURANCE SERVICES

Services are backed up by quality certifications ISO 22000:2005 and ISO 9001:2008 and the Group is a certified AEO (Authorized Economic Operator).

Services • Warehousing and Distribution of products for trading companies • Merchandising of Consumer Goods via strategic placement and maintenance at points of sale • Shipping Agency • International Freight Forwarding from/to anywhere in the world • Ship provisions and supplies • Support services to Oil & Gas companies • Domestic and International Express courier • Retail E-Link Supply Chain Management • Customs Clearing • Airlines Representation • Airport Ground Handling • General Insurance • Credit Insurance • International Money Transfers • Foreign Exchange Payments • Hotels • Tourism

INTERNATIONAL BUSINESS PAYMENTS

INTERNATIONAL MONEY TRANSFERS

AIRLINES REPRESENTATION - GSA

AIRPORT GROUND HANDLING SERVICES

HOTELS

FREIGHT FORWARDING

TRAVEL & TOURS

QUALITY

www.gapgroup.com 20 Stroviolos Avenue, 2011, Nicosia Tel: 22710000 | Fax: 22514081 | info@gapgroup.com

ISSUE 58 JANUARY 17, 2016

T H E

B U S I N E S S

M A G A Z I N E

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C Y P R U S

| COVER STORY |

THE BEAUTY BUSINESS

KEY PLAYERS, PLA LAYERS, YERS MAR YERS, M MARKET MARKE ARKET TRENDS, CONSUMER BEH BEHAVIOUR

By Effy Pafitis & Artem Artemis Constantinidou Photos by Emma Charalam Charalambous & Andreas Loucaides

GOLD GO G OLD OL D

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eauty sells – just ask the leaders in the interna-tional cosmetics industry, who amass billions SJ IYVSW MR TVSÁXW IZIV] ]IEV EW E VIWYPX SJ GSR-WYQIVW¸ IZIV MRGVIEWMRK HIWMVI XS FI FIEYXMJYP -RHIIH WS TS[IVJYP MW XLI MRHYWXV] MR WIGYVMRK TYVGLEWMRK TS[IV XLEX MX LEW GSQI XS JEGMPMXEXI MRGVIEWIH WTIRHMRK SJ HMWTSWEFPI MRGSQI MR XLI TSWX GVMWMW GPMQEXI WS QYGL WS XLEX MR ĀþÿĂ MX [EW ZEPYIH EX SZIV ¾ĂĀþ FMPPMSR F] Research and Markets.

8LI KPSFEP ÁRERGMEP GVMWMW YRHSYFXIHP] TYX E HEQTIV SR XLI KPSFEP FIEYX] QEVOIX ERH HYVMRK XLSWI ]IEVW QSVI EJJSVHEFP] TVMGIH QIVGLERHMWI [EW OI] ,S[IZIV XLI TEWX JI[ ]IEVW LEZI WIIR MQEKI GSRWGMSYW +IRIVEXMSR = IRXIV XLI NSF QEVOIX E HIZIPSTQIRX [LMGL LEW TVSZIR XS FI E KVIEX HVMZIV SJ FSXL PY\YV] ERH RMGLI GSWQIXMG ERH JVEKVERGI FVERH WEPIW 8LI ']TVMSX MRHYWXV] LEW YRHIRMEFP] FIIR MRÂYIRGIH F] XLIWI MRXIVREXMSREP XVIRHW [LMGL ³ TEMVIH [MXL MXW S[R TEVXMGYPEVP] GLEPPIRKMRK ÁRERGMEP GVMWMW WEZZ] GSRWYQIV IRZMVSRQIRX ERH YRMUYI GSVVIPEXMSRW between both the European and Middle Eastern markets – has led to XLI IQIVKIRGI SJ E WIVMIW SJ MXW S[R XVIRHW 8S ÁRH SYX XLI HIXEMPW SJ XLI PSGEP FIEYX] FYWMRIWW [I WTSOI [MXL WIZIR I\IGYXMZI VITVIWIRXEXMZIW SJ XLI MRHYWXV]¸W QSWX TVSQMRIRX PSGEP TPE]IVW [LS HMZYPKIH XLIMV MRWMHIV ORS[PIHKI SJ ']TVMSX GSRWYQIVW¸ MRGVIEWIH HIQERH JSV FVMKLXP] GSPSYVIH GSWQIXMG TVSHYGXW E WLMJX XS cheaper skincare, an increase in men’s interest in personal care prodYGXW E KVIEXIV MRÂYIRGI SJ WSGMEP QIHME ERH FPSKKMRK MR WLSTTIVW¸ TYVGLEWMRK LEFMXW ERH QYGL QSVI 8LSYKL GSRGPYWMZI HEXE MW RSX EZEMPEFPI XLIMV IWXMQEXIW MRHMGEXI XLI ']TVMSX QEVOIX XS FI [SVXL ¾Ăþ ¾ăþ QMPPMSR 3R XLI JSPPS[MRK TEKIW [I TVIWIRX XLI ZMI[W SJ VITVIWIRXEXMZIW SJ WM\ ']TVMSX ÁVQW [LMGL HSQMREXI XLI [LSPIWEPI QEVOIX ³ Andry Tryfonos, &YWMRIWW 9RMX 1EREKIV EX :EVREZEW ,EHNMTERE]MW 0XH Vicky Guezukutchukian +IRIVEP 1EREKIV EX %VXZMI[ 'S 0XH Eleonora Orthodoxou, 'LMIJ 1EVOIXMRK 3JÁGIV EX ' % 4ETEIPPMREW Monica Papaellina, DeTEVXQIRX 1EREKIV 4IVJYQIW 'SWQIXMGW (MZMWMSR EX 'SWXEW 4ETEIPPMREW 3VKERM^EXMSR Lily Knobel 7EPIW 1EREKIV EX ,SYWI SJ &IEYX] 0XH ERH Nebojsa Petridis +IRIVEP 1EREKIV EX ** +VSYT ']TVYW ³ EW [IPP EW X[S I\IGYXMZIW SJ XLI MWPERH¸W PIEHMRK VIXEMPIVW [LS WXVMOMRKP] FIEV MHIRXMGEP names – Rea Ioannidou ,IEH SJ &YWMRIWW 9RMX EX &IEYX] 0MRI ERH Rea Ioannidou 'SWQIXMGW 'SQQIVGMEP 1EREKIV EX (IFIRLEQW ']TVYW

CONTENTS 8 | BUSINESS BRIEFING

Economic & Business Highlights of the past month.

14 | MY WAY

Despo Lefkariti’s management style.

COVER CO

STORY ST

ld

18 | FIVE MINUTES WITH… Andrew Pyne

| GOLD | 35

20 | THEY SAID WHAT?

30 | T The Beauty

A selection of memorable recent quotes from Cyprus.

Busine in Cyprus Business Representativ Representatives of eight Cypriot leading fi firms in the local wholesale an and retail cosmetics and fragran fragrances industry give their views on the latest trends, consumer behaviour and the most successful brands in the multi-million euro Cyprus market.

OPINION 26 | SETTING A STANDARD

By Kyriakos Parpounas

28 | 2016: CHALLENGES FOR THE CYPRIOT ECONOMY

By Dr. George Theocharides

FEATURES 20 | REFORM MOVEMENT

Ric Todd, British High Commissioner to Cyprus, explains what David Cameron hopes to achieve in his renegotiation of the UK’s relationship with the EU and how Britain has been helping the Cyprus government to reform the public sector.

66

24 | RETIREMENT INADEQUACY

20

REVEALED 70% of Cypriots will not have the required savings upon reaching pension age.

40 | LEADING AND MANAGING

PEOPLE Françoise Chevalier, trainer of the IN Business Executive Leadership Programme.

72

41 | APPLIED GOVERNANCE: BEYOND COMPLIANCE Photos from the 1st Compliance Forum

42 | INCOME INEQUALITY,

REDISTRIBUTION AND ECONOMIC GROWTH Governments need to perform a ÄUL IHSHUJPUN HJ[

66 | SURVIVING IN A

CHANGING WORLD 7YVÄSL VM .(/ (\KP[ :LY]PJLZ Ltd.

76

68 | TAKING CARE

OF BUSINESS Interview with the founders of recruitment agency Career Finders.

70 | LEAVING IT TO THE

72 | EXCHANGE RATE

FICTIONS It is only a matter of time before devaluation in Central, Eastern HUK :V\[OLYU ,\YVWL ZH`Z +Y :H]]HZ :H]V\YP

EXPERTS Asset Management in a Nutshell.

74 | SOCIAL MEDIA AND THE

71 | THE 3RD CYPRUS

75| BOOKSHELF

BANKING FORUM Photos from last month’s event.

4 | GOLD | The Business Magazine of Cyprus

FINANCIAL SERVICES INDUSTRY By Mariana Antonescu

Five of the best new business titles.

SPECIAL PROMOTIONAL FEATURE Tax Guide 2016

In 2015, Cyprus made a number of changes to its tax legislation.

Nine leading firms present their products and services, as well as information on the key legislative amendments affecting their clients.

76 | LUNCH WITH GOLD

Yvonne Georgiadou, Artistic Director of the Pharos Arts Foundation.

79 | BUSINESS CLASS

Manuela Mazzacco, CEO of AFX Capital.

80 | WHAT’S ON

Gold’s guide to the best cultural events of the coming month.

82 | A DAY IN THE LIFE -YP_VZ :H]]PKLZ

www.goldnews.com.cy | GOLD | 67

| EDITORIAL |

GOLD

Smells like…Big Business

ISSUE 58 JANUARY 17, 2016 PRICE €3.00

T H E

B U S I N E S S

M A G A Z I N E

O F

C Y P R U S

THE BEAUTY Business in Cyprus

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KEY PLAYERS, MARKET TRENDS, CONSUMER BEHAVIOUR REFORM MOVEMENT

British High Commissioner Ric Todd on reform in the EU & Cyprus

EXCHANGE RATE FICTIONS

Devaluation shocks are on the way

INTERVIEWS Christian Jacob Andrew Pyne Frixos Savvides

WHAT’S ON Art, Theatre, Music, Opera, Film & More

PUBLISHED BY IMH ISSN 1986 - 3543

O

MANAGING DIRECTOR

George Michail

GENERAL MANAGER

Daphne Roditou Tang

ver the past two decades, the global beauty market has enjoyed annual growth rates ranging from around 3% to 5.5%. The lowest of these were the years of the global financial crisis and they are, in fact, reasonably accurate indicators of how well a country’s economy is doing. When the going gets tough, retailers of skincare, haircare, make-up products and fragrances in particular are among the first to feel the pinch.

In Cyprus, it’s the same story, as we discovered when researching this issue’s cover story.

Cypriots (for a change we are talking mainly about women) follow all the international trends and spend as much as €50 million a year on beauty products when things are going well. Sales slumped in 2013 but now they are back on track, according to the representatives of eight leading cosmetics wholesalers and retailers who gave us their opinions and input (see page 30). While several of them noted that men are spending an increasing amount on personal care products, the fact remains that this is very much an industry aimed at and supported by women. The success of outlets such as Beauty Line and the cosmetics departments of Debenhams department stores shows how much purchasing power the so-called fairer sex wields in Cyprus. ************************* You don’t need Gold to tell you how influential a songwriter and musician the late David Bowie was. However, you may not be aware of his connections with Cyprus which lasted from Christmas 1969 – when he wrote The Prettiest Star for his future wife Angie and sang it to her down the phone to her when she was in Nicosia with her parents – to 1979 when he sang “Cyprus is my island” on Move On, a track on his album Lodger. Angie Bowie was born in Nicosia and spent much of her youth in Cyprus, since her American father was a mining engineer and worked for the Cyprus Mines Corporation.

In July 1972, I found myself on a flight from London to Nicosia, sitting next to Bowie, his wife and two members of his band (the Ziggy Stardust album had been released a month earlier). Their destination was Kyrenia, for a well-earned rest ahead of the tour that would make him an international superstar. I regret to say that I was too shy to say a word to him.

He came back in 1977 in the company of Iggy Pop, staying (and running up a hefty bill that was reluctantly paid by the local representative of his record company) at the Hilton Cyprus. Fast-forward four decades to January 8, his 69th birthday. I John Vickers, downloaded his new album. And you probably know by now that Chief Editor one of the songs, Lazarus, begins with the words, “Look up here, I’m in heaven”. What a way to say goodbye. john@imhbusiness.com

6 | GOLD | The Business Magazine of Cyprus

MEDIA MANAGER

Elena Leontiou

EDITOR-IN-CHIEF

John Vickers

JOURNALISTS

Effy Pafitis, Artemis Constantinidou CONTRIBUTORS TO THIS ISSUE

Tassos Anastasiades, Mariana Antonescu, Amalia Hadjipapa, Kyriakos Parpounas, Savvas Savouri, George Theocharides PHOTOGRAPHY

Jo Michaelides, Emma Charalambous, Andreas Loucaides ART DIRECTION

Anna Theodosiou

SENIOR DESIGNER

Alexia Petrou

PHOTOGRAPHY

Jo Michaelides, Harris Kyprianou MARKETING EXECUTIVE

Kevi Chishios

SALES MANAGER

Irene Georgiou

SALES EXECUTIVE

Stavros Epifaniou

OPERATIONS MANAGER

Voulla Nicolaou

SUBSCRIPTIONS

Myria Neophytou PRINTERS

Cassoulides Masterprinters CONTACT 5 Aigaleo St., Strovolos 2057, Nicosia, Cyprus Mailing address: P.O.Box 21185, 1503, Nicosia, Cyprus Tel: +357 22505555, Fax: +357 22679820 e-mail: gold@imhbusiness.com subscriptions: goldsubscriptions@imhbusiness.com www.imhbusiness.com

MARIA

THE FIRST NAME IN LO N G -T E R M LOYA LT Y

We are one of the world’s largest independent providers of trust, fund and corporate administration services.

We are committed to helping our clients protect, nurture and grow their wealth.

Above all, we are a people business.

To find out more about our services and to get to know us better, visit www.firstnames.com

BUSINESS BRIEFING

TOURISM TO

S CYPRU

“A NEW CYPRUS IN 2016”

2015 A GOOD YEAR FOR TOURISM FO

Cyprus witne witnessed record tourist arrivals during the summer sum months of 2015, while November saw sa 32.7% increase over the previous year, due mainly to more visitors from Britain and Russia. Numbers of tourists from Greece, Poland, Switzerland, France and Austria also a rose. The year was also successful as a regards tourism revenue.

In a New Year article published d in the local press, President Nicos Anastasiades wrote that if all sides Z\WWVY[ [OL LɈVY[ LZWLJPHSS` ;\YRL` ¸>L JHU [HSR ;\YRL` ¸>L JHU [HSR g in 2016”. He deabout a new Cyprus emerging nd Turkish Cypriot scribed the solution that he and JYLH[L HZ ¸H MLKLYHS SLHKLY 4\Z[HMH (RPUJP ^HU[ [V JYLH[L HZ ¸H MLKLYHS L PUZ[P[\[PVUZ [OH[ ^PSS Z[H[L ^P[O OLHS[O` HUK LɈLJ[P]L PUZ[P[\[PVUZ [OH[ ^PSS osperous country with ensure a secure future in a prosperous [OH[ ^PSS IL ¸[OL H ,\YVWLHU PKLU[P[`¹ HUK ZHPK [OH[ ^PSS IL ¸[OL key year for the decisions that will determine our future.”

N AVIATIO

ENTERTAINMENT

Cyprus was named the least expensive of 10 favourite winter sun destiUH[PVUZ PU [OL <2»Z SH[LZ[ 7VZ[ 6ɉJL Z\Y]L` with 7 nights in Paphos and air fare costing £239 per head. UK visitors are also benLÄ[PUN MYVT [OL MHSS PU [OL ]HS\L VM [OL L\YV against the pound sterling.

Cobalt Air to operate soon

A

ustralian-backed Cobalt Air is in the final stages of obtaining authorisation to set up as a locally based airline. According to CEO Andrew Pyne, the airline aspires to fill the void left by the closure of Cyprus Airways and also to enhance Cyprus’ image as an all-year-round destination and a regional air base. “For us, Cyprus is our home, not just another base,” Pyne said. “Our job is to promote Cyprus as a travel destination and a transit centre.”

Emirrat marks its Emirates 30th h yyear

E

mirates, the world’s largest international airline, concluded another year of growth in 2015, having carried over 51.3 mil million passengers, or 9% more than the previous year. During its 30th year of operations, Emirates added 26 new aircraft to its fleet and expanded its network to 150 destinations in 2015. In March, a report by Frontier Economics estimated that Emirates contributed €6.8 billion to the economies of European Union counun tries in 2013 and 2014, supporting more tthan 85,000 jobs.

8 | GOLD | The Business Magazine of Cyprus prus

CYPRUS IS BEST-VALUE WINTER DESTINATION

EIGHT BIDDERS

FOR CYPRUS CASINO RESORT ;OL ÄYZ[ ZLSLJ[PVU WOHZL MVY [OL

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INCREASE IN WEDDING TOURISM

Around 8,000 couples from abroad chose Cyprus as their wedding destination last year, with the number steadily climbing, according to the Cyprus Tourism Organisation (CTO). Currently, around half of the couples HYL )YP[PZO (JJVYKPUN [V ();( VUL PU Ä]L UK weddings now takes place abroad with Cyprus attracting some of the biggest.

PAPHOS MARINA TO GO AHEAD

The development of the Paphos Marina, which looks ready to go ahead after the settlement of a protracted court case, will accommodate more than 1,000 yachts and is expected to attract more and new visitors to Paphos from neighbouring countries. The marina will be built in the area between Kissonerga and Peyia.

NEW TO CYPRUS

HARD ROCK CAFE

CIGAR LOUNGE

CIAO STELIO HOTEL

he legendary Hard Rock Cafe is due to open in Ayia Napa, through a franchise with Karmia Enterprises Ltd., the company associated with TGI Fridays in Cyprus. The location has already been selected (opposite the monastery of Ayia Napa) and work has already started on the building, which consists of three floors and covers an area of 600 m2. The typical decoration of the franchise will be adjusted to the local heritage and culture and Hard Rock Cafe Ayia Napa will open this summer. Hard Rock International is one of the world’s most globally recognized brands and it is known for its collectible fashion and music-related merchandise, dining experience and Hard Rock Live performance venues.

K Luxury Group celebrated the opening of the Cigar Lounge at Limassol Marina last month.

Elegant and adorned with sophisticated décor, the lounge is expressly designed to be a tranquil sanctuary, where cigars and quiet conversation can be enjoyed by visitors.

Hardwood floors, luxury seating, a stateof-the-art ventilation system and soothing colours are just a few of the refined features. Premium cigar brands on offer include Cohiba, Montecristo, Partagas, Trinidad, Romeo Y Julieta and Davidoff.

A range of wines and spirits is also displayed on the second floor. The Cigar Lounge joins the EK Luxury Group’s other stores at Limassol Marina: Graff jewellery, Halcyon Gallery, Zilli fine garments for men and Shiraz carpets.

ocated in the McKenzie beach area of Larnaca, Ciao Stelio is a luxury boutique hotel combining the exclusivity of a private house with all the comforts of a 5 star establishment. Part of HotelREZ Hotels & Resorts latest addition in Cyprus, Ciao Stelio has 52 adults-only guestrooms, each beautifully decorated with silks and brocades, marble shower rooms and exceptional furnishings. Free highspeed Wi-Fi, complimentary bathrobes and slippers, bespoke luxury toiletries, large plasma TVs with a variety of free satellite channels, a fully stocked mini-bar and complimentary coffee and tea facilities, are some of the luxury amenities on offer. Higher room categories include a jacuzzi, large balcony with sea views, complimentary fruits and wine, and an express check-in service.

T RGY ENE

ENI-KOGAS LICENCE RENEWED

O

n 28 December 2015, the Council of 4PUPZ[LYZ YH[PÄLK H two-year extension of the Italian/South Korean consortium Eni-KOGAS’ licence to explore for hydrocarbons In Cyprus’ exclusive economic zone (EEZ). Energy Minister Yiorgos Lakkotrypis said that the extension until February 2018 will enable th consortium to re-evaluate the potential in Blocks 2, 3 and 9 of the Cyprus EEZ, following the discovery of huge reserves in the neighbouring Egyptian zone. Based on a preliminary plan submitted to the Government last year, a new round of drilling is expected to begin in mid-2017.

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Cyprus solution on Guardian 2016 global predictions list

POLITICS

Solving the Cyprus Problem has been included in The Guardian’s list of global predictions for 2016. The UK newspaper wrote: “It’s been dubbed a graveyard for peacemakers, the Rubik’s ik’ Cube of diplomacy, but despite the odds Cyprus may well defy naysayers in 2016 by solving its decades-long division.” It noted that Greek and Turkish Cypriots alike regard the year ahead as the last best chance to end the ethnic divide. According to The Guardian, it is the stance of Turkey that gives the biggest hope. “A confluence of events – ranging from Ankara’s recent run-in with Russia to the re-energising of its EU accession process – has put the need for a Cyprus settlement centre stage. A solution would afford Turkey a badly needed foreign policy success, allow it to diversify its energy supplies – with the island’s subsequent transformation into a regional transport hub for oil and gas reserves – and boost its chances of joining the EU. It would also free up Turkish funds: the island’s breakaway north is utterly dependent on Turkey bankrolling it,” the paper reports. www.goldnews.com.cy | GOLD | 9

BUSINESS BRIEFING

FACTS & FIGURES Car Registrations Up

Vehicle registrations YLJVYKLK H ZPNUPÄJHU[ increase in JanuaryNovember 2015 compared to 2014, according to the SH[LZ[ ÄN\YLZ YLSLHZLK I` the Statistical Service of Cyprus. The total number of registrations of motor vehicles increased by 13.6% to 23,598 from 20,775 in the corresponding period of 2014.

Deposits and Loans Down

Total deposits in banks in Cyprus in November 2015 fell by €67.9 million, compared with a net increase of €287.9 million in October 2015, according to data from the Central Bank of Cyprus. Total loans for the same month also fell by €493.2 million, compared with €106.2 million in October 2015. Outstanding loans increased by €2.1 billion to €63.2 billion.

PRIVATISATION

Cyprus has second biggest foreign population in EU

After Luxembourg, Cyprus has the highest number of foreign nationals living on the island as a percentage of population than any other EU member state, according to a new Eurostat report. From a population of 858,000, some 80% have Cypriot citizenship. The remaining 20% are foreign nationals, either from other EU countries or third countries.

The Government and its international lenders recently reached agreement on the future of the Electricity Authority of Cyprus (EAC), which removed the semi-government organisation from the list of those due to be privatised.

The agreement provides, nonetheless, for the legal unbundling of the Authority into two separate companies, one of which will be responsible for the transmission and distribution networks and the other for electricity generation and supply. The EAC employees’ unions, which had fought privatisation from the outset, have threatened action to prevent the division of the Authority’s operations, including strikes.

10 | GOLD | The Business Magazine of Cyprus

President Nicos Anastasiades and the Turkish Cypriot leader Mustafa Akinci have said the cost of a solution has been estimated at €25-€30 billion.

They told CNN Turk that the cost of a settlement is a major problem but one that they believe can be solved. The estimated cost is almost twice the current €17.5 billion annual GDP of the Republic.

Cyprus has welcomed the appointment of a new Director, Michael Heger, subject to approval by the European Central Bank. Once approved, Heger will also participate as a member of the Human Resources & Remuneration Committee.

Heger, who is the General Manager, Finance and Investment of S.I.F. International S.A., Luxembourg, has extensive financial and banking experience, having held a variety of executive positions with the UniCredit Bank Austria Group.

REGINOS TSANOS Reginos Tsanos, CEO of Lavar

Shipping, has been elected as President of the Cyprus Shipping Association (CSA), one of the most important and prestigious organisations in the Cyprus shipping industry. The CSA is the official body representing the profession in Cyprus. Tsanos, who will serve a two-year term said, “I look forward to working with my colleagues on the board to help overcome the major challenges for our profession and take the right steps forward”.

Record tourist numbers from Israel

Close to 100,000 tourists from Israel visited Cyprus in 2015, making it a record year, the Cyprus Hotel Association (CHA) announced in December. The */( ZHPK PUJYLHZLK LɈVY[Z to promote Cyprus in the Israeli market are responsible for the increased number of visitors tourists from the neighbouring country.

AWAR DS

PEOPLE

MICHAEL HEGER The Board of Directors of the Bank of

CHANGE OF PLAN FOR EAC

€25-€30 billion Cyprus solution

Columbia Shipmanagement

Limassol-based Columbia Shipmanagement was honoured with the ‘President’s Award’ at this year’s BIMCO Annual Conference and Awards Dinner. The award is presented and chosen by the Baltic and International Maritime Council (BIMCO) President Philippe Louis-Dreyfus, in honour of an individual or company which has made a significant contribution to shipping and the maritime industry. Louis-Dreyfus gave the award to Columbia Shipmanagement for its outstanding work in rescue operations involving migrant boats in the Mediterranean.

ForexTime

ForexTime (FXTM) was named Best Investor Training Institution by cnforex.com, the leading source of real-time financial news in China, in December. It was FXTM’s second award from cnforex.com in 2015, having already been named Most Promising Forex Broker in China. “Being recognized for our efforts to provide the best possible trading services by cnforex.com is a huge accolade as cnforex.com commands respect both in the Forex industry and all over Asia,” FXTM representatives noted.

BUSINESS BRIEFING

EDUCATION CYPRUS AND QATAR TO STRENGTHEN COOPERATION During an ofďŹ cial visit to Qatar, Education & Culture Minister Costas Kadis spoke about the development of

MUSIC

an education cooperation programme between Cyprus and Qatar. Such a programme could signiďŹ cantly facilitate the enhancement of bilateral relations between the countries, he noted. The Cypriot Government hopes to have its higher education institutions recognized by Qatar in the framework of its efforts to become a regional education hub. The Qatari Education Minister, Dr. Mohammed bin Abdul Wahid Al Hammadi, expressed his willingness to promote cooperation between the universities of the two countries in the ďŹ elds of education and research.

Bowieâ&#x20AC;&#x2122;s Cyprus Connection

REAL E ESTAT

D

avid Bowie, who died on January 10, visited Cyprus on more than one occasion in the â&#x20AC;&#x2DC;70s, due to the fact that his first wife Angela (Angie) was born in Nicosia and lived in Cyprus for many years, as her father worked for the Cyprus Mines Corporation (CMC). She met Bowie in London in 1969, and they were married a year later. They divorced in 1980.

David and Angie (about whom Mick Jagger is said to have written the eponymous Rolling Stones track) holidayed with members of his band in Kyrenia in July 1972.

He visited the island again in 1977, this time with Iggy Pop, the two of them staying at the Hilton Cyprus.

His 1979 album Lodger contains the song Move On, which contains the lyrics: â&#x20AC;&#x153;Cyprus is my island / When the goingâ&#x20AC;&#x2122;s rough / I would love to find you / Somewhere in a place like thatâ&#x20AC;?.

IN THE NEWS

BLACK FLAMINGO RETURNS A rare black ďŹ&#x201A;amingo thought to be the

only one of its kind in the world has returned to the Akrotiri Salt Lake, within the Western Sovereign Base Area of Cyprus, just under a year after its last visit. Last March, the ďŹ&#x201A;amingo caused a media storm with its whereabouts being published in news all over the world.

Pantelis Charilaou, the SBAA Environmental OfďŹ cer, said he was thrilled to see the ďŹ&#x201A;amingo return again this year: â&#x20AC;&#x153;Very few people had ever been fortunate enough to lay eyes on it prior to last year so for it to return again is wonderful.â&#x20AC;?

12 | GOLD | The Business Magazine of Cyprus

PAFILIA BUILDS THE TALLEST SEAFRONT RESIDENTIAL TOWER IN THE MED

One of the largest projects in Europe, and the tallest seafront residential tower in the Mediterranean, is to be constructed in 3PTHZZVS I` 7HĂ&#x201E;SPH +L]LSVWLYZ Construction work on the One WYVQLJ[ PZ K\L [V ^P[OPU TVU[OZ As its name suggests, once completed, the building will be one of H RPUK 6UL ^PSS IL Ă&#x2026;VVYZ HUK TL[YLZ PU OLPNO[ SVJH[LK VU [O 6J[VILY (]LU\L 0[ ^PSS JVU[HPU S\_\Y` HWHY[TLU[Z ^P[O HWHY[TLU[Z WLY Ă&#x2026;VVY PUJS\KPUN ILKYVVT HUK K\WSL_ HWHY[TLU[Z 7HĂ&#x201E;SPH PZ JVVWLYH[PUN ^P[O four international companies â&#x20AC;&#x201C; Atkins, WKK, HBA and BurohapWVSK ,UNPULLYPUN Âś VU [OL WYVQLJ[ AIR IC TRAFF

LIMASSOL MARINA: 95% OF APARTMENTS SOLD

3PTHZZVS 4HYPUH [OL Ă&#x201E;YZ[ S\_\Y` Z\WLY `HJO[ KL]LSVWTLU[ VU [OL PZSHUK OHZ YLWVY[LK [OH[ HU PTWYLZZP]L VM P[Z YLZPKLU[PHS HWHY[TLU[Z OH]L ILLU ZVSK 0[ OHZ HSTVZ[ ILLU [OYLL `LHYZ ZPUJL [OL Ă&#x201E;YZ[ HWHY[TLU[Z H[ 3PTHZZVS 4HYPUH ^LYL KLSP]LYLK [V [OLPY V^ULYZ 5LYLPKZ 9LZPKLUJLZ Âś S\_\Y` OVTLZ ^P[O \UPU[LYY\W[LK ZLH HUK 4HYPUH ]PL^Z ^OPJO share two communal swimming pools and landscaped gardens â&#x20AC;&#x201C; were comWSL[LK PU 1HU\HY` HUK ^LYL ZVVU MVSSV^LK I` [OL HWHY[TLU[Z H[ ;OL[PZ Residences, located just steps away MYVT [OL KL]LSVWTLU[ÂťZ MHZOPVUHISL ZOVWWPUN HUK KPUPUN HYLH 3HZ[ `LHY +PVUP 9LZPKLUJLZ ^LYL HSZV KLSP]LYLK [V [OLPY V^ULYZ OH]PUN ZVSK V\[ ^P[OPU TVU[OZ VM [OLPY YLSLHZL :P[\H[LK HIV]L the Halcyon Gallery, these apartments are located in the heart of the comTLYJPHS HYLH ;OL HWHY[TLU[Z HUK ]PSSHZ OH]L ILLU ZVSK [V WLVWSL VM ZP_[LLU UH[PVUHSP[PLZ

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MY WAY

Despo Lefkariti

CEO, DeLeMa/ McCann Cyprus

MASTERING THE MANAGEMENT OF ANY FIRM IS A SIZEABLE CHALLENGE IN ITSELF. IN TODAY’S TURBULENT ENVIRONMENT, HOWEVER, THE TASK BECOMES MORE ARDUOUS STILL, RENDERING THE ATTAINMENT OF BOTH AN ORGANISATION’S LONG-TERM SUCCESS AND ITS EMPLOYEES’ DEVELOPMENT NO SMALL FEAT. DESPO LEFKARITI IS ALL TOO AWARE OF THIS, WHICH IS WHY – AS SHE TELLS GOLD – REMAINING FOCUSED ON REACTING TO, AND EMBRACING, CONSTANT CHANGE IS AMONG HER TOP PRIORITIES AS A CORPORATE LEADER. HERE SHE TELLS US MORE, FROM THE ROOTS OF HER ENTREPRENEURIAL INSPIRATION TO THE HEIGHTS OF HER PROFESSIONAL EXPECTATIONS.

“M

y greatest professional achievement has been to create an amazing team, one that is not only dedicated to but loves our company and whose members are committed to giving the best of themselves – their creativity and energy – to every job we undertake for our clients.”

“A

chieving a healthy balance between life at work and at home is something I have always strived to accomplish, though I have yet to find a solution to it. I love my work and I don’t feel it should be separate from the rest of my life; it is an important part of it. Whether this is healthy or not, who is to say?”

“H

ow would I describe my management style? Well, being truthful and never promising something I will not be able to deliver is a code I always follow. I care about every person in my team and try to coach them and help them grow in their jobs. At the same time I expect people to be accountable for their own actions and am very demanding. I will not praise people for doing their job well – it’s what is expected of them – but I will recognise and celebrate the excellence demonstrated through their extra effort.”

“W

hat has helped me most throughout the course of my career? I was blessed to be born to loving parents, with an entrepreneur as a father. I was nurtured to believe that one must create opportunities in life and be intelligent enough to grab any opportunities that appear. This, I believe, has helped me in everything I have done professionally.”

“T

he object of my professional admiration is pretty obvious: my father.”

“T

he biggest mistake managers make is taking things for granted and becoming complacent. In this current environment the only constant is change.

It is a leader’s responsibility to see what is coming well in advance so that he/ she can take proactive action to ensure the company’s continued success.”

“I

“My leadership style has been influenced most by watching my father create a business. He was a true leader, a visionary as well as a fair and dynamic person. His entrepreneurial spirit inspired me. I have “copied” many of his leadership techniques and developed others of my own which are rather different.

My involvement in YES for Europe exposed me to how entrepreneurs in other countries think and behave, in what could ld be described as a more ore contemporary, moree “socially responsible”” way, and I have also embraced some of these practices.”

relax by taking road-trips to different destinations with my daughter, exploring country roads and sites; playing with my son’s 18-month and 2-month old kids; visiting the cinema, theatre, museums and galleries; indulging in arts and crafts; taking long walks; playing biriba with friends; reading, and lots of other activities! I like to always keep busy doing things and learning.”

14 | GOLD | The Business Magazine of Cyprus

Despo Lefkariti holds a degree in Marketing from Hammersmith College, London. She began her career at Petrolina SA, Athens EW XLI ÁVQ¸W 1EREKMRK Director between 1977 and 1985, when she established LIV S[R ÁVQ (I0I1E Today, DeLeMa/McCann is among the most succesful communications agencies in Cyprus.

Innovation delivered!

Microsoft Innovation Center Cyprus (MIC Cyprus) is a strategic collaboration between Microsoft Cyprus and the European University Cyprus. MIC Cyprus is an initiative of great significance, premised in a state-of-theart facility. Its main purpose is to play a pivotal role in the development, growth and promotion of innovation, research and technology.

MIC Cyprus is located at European University Cyprus, offering services to students, academia, the government and the private sector through innovative technology transfers. MIC Cyprus facilities, services, and activities support students, researchers, startups, professionals, the private and public sector, and develops business solutions, that help the growth of sustainable local economies through skills and professional training, industry partnerships, and innovative solutions.

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FIVE

MINUTES WITH ANDREW PYNE

A

t what stage are Cobalt Air’s plans to launch its flight schedule?

We are well advanced with the licensing process and aim to launch flights in the first quarter of this year.

offer ultra-low fares and stimulate new passenger traffic. But we also aim to be innovative and imaginative in our service offering. We want to offer the best ‘value

How many members of staff have already been employed, and in which departments?

We have 22 staff supporting us at present, the vast majority Cypriot. We cover the full gamut of airline operations and activities and we continue to actively recruit here for A320 cockpit and cabin crew.

How many aircraft will you be operating initially?

We will launch with two A320s but we are projecting fairly rapid fleet expansion during 2016-17.

Which markets is the airline looking to serve?

The full range of markets in both Western Europe and the Middle East/North Africa. For commercial confidentiality reasons, we don’t want to show our hand too early!

What competitive advantages can Cobalt Air lay claim to over other airlines operating in the region?

Cost advantage is key to success because this provides a platform from which to

16 | GOLD | The Business Magazine of Cyprus

CEO Cobalt Air (Cyprus) for money’ proposition in the markets that we serve.

Following the closure of Cyprus Airways, many airlines have sought to increase their operations in Cyprus; indeed two other companies are currently preparing to launch services to and from the island. Is there enough room in the market to accommodate new players such as Cobalt Air? Absolutely! Travellers have been forced

to pay high fares on many popular routes since the demise of Cyprus Airways. As the new Cyprus flag carrier we aim to champion the consumer and bring fares sharply down. The lesson of low-cost airline de developments globally is that low fares stim stimulate new travel and new markets. We feel that Cyprus and Cypriot consu consumers are getting a very raw deal from those airlines that moved in when Cyprus Airways went down.

What can you tell us of the company’s business and expansion plans, particularly in relation to its operations based in Cyprus?

Cyprus will always be our primary base. We are committed to the development of tthe tourist industry here and ou our aircraft will carry slogans support porting Cyprus and encouraging travel here. h A strong home carrier is a vital component com in the future success of the national economy: strong home carriers build strong economies – look at the success of Emirates and Dubai, Cathay Pacific and Hong Kong, Singapore Airlines and Singapore. A home carrier builds local employment, it builds a network drawing traffic into its primary hub. These benefits are simply not replicated by other – foreign – carriers who just happen to fly here. We will form part of the vital national infrastructure.

This is our mission and within three years we intend to be a major regional carrier, with a substantial fleet providing a wide variety of destinations from Cyprus.

É

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QUOTES OF THE MONTH

They Said What?

Some of the more interesting statements uttered by Cypriots in the news over the past month.

EVGENIOS HAMBOULLAS

â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;M NOT GOING TO TELL YOU WHERE I GOT THEM FROM BUT I WILL TELL YOU ONE THING. WHENEVER SOMEONE PUTS THEM IN FRONT ME, I EAT THEM. I HAVE NO PROBLEM. IF Iâ&#x20AC;&#x2122;VE COMMITTED A CRIME FOR THIS LET THEM TAKE ME TO COURT.â&#x20AC;?

Evgenios Hamboullas MP, who gained instant notoriety when he put a photo on Facebook of himself sitting at a table with a plate of œDPEHORSRXOLD¡ EODFNFDSV WKH NLOOLQJ of which is prohibited by law.

â&#x20AC;&#x153;YOU CANNOT BE A LAWMAKER AND SHOW DISRESPECT.â&#x20AC;?

DISY Chairman Averof Neophytou states what everyone except Hamboullas seems to understand.

AVEROF NEOPHYTOU

â&#x20AC;&#x153;WE REALISED THAT THESE 500-600 PEOPLE WILL FEEL COLD INSTEAD OF THE WARMTH OF THE HOLIDAYS.â&#x20AC;?

EVROKO Chairman Demetris Syllouris discovers that the Central Prison is not a state-run hotel after all.

COSTAS KADIS

â&#x20AC;&#x153;TODAY, TEACHERS ARE EVALUATED BY A SINGLE INSPECTOR WHO MAY SEE THEM ONCE EVERY TWO YEARS. MOST OF THEM ARE GIVEN 35-39 OUT OF 40, BASED NOT ON HOW GOOD THEY ARE BUT ON HOW LONG THEYâ&#x20AC;&#x2122;VE BEEN WORKING.â&#x20AC;?

Education Minister Costas Kadis explains how the 40-year old, still unchanged teacher assessment œV\VWHP¡ ZRUNV 1R ZRQGHU teachers like it.

â&#x20AC;&#x153;I RECEIVED THE INVITATION IN SEPTEMBER AND REPLIED THE SAME DEMETRIS MONTH. THERE WAS NOTHING SYLLOURIS SECRET ABOUT IT. THE INVITATION WAS ALSO EXTENDED TO MR â&#x20AC;&#x153;THE CYPRIOT PEOPLE LOVE YOU; ANASTASIADES, BUT IT HAS NOTHING TO DO WITH TRANSFERRING THE THEY WANT TO CYPRUS TALKS OR HOLDING A FIVESUPPORT YOU IN WAY CONFERENCE IN DAVOS.â&#x20AC;?

EVERY WAY. XENOPHOBIA AND, ESTurkish Cypriot leader Mustafa PECIALLY, RACISM Akinci dashes another of those HAS NEVER BEEN â&#x20AC;&#x153;The UN and everyone else A PART OF HELLEis going to impose a terrible NISM SO WE CONsolution on us when we least SIDER YOU TO BE expect itâ&#x20AC;? conspiracy theories.

MEMBERS OF CYPRIOT SOCIETY.â&#x20AC;?

MUSTAFA AKINCI

House Speaker Yiannakis Omirou on how much the Cypriots love migrants from the Middle East. Really?

YIANNAKIS OMIROU

â&#x20AC;&#x153;DISY DID NOT LET THE CHRISTOFIAS GOVERNMENT TAX THE RICH, WHICH WAS ONE OF THE COMPONENTS OF THE FORMULA FOLLOWED BY ICELAND, WHICH HAD EXACTLY THE SAME PROBLEMS AS OURSâ&#x20AC;ŚAND IT EXITED THE CRISIS IN RECORD TIME.â&#x20AC;?

AKEL General-Secretary Andros Kyprianou conveniently forgets to mention that three Icelandic EDQNV FROODSVHG RI WKHLU VHQLRU RIĂ&#x20AC;FLDOV ZHUH MDLOHG and capital controls imposed in 2008 are still in place.

ANDROS KYPRIANOU

18 | GOLD | The Business Magazine of Cyprus

PRESENTS

JANUARY 2016 | HILTON PARK HOTEL | NICOSIA Recognising business excellence and rewarding best practices, great ideas and outstanding professionals in the local business community.

For the eighth consecutive year, the IN Business Awards honour the very best on the Cypriot business scene: enterprises, their products & services, and the people leading and running them.

Business, SME, Manager (in memory of Andy Hadjicostis), Corporate Social Responsibility, New Product/Service, Manufacturing/Processing, Services, Best Workplace, Lifetime Achievement, Editorâ&#x20AC;&#x2122;s Choice

| INTERVIEW |

REFORM Movement

With a referendum on continuing British membership of the EU promised for next year, David Cameron has embarked on a campaign to persuade his 27 European Union counterparts that his wish-list of reforms will be good for everyone. In this exclusive interview with Gold, Ric Todd, British High Commissioner to Cyprus, explains what the Prime Minister hopes to achieve, how Britain has been helping the government in Nicosia to reform the public sector, and why a reunited Cyprus will be good for its people, the region and the world.

By John Vickers | Photo by Jo Michaelides

20 2 0 | GOL GO GOLD OL O LD | T Th The hee B h Business Bu usin sin iness esssss Magazine Ma M aga gaz g azzin a ine ine ne of of C Cy Cyprus yp pru pr rus ru

G

old: The British Prime Minister has launched a campaign to renegotiate the UK’s relationship with the EU. Can you tell us more about this effort?

Ric Todd: In June 2015 the Prime Minister formally launched the renegotiation process and now EU reform work is headed towards the 18 February European Council. Domestically, the Referendum Act secured Royal Assent before Christmas: the focus now moves to preparing to set the date, and Government publications. In the meantime the Prime Minister has had bilateral meetings with every Head of State and Government of 27 Member States in order to explain the UK proposals and understand Member States’ concerns. This includes, of course, President Anastasiades who has been very open to our suggestions and with whom we are working closely. So our approach is this: reform, renegotiation and then a referendum. We will work together with other countries to discuss and agree reforms, many of which will benefit the entire EU, before holding a referendum to give the British people their final and decisive say. Throughout the time that I’ve been dealing with the EU – since the 1980s – it has changed enormously. There is indeed a feeling all across Europe that the EU has moved away from its citizens, who feel less connected with it – we can see that in the growth of anti-EU parties across Europe and opinion polls – and, as the Prime Minister is saying, citizens want the EU to be more democratic, more accountable, better equipped to deliver growth, jobs and prosperity and better able to offer an EU that works for them.

tape. This certainly sounds like something that everyone would support. Do you agree?

R.T.: Yes, and this is something we have seen in our discussions with Member States including Cyprus. The EU should be a source of jobs, growth and innovation, through the completion of the single market and the signing of external trade deals. If we are honest, we can see that the European Union is not delivering the levels of growth that are required to reduce unemployment. In order to make the EU more competitive in a globalising world, facing many challenges, we need to enhance the single market. It already functions very well in some areas but it needs to be improved in others such as services, digital and energy and an important part of that is better regulation. This is not about getting rid of regulation but about ensuring that the regulation is fit for purpose; that it encourages and facilitates businesses rather than making life more difficult for them.

Improving regulation is not an easy thing to do but the European Commission is committed to it. There is a very good rule quoted by Commissioner Timmermans, which says, “European where necessary, national where possible” and it applies perfectly to regulation.

THERE IS A FEELING ALL ACROSS EUROPE THAT THE EU HAS MOVED AWAY FROM ITS CITIZENS, WHO FEEL LESS CONNECTED WITH IT

Gold: In November 2015, David Cameron formally set out the four objectives that lie at the heart of the UK’s demand for reform. The first one concerns the “Protection of the single market for Britain and other non-euro countries”. What does this mean?

R.T.: The single market is one of the biggest achievements of the European Union, with huge benefits for consumers and for the economies of its Member States. At the moment, the EU has many currencies within it. 19 members of the EU are in the eurozone and nine are outside. It matters to everyone in the EU that the eurozone succeeds and the UK doesn’t want to stand in the way of measures that the eurozone countries may want to take to ensure the longterm success of the single currency. But it is critical that the integrity of the single market and the legitimate interests of the non-euro members are respected. The UK is not looking for any veto over what happens in the eurozone but rather for some principles and guarantees that will ensure that those outside the euro cannot be put at a disadvantage and that the single market works for all 28 members.

Gold: The second UK objective is about boosting competitiveness by setting a target for the reduction of the “burden” of red

Gold: The third objective of exempting Britain from “ever-closer union” and bolstering national parliaments is not so straightforward, given the philosophy and desire of many countries to move closer politically and economically. Isn’t this a case of the UK ‘having its cake and eating it’?

R.T.: It is important to bear in mind that for several decades now, part of the debate in the UK has been about sovereignty. The Government believes that, while a number of member states may have the objective of ever-closer union – and we completely respect those wishes – it is not a commitment that we want to have applied to the UK. In this context, we’re also looking at the roles of the European Parliament and national parliaments because citizens all across the EU identify much more with their national parliament than they do with the European Parliament. We also want to ensure that the EU’s commitments to subsidiarity are fully respected, which brings us back to the “European where necessary, national where possible” concept. What we are saying is that a union of 28 countries needs to be able to respond to the wishes of a variety of its members. It’s not purely about Britain; it’s about making the EU flexible in a way that works for everyone.

Gold: The issue that probably resonates most with British people of all political persuasions is the Prime Minister’s fourth objective of restricting EU migrants’ access to in-work benefits such as tax credits. Opponents of this argue that it goes against the basic principle of equality among all the Union’s citizens.

Does it?

R.T.: Let me start by saying that the UK is an open economy and a trading nation. We are a welcoming country. We have a very long tradition of giving asylum to the persecuted. We don’t want to change that but we need to be in a position where we are able as a country – and I think this applies to every country in the EU – to ensure fairness in the immigration system and to see that our welfare system is not abused. Over the past few years, the increase in Britain’s population has been significant. It’s set to exceed 70 million in www.goldnews.com.cy | GOLD | 21

| INTERVIEW |

the next decade and we may become the most populous nation in the EU by 2050 with net immigration running at higher levels than we believe are sustainable. So what we’re looking to do is to restore a sense of fairness to the immigration system and to reduce population flows from within the EU into the UK, which are higher than forecast and, of course, they certainly weren’t envisaged by the EU’s founding fathers. We believe that we need to deal with the abuse of free movement, an issue where the Prime Minister has found wide support among his EU colleagues. We want to reduce the draw that our welfare system exerts across Europe: there’s no sense in the welfare system having the effect of attracting highly-skilled people from elsewhere in the EU to end up doing relatively low-skilled work in the UK. It doesn’t make sense for the UK nor the EU as a whole.

Gold: For all its faults, the civil service here is seen to be much better organised and more efficient than its counterparts in many other countries, precisely because it is part of the island’s colonial legacy. Has it simply got ‘out of hand’ over the past 50 years or so?

R.T.: In my experience, I’d agree that the civil service is efficient with lots of capable people. This had a big role in the success of Cyprus’ EU Presidency back in 2012. What I would also say is that over the past 50 years, there have been quite dramatic changes in society, in technology, in the world as a whole and in what citizens expect from their government. Therefore, every public sector including in the UK and in Cyprus has to keep on adapting to that. People are demanding better, quicker and more responsive public services and, partly as a consequence of economic difficulty, they are also saying that they want the civil service to be less expensive. They want better services and to pay less for them, so the challenge for the public service in both Cyprus and the UK is to keep responding to these changes. I’ve been a civil servant for 35 years and the process of change and reform hasn’t stopped at any stage during this time and I’m sure it won’t. Because our two countries’ civil services have similar roots, we are happy and able to work together on these things.

THERE ARE GOOD REASONS TO BE HOPEFUL AND OPTIMISTIC THAT A SOLUTION TO THE CYPRUS PROBLEM CAN BE FOUND

Gold: Let’s talk about another kind of reform. The UK government has been advising Cyprus on how to reform the civil service.

What form has this consultancy project taken?

R.T.: It’s comprised a couple of elements: the first was at the time of the financial crisis in 2013, when some senior British officials worked with and advised their Cypriot colleagues, drawing on our experience of dealing with difficulties with our own banks. I think that this proved very helpful. Secondly, the National School of Government, which is partly financed by the UK Government, has been providing technical advice and assistance to Cyprus’ efforts for the reform of the civil service for almost four years now. This has taken the form of working together with various ministries such as Foreign Affairs, Justice, Defence, and Energy, Commerce, Industry & Tourism but also advising on specific sectors such as the Registrar of Companies, bankruptcy and liquidation, local administration and horizontal human resource issues. We went through a similar process of reforming our civil service and are continuing to do so. As a country which has many things in common with Cyprus, we feel that our relationship allows us to share our own experiences in a way that is beneficial; each country is, of course, unique but we can all learn from each other and follow best practices.

Gold: What stage has the process reached right now?

R.T.: It’s a project that has been very successful for three years now and is in the process of concluding. It will now be up to the Cyprus government to choose which recommendations it will implement.

That said, the UK will continue to offer technical assistance in a wide range of areas (as it has in the past when asked). For example, in two weeks’ time, a team from the Cyprus government will visit our Department of Energy, Climate Change and Environment to find out more about Environmental Practices for Offshore Oil and Gas Activities in the UK; similar study visits took place with colleagues from the UK Treasury in the last year too. We always try to support Cyprus’ efforts for reform where we can. The ongoing work done by the Ministry of Finance and the Unit of Administrative Reform, headed by Mr Petrides, is remarkable and we are proud to have such an excellent and ongoing co-operation with it.

22 | GOLD | The Business Magazine of Cyprus

Gold: Finally, it is clear that the two sides in Cyprus are closer to reaching a settlement of the Cyprus Problem than they have ever been. The British government, like many others, has been encouraging the two leaders to reach agreement. If they succeed, what, in your view, will this mean for Cyprus and the broader region?

R.T.: There are good reasons to be hopeful and optimistic that a solution to the Cyprus Problem can be found. Everyone has been struck by the way the two leaders have worked together, built confidence and started to tackle the really difficult issues. There is very strong support for finding a solution from the international community, expressed by visiting ministers, including our Foreign Secretary Philip Hammond, who has been here twice in a few months.

A settlement of the Cyprus question will be very good for all Cypriots. It will open up a whole set of economic opportunities and it will enable Cyprus to achieve its potential. Everyone who looks at the Green Line in Nicosia feels a powerful sense of the waste of that potential, of the missed opportunities and of how much more could be done by a united Cyprus. Such a united Cyprus will be able to play an even stronger role in the neighbourhood; it will be a source of stability in the region; an example of how a conflict can be brought to an end by peaceful means; and a great asset for the European Union and the West in dealing with a region fraught with major difficulties. A solution will enable Cyprus to change its relationship with its large and important neighbour – Turkey – as well as with other countries in the region. And of course, in purely human terms, it will be a great advantage for the Cypriots to be able to live in a united island and make the most of all the opportunities that will be created here.

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| PENSIONS |

70% CYPRIOT EMPLOYEES WILL NOT HAVE RETIREMENT SAVINGS THAT EXCEED THE AMOUNT NEEDED AT AGE 65.

A on Hewitt’s recently published second instalment of its study The Real Deal: Cyprus analyzes the financial retirement readiness of 2,000 employees of Cypriot companies. The study projects employees’ retirement needs and resources, it analyzes retirement risks, measures employer and employee actions to help improve retirement outcomes, and it provides answers to the critical questions that both employees and employers need to consider while preparing for a financially successful retirement.

Retirement income adequacy is a global issue affecting both employers and employees and Aon Hewitt’s report states that companies must realize that they will face serious problems in relation to their HR strategies if their employees fail to plan early for their retirement needs.

Many employees are unaware of their retirement income sources and their likely final retirement

benefits, meaning that planning for retirement is very difficult and may lead to inadequate retirement income.

The key question remains: Will current employees be able to retire with adequate retirement income, and at what standard of living?

How much do workers need to retire and maintain their standard of living?

Workers typically need to accumulate retirement assets and benefits (beyond Social Security) worth about seven times their pay at retirement at age 65 to maintain their pre-retirement standard of living over an average life expectancy. Employees who fail to save the required amount may be forced to defer retirement beyond age 65 or accept a lower standard of living on retirement.

Are today’s workers prepared to meet their needs at retirement?

Roughly three out of 10 em-

24 | GOLD | The Business Magazine of Cyprus

ployees who participate in their employer’s Provident Fund for their entire career are expected to be on track to retire with reasonably adequate retirement income.

Only 1 in 20 are projected to accumulate more assets than needed.

Only 1 in 4 are expected to fall close enough to their targeted needs to allow them reasonably adequate retirement income if they adjust their post-retirement spending or supplement their retirement savings with other assets.

This leaves 7 out of 10 employees who are not projected to have saved enough to retire at age 65. Even with adjustments in spending, these employees will either need to increase their savings or delay retirement.

When will employees be able to retire with adequate retirement resources?

Age 70 is the median age at which full-career contributors are projected to have sufficient

RETIREMENT INCOME ADEQUACY IS A GLOBAL ISSUE AFFECTING BOTH EMPLOYERS AND EMPLOYEES

resources to maintain their standard of living. Some 53% of employees are not expected to be able to retire by age 70 whilst 7% are not expected to be ready to retire before age 75. Earlier retirement may be financially feasible for some employees if they decide to reduce their standard of living. On the other hand, there may be reasons – poor health or the need to care for a loved one – that impede a worker’s ability to wait until financially ready to retire.

How can employees know if they are on track?

On average, employees need to save 15% of each year’s pay from age 25 to 65, in order to accumulate adequate retirement income. This includes employee and employer contributions.

Doing so will allow employees to accumulate resources over their career. If employees save lesser amounts, start saving later than age 25, or are not investing appropriately, they may need to contribute more in future years to make up the shortfall.

For example, for every ten years retirement savings are delayed after age 25, an additional contribution will be required.

In this study, the typical employer and employee contributions are about 7.8% and 5.7%

of pay respectively. This typical profile could differ significantly from the profile of the average employee participating in a Provident Fund.

What can employers do?

The study indicates that employees who save for retirement over long periods and who invest efficiently can accumulate benefits reasonably close to what they might need to maintain their pre-retirement standard of living. However, the study also indicates that almost 70% of employees are not projected to be close to retiring with adequate financial resources. This highlights the importance of helping employees save more and invest their savings appropriately for retirement.

Specific future actions can improve the projected results. Such actions may include:

TOTAL SAVINGS Q RATES REQUIRED

Í Automatic enrolment About 50% of Provident Funds in Cyprus operate on a voluntary basis. Possible reasons for employees not voluntarily joining a Provident Fund may include a lack of understanding or proper disclosure of the retirement benefits offered, a lack of understanding of the overall Cypriot retirement framework and the important role of Provident Funds, a lack of trust in the Provident Fund committee, the absence of a formal governance policy as well as low employee engagement, which

EN AGE WHGS SAVIN N BEGI T PERCENIF OF PAY E RETIR AT 65

may affect the length of an employee’s career with any one employer. Accumulated savings can dramatically improve when Provident Funds offer automatic

ees who are close to retiring as it provides relative protection for accumulated savings. However, such a strategy is less appropriate for younger employees with

ALMOST 70% OF EMPLOYEES ARE NOT PROJECTED TO BE CLOSE TO RETIRING WITH ADEQUATE FINANCIAL RESOURCES enrolment to employees. Aon Hewitt strongly encourages the adoption of automatic enrolment for Provident Funds. Í Automatic escalation of contributions This measure can be used as motivation to join the Provident Fund as contribution savings will start at a low level and gradually rise as a percentage of pay. The escalation can have a significantly positive impact on the level of saving and may lead to covering part of the savings shortfall. Í Individual investment choices A typical Provident Fund applies a single overall investment strategy set by the administrative committee. It is an impossible task for a single strategy to meet the needs of all Provident Fund members, due to differences in age and retirement needs. For example, a cash-only strategy may be appropriate for employ-

many years left until retirement as they will want to ensure that inflation does not erode the value of their savings. Offering individual investment choices can improve Fund governance, where each member will be in a position choose how their contributions are invested, and to make changes to their choices as and when they prefer. Í Employee education and training Many employees don’t understand the important role of saving adequately and over time for retirement. Employers can assist by ensuring that employees are educated and trained to understand the importance of saving early and adequately and also to understand the impact of their decisions on the level of their retirement savings . Í Reducing costs associated with Provident Funds Provident Fund governance in today’s regulated environment

is challenging, complicated and expensive. Employers should try to access more efficient solutions in relation to the operation, administration and investment of Provident Funds to ensure speed of action and access to economies of scale for better member outcomes.

What can employees do?

Employees can become educated, save more and take advantage of investment options.

Employee actions can include: Becoming educated in retirement income adequacy Targeting a realistic retirement age Identifying ways to save more in employer-sponsored retirement plans Taking advantage of financial wellness services, tools and resources made available for retirement planning Pursuing lifetime income solutions rather than relying on lump sum distributions Minimize leakage through reasonable use of Provident Fund loans, to maximize the accumulated savings at retirement Minimize leakage by not withdrawing benefits from a Provident Fund when employment changes, to maximize the accumulated savings at retirement.

The Real Deal: Cyprus report concludes that improving retirement readiness in Cyprus requires a concerted effort from all stakeholders.

25

35

45

15%

21%

33%

www.goldnews.com.cy | GOLD | 25

Opinion

SETTING A STANDARD

WHY BUSINESS ETHICS ARE A NECESSITY

L

By Kyriakos Parpounas

ast month, I tory standard or certifiable managewrote about the ment system. It attempts, however, difference beto clarify what constitutes CSR, how tween corporate it can become part of everyday busiphilanthropy and ness practice, and the relationship of Corporate Social CSR to sustainable development. It Responsibility (CSR). The case of sets out seven key principles for the the former Cyprus Popular Bank effective assumption of social reprovides a concrete example of the sponsibility by organisations. These difference between the two. The principles are (1) accountability, (2) Cyprus Popular Bank was perhaps transparency, (3) ethical behaviour, the pioneer of corporate philanthropy (4) respect for stakeholder interests, during its boom years: it made finan(5) respect for the rule of law, (6) cial contributions to a variety of social respect for international norms of groups, embraced and expanded the behaviour and (7) respect for huRadiomarathon – the biggest fundman rights. raiser in Cyprus – and became largely In defining the limits of its social synonymous with organised charity. responsibility, each organisation The Bank’s communications at the is required to consider the followtime indicate that all these actions ing key issues: (a) organisational were taken in the framework of its governance, (b) human rights, (c) CSR policy, demonstrating that its executives had labour practices, (d) the environment, (e) fair Info:Kyriakos Parpounas is General Manager of Green Dot (Cyprus) a totally wrong understanding of their obligations operating practices, (f) consumer issues and (g) Public Co Ltd. to the community. They correctly considered that community involvement and development. the Bank had an obligation to return something to It is clear that the standard is broad and touches society in the form of charity but they failed to appreciate that their in a coherent manner on the need to respect the financial results foremost obligation was to protect it from poor and irresponsible of firms, the interests of people (employees, partners, customers, business practices. consumers, local communities and society at large) and those of There is no doubt that, in a number of instances, certain executives the planet (environment impact the operation of the business, and the Bank as an organisation violated business ethics and the etc.). principles of responsible entrepreneurship. This case – and its trag- If businesses do not manage to incorporate the basic principles ic impact – highlights the extended responsibilities of executives of CSR into their daily operations, we will continue to have working in large organisations that are important to society, such examples similar to that of the former Cyprus Popular Bank, as banks. where the charity showcase may be stunning but the content is CSR has been an issue of standardization for many years and, in insufficient, socially analgesic and – depending on the extent of 2004, the International Organithe social impact of a possible business zation for Standardization (ISO), failure – potentially dangerous.

ISO IS A GOOD decided to proceed with the pubThe use of the ISO 26000 guidance STARTING POINT ON lication of an international standstandard as a basis for identifying the ard for CSR. The consultation THE WAY TO IMPROVING responsibilities of a business and, espelasted 10 years, until November cially, for the design of a coherent stratBUSINESS ETHICS 2010, when the ISO 26000 egy to undertake such responsibilities, is AND DEVELOPING Standard was issued. Described as a good starting point on the way to imMORE SUSTAINABLE “Guidance on Social Responsibilproving business ethics and developing ENTREPRENEURSHIP ity”, it is advisory, not a mandamore sustainable entrepreneurship.

26 | GOLD | The Business Magazine of Cyprus

Opinion

Ą ',%00)2+)7 *36 8,) '=46-38 )'3231= 92)1403=1)28 2407 %2( 7869'896%0 6)*3617 2))( %88)28-32

T

By Dr. George Theocharides

he year 2015 was acceptable and affordable levels.

There is also the big problem with undoubtedly non-performing loans (NPLs) in the another difficult one system. The latest figures from the for the economy, Central Bank of Cyprus (CBC) show with several that they now make up nearly 50% of problems remaining the total of the domestic loan portfolio, unresolved. On a positive note, howa figure of around €27 billion. The ever, i the economy finally returned to banks must address this and find credigrowth after several years of recession. ble solutions: The latest figures show that, compared • Firstly, the enactment and adoption to the previous year, growth in the third of the foreclosure legislation and of the quarter of 2015 was 2.2%, which is the insolvency bill framework will eventualhighest rate recorded since the fourth ly force strategic defaulters to approach quarter of 2010. Also, the fiscal data the banks and start cooperating. shows high primary surpluses. Forecasts • Secondly, the banks need to infor the period beyond 2015 are that crease the speed and effectiveness of the there will be primary fiscal surpluses, loan restructuring process. with the target being 3% to 4% in the • Thirdly, the number of non-permedium term, which is enough to place forming loans will start to decline public debt on a path of sustainability. significantly when the real economy These results were helpful in the Credrecovers and more jobs are created. it Rating Agencies’ upgrading of the Info: Dr. George Theocharides is an • Finally, the establishment of an asset manageCypriot economy ratings and contributed to a Associate Professor of Finance at Cyprus International Institute of ment company similar to Ireland’s National Asset successful exit to the international markets in late Management (CIIM) and the Director Management Agency (NAMA) or a “bad” bank October with the issuance of a ten-year bond at of the MSc in Financial Services. A version of this article first appeared in that would undertake all the problematic loans an interest rate of 4.25%. We are now at the last InFocus magazine. and take them out of the banking sector, thus evaluation of the Cyprus economic adjustment allowing the banks to clean up their balance programme by the Troika and, unless something sheets, could be a radical solution to this problem. unexpected occurs, as of April 2016 Cyprus will have exited the Another significant challenge faced by the economy conMemorandum of Understanding. cerns the structural reforms included in the Memorandum However, there are still many difficulties and challenges to be of Understanding: the privatisation of state-owned organizatackled. First is unemployment, especially among the young. A tions, the National Health Scheme, and civil service reform. large number of young Cypriots are leaving the country as there Unfortunately, we are far behind as regards this part of our are no satisfactory employment opportunities for them. Furcommitments and much-needed thermore, a large proportion of the structural reforms are not being economically active population has implemented. We had a golden been unemployed for a long period. &38, 8,) +3:)621)28 opportunity to implement these Unemployment may have stabilized but it still remains very high at close %2( 8,) 46-:%8) 7)'836 changes through the Memorandum 1978 -2:)78 19', of Understanding but it appears to 16%. Both the government and the private sector must invest much 136) -2 ():)0341)28 to have been lost. I am very much afraid that this may cost us dearly more in development projects if 463.)'87 in the future. unemployment is to be reduced to

28 | GOLD | The Business Magazine of Cyprus

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tel: +30 210 4294 404 | piraeus@register-iri.com

www.register-iri.com

| COVER STORY |

THE BEAUTY BUSINESS

KEY PL PLAYERS, LAYERS, M MARKET ARKET T TRENDS, RENDS, CONSUMER BEHAVIOUR

By Effy Pafitis & Artemis Constantinidou Photos by Emma Charalambous & Andreas Loucaides

30 | GOLD | The Business Magazine of Cyprus

B

eauty sells – just ask the leaders in the international cosmetics industry, who amass billions SJ IYVSW MR TVSÁXW IZIV] ]IEV EW E VIWYPX SJ GSRWYQIVW¸ IZIV MRGVIEWMRK HIWMVI XS FI FIEYXMJYP -RHIIH WS TS[IVJYP MW XLI MRHYWXV] MR WIGYVMRK TYVGLEWMRK TS[IV XLEX MX LEW GSQI XS JEGMPMXEXI MRGVIEWIH WTIRHMRK SJ HMWTSWEFPI MRGSQI MR XLI TSWX GVMWMW GPMQEXI WS QYGL WS XLEX MR ĀþÿĂ MX [EW ZEPYIH EX SZIV ¾Ă FMPPMSR F] Research and Markets.

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www.goldnews.com.cy | GOLD | 31

| COVER STORY |

WHOLESALE BUSINESS

%68:-); '3 08( 396 '314%2= %2( 396 &6%2(7 Artview is the exclusive importer of Dior cosmetics to Cyprus. Dior is a very important brand and its representation on the island comes with detailed guidelines and many requirements issued directly from its Parisian headquarters.

Needless to say, as one of the largest beauty houses in the world, its operation is very complex! As a result, we offer our full focus to fulfilling the necessary procedures and undergo constant training in order to increase our effectiveness in doing so.

We work with 24 stores throughout Cyprus, in addition to the travel retail sites at the island’s two airports.

,3; ;) %6) (-**)6ENT First of all we are a premium brand, something which distinguishes us from other industry players.

32 | GOLD | The Business Magazine of Cyprus

As such, the way we and our employees perform and operate is completely guided and protected by Dior.

Dior is a trendsetter; it is a couture house. It sets the trends through fashion and its cosmetics and fragrances follow these in the colours, textures and styles used. Cosmetic brands that don’t have a couture line differ greatly in that, without this influence, they are promotional. That’s fine too, but it doesn’t offer them the luxury dimension that Dior – and Artview – is proud of.

7-+2-*-'%28 86)2(7 -2 '=4697 There is a big trend in make-up now, with consumers demonstrating an increasing demand for colour.

Though this was partly influenced by international trends, we noted increased sales of brighter products such as red lipsticks when the crisis hit here in Cyprus. It seemed as though consumers wanted Vicky to add Guezukutchukian, colour General to their Manager lives because the economic and political climate were so dark at the time. This continued to positively impact our sales throughout 2015, by more than 22% in fact.

Other than this, we have seen consumers turn to cheaper skincare, as a direct result of the financial crisis – luxury skincare can be quite expensive. Despite this, they still want their lipsticks, mascaras and foundations to be of high quality from

luxury brands.

An increase in demand in high-end fragrances was also apparent throughout last year – so much so that we adjusted our financial forecast three times following the launch of our new Touche de Parfum fragrance in November, tripling the initial figure.

1%6/)8 7->)

:%09) In 2010 the value of the selective market – not including the mass market and brands such as M.A.C, Gosh, L’Oréal and Maybelline – was estimated at €40 million. In the years that followed, the local industry suffered a

decline of approximately 20%, which leveled out somewhat in 2015 as consumers began to spend more on cosmetics and fragrances once more. This, as well as figures I have for our own operations and certain market research, leads me to believe that this selective market is now worth €36-€38 million.

-28)62%8-32%0 -2*09)2') As a result of the increased awareness of cosmetics and beauty among men internationally, the male population in Cyprus is becoming more conscious of luxury personal care products, including bath products, deodorants and aftershaves.

There are other trends which have been impacted by the development of the associated markets in Europe. As the region, including Cyprus, is still in recession, retailers have taken to offering large discounts

rather frequently. Here, this has led to consumers investing more in the market; however, they have also become used to taking advantage of discounts on a monthly basis and are becoming increasingly more reluctant to purchase anything that is not discounted. Following two years of frequent offers – which Dior does not participate in as the brand is very particular with regards to promotions – retailers have started to realize that they must attempt to curb this trend as it is negatively affecting their profitability. They must be careful, though, because consumers’ ongoing price-sensitivity means they could easily take their spending power elsewhere if the beauty stores stop promotions altogether. In 2016, I believe the trend will be for fewer discounts on products but more quality services extended to customers.

prefer heavier, richer scents. This is attributed to our influence from the Middle East, as well as our darker complexion, which suits more intense perfume.

This trend is also apparent in our male fragrances, as well as in the popularity of some of our skincare products. In Cyprus our skin-type is mostly mixed-to-oily, as opposed to the dryer skin of European consumers and the entirely different requirements of the Asian market. So here we also follow the Middle Eastern trends in skincare.

79'')77 %&63%( *%-096) -2 '=4697# We launch almost everything that Dior releases for Europe – which is a different assortment to what is released for Asia.

Though Cypriot consumers follow Dior’s European trends for the most part, we see an interesting differentiation in our fragrance department. Local consumers have a different ‘taste’ in scents compared to European shoppers in that they

www.goldnews.com.cy | GOLD | 33

| COVER STORY |

WHOLESALE BUSINESS

' % 4%4%)00-2%7

396 '314%2= %2( 396 &6%2(7 C. A. Papaellinas is the exclusive distributor of several prestigious brands that are positioned at the high end of the cosmetics industry. Our portfolio consists of Chanel, La Prairie, Hermes, Sisley, Bvlgari, the BPI group which includes Narciso Rodriguez, Alaϊa, Elie Saab, Issey Miyake and Jean Paul Gaultier and brands of the COTY group such as Lancaster, Miu Miu, Roberto Caval-

li, Marc Jacobs, Calvin Klein, Davidoff, Chloe, Bourjois, Rimmel, Beyonce, Katy Perry, Adidas, Playboy and more.

Our main operations in the local market include services to our suppliers such as the distribution of their products to cosmetic retail chains, perfumeries and pharmacies through our own distribution company, PharmacyLine.

We also provide ongoing marketing communication services through our specialised marketing team which is part of our cosmetics department. Our cosmetics department also has a sales team that supports the brands that are sold in pharmacies, and a big team of 50 beauty advisors who promote our brands.

,3; ;) %6) (-**)6)28 The main brands our company represents are positioned in the more prestigious segment of the cosmetics market or ‘selective distribution’ as we call it in the cosmetics world. What really sets us apart from the competition is the way we promote our brands, which is based on building and strengthening the brands’ values.

Moreover, we strongly believe that the key for our brands to succeed in the market is the expertise of our employees and we therefore invest a lot in their extensive training and development.

7-+2-*-'%28 86)2(7 -2 '=4697 Eleonora Orthodoxou, Chief Marketing 6ɉJLY

34 | GOLD | The Business Magazine of Cyprus

Undoubtedly, one of the biggest trends in the cosmetics market is online shopping but that is the same for many other industries. The new consumer, besides shopping online, is now more sophisticated and more educated than ever. He/she likes to search and find all the latest international trends, such as natural products and more scientific and technologically advanced products.

Additionally, niche products and more need-specific products are now the new mainstream.

1%6/)8 7->) :%09) The selective cosmetics part of the market, in which we are mainly active, is estimated to be around €35 million.

To this one can add cosmetic products that are only sold through pharmacies – brands like Apivita, Nuxe and Korres – and those that are only distributed to beauty salons and supermarkets. Taking these into account, the total market is estimated to be €40-€42 million and this figure number doesn’t include sales of cosmetic products sold at the airports.

-28)62%8-32%0 -2*09)2') The cosmetics market in Cyprus is completely influenced by international cosmetic trends and changes that occur frequently. The new consumer is now more aware and informed of everything that is happening at any given moment.

SUCCESS %&63%( *%-096) IN CY4697# There are cases where products that are successful abroad do not have the same success in Cyprus. Local distributors thus play a crucial role in developing brands by investing in people and systems and using the right communication and promotional methods.

WHOLESALE BUSINESS

'378%7 4%4%)00-2%7 36+%2->%8-32 396 '314%2= %2( 396 &6%2(7 We represent the EstĂŠe Lauder company (M.A.C. cosmetics, EstĂŠe Lauder, Clinique, La Mer, Tom Ford and D.K.N.Y. fragrances and Darphin skincare), the L.V.M.H group (Givenchy and Guerlain fragrances, skincare and make-up), Clarins skincare and makeup, and Elizabeth Arden skincare and make-up. We are distributors of a variety of fragrance houses such as Thierry Mugler, Burberry, Versace, Moschino, Kenzo, Trussardi, Dsquared, Jimmy Choo, Montblanc, Karl Lagerfeld, Britney Spears and smaller brands of the

Elizabeth Arden Group such as Justin Bieber, Taylor Swift and Nicki Minaj.

C.P.O. is also the distributor of Korres natural products All the above are distributed mostly through the Beauty Line chain and Debenhams. Our fragrances Korres and Darhin are distributed through pharmacies as well and we also distribute professional products to aestheticians and hotel spas. Our most important professional brand is Thalgo cosmetics.

,3; ;) %6) (-**)6)28 As we are a multi-brand company, our department consists of different brand managers who are in charge of a team (training managers, beauty advisors, make-up artists, therapists and merchandizers) and take care of one brand or different brands. Each team has its own sales targets to achieve. There is always cooperation among the different departments but, as the priority is the achievement of their sales targets, there is a healthy competition among the different brand managers and their teams.

7-+2-*-'%28 86)2(7 -2 '=4697 The most significant trend currently unfolding in the cosmetics market is the increasing importance of the Internet.

Our customers get all the information about new launches or new colour trends as soon as the products are out in the market. Our beauty advisors, makeup artists and therapists are therefore trained very Monica thoroughly and earPapaellina, ly enough so as Department to provide their Manager, Perfumes educated & Cosmetics customers Division with a very high level of service. Another 35 3 5|G GOL GOLD OL LD | The Business Bu Magazine of Cyprus

new trend in our market is the increased importance of make-up.

Since the launch of M.A.C. ten years ago, a lot of changes have taken place. Women of all ages are buying a lot of items (not only the basics) and they want to learn make-up applications themselves.

1%6/)8 7->) :%09) There is no official data for the size of the market but, based on our estimates, it is about â&#x201A;Ź50 million.

SUCCESS %&63%( *%-096) -2 '=4697# Are there ever successful products abroad that, for some reason, fail to attract customers in Cyprus?

Not to my knowledge.

www.goldnews.com.cy | GOLD | 35

| COVER STORY |

WHOLESALE BUSINESS

,397) 3* &)%98= 08( 396 '314%2= %2( 396 &6%2(7 House of Beauty Ltd. is a distributor company established in 1999 as a joint venture between the MPM Group and the Cyprus Trading Corporation. As a company, it is exclusively focused on cosmetics and fragrances, representing worldwide leading companies such as L’Oréal

Lily Knobel, Sales Manager

Luxury Division with a rich portfolio of brands such as Lancôme, Yves Saint Laurent, Giorgio Armani, Biotherm, Helena Rubinstein, Kiehl’s, Ralph Lauren, Cacharel, Viktor & Rolf, Diesel. We also represent P&G Prestige products, with leading fragrance brands such as Dolce & Gabbana, Gucci, Hugo Boss, Escada, Lacoste and the brand which was created by the ‘father’ of make-up, Max Factor.

Recently, House of Beauty has entered into other areas with brands such as Lee Stafford hair care products and Spapharma face and body care products with Dead Sea minerals.

Our products are distributed in all major channels of the market: Debenhams, Beauty Line, independent perfumeries and pharmacies.

,3; ;) %6) (-**)6)28 I believe that through the variety of our portfolio of brands, we manage to satisfy every consumer as we represent brands which respond to all age groups and all possible demands, from technologically advanced products to more natural products and thus at any price point from high to low. Also, the fact that we are fully focused on cosmetics and fragrances gives us the expertise and knowledge to further develop the brands we represent.

7-+2-*-'%28 86)2(7 -2 '=4697 In my opinion, the most significant trends currently unfolding in Cyprus are the demand for more science-based skincare products and for more innovative products.

Additionally, products that fight fatigue and illuminate the skin 36 | GOLD | The Business Magazine of Cyprus

are also in demand. In make-up, I believe that consumers are looking for innovative, more convenient and more professional products.

1%6/)8 7->) :%09) Unfortunately, there are no official statistics regarding the size of the market.

-28)62%8-32%0 -2*09)2') Our market is greatly influenced by what is happening internationally.

Today’s consumers are now more easily educated and are therefore more aware of what the new trends abroad are. Consumers in Cyprus are usually attracted by novelties and new trends.

79'')77 %&63%( *%-096) -2 '=4697# Generally, products that are successful abroad attract customers in Cyprus too, with the exception of certain niche brands or, in the case of fragrances, there may be certain scents that do not correspond to our market’s taste.

WHOLESALE BUSINESS

** +6394 '=4697 396 '314%2= %2( 396 &6%2(7 The activities of the FF Group in the Beauty & Cosmetics sector in Cyprus involve the exclusive representation and distribution of Shiseido and Molton Brown.

,3; ;) %6) (-**)6)28 The brands we represent are all distinctive with their own unique characteristics. Shiseido is one of the most award-winning cosmetics brands in the world. Shiseidoâ&#x20AC;&#x2122;s research

and development started in 1897 and it has succeeded in developing high-quality products based on cutting-edge dermatology and formulation development technology for more than a century. On the other hand, Molton Brown has been well-known for blending exotically-fragranced bath, body and home indulgences since 1973. Using rare ingredients from around the world, Molton Brown creates products for everyone, with specialist ranges for men and women.

7-+2-*-'%28 86)2(7 -2 '=4697 The Cypriot premium cosmetics market can be characterized as mature. Some of the distribution companies are integrat-

Nebojsa Petridis, General Manager

ed forward into retail operations. Itâ&#x20AC;&#x2122;s a competitive market with constant changes in consumer behaviour. Skincare products hold the largest share of the market in relation to make-up products and fragrances. Other emerging trends in product types are natural cosmetics and pharmaceutical products, as well as 24-hour care products and super serums with an emphasis on glow and radiance.

:%62%:%7 ,%(.-4%2%=-7 08( :,4 08( 396 '314%2= %2( 396 &6%2(7

7-+2-*-'%28 86)2(7 -2 '=4697

Our company represents a number of exclusive premium brands including fragrances by Carolina Herrera, Nina Ricci, Paco Rabanne, Valentino and Prada as well as make-up and skincare products

by Revlon which are imported and distributed in the Cyprus market.

All trends that exist abroad are strictly followed in the Cyprus market as well. One could say that the Cyprus market is a miniature of the international market.

,3; ;) %6) (-**)6)28

Andry Tryfonos, Business Unit Manager

It is not an issue of how we differentiate as a company.

Each brand differentiates itself because of its own DNA, tradition and philosophy.

-28)62%8-32%0 -2*09)2') In Cyprus, we follow all the guidelines established by the international brands and which apply worldwide.

79'')77 %&63%( *%-096) -2 '=4697# I cannot say that it has ever happened to us for a successful product abroad to fail to attract customers in Cyprus.

www.goldnews.com.cy | GOLD | 37

| COVER STORY |

RETAIL BUSINESS

()&)2,%17 '=4697 '32791)6 &),%:-396

that appeal to the very young consumer at a given time.

The main factors influencing consumer behaviour are the good communication of product launches and promotions, the use of social media in marketing and advertising, well- known brands that consumers identify with, a good range of innovative products with strong visual merchandising, informative customer service, price and special offers.

2%896%0 463(9'87

(-+-8%0 1)(-% Media such as Instagram and blogging as a means of promoting beauty products is already playing a significant role in Cypriots’ purchasing habits. They can obtain and compare product information at their leisure and, consequently, they are more informed and demanding.

')0)&6-8= *6%+6%2')7 Judging from the sales in our stores, I would say that they are not especially successful in Cyprus. Fragrance companies capitalize on the popularity of international celebrities Rea Ioannidou, Cosmetics Commercial Manager

Pharmaceutical cosmetics and products with natural ingredients are not particularly important for Cypriot consumers at the moment but it is a growing category, driven by consumer demand for natural /nutrient cosmetics with health benefits.

&)78 1%6/)8-2+ 786%8)+= If you take premium brands like Dior and Chanel, their high-end marketing approach is focused on the premium aura of their products, i.e. the packaging, store presence, TV advertising, product launches and no discounting. The association with their fashion collections adds to their luxury awareness. M.A.C., on the other hand, which is a very successful brand, does not advertise at all on TV. It has a highly targeted content strategy, creating interactions on key social media platforms including Facebook, Twitter and YouTube as well as strong store theme events.

6)8%-0-2+ Retailers should enhance the consumer experience through store atmospherics, provide more entertainment and offer interactive promotions and services. It is important to link their online activities to their physical stores so that each channel supports the other. The best example of this is the Click and Collect service where you can buy something online and then collect it at one of the stores. Customer Relationship Management (CRM) and loyalty schemes are also useful marketing tools.

) '311)6') e-commerce is already part of our lives and it will continue to grow as time goes by. The presence of online beauty stores is therefore unavoidable and they will defi-

38 | GOLD | The Business Magazine of Cyprus

nitely gain market share but physical stores will always play an important part as regards the shopping experience of consumers who want to see, touch and feel products and have personal service. The ideal strategy for retailers will be the seamless integration of both worlds.

8%6+)8 1%6/)8 Department stores by default attract the 25+ customer. By introducing new fashion and cosmetics brands that appeal to a younger age group, we are attracting many customers in the 18+ age group.

1378 43490%6 463(9'87 In general, products with advanced formulas – for example, youth activators in serums and face creams – were among the most popular with customers last year. In make-up, innovative products for contouring, products for a natural look, mascaras with vitamins, eyebrow kits and lipsticks with plump -up qualities have all been popular, while regarding fragrances, the leading products are those supported by the classic Cosmetics Houses: Dior, Chanel, Lancôme, Givenchy, Paco Rabanne, Armani and Gucci.

'371)8-'7 *36 1)2 This is an upcoming category, especially among the younger generation. Men nowadays are more interested in their appearance than they were in the past. We have noticed that men feel more comfortable shopping for cosmetics in department stores than in specialist stores.

RETAIL BUSINESS

&)%98= 0-2) '32791)6 &),%:-396 Customers today pay attention to the values of a brand and how they relate to those values. Of course, pricing and convenience are still important factors but consumers give great value to the communication of a brand, to customer service, loyalty schemes and other services offered.

(-+-8%0 1)(-% Social media such as Instagram and blogging definitely have an influence on people’s purchasing habits, especially those who prefer to be informed through digital channels. The information is immediate, interactive and consumers can engage with the brand. The choice of the blogger needs to be associated with the brand as consumers relate to bloggers and are highly affected by their opinions.

It is important, however, to note that both traditional and online marketing are important for the complete communication of a brand.

')0)&6-8= *6%+6%2')7 Some of them are very successful in Cyprus and others not so. International celebrity fragrances are mainly popular with the younger generation and they change from year to year.

2%896%0 463(9'87 Pharmaceutical cosmetics and products with natural ingredients are a growing trend around the world.

However, in Cyprus consumers still pay great attention to the technological development and innovation of brands as well as the advice of beauty experts.

&)78 1%6/)8-2+ 786%8)+=

rience needs to reflect the one they have in-store.

Chanel is definitely a leader. It is focused on maintaining the luxury element of the brand and will not compromise its position in the market. From the beginning, it has always applied strict guidelines for any marketing campaign, promotion or animation, both for fashion and cosmetics, to protect the brand. Chanel’s brand ambassadors are always of a high calibre and identify with the brand’s values.

8%6+)8 1%6/)8

6)8%-0-2+ Retailers should always focus on their customers. Our job is to satisfy our customers’ needs and make their shopping experience as pleasant and enjoyable as possible.Retailers should be able to adjust their strategies for store design, promotions and loyalty schemes according to the trends, but always within their own Rea brands’ valIoannidou, ues. It is very Head of important to Business update and Unit refresh a brand to maintain interest, especially of the younger generation.

) '311)6') e-commerce is the future but it will not surpass the need for physical stores and service. Physical stores will always mirror a brand’s values and it is our responsibility to attract customers to our stores through our services and through exciting and interactive animations. We are great believers in the presence of online beauty stores in Cyprus, which is why we were the first to launch such a store through www. beautyline.com.cy. The online store is important for the convenience of customers and the expe-

Beauty Line is mainly focused on women, but we also have a large number of male customers. We do not target a specific age group; rather we welcome anyone looking for expert advice on beauty.

1378 43490%6 463(9'87 There are always our standard best seller fragrances, such as Chanel’s Coco Mademoiselle, Bleu de Chanel and Chloe Eau De Parfum, but last year the standout sellers were Dior Sauvage and Lancôme’s La vie est belle.

As far as beauty products are concerned, the brands that stand out have always been the ones that have strong fashion houses historically, while in skincare, brands with strong innovation have always been successful.

COSMETICS *36 1)2 These days, men are more concerned with their appearance and there is an increasing trend of men purchasing skin care cosmetics along with their fragrance.

www.goldnews.com.cy | GOLD | 39

| LEADERSHIP |

PEOPLE

LEADING AND MANAGING

E

very successful business leader knows that, in order to become an effective mentor, a creative problem solver, a skilled negotiator and a reliable decision-maker, it is essential first of all to have an open mind and the ability to listen.

The qualities that make a good leader do not appear by magic; what you pass on to others has to be fully absorbed and assimilated first.

The objective of the IN Business Executive Leadership Course is to help Executives, directors and managers broaden their business skills and develop a critical awareness of themselves, their management style and the impact they have on others, thereby ensuring that they have the necessary knowledge and ability to lead and motivate others to excel and achieve maximum results for their company or organisation.

Executive leadership begins with cultivating the right mindset. When we are seeking to become the best, we need to learn from those who are considered the best. The acclaimed trainers who are teaching this prestigious course and, at the same time, share their own experience and knowledge are without any doubt among the very best in their field.

One of them is Françoise Chevalier, Associate Professor at HEC Paris. Coordinator of the HRM Department and of HRM PhD for several years, she is now a member of the Academic Board for HEC Executive Education. A graduate of La Sorbonne (in Literature), the Institut d’Etudes Politiques Paris (in Sociology) and Paris XII (in Management Control) and with a Doctor40 | GOLD | The Business Magazine of Cyprus

ate from HEC, she focuses her research on Organisational Change, Human Resources Management, Creativity and Pedagogy.

Françoise Chevalier specializes in qualitative and longitudinal research methods, she is a member of the research committee at HEC, a research expert for the National Technology and Research Agency (ANRT) and Vice-President in charge of Pedagogy for the AGRH (Human Resource Management Academic Association).

In addition to conducting research, organising conferences and workshops and publishing a variety of articles in academic and professional journals, she has also written several books, the latest of which is Des PME aux ETI: les entreprises en croissance (From SME to ETI: growing enterprises) on the evolution of small and medium sized enterprises (up to 250 salaried employees) into intermediate size enterprises (251-5,000 employees)

LEADING AND MANAGING PEOPLE Françoise Chevalier’s seminar (29 & 30 January 2016, 9.00am-4.00pm, Amathus Beach Hotel, Limassol) is aimed at improving leadership skills, for managing people in the context of a company’s business strategy and culture. Included are key and socially responsible management practices in planning, organising, and controlling for achieving organisational goals and objectives, as well as in creating a high quality work environment for attracting, developing and retaining human talent.

The Seminar’s objectives are: • To identify the links between People Man-

Françoise Chevalier, Associate Professor at HEC Paris, is one of the trainers in the IN Business Executive Leadership Programme being held from November-January at the Amathus Beach Hotel in Limassol.

Leadership and learning are indispensable to each other.”

John F. Kennedy

agement, Culture, Strategy and Performance • To clarify the different roles and responsibilities in People Management among Executives, HR Specialists and Line Managers • To have an overview of tools to develop talents (planning, recruitment and selection, performance appraisal, training, mobility, compensation and benefits, mobility and career management) and increase performance • To develop attitudes and behaviours to mobilize and motivate people and to enhance one’s leadership style.

• To share and exchange experiences and tips on leading and managing people.

‘Leading and Managing People by Professor -YHUsVPZL *OL]HSPLY PZ VUL VM [OL Ä]L JVTWVULU[Z VM [OL 05 )\ZPULZZ ,_LJ\[P]L 3LHKLYZOPW 7YVNYHTTL HPTLK H[ +PYLJ[VYZ HUK :LUPVY 4HUHNLYZ PU *`WY\Z ;OL WYVNYHTTL OHZ ILLU HWWYV]LK I` [OL /\THU 9LZV\YJL +L]LSVWTLU[ (\[OVYP[` ,U[LYWYPZLZ HUK 6YNHUPZH[PVUZ WHY[PJPWH[PUN ^P[O [OLPY LTWSV`LLZ ^OV ZH[PZM` [OL /9+(»Z JYP[LYPH HYL entitled to a subsidy.

Organiser: IN Business Magazine Co-organiser: Cyprus Institute of Marketing Coordination: ʢʥʠ -VY TVYL PUMVYTH[PVU! Tel: (+357)22505555 22(+357) 22505555

| CONFERENCE |

APPLIED GOVERNANCE: BEYOND COMPLIANCE

T

Speakers: Andreas Andreou, CySEC, Elena Frixou, Association of Cyprus Banks, Louis Pochanis, Bank of Cyprus, Gregory Dellas, Bank of Cyprus, Kyriakos Iordanou, ICPAC, Mike Pierides & Stephan Becker, Pillsbury Law Firm, Pantelis Christophides, L. Papaphilippou & Co LLC

Louis Pochanis, Bank of Cyprus

he first Compliance Forum to be held in Cyprus took place in Nicosia on December 9, organised

by IMH and Gold, under the auspices of the Cyprus Fiduciary Association (CFA) and the Institute of Certified Public Accountants of Cyprus (ICPAC).

Its objective was to bring attendees up-to-date on the recent changes to legal, regulatory and other responses to reported corporate transgressions which have broad and, in some respects, still uncertain implications for companies. The Forum was attended by compliance professionals from the finance sector and senior executives and managers responsible for risk management and compliance issues.

Organizers

The Cablenet INbusinessnews stand

Main Sponsor

Photos Photiades +PZ[YPI\[VYZ VÉ&#x2C6;LYLK Kronenbourg beer to all participants

Sponsors

Under the auspices of

Yiannis Zarvos & Caroline Stavrou, PwC

Tonia Nicolaou & Tasoula Hadjiiona, Bank of Cyprus

Communications Sponsors

Olga Prodromou & Stefanos Parpas, TFI Markets Mike Yiangou & Mariella Livera, Infocredit Group

Speakers: Marios M. Skandalis, Bank of Cyprus, Andra Balla, Microsoft Romania, Louis Pochanis, Bank of Cyprus, Jean- Marc Goy, ICSSF, Maria Athienitou & Yiannis Zarvos, PwC Cyprus

Christodoulos Hadjichristodoulou COOP Nicosia & Marios Xenides, Cooperative Central Bank Ltd www.goldnews.com.cy | GOLD | 41

| ECONOMY |

GOVERNMENTS NEED TO PERFORM A FINE BALANCING ACT

A country with low taxes and no infrastructure will not attract private investment

INCOME INEQUALITY,

REDISTRIBUTION

AND ECONOMIC

GROWTH

I

By Tassos Anastasiades

n the capitalist system, income inequality is an essential driver of economic growth. It is the expectation of a high reward that spurs high-risk investments and innovation and the prospect of earning a high income that encourages the acquiring of more qualifications, both academic and technical. Even though In Communist or Socialist economies, the emphasis is also on income equality, the Chinese leader Deng Xiaoping once stated, “Let some people get rich first”. He was, of course, referring to China but this statement could apply to all developing countries.

While some income inequality is positive for economic growth, too much can have a negative effect, both on the economy and the social fabric of the country.

The task of the government, then, becomes one of income redistribution through taxes and social benefits. Economists disagree on the degree to which this should be implemented. While some emphasize the disincentive for investment, work and education, which emanates from high taxes and high social benefits others argue that redistribution does not harm growth, especially if tax 42 | GOLD | The Business Magazine of Cyprus

revenue is used for the financing of infrastructural projects and/or for educational purposes and the provision of improved health for those on low incomes. Economists supporting income redistribution point to studies showing that good infrastructure and an educated workforce encourage investment and economic growth. A country with low taxes and no infrastructure will not attract private investment.

The IMF recently published a study which states that redistributing income leads to faster and more viable economic growth but it warns that there will be unfavourable effects if income redistribution is pushed too far.

The study is supported by facts: for example, Scandinavian countries, which pursue redistributive policies, are achieving better results with regard to economic growth than the southern states of the EU which do not pursue such policies to a significant extent. It is also noted that countries with lower inequality in Eastern Asia, such as Japan and South Korea, achieve better economic growth than countries with higher inequality, such as those in Latin America.

It is important to note that less inequality improves the efficiency of the economy by improving the potential of human resources to participate in the labour market. At the same time, however, some inequality may

Info: Tassos Anastasiades is an Economist and Former Director of the Ministry of Finance.

promote economic growth, if this is a result of providing incentives to businesses for investment and research. On the other hand, a great degree of inequality may deprive the poor of the possibility to gain wealth, to specialize, or to care for and educate their children. The IMF study found that countries with higher inequality have slower and more fragile economic growth. Conversely, economic growth is more rapid in societies with less inequality than in those with more inequality. It concluded that reasonable income redistribution does not have a negative effect on economic growth but high inequality may certainly affect growth, especially if those on low incomes are facing issues such as low education, health, and crime, which can lead to low productivity. According to the Gini coefficient (an index which measures a country’s income distribution), inequality in China has increased at a higher rate than expected and has surpassed that of the USA. The increase is mainly the result of the remuneration gap between those living in urban and rural areas.

In Cyprus, the Gini coefficient for the country was 31.0 in 2012 and 32.4 in 2013, showing an increase in inequality. For the same period, the average Gini coefficient for the 28 EU countries remained essentially unchanged, at 30.4 in 2012 and 30.5 in 2013.

Mutual Responsibility

| DEBT MANAGEMENT |

New rules, based on the principle of mutual responsibility between lender and borrower, are required to resolve Cyprus’ nonperforming loans problem.

By Effy Pafitis

44 | GOLD Business ofFESS 44 Gold 44 G Gol olld TH T E INTERNATIONAL THE INTE IN INT NTE NT T| The RNAT RRN NAT A ION IONA ON NAAL IN N INVESTMENT, NVVEEST ESSTTM ES MEN EN NMagazine NT T, FINANC FI FINANCE NANCEE & PROF PROFESSIONAL ROF ECyprus SSI SIION OONAL NAL N AALL SER SE SERVICES ERRVIC VIICE VICE ICCE CES MA M MAGAZINE AGAZI ZINEE OF ZI OF CYPRUS CYPRUS

T

hough the island has succeeded in overcoming many hurdles in recent years, one gargantuan challenge remains: the reduction of undue levels of non-performing loans. Joining this battle is debt management firm Qualco, which expanded its operations to the island just weeks ago. Qualco Cyprus’ mission is to address the debt management challenge of financial institutions and other debt originators by capitalizing on the Group’s experience in credit and debt collection across some 15 countries internationally. On the occasion of the Cyprus office’s inauguration, Christian Jacob, Managing Director of Qualco UK, spoke to Gold about the firm’s expertise, its ambitious expansion strategy, and how the Cyprus team may learn from the success of the UK office.

Gold: Let’s start with the basics: what is Qualco?

Christian Jacob: Qualco is a global service provider with over 15 years of experience in all aspects of the credit and debt collections life cycle.

Qualco covers the decision-making, analytical and operational needs of entities with receivable assets, of-

fering a wide range of solutions from technology platforms, Business Process Outsourcing services (BPO), advisory portfolio management services and reliable behavioural prediction models.

Gold: Where are you based?

C.J.: Our headquarters are in Athens and we have a corporate presence in the UK, France and, now, in Cyprus.

Through our offices and strategic partnerships in Europe, Africa and Latin America, we provide products and services to over 80 clients across 15 countries, including some of the strongest players in the financial and debt servicing industry.

Gold: How has the firm’s client portfolio evolved in the post-crisis climate?

C.J.: Qualco’s Senior Management had the vision and forward thinking to engage with distress debt and non-performing loans well before the crisis in Europe evolved. We have been devel-

The LɈLJ[P]L

management of distress debt

is of strategic importance

for the recovery economy

and development of the Cypriot

oping our specialized solutions, our platforms and core portfolio management services for the last 10 years. As a result, we feel that we are ready to add value to our customers and partners, to support them in achieving their strategic objectives and optimize their operations.

We, as Qualco, are interested more in building trusting, long-term relationships with our customers rather than just expanding in volumes.

Gold: You are personally tasked with establishing new business opportunities at Qualco UK. How do you go about it?

C.J.: Qualco’s client base spans right across the financial services space, including key markets such as retail, telecoms, BPO (business process outsourcing) and debt sale. Our panel and asset management analytics and software offer these clients a magnitude of opportunities to better understand their customer data and ultimately drive efficiency and increase net returns. For example, Qualco Intra Collect enables clients to improve the performance of their internal collections team; the Qualco Extra Collect platform, meanwhile, enables clients to better manage their recoveries process through external agencies; its advanced placement, monitoring and benchmarking tools ensure the clients’ debt book is placed with the right agencies to maximise collections.

Gold: Tell us about your newest services and where they are aimed.

C.J.: The most recent service we’ve launched in the UK is Qualco Consult, which offers advisory services to

www.goldnews.com.cy | GOLD | 45

| DEBT MANAGEMENT |

The current administration model is neither LɉJPLU[

nor sustainable

originators and debt purchasers on their collections framework, strategies and procedures. This enables us to help our clients access the expertise that Qualco has developed in credit management to their great benefit. For example, this could include a review of processes, analysis of accounts and best placement and business recommendations to aid business growth and profitability.

Qualco’s software solutions identify trends, product usage, purchase patterns, behaviours, transactions and specific metrics that can be harnessed to ensure that the appropriate strategy is employed with each customer. That is why we have had have a number of conversations with potential clients of late regarding our Qualco Engage product. We can help them ensure that the right customers receive the right communications at the right times, thereby increasing the level of customer engagement, the emotional involvement with the brand and the number of advocates it has. All of this ultimately leads to a notable increase in revenue for the prospective client.

All products in the Qualco suite offer bespoke and powerful analytics tools that enhance accurate decision-making through interactive reporting and analysis. This allows our clients to confidently apply result indicators in order to best create future models.

Gold: Qualco Cyprus was recently inaugurated in the context of the firm’s international expansion strategy. How far do the company’s plans extend?

Qualco’s expansion into new geographical territories has always been one of our interests. Our international expansion plan, in alignment with our three-year Business Plan, is dynamic, while at the

46 | GOLD | The Business Magazine of Cyprus

same time realistic and gradual. The penetration model, development strategy and solutions and services provided vary in each country, depending on the maturity and depth of the market as well as the market conditions. Throughout this process, our commitment to quality and the provision of high value-added solutions remains our fundamental principle.

Gold: The establishment of a Qualco office on the island comes at a pivotal time for the country, when – due to its unprecedented financial challenges – debt collection is arguably more important than ever.

C.J.: Indeed, the effective management of distress debt is of strategic importance for the recovery and development of the Cypriot economy, and we see ourselves as fellow travellers in this effort. Trust between financial institutions and their clients is a very important element in any economy and, as this must be strengthened in view of the current difficult situation on the island with a high percentage of loans in arrears, new credit policies must be implemented and loan restructuring processes enhanced. The current administration model is neither efficient nor sustainable, especially when new conditions require new rules, which are based on the principle of mutual responsibility between lender and borrower. It is important to create a new model of cooperation in Cyprus, which always take into account the current circumstances, the need to finance healthy businesses and the support that should be extended to social groups that fail to meet their obligations. I strongly believe that addressing the phenomenon will allow for the rehabilitation of the economy, which is a real precondition for future social prosperity.

ORESTIS TSAKALOTOS,

Gold: What can the Qualco Cyprus team learn CEO, Qualco from the success “Qualco’s presence in of the firm’s Cyprus comes at an interoperations in esting time for the island.

Cyprus and Greece are the UK? the only two countries in C.J.: Qualco UK the world whose banks is in its fourth have amassed non-peryear of operation forming loans equivalent and, in that short to 50% of total loan portfolios. There has never time, we have been such an experience had to be nimanywhere else; although ble on our feet, there have been many quick to spot opeconomic restructuring portunities and programmes in countries such as Spain, Portugal constantly seek and Ireland, their need for innovation. We loan restructuring never think that the reached such levels. key to our sucWe have expanded our cess has been to operations to Cyprus with much respect for the develop agency economy and we believe relationships and that this is a unique opquickly underportunity: if all restructurstand their speing exercises are carried cialism to ensure out in a socially sensitive way by utilizing all the bethat we get fast havioural patterns that are results for our cliexhibited in these circuments’ portfolios. stances, then we can truly Whilst rolling reset the economy and lift out our software the burden of these high levels of NPLs. and analytics Today, we exercise all platforms with kinds of portfolio models great success, we in many countries and we have continued are seeking to share this to innovate. For experience here in Cyprus whilst working alongside example, we the country’s banks and know that our cooperating with all econknowledge and omy drivers.” expertise can be utilized, irrespective of implementing our collections platforms, hence we have launched our Consult and Engage services. Tenacity to succeed drives everyone in the UK operation and that is why we have had such a newsworthy story in such a short time span. We are out talking to the market every day to ensure that our product offering is continuously improved and drives return on investment, and the same can be done here in Cyprus.

GU

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201 6

special promotional feature

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ne of the main reasons why so many foreign companies and High Net Worth Individuals decide to relocate to Cyprus is to take advantage of the countryâ&#x20AC;&#x2122;s attractive tax regime.

Hundreds of local service providers are tasked with assisting and advising on issues pertaining to tax planning, including succession, trusts, wealth management, investment in real estate, citizenship by exception and more.

BAKER TILLY

DELOITTE

EUROFAST

EY CYPRUS

KPMG

48

50

52

54

56

P. CONSTANTINOU & CO LTD

58

In 2015, Cyprus made a number of changes to its tax legislation. On the following pages, nine leading firms present their products and services, as well as information on the key legislative amendments affecting their clients.

PwC

RSM

TAX ATELIER

60

62

64

www.goldnews.com.cy | GOLD | 47

201 6 E GU ID

special promotional feature

%$.(5 7,//< 67521* ,17(51$7,21$/ :25. &\SUXV *UHHFH 5RPDQLD %XOJDULD 0ROGRYD %$.(5 7,//< is a leading regional network of auditors, accountants, tax and business advisors, operating in Cyprus, Greece, Romania, Bulgaria and Moldova, within the framework of the strong international network of Baker Tilly International. â&#x20AC;˘ A single senior management team with clear vision and direction coordinates the operation of our offices in all our countries of operation. â&#x20AC;˘ 20 directors and more than 300 people offer services of the highest standards to more than 6,000 businesses operating both nationally and internationally across all industries. â&#x20AC;˘ At Baker Tilly, we pride ourselves in offering holistic, one-stop shop service of the highest standards to clients in all their areas of operation and geographical locations.

2XU LQWHUQDWLRQDO LGHQWLW\ â&#x20AC;˘ Baker Tilly and its practicing entities in Cyprus, Greece, Romania, Bulgaria and Moldova are independent members of Baker Tilly International, the 8th largest accounting network in the world. â&#x20AC;˘ Baker Tilly International is represented by 154 firms in 133 countries and 27,000 people worldwide.

2XU VHUYLFHV â&#x20AC;˘ Through a wide range of audit, accountancy, tax and business advisory services we aim to offer complete, practical and sound solutions to our clientsâ&#x20AC;&#x2122; business issues. We achieve this by keeping abreast of developments across all sectors of the economy, identifying and proactively resolving future challenges. â&#x20AC;˘ We serve clients of all sizes across all industries, whilst devoting enough personal attention and partner involvement to meet

and exceed our clientsâ&#x20AC;&#x2122; expectations. â&#x20AC;˘ Our membership of Baker Tilly International provides us with a range of resources, including access to the specialist knowledge, experience and intellectual property of thousands of recognised experts worldwide.

$XGLW DQG $VVXUDQFH â&#x20AC;˘ Statutory audit for companies registered in Cyprus â&#x20AC;˘ Audit of financial statements prepared in accordance with International Financial Reporting Standards (IFRS) â&#x20AC;˘ Review of financial statements and interim financial information â&#x20AC;˘ Internal Audit â&#x20AC;˘ Forensic Audit

%XVLQHVV 6HUYLFHV â&#x20AC;˘ Bookkeeping services â&#x20AC;˘ Accounting supervision â&#x20AC;˘ Management accounting â&#x20AC;˘ Payroll Services â&#x20AC;˘ Preparation of statutory financial statements â&#x20AC;˘ IFRS consulting services

&RQVXOWLQJ DQG %XVLQHVV $GYLVRU\ â&#x20AC;˘ Business & Performance Enhancing Advisory Services â&#x20AC;˘ Financial Advisory Services â&#x20AC;˘ Corporate Governance, Risk & Compliance â&#x20AC;˘ Insolvency Practices â&#x20AC;˘ Restructuring and Recovery Services â&#x20AC;˘ HR Consulting â&#x20AC;˘ EU Funds and Subsidies

0DQDJHPHQW 6HUYLFHV â&#x20AC;˘ Intermediary services for acquiring immovable property in Cyprus or Greece â&#x20AC;˘ Intermediary services for acquiring citi-

CONTACT INFORMATION:

Address: *VYULY * /H[aVWV\SV\ .YP]HZ +PNOLUPZ Ę&#x203A;]LU\L 5PJVZPH *`WY\Z Postal Address: 7 6 )V_ 5PJVZPH *`WY\Z c Tel: (+357) 22458500 Fax: c e-mail: PUMV'IHRLY[PSS`RSP[V\ JVT

48 | GOLD | The Business Magazine of Cyprus

zenship and/or residency permit in Cyprus and Greece â&#x20AC;˘ Advice and support throughout the application process and liaising with the relevant authorities as required

7D[ &RQVXOWLQJ DQG &RPSOLDQFH 6HUYLFHV â&#x20AC;˘ Local and international tax planning for companies and individuals â&#x20AC;˘ Corporate and personal tax compliance services â&#x20AC;˘ Tax due diligence reports â&#x20AC;˘ Tax rulings and negotiations with the authorities â&#x20AC;˘ Transfer Pricing Services â&#x20AC;˘ VAT compliance services â&#x20AC;˘ VAT planning â&#x20AC;˘ VAT advisory services, including assistance in VAT investigations â&#x20AC;˘ Fiscal representation (where required)

2XU RQOLQH SUHVHQFH :HEVLWHV

Cyprus: www.bakertillyklitou.com Romania: www.bakertillyklitou.ro Bulgaria: www.bakertillyklitou.bg Moldova: www.bakertillyklitou.md Baker Tilly Greece: www.bakertillygreece. com

6RFLDO 0HGLD Linkedin: https://www.linkedin.com/company/baker-tilly-klitou Twitter: https://twitter.com/BakerTillyCY Facebook: https://www.facebook.com/pages/Baker-Tilly-Cyprus/112537415510271

www.goldnews.com.cy | GOLD | 49

Your tax advisers in Cyprus Insight and innovation Our Tax Services Deloitte offers clients a broad range of fully integrated tax services.

The provision of taxation services is core to Deloitte’s business both in Cyprus and in the international arena. Our firm has one of the largest teams of taxation experts in Cyprus, providing a full range of business and personal taxation services to a wide range of clients, from multinationals to family-owned businesses and individuals. We can assist with transactions across many jurisdictions, advise on key business decisions, and offer costeffective support for more routine matters.

quality taxation advice and services to large multinational groups, corporations, owner-managed businesses, entrepreneurs and high net wealth individuals in Cyprus and throughout the world.

Our tax services include: Business tax

O

International tax

O

Our approach combines insight and innovation from multiple disciplines with business and industry knowledge to help our clients excel globally.

Our tax 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. We are proud to provide

Transfer pricing

O

Tax management consulting

O

Indirect tax

O

Global employer services

O

Business process solutions

O

Tax Diary 2016 End of each month

O

Payment of PAYE deducted from employees’ salaries for the previous month

O

Payment of tax withheld on payments made to non tax residents during the previous month

Payment of special defence contribution withheld on dividends, interest or rent* paid in the previous month to Cyprus tax residents * Where the tenant is a Cyprus company, partnership, the Goverment or any local authority there is an obligation to withhold special defence contribution on the amount of the rent paid O

31 January

31 March

O

O

O

O

30 June

O

O

Payment of the second instalment of the special tax levy by Credit Institutions for 2016

O

Electronic submission of the 2015 personal tax return (IR1) by salaried individuals whose gross income exceeds €19.500 for the tax year 2015

O

Electronic submission of the 2015 employers’ return (IR7) and employees’ details

O

Submission of the 2016 provisional tax return and payment of the first instalment

O

Payment of the 2015 tax balance through self assessment by individuals and companies preparing audited financial statements

O

Payment of the second instalment of the premium tax for insurance companies (life business) for the second quarter of 2016

O

Electronic submission of the 2015 personal tax return (IR1) by individuals who do not prepare audited financial statements if their gross income exceeds €19.500 for the tax year 2015

O

30 April

dividends or interest from sources outside Cyprus for the first 6 months of 2016

31 July

Submission of the deemed dividend distribution declaration (IR 623) for the tax year 2013

1 August

Electronic submission of the income tax return (IR1/IR4) for individuals and companies preparing audited financial statements for the tax year 2014

31 August

Submission of return and payment of the first instalment of the special tax levy by Credit Institutions for 2015

Submission of the 2015 personal tax returns (IR1) by salaried individuals whose gross income exceeds €19.500 for the tax year 2015

30 September

Payment of the first instalment of the premium tax for insurance companies (life business) for the first quarter of 2016

Submission of the 2015 personal tax return (IR1) by individuals who do not prepare audited financial statements if their gross income exceeds €19.500 for the tax year 2015

O

Payment of tax balance for the tax year 2015 through self assessment by individuals (excluding those individuals who prepare audited financial statements)

O

Payment of special contribution for defence on rents,

50 | GOLD | The Business Magazine of Cyprus

31 December

Payment of immovable property tax for for the tax year 2016

O

O

Payment of the third instalment of the special tax levy by Credit Institutions for 2016

O

Payment of the second instalment of the 2016 provisional tax

O

Payment of special contribution for defence on rents, dividends or interest from sources outside Cyprus for the last 6 months of 2016

O

Payment of the third instalmet of the premium tax by insurance companies (life business) for the last quarter of 2016

O

Payment of the fourth instalment of the special tax levy by Credit Institutions for 2016

Deloitte’s Tax Webcasts Series Our new video Stay on top of tax issues and strategies that impact your business. Watch Cyprus Tax Webcasts, a quarterly summary of significant local and international tax events impacting Cyprus.

The Webcasts are presented by Pieris Markou, Tax and Legal Services Leader of Deloitte Cyprus and broadcast during the first week of the month following every quarter.

In our latest tax Webcast published on 8 January 2016, we covered the following topics: 1. Local tax developments 1.1 Main amendments to the Income Tax Law 1.2 Main amendments to the Capital Gains Tax Law 1.3 Loan restructurings tax provisions 1.4 Public interest rate 1.5 Income tax circulars and announcements 2. Tax treaties update 2.1 Amending protocol with Ukraine 2.2 Tax treaties effective from 1 January 2016

3. International tax update 3.1 BEPS 3.2 EC Investigations on tax rulings 3.3 CRS 4. Tax Diary for January – March 2016 You can access the video on Deloitte Cyprus Youtube channel or via our website: www.deloitte.com/cy To be notified when a new video is out, please subscibe via our website.

For general enquiry, please email us at CyprusTaxWebcasts@deloitte.com

www.goldnews.com.cy | GOLD | 51

info@eurofast.eu | www.eurofast.eu

Eurofast: Your Regional Business Advisory team Our History Eurofast started its operations in 1987 as Eurofast Services operating within Euroglobal SEE Audit Limited (formerly known as BKR Damianou and Partners). In 2002, Eurofast assumed the tax and consulting divisions of BKR Damianou and via a spin-off became fully independent from the audit-firm. Today, Eurofast employs over 200 people in South East Europe and East Mediterranean.

Our Services We specialise in M&A, tax advisory, tax planning and compliance, accounting, transfer pricing, HR services, citizenship & residency, banking and financial services, business restructuring & insolvency, cross border structuring and restructuring services.

Furthermore, Eurofast offers market entry services for clients interested in expanding internationally. We provide market entry services to Cyprus, Greece, Bulgaria, Romania, Serbia, Montenegro, Albania, FYR Macedonia, Bosnia, Croatia, Ukraine, Russia, Georgia and Egypt. We can assist with company registration, establishing partnering with foreign firms (Joint Ventures), purchasing existing company, securing funding. assist with all legal and regulatory issues.

with the same client focused approach and partner led personal service.

Our competitive advantage We seek to delight our clients, by being proactive. Our aim is to create client enthusiasm by giving even more value to our clients, whether measured by price, performance, quality or service. Our portfolio includes a number of high net worth individuals and clients engaged in every sector of the economy , which proves the range of our abilities.

Our competitive advantage stems from our ability to serve our clients promptly, efficiently and effectively. Every Eurofast office consists of teams ranging from 15-60 professionals with diverse backgrounds and experience including tax, legal, M&A, payroll, accounting, audit and consulting.

Our credentials We have over 28 years of history, working with many global brands and leading Institutions, operating in the manufacturing, retail, airlines and professional services sector. Our clients are the vivid evidence that Eurofast is your trusted business advisor in South East Europe and East Mediterranean.

Our Network We are uniquely positioned as one stop shop for investors looking to enter South East Europe and Eastern Mediterranean. We have office in South East Europe and East Mediterranean, with 21 fully fledge offices in Athens, Thessaloniki, Nicosia, Sofia, Bucharest, Belgrade, Podgorica, Tirana, Skopje, Zagreb, Pristina, Banja Luka, Sarajevo, Cairo, Alexandria, Tbilisi, Beirut, Erbil, Moscow, Kiev and Tehran.

Eurofast is managed by a team of professionals capable of addressing all client needs in all the countries of operation in the Region in one single meeting, using one single language for all the countries involved. The fact that all local Eurofast offices are fully fledged subsidiaries of the Cyprus office enables us to implement and maintain a uniform region-wide management policy

We have achieved worldwide market recognition for our exceptional advice, capabilities and innovation. We have been acknowledged as a leader in Tax in Cyprus. Among others, we have been ranked top Tax Advisors and announced “Cyprus Tax firm of the Year” by International Tax Review which is a true recognition for the valued client work we deliver every day.

For 2016 we were acknowledged by Acquisition International as ‘Corporate Adviser of the Year – South East Europe’ for our work done in the Region. In 2015, Eurofast has ranked Tier One Tax Planning Advisor by International Tax Review for the seventh time in a row. In 2014, Eurofast was also recognized for its expertise in M&A.

Since 2006, Eurofast has undertaken the representation of Taxand Cyprus.

For more information on Eurofast and its service portfolio, please visit www.eurofast.eu.

52 | GOLD | The Business Magazine of Cyprus

info@eurofast.eu | www.eurofast.eu

Your Regional Business Advisory Organisation

Twenty one cities

www.goldnews.com.cy | GOLD | 53

201 6 E GU ID

special promotional feature

(< &<3586 &203(//,1* $'9$17$*(6 72 ,1',9,'8$/6 $1' &203$1,(6 In 2015, the House of Representatives voted on a number of amendments to the tax laws. Possibly these amendments were the most significant since the introduction of the current tax regime in 2003, and their main purpose is to: â&#x20AC;˘ Encourage the creation of business substance by offering compelling advantages from a tax perspective, to both Individuals and companies. â&#x20AC;˘ Further enhance Cyprus as aninternational business hub and establish it as an attractive and efficient tax jurisdiction.

5HFHQW DPHQGPHQWV LQ WKH &\SUXV WD[ ODZ ,QGLYLGXDOV â&#x20AC;˘ Exception from income from employment The current exemption of 20% on employment income exercised in Cyprus, which applies to Individuals who were not resident in Cyprus in the year before the commencement of the employment, is extended from 3 years to 5 years provided the employment started during or after 2012.

Furthermore, as of 1 January 2012, 50% of the gross emoluments are exempted from personal income tax for Individuals that were not tax residents of Cyprus prior to the commencement of their employment in Cyprus. This deduction applies when income exceeds â&#x201A;Ź100,000 per year. The law is now amended to extend the aforesaid exemption to a period of 10 years commencing from the year of employment. â&#x20AC;˘ Introduction of non-dom rules for Individuals

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EY is a global leader PU HZZ\YHUJL [H_ [YHUZHJ[PVU HUK HK]PZVY` ZLY]PJLZ ;OL ,@ *`WY\Z Ă&#x201E;YT PZ part of EYâ&#x20AC;&#x2122;s Europe, 4PKKSL ,HZ[ 0UKPH HUK (MYPJH ,4,0( (YLH HUK VUL VM [OL JV\U[YPLZ [OH[ JVTWYPZL [OL *LU[YHSHUK :V\[OLHZ[ ,\YVWL *:, 9LNPVU >P[OPU [OPZ Z[Y\J[\YL ^L WYV]PKLMHZ[ LHZ` HJJLZZ [V [OL PUMVYTH[PVU HUK WLVWSL ^P[O [OL ILZ[ ZRPSSZ HUK^LHS[O VM expertise, to help our JSPLU[Z THRL [OL YPNO[ KLJPZPVUZ

The Special Contribution for the Defence of the Republic Law (SDC) imposes tax on certain categories of income (interest, rents, dividends) received by persons who are considered to be residents for tax purposes of Cyprus, subject Advisory and to any available Tax Compliance Services exemptions. >L OLSW V\Y JSPLU[Z HZZLZZ PTWYV]L HUK The SDC law TVUP[VY [OLPY [H_ is amended M\UJ[PVUÂťZ WYVJLZZLZ so that an InJVU[YVS HUK YPZR dividual will THUHNLTLU[ HUK THPU[HPUPUN LÉ&#x2C6;LJ[P]L be subject to YLSH[PVUZOPWZ ^P[O SDC if he/she the tax authorities. is a resident for ;H_ Z\I ZLY]PJL SPULZ JV]LY H ^PKL YHUNL VM tax purposes PZZ\LZ! )\ZPULZZ ;H_ of Cyprus and :LY]PJLZ ;YHUZHJ[PVU provided such ;H_ /\THU *HWP[HS Individual is 0UKPYLJ[ ;H_ HUK 0U[LYUH[PVUHS ;H_ considered to :LY]PJLZ 0;: be domiciled in Cyprus, therefore, a Cyprus tax resident Individual who is not domiciled of Cyprus will effectively not be subject to SDC in Cyprus.

5HFHQW DPHQGPHQWV LQ WKH &\SUXV WD[ ODZ &RPSDQLHV â&#x20AC;˘ Notional Interest Deduction (NID) on equity

CONTACT INFORMATION:

Nicosia Address: 1LHU 5V\]LS ;V^LY :[HZPUV\ (]LU\L 5PJVZPH c Postal Address: 7 6 )V_ 5PJVZPH c Tel: c Fax: c Website: ^^^ L` JVT J` Limassol Address: ,YUZ[ @V\UN /V\ZL :W`YV\ 2`WYPHUV\ (]LU\L 4LZH @P[VUPH 3PTHZZVS Postal Address: 7 6 )V_ 3PTHZZVS c Tel: (+357) 25209999 Fax: c Website: ^^^ L` JVT J`

54 | GOLD | The Business Magazine of Cyprus

As per the amended law, corporate entities (including permanent establishment of foreign Companies) will be entitled to a NID on equity. The NID will equal the multiple of â&#x20AC;&#x153;reference interest rateâ&#x20AC;? and the â&#x20AC;&#x2DC;â&#x20AC;&#x2122;new equityâ&#x20AC;&#x2122;â&#x20AC;&#x2122; held and used by a Company in the carrying on of its business activities. â&#x20AC;˘ Tax neutrality of profits and losses resulting from currency exchange rate fluctuations.

The law is amended so that as of 1 January 2015, any foreign exchange (FOREX) gains or losses should be neither taxable nor deductible for tax purposes regardless whether they are realized or unrealized in nature. The tax neutrality of FOREX differences is a fundamental change as it provides certainty to taxpayers that foreign currency results should be disregarded for tax purposes regardless whether they are of trading or capital nature.

Notwithstanding the above, any FOREX gains/losses resulting from trading in foreign currencies (including trading in foreign currency derivatives) should be taxable/deductible respectively.

Read more about the recent amendments in the Cyprus tax law on ey.com/cy

www.goldnews.com.cy | GOLD | 55

Cyprus Tax System Cyprus is a reputable financial centre for over the last 30 years and has become the jurisdiction of choice for structuring of international operations. It has a strong and developed legal framework, based on UK law system and fully harmonized with the European Union Directives.

Traditionally Cyprus, having a simple and very competitive tax regime, with an extensive network of double tax treaties, is used in tax planning for Holding, Financing and Intellectual Property (IP) companies, as an intermediary jurisdiction for structuring activities in Europe, Asia and the Middle East and wealth management through family offices. The above advantages also increased the volume of foreign direct investments in the country, while the naturalization by investment schemes and the other incentives provided to property investors have positively affected the Cyprus property market.

Corporate Taxes Corporate tax for Cyprus tax resident companies is currently imposed at the rate of 12.5% for each year of assessment on the taxable income derived from sources both within and outside Cyprus. In arriving at the taxable income, deductions, exemptions and notional interest deduction on new capital should be taken into account.

Cyprus imposes no withholding taxes on payments made to non tax resident persons (companies or individuals) in respect of dividends, interest and royalties 56 | GOLD | The Business Magazine of Cyprus

to the commencement of their employment in Cyprus.

George Markides, Board Member, Head of Tax

used outside Cyprus, irrespective of whether the recipient of the payment resides in a treaty country or not. As provided in the Cyprus Tax legislation, any profit arising from the sale of ‘securities’, including shares and bonds, is exempt from corporate income tax.

Personal Income Tax A foreign national who is physically present in Cyprus for more than 183 days in a calendar year, will be considered as a Cyprus tax resident and s/he will be subject to taxation in Cyprus on his/her worldwide income.

Additionally, foreign pensions in respect of services rendered outside Cyprus are tax free in respect of the first €3.420 and thereafter, are taxed at a flat rate of 5%.

It shall be noted that 50% of the gross emoluments (for the first ten years and emoluments are at least €100.000 p.a) are allowed to be deducted from taxable income for individuals that were not tax residents of Cyprus prior

Dividend income and interest income are exempt from personal income tax in Cyprus, but are subject to Special Defence Contribution (SDC) tax. The SDC tax applies only to Cyprus tax residents and domiciles. A recent change in the tax laws implies that the current provisions will exclude from SDC, dividends, interest and rents of individuals who are Cyprus tax residents are domiciled in Cyprus (as defined in the SDC Law) irrespective of the origin of the relevant income (i.e. from sources within Cyprus or abroad). A foreigner who decides to relocate in Cyprus will not pay any taxes on dividends or profits on sale of shares.

Taxes on Properties Capital gains are not included in the ordinary trading profits of a business but instead are taxed separately under the Capital Gains Tax Law (CGT) at 20%, only in the case where the immovable property is located in Cyprus.

According to a recent legislation enacted in July 2015, a full exemption from capital gains tax will be granted for the sale to an independent party, of immovable property, which will be acquired from the date the law entered into force until 31/12/2016.

Contact Information: George Markides Board Member, Head of Tax T: +357 22 209 000 / 297 E: gmarkides@kpmg.com W: kpmg.com.cy

We believe in bringing our clients to the centre of our activity and positioning ourselves at the heart of their business KPMG operates through fully integrated teams that include professionals across our Audit, Tax and Advisory practices who combine a wide range of skills and experience tailored to meet the individual needs of our clients. We believe in bringing our clients to the centre of our activity and positioning ourselves at the heart of their business. This enables us to fulfill our role of providing advice based on a thorough understanding of their objectives.

Particularly KPMG can assist you through a number of projects, including tax compliance and international tax planning, corporate services, market and financial feasibility studies, project conceptualization and investment planning, project management and business plans, business performance improvement, valuation services, collective investment schemes (funds) services and immigration services (specialized team for the scheme of naturalization by investment).

George Markides Board Member, Head of Tax T: +357 22 209 000 / 297 E: gmarkides@kpmg.com kpmg.com.cy

©2016 KPMG Limited, a Cyprus limited liability company and member of the KPMG network of independent member firms affiliated with KPMG International Cooperative (”KPMG International”), a Swiss entity. All rights reserved.

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40 Kimonos Street, 3095 Limassol - Cyprus P.O. Box: 57186, 3313 Limassol - Cyprus Tel: +357 25 361 000, Fax: +357 25 355 888 Email: info@pconstantinou.com www.pconstantinou.com

58 | GOLD | The Business Magazine of Cyprus

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3 &RQVWDQWLQRX &R /WG LV DQ DXGLW ÂżUP EDVHG LQ /LPDVVRO &\SUXV ZKLFK RIIHUV D IXOO UDQJH RI SURIHVVLRQDO VHUYLFHV IRU DOO W\SHV RI EXVLQHVVHV DQG PRUHRYHU GHOLYHUV D SHUVRQDO VHUYLFH DQG DGYLFH 7KH ÂżUPÂśV SKLORVRSK\ LV WKDW â&#x20AC;&#x153;We never underestimate the valueâ&#x20AC;? RI RXU FOLHQWV DQG PDLQWDLQ D KLJK OHYHO RI VHUYLFH Our mission is to motivate and develop the skill of our employees by creating a culture based on teamwork, the promotion of perfection and respect for the individual.

Our employees are people of high potential in succeeding in their careers and we participate in their success.

We realize that without a detailed knowledge of our clients we cannot give professional advice that is relevant and helpful and therefore avoid useless generalities.

Getting to know the client is our key to success. We believe that with this approach we help our clients grow and become more competitive in their ďŹ eld. We also try to give our clients more value than they expect whether measured by price, performance, quality or service.

Audit - our ACA and ACCA qualiďŹ ed staff provide auditing services for statutory and other reporting requirements.

Accounting - the accounting department of our

ofďŹ ce offers bookkeeping services, VAT services, VIES services, INTRASTAT services as well as payroll services and feasibility studies.

Tax services - we offer tax planning for businesses and individuals who want to take advantage of the Cyprus tax system. In addition, we offer tax services such as capital statements, completion of tax forms, tax payments, obtaining tax certiďŹ cates etc.

www.goldnews.com.cy | GOLD | 59

201 6 E GU ID

special promotional feature

3Z& 86,1* 7$; $6 $ 722/ )25 (&2120,& 67$%,/,7< $1' *52:7+ )25 %86,1(66 :$6 $ <($5 of major tax amendments in Cyprus. Whilst the amendments leave the fundamentals of the Cyprus tax framework unaltered, the Government has introduced a variety of tax measures aimed at achieving economic stability and growth for business. In particular, the tax amendments include provisions which aim to encourage a reduction in the levels of indebtedness of Cyprus companies, provide a boost to the real estate market, attract individuals to live, work and invest in Cyprus as well as to modernise the tax framework of the offshore oil and gas sector.

In 2015, Cyprus was also very active in its international tax relations, signing five new or amended double tax treaties and achieving an upgraded rating from the Global Forum on tax transparency to that of â&#x20AC;&#x2DC;Largely Compliantâ&#x20AC;&#x2122;.

Following political agreement at European Union level, the Government also announced its intention to amend the Intellectual Property tax regime to align it as from 1 July 2016 with the OECDâ&#x20AC;&#x2122;s Base Erosion and Profit Shifting (BEPS) Action 5 conclusions.

At the same time, in order to provide stability to taxpayers, it was announced that the maximum possible transitional periods (i.e. until 30 June 2021 at the latest) will apply for those assets which qualify.

All the above certainly make Cyprus a lot more tax efficient. However, with the international tax environment ever

changing, Cyprus should continue to strive for further tax law reforms.

The main 2015 tax measures are highlighted below;

7D[DWLRQ RI FRUSRUDWHV Notional interest deduction In order to encourage companies to raise new financing in the form of equity rather than debt (or even replace existing debt), an annual notional interest deduction (NID) is available on equity which is introduced to companies as from 1 January 2015.

Annually, the NID is calculated by multiplying the qualifying equity with the applicable interest rate. The result is tax deductible in a similar manner as for actual interest expense incurred on debt financing (subject to a maximum deduction equal to 80% of the profits financed by the qualifying equity). The interest rate used in the calculation is, as a minimum, the 10-year Cyprus government bond rate plus a 3% premium; a higher rate may be applicable depending on circumstances.

Tax neutrality of foreign exchange differences Foreign exchange (forex) differences can be difficult for businesses to manage and predict. This leads to unpredictable tax liabilities in cases where forex gains are taxable. To address this, as from 1 January 2015, forex differences are exempt from tax with the exception of forex differences arising from trading in foreign currencies and related derivatives.

CONTACT INFORMATION:

PwC Central +LTVZ[OLUP :L]LYP (]LU\L c *@ 5PJVZPH *`WY\Z Tel: c Website: ^^^ W^J JVT J`

60 | GOLD | The Business Magazine of Cyprus

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3HUVRQDO WD[DWLRQ Non-domiciled individuals As from 16 July 2015, individuals who are resident in Cyprus but not domiciled in Cyprus may no longer be subject to tax in Cyprus on their dividend and interest income. This applies regardless of whether the dividend/interest income is locally or foreign source.

In essence, this amendment means that individuals who take up residence in Cyprus may receive their dividends and interest tax free for at least 17 years, depending on personal circumstances.

Employment income exemptions Individuals who were not resident in Cyprus at the time of taking up employment in Cyprus and whose annual remuneration exceeds â&#x201A;Ź100,000 may receive a 50% exemption from income tax for ten years. Accordingly, the income tax rate for such income will range from around 8% to below 17.5%, depending on personal circumstances.

www.pwc.com.cy

The tax system in Cyprus

Tax Facts & Figures 2016 - Cyprus

We in PwC are here to offer you the best of our knowledge and expertise. Our specialised tax solutions are adjusted to your own specific needs to support you in structuring your operations in an efficient way.

The guide is available on our website www.pwc.com.cy/tax-facts-figures

Š 2016 PricewaterhouseCoopers Ltd. All rights reserved

www.goldnews.com.cy | GOLD | 61

201 6 E GU ID

special promotional feature

560 560 ,1 &<3586 is a strategic partner for dynamically developing companies with local and international orientation, seeking the complete spectrum of services provided by Certified Public Accountants and Business Advisors. Our philosophy is directly linked to 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 the high standard 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 740 offices in 120 countries around the world, with more than 37,500 people.

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, including shipping, raw materials, the public sector, energy, commerce, food and beverages, technology and telecoms.

)RFXVHG RQ H[FHHGLQJ H[SHFWDWLRQV At RSM, we believe in giving clients more.

More understanding. More expertise.

More confidence.

Collaboration globally and locally: We believe in providing all our clients with a consistent service that goes above and beyond their expectations, wherever they are in the world. That means supporting you with valuable expertise from a local perspective, combined with the international knowledge and insights of our global professionals. This dual perspective empowers you to face the future with confidence.

Senior expertise, ideas and insights: We believe that every one of our clients deserves access to the invaluable knowledge and industry acumen of our most senior global professionals. Whether youâ&#x20AC;&#x2122;re an

SME or a multi-national, you can always depend on the latest thinking from some of our industryâ&#x20AC;&#x2122;s most respected practitioners. Weâ&#x20AC;&#x2122;re proud to share their expertise with you, responding with speed and agility so that you can meet each new challenge armed with all the relevant knowledge and insights.

Understanding our clients: Our client relationships are based on mutual respect and collaboration. Weâ&#x20AC;&#x2122;ll immerse ourselves in your business to gain a deeper understanding of who you are, what you believe in and what and what motivates you.

Weâ&#x20AC;&#x2122;ll undertake a 360-degree analysis of your markets, laws and customs, enabling us to identify opportunities or challenges before they arise. By fully understanding your goals and measures of success, we can support and empower you every step of the way â&#x20AC;&#x201C; maximising your potential.

2XU SHRSOH Î&#x2018; significant part of the success of RSM is directly related to the high quality of its services and 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 fields 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.

CONTACT INFORMATION:

Address: 2H[ZVUP :[ Z[ -SVVY 5PJVZPH *`WY\Z c Tel: Fax: c E-mail: PUMV'YZTJ`WY\Z JVT J` c Website: ^^^ YZT NSVIHS J`WY\Z

62 | GOLD | The Business Magazine of Cyprus

2XU VHUYLFHV RSM in Cyprus combines the benefits of the international network of RSM International 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 be able to provide the full spectrum of professional services according to our clientsâ&#x20AC;&#x2122; needs.

RSMâ&#x20AC;&#x2122;s fields of specialization are the following: â&#x20AC;˘ Audit and Assurance â&#x20AC;˘ Risk Management Services â&#x20AC;˘ Transaction Services â&#x20AC;˘ Corporate Finance â&#x20AC;˘ Advisory Services â&#x20AC;˘ Accounting and Tax Services â&#x20AC;˘ Human Capital Services

1HZ *OREDO %UDQGLQJ As of October 2015, all RSM member firms are operating under one brand name: RSM. Our new brand positioning is based around three concepts: understanding; ideas and insights; and collaboration. Together, they are captured in our brand positioning â&#x20AC;&#x201C; â&#x20AC;&#x2DC;The Power of Being Understoodâ&#x20AC;&#x2122; â&#x20AC;&#x201C; which can be succinctly summed up as follows: The power of being understood is all about confidence.

When you work with RSM, you are working with people who will take the time to truly understand you, who will bring tailored ideas and insight to your environment and who are committed to your success, helping you make confident decisions about your future.

Thinking about your business is a big part of ours.

To make confident decisions about the future, an entrepreneurial, growing business needs a different kind of adviser. One who starts by understanding where you want to go and then brings the ideas and insights of an experienced global team to help get you there.

We are excited to announce that RSM Cyprus is now called RSM. Together with our fellow RSM firms, we have united under one name – RSM. Experience the power of being understood.

Experience RSM. rsm.global/cyprus

8 Katsoni Street, 1082 Nicosia, Cyprus T +357 22 751140 | F +357 22 751145 | E info@rsmcyprus.com.cy NICOSIA · ATHENS · THESSALONIKI

RSM Cyprus Ltd is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting 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 www.goldnews.com.cy | GOLD |by 63article 60 et seq of the Civil Code of Switzerland whose seat is in Zug.

201 6 E GU ID

special promotional feature

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By Neofytos Neofytou

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n December, the House of Representatives passed the remaining changes to the tax laws, which the Government of Cyprus had agreed with the private sector over the previous few months. The most significant changes, relating to income tax and capital gains tax, are summarized below.

64 | GOLD | The Business Magazine of Cyprus

A. OFFSHORE ACTIVITIES The law has been amended so that the definition of the term “Republic of Cyprus” includes specifically and clearly the territorial sea, the contiguous zone, the exclusive economic zone and the continental shelf of Cyprus.

The term “permanent establishment” now includes all activities for the exploration and

exploitation of the seabed in the exclusive economic zone, as well as services related to such exploration or exploitation activities.

B. REMUNERATION FROM FIRST EMPLOYMENT IN CYPRUS (i) Under current law, 20% of the income from employment in Cyprus of a person who was not a tax resident of Cyprus during the previous tax year is exempt from taxation for a period of three years. The maximum amount of the exemption is â&#x201A;Ź8,550 per annum. This exemption is now extended for the first five years, but exemption can only be claimed until the year 2020. (ii) Under current law, 50% of the income from employment in Cyprus which commences after 1 January 2012 of a person who was not a tax resident of Cyprus during the previous tax year is exempt from taxation for a period of five years, provided that the income from employment in Cyprus exceeds â&#x201A;Ź100,000 per annum. The period of five years is now extended to ten years, adding some additional conditions in order to grant the exemption.

C. GROUP LOSS RELIEF Under current law, group loss relief can only be given for losses incurred

by Cyprus tax resident companies. This means that losses incurred by a member of a group of companies can only be surrendered to another member of the same group, provided that both companies are tax residents of Cyprus. The law is amended so that a subsidiary company which is tax resident in another EU member state can surrender its taxable losses to another group member company tax resident in Cyprus, subject to certain conditions.

D. RELATED PARTY TRANSACTIONS Under current law, the Commissioner has the right to adjust the value of transactions between related parties, if such transactions are not carried out on an armâ&#x20AC;&#x2122;s length basis, but not the obligation to grant a corresponding deduction to the other party for income adjusted in the hands of the first party to the transaction, thus there was a mismatch.

The law is amended, so this anomaly is now corrected.

E. CAPITAL GAINS FROM SALE OF SHARES IN PROPERTY RICH COMPANIES (i) Currently, capital gains tax is charged on the disposal of immovable property located in Cyprus or on the disposal of shares of companies, which directly own immovable property located in Cyprus. (ii) Under the new law, gains from the sale of shares in companies which indirectly own immovable property in Cyprus by holding directly or indirectly shares in a company, which owns immovable property located in Cyprus, will also be subject to capital gains tax. This will apply only in cases where the value of the immovable property represents more than 50% of the value of the assets of the company whose shares are sold. (iii) Thus, it will no longer be possible to avoid the payment of capital gains tax by interposing a series of intermediary companies, tax resident either in Cyprus or abroad.

CONTACT INFORMATION:

Address: +LSMVU :[YLL[ [O Ă&#x2026;VVY 5PJVZPH *`WY\Z Postal Address: 7 6 )V_ 5PJVZPH *`WY\Z Tel: (+357) 22875720 Fax: e-mail: PUMV'[H_H[LSPLY JVT J` Website: ^^^ [H_H[LSPLY JVT J`

www.goldnews.com.cy | GOLD | 65

| ACCOUNTING |

SURVIVING

in a Changing World IN Ä&#x2020; , GEORGE HADJIMICHAEL FOUNDED HIS OWN AUDIT AND ACCOUNTING FIRM. EIGHTEEN YEARS LATER, IT EVOLVED INTO GAH AUDIT SERVICES LTD. ANDREAS HADJIMICHAEL HAS FOLLOWED IN HIS FATHERâ&#x20AC;&#x2122;S FOOTSTEPS AND, TODAY, THEY ARE BOTH DIRECTORS OF THE LARNACA-BASED FAMILY FIRM. By John Vickers 66 | GOLD | The Business Magazine of Cyprus

ơ

ndreas Hadjimichael spoke to Gold about its services, its future plans and the importance of foreign investment to the Cypriot economy.

Gold: What are the firm’s particular areas of activity?

Andreas Hadjimichael: We offer assurance and advisory service, mostly in relation to Taxation, VAT, Financial Reporting and Business Advisory matters, mainly to the domestic market. Our clients are active in various sectors and industries.

Gold: What distinguishes GAH from other firms offering similar services?

A.H.: I think our clients are better placed to answer such a question! It is quite difficult for such firms to distinguish themselves from one another, based solely on the outcome of their audit service, but I would say that at GAH we pride ourselves in offering a high quality service at a competitive price, while maintaining a strong and personal relationship with clients. GAH also places great importance and emphasis on compliance and regulatory matters.

which also develops its future strategy, procedures and internal policies. Our main strategy is to remain sustainable for now and gradually to grow both in terms of size and services offered, while improving the quality of our services.

Gold: How many people does the firm employ?

A.H.: We currently have 25, including qualified auditors, Tax and VAT specialists, Business Advisory and administration staff.

Gold: How would you describe your client base?

A.H.: It consists mainly of local clients, active in various segments of the Cyprus economy, but we also have some whose operational base is Cyprus and who are active globally. Property Development is probably the dominant industry in our client portfolio.

Gold: How do you see GAH’s future?

A.H.: For the immediate future, the plan is to continue our sustainability strategy until the economy shows stronger signs of growth. In the medium term, we are looking towards growth in terms of our client base and client fees. We also intend to offer a wider range of services and this diversification is one of the biggest challenges we expect to face. The business world is changing rapidly and dramatically and we understand that clients will be looking for more services, especially in the areas of compliance and the regulatory environment.

PUBLIC SECTOR ATTITUDES AND BUREAUCRACY SEEM TO BE THE BIGGEST BARRIER TO FOREIGN INVESTMENT AND THE GOVERNMENT NEEDS TO DO MORE TO CREATE A BETTER INVESTMENT ENVIRONMENT

Gold: How has the firm evolved?

A.H.: GAH is the continuation of George Hadjimichael & Partners which was founded by my father in 1987. The partnership became a Limited Company offering a wider range of services to a broader client base. GAH is managed by a five-member executive committee

Gold: You obviously believe that there is potential for further growth in the economy. Do you have ideas about how to achieve it?

A.H.: The potential for growth exists but it will probably need to be driven by new areas of economic activity such as the energy industry. As a country, we have made slow but steady steps forward but a lot still needs to be done. The Government has taken certain positive decisions and, in some cases, action to revive the economy and specific sectors but, in my opinion, in order to see fast and sustainable growth, we need more foreign direct investment. Public sector attitudes and bureaucracy seem to be the biggest barrier to foreign investment and the Government needs to do more to create a better investment environment.

www.goldnews.com.cy | GOLD | 67

| EMPLOYMENT |

TAKING CARE

of Business

A newly established recruitment agency, CareerFinders, only began operating in Cyprus nine months ago but it has already established itself, particularly in the professional services industry. The founders of CareerFinders, recruitment experts Chris Moore and Sophie Aristodemou, tell Gold about their decision to set up a business during the recession, the secrets behind talent acquisition and the mistakes that jobseekers should avoid.

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By Artemis Constantinidou, Photo by Andreas Loucaides

aving worked in recruitment for the last eight years, Chris Moore and Sophie Aristodemou reached a point where they felt they had enough knowledge and experience to establish their own company. The aim was to bring UK recruitment standards, high quality services and consultancy to candidates and clients alike. “We wanted to create something that would set us above the market in terms of the quality of services we provide. I think that is the foundation of a good company,” Chris Moore explains.

This is echoed by his business partner: “We try to go one level beyond other recruitment agencies and to tailor our services to both clients and candidates. We personally meet candidates before we present them to clients and we try to provide high quality control and other services, such as CV writing and interview training for candidates struggling to find employment in Cyprus. Even a two-minute conversation can change someone’s career path.”

Moore and Aristodemou previously worked together at a recruitment company where they realised that they complemented each other well. “Sophie is excellent with candidates and client relationship management and I have always had a bit more of a speciality in general operations and marketing,” explains Chris Moore.

CareerFinders was established at a time when the Cyprus jobs market was at its lowest and many companies were uncertain about their future and their ability to invest in people. Now, the agency founders say, business is significantly better than it was twelve months ago: “There is a constant flow of new business as new organisations and big global companies come to Cyprus,” says Moore.

And while he admits that there is still a long way to go, the two months that are traditionally the quietest for recruitment (August and December) were actually extremely busy for CareerFinders in 2015, clear indicators that the market is improving.

The very concept of recruitment agencies is a fairly new one in

68 | GOLD | The Business Magazine of Cyprus

Cyprus. Have Cypriots taken to it when looking for work? “On the candidate side, people are more prone to use a recruitment agency these days,” says Aristodemou, adding that companies are also starting to understand the value of such agencies. “Local companies are less likely to want to use an agency because they have a bigger network, which makes it easier for them to find staff in certain areas, but international companies understand the quality you get from using an agency.”

Confidentiality is a key element in the recruitment process, which is why CareerFinders removes key personal information from all CVs that they forward to client companies: the candidate’s name, current employer and contact information. “We only reveal the name of the candidate once the company has told us which CVs it is interested in,” says Sophie Aristodemou, “and we trust our clients not to disclose any information concerning the candidates’ details once they have them.”

Chris Moore explains that the aim of CareerFinders is “to support the best organisations in Cyprus by finding the best talent available.

We also want to ‘hold the hand’ of candidates to make sure that, when they go to see a client of ours they will deliver to the best of their abilities. They are not just representing themselves, they are representing us as a brand, too.”

“For us, it is all about quality rather than quantity,” Aristodemou adds. “We don’t work with just any company in Cyprus.

We specialise in a variety of key industry sectors including, but not limited to accounting, finance, banking, corporate services, engineering, forex/binary, information technology, shipping, legal and oil & gas.”

Chris Moore reveals that there have been cases where CareerFinders has refused to work with certain companies. “We have a moral obligation to the candidates not to send them to a place with poor working conditions,” he says. “We want to give them a chance to improve as professionals and to be invested in. People genuinely appreciate this approach.”

The service provided to candidates is free (it is against the law to charge the job-seeker, unless they are offered CV writing and interview training) so CareerFinders makes its money through an agreement with the client company, which pays a commission on the candidate’s first year’s salary.

So what are employers looking for when they approach a recruitment agency such as CareerFinders? Chris Moore says that a first degree (2:1 or better) from a top-tier British university is quite normal. “Many companies still prefer UK universities, although qualifications from Greek universities were once seen as very desirable. But there was a period during which there were lots of strikes and people were stuck for years doing their undergraduate degrees, which undervalues their CV, even though it was not their own fault. However, we have seen improvements

in the standards of local universities and there is now less ‘pickiness’ amongst clients in relation to candidates from Cypriot universities.”

Unemployment is an issue that particularly affects the younger generation but Sophie Aristodemou believes that companies are now keen on hiring new graduates. “At the moment, there are a lot of companies setting up in Cyprus looking for graduates,” she says. “They are employing people who are very well educated and looking for their first job, so they not only get quality for very little money but they also have the opportunity to shape and mould each person as they see fit. At entry level, as a candidate, you are not differentiated by your experience but by your enthusiasm, your ambition and your personality.”

The downside to candidates, of course, is

International companies understand the quality you get from using an agency

the low salaries currently being offered. High unemployment means that companies can exploit people more easily. This is partly true, Aristodemou admits, and she points to the fact that it takes time and effort for companies to train people. “But they should understand that the employees are the main asset of any company; they are the people who drive the company and are responsible for its image, so they deserve to be paid accordingly.”

I asked the two experts to give some examples of common mistakes that candidates make in interviews and when applying for jobs. “Two of the main ones are sending out a blank e-mail with an attached CV or even having spelling mistakes in an e-mail,” says Chris Moore. “And when attending interviews, candidates should always be dressed appropriately. Don’t show up in jeans, tshirts and trainers! And be on time. It’s no excuse to say that you got lost on the way or didn’t know where to park. Bad mouthing a current employer is also considered unacceptable. These are some of the fundamental things that people do wrong, for which we have to give advice.”

Candidates are encouraged to ask questions of their own during an interview, Sophie Aristodemou notes, since it is a two-way process. “It is also essential to be informed about the company you want to work with,” she says. “You should be prepared. Go to the website, do some research on LinkedIn to find out about the career history of the manager you will be meeting with. That may help you find some common ground to start a conversation.”

After a successful first year in Nicosia, Moore and Aristodemou are planning to open an office in Limassol, a move that they consider vital for the future of the business. A presence in the island’s second largest town, where so many international companies are based, can only be good news for jobseekers and clients and, of course, for CareerFinders.

For further information or enquiries contact (+357) 22 002 285 or visit ^^^ JHYLLYÄUKLYZ JVT J`

www.goldnews.com.cy | GOLD | 69

CYPRUS %$1.,1* UG

| CONFERENCE |

3RD CYPRUS BANKING FORUM

T

Attendees at the conference

John Hourican, Bank of Cyprus

Panel Discussion: The Future of Banking in Cyprus

Stelios Constantinou, PwC Cyprus

Cablenet, Sponsor of the event

Haris Hambakis, Eurobank Cyprus

Marios Papanicolaou & Caroline Stavrou, PwC Cyprus

Savvas Savvides, Michael chael prianou & Kyprianou Co o LLC

Nicolaos Beis, National Bank of Greece, Fotios Pasiouras, University of Surrey, Savvas Savvides, Michael Kyprianou & Co LLC & Tom Hunersen, CKW Ventures LLC

Kirill Zimarin, RCB Bank Ltd

Bert Pijls, Hellenic Bank

Nicholas Hadjiyiannis, Cooperative Central Bank

Georgia Apostolou & Penny Chirou, USB Bank

he 3rd Cyprus Banking Forum, organised

by IMH and Gold, in association with the Association of Cyprus Banks, CITEA and Transparency International, took place on December 3, 2015 at the Hilton Park Hotel, Nicosia.

The annual Forum constitutes an important gathering for senior executives and managers of financial institutions as well as for all professionals from the services sector dealing with banking matters. This year’s Forum addressed issues such as the challenges for banks in Europe, banking standards and ethics, and Banking Union in Europe. One of the high points of the Forum was a discussion on the future of banking in Cyprus, with a panel comprising the CEOs of the six main banks in Cyprus (Alpha Bank Cyprus, Bank of Cyprus, Cooperative Central Bank, Eurobank Cyprus, Hellenic Bank and RCB Bank Ltd).

Organisers: IMH and Gold Magazine Sponsors: Cablenet Business, Logicom Solutions, Michael Kyprianou & Co. LLC, PwC Cyprus Supporting Partners: Alpha Bank Cyprus Ltd, Bank of Cyprus, Cooperative Central Bank, Eurobank Cyprus, Hellenic Bank, National Bank of Greece, RCB Bank Ltd and USB Bank Plc Communication Sponsors: IN Business News, Gold News, Sigmalive and Dias Publishing House In association with: The Association of Cyprus Banks, CITEA and Transparency International Supported by: Unicare Cleaning Services Ltd 6SRQVRUV

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Nicholas Ladommatos & Nikitas Alkiviades, Alpha Bank Cyprus

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Stella Mourouzidou & Pavlos Koushiappas, Bank of Cyprus

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Christos Attikos & Charalambos Charalambous, Logicom Solutions

John Hourican, Bank of Cyprus, Stelios Constantinou, PwC Cyprus, George Georgiou, Alpha Bank & Bert Pijls, Hellenic Bank.

70 | GOLD | The Business Magazine of Cyprus

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| INVESTMENT |

LEAVING IT TO THE EXPERTS

Institutional investors account for 76% of total assets under management

Info: Amalia Hadjipapa is a Partner at Marangos & Hadjipapa LLC. She specialises in Corporate Law and Mergers & Acquisitions.

Asset Management in a Nutshell

A

By Amalia Hadjipapa

ny one of us managing his/her personal assets is, in essence, performing some sort of asset management. In the financial world, this is understood to mean the professional management and trading of securities and other types of assets to achieve a specific investment goal.

Asset management exists because investors don’t always have the expertise to invest their assets in such a way as to receive a good return on their investment.

Successful asset managers are those who invest their clients’ money wisely in a variety of financial or non-financial products, while being careful to diversify their portfolio enough in order to minimize potential risks and, at the same time, maximizing the return their clients gain on their investments.

One of the basic goals of asset management is to channel funds from those who save to those who have a shortage. Those who need funds can be companies, governments and households while the savers can be ordinary people, High Net Worth Individuals, pen-

sion/retirement funds, insurance companies or governments with a surplus. In fact, the biggest clients for asset managers are sovereign wealth funds like SAMA (the monetary agency which manages Saudi Arabia’s sovereign wealth fund), Norway’s Government Pension Fund, Abu Dhabi’s Investment Authority and China’s State Administration of Foreign Exchange. Unlike banks, asset managers are not systemically important, according to the Financial Stability Board, because they are the managers of third-party assets and not the owners of assets and risky balance sheets.

Funds managed by asset managers are not inherently leveraged as banks are, therefore the capital rules applied to banks and insurers cannot be logically applied to asset managers.

If asset management is done on an own account, investors have to manage their own portfolios. Alternatively, private and institutional investors may delegate the management of their portfolios to companies specialized in asset management and so rely on the expertise of these third-party asset managers.

In 2013, total assets under management in Europe reached an estimated €16.8 trillion, growing at a steady rate of almost 10% per year. Typically, asset managers receive mandates from institutional investors and High Net Worth clients, whereas investment funds serve both retail and institutional investment needs.Institutional investors represent the largest client category, accounting for 76% of total assets under man-

agement (half of the institutional investors are insurance companies and pension funds acting on behalf of millions of households).

In Cyprus, external asset managers can be investment firms (IFs), provided that they are licensed to provide the investment service of portfolio management, UCITS management companies or Alternative Investment Fund Managers (AIFMs). For small funds, it can be any company which has as its sole purpose the provision of the portfolio management service to the specific alternative investment fund with a limited number of persons. In this case, the expertise and overall appropriateness of the manager of the alternative investment fund with a limited number of persons is assessed by the Cyprus Securities and Exchange Commission (CySEC).

Whatever corporate structure the asset manager chooses (IF, UCITS management company or AIFM), it has to satisfy some basic obligations. It must have adequate initial capital, suitable shareholders that need to be approved by CySEC, persons with the necessary knowledge and expertise who will effectively direct the business, suitable staff who can perform their tasks, and adequate organisational procedures.

According to CySEC, there are currently nine licensed Alternative Investment Fund Managers operating in Cyprus. There is also one UCITS management company and more than a hundred IFs, which are licensed to carry out portfolio management. www.goldnews.com.cy | GOLD | 71

| CURRENCY |

Exchange Rate

FICTIONS

It is only a matter of time before we see devaluation shocks across Central, Eastern and Southern Europe.

P

Info: Dr. Savvas Savouri is a Partner and Chief Economist of Toscafund.

72 | GOLD | The Business Magazine of Cyprus

By Savvas Savouri

redicting exchange rates is the aspect of my work which I find by far the most challenging; indeed there will no doubt be those asserting it is the weakest part of my “economics game”, accusingly pointing to one particular forecast I made in 2011, which haunts me.

The Aussie presently buys US$0.73 and, indeed over recent months, has been as low as US$0.70. I mention this because, four years ago, I forecast that the Australian dollar would by now be buying US$1.70.

I could be glib and say I was only one digit out, but those who may have made decisions based on my view will hardly find the humour in this. As much as this is the standout of my failed exchange rate predictions, it is far from the only forecasting error. In my defence I have had some successes, for instance anticipating that the Swiss Franc’s peg to the euro would have to break, but hey, who remembers those when you on your CV such howlers as the Aussie?

In what follows I will not dwell on past failure or success, but plough on with predictions. Some of these will seem very familiar, no doubt exposing me to the accusation of trying to freshen-up stale forecasts which have proven plain wrong ever since I first made them. For my part I like to think of these long-standing predic-

tions as simply not yet ‘realised’. Indeed, the longer these exchange rate fictions have continued, the more sanguine the mood that there is nothing to fear. Such complacency is dangerous. To repeat, I consider each of the shocks outlined below as certain to happen, albeit with a frustrating uncertainty as to their precise timing. This said, I have a sense that the events we have seen unfold through 2015 have significantly increased their likelihood. Let me also point out that whilst each of the exchange rate shocks I foresee are fermenting in their own “juices”, all can be connected. We are, after all, in a truly global economy, across which there is a growing temptation to serve one’s best interest in the best “beggar-thy-neighbour” tradition.

Whilst my focus falls most acutely on the Polish zloty, I have long expected widespread exchange rate shocks across Central, Eastern and Southern Europe. The reason I choose to make so much of a disorderly devaluation of the zloty against the euro is that it is the currency whose depreciation will be the most “shocking”, and the shock which threatens to inflict the single most competitive pain to the eurozone. This pain will not simply be to the eurozone’s trade sectors but it will introduce a further deflationary virus into it. As to why devaluations across Central, Southern and Eastern Europe have yet to impact, I would say we had something of a dress rehearsal in 2008. As already noted back then, slumps were interrupted by considerable capital injections. The result has been that a san-

guine air has reigned over currencies across Central, Eastern and Southern Europe; units which I am convinced are simply levitating against the euro.

Be in no doubt: devaluation is the breakglass option for an economy in need of a stimulus. It is exactly what has been at the core of Abenomics. Moreover, a return to a ‘wonderfully weak’ drachma has long been what austerity-hit Greeks would dearly like to see but have been frustratingly denied (proving the adage that one should be careful what one wishes for).

With all the above in mind, let me address the question as to why Poland’s economy, long considered Europe’s poster-nation of accession success to the EU, is in need of a devaluation-based stimulus. The answer is simple: just as in September 1939, Poland has been caught in a damaging pincer movement. From one direction, EU-wide sanctions against Russia have hit its trade sectors. Poland’s exporters have seen their fortunes made all the worse by a markedly cheaper Ukrainian hryvnia, bearing in mind that Poland and Ukraine are fierce rivals across a number of markets. These unfavourable trade forces facing Poland have been further compounded by austerity across the EU, a programme insisted upon

by Germany. To repeat, whilst the euro and the zloty have cheapened against the dollar over recent years, both have become ever less competitive against the currencies of Ukraine, Turkey and other nations across Europe vying for the same customers. Indeed, whilst neither Turkey nor Ukraine is a member of the EU, both enjoy relatively open access to its internal markets. On a political note, it is it important to remember that Poland has seen a recent electoral shift away from an avidly pro-EU leadership, towards the Law and Justice Party with its palpable nationalist agenda. Most importantly, from being a nation whose political elite have made clear their eurozone accession ambition, Poland is now controlled by those who are wise to the fact that an independent zloty provides them with monetary leverage over their own interest rates and level of competitiveness.

Alongside the arrival of considerable foreign direct investment, the superior yield enjoyed by the zloty over the euro has

supported it. Not only is the inflow of FDI sharply lower but the interest rate premium has been coming down. Crucially, I am convinced that it will fall still further through next year.

Poland’s central bank will not be alone in cutting interest rates in 2016, with those of Romania, Croatia, Hungary et al also doing so, moves that can only put downwards pressures on their respective currencies.

Bulgaria has long had a currency board, by which it has held its currency, the lev, on a strict peg to the euro. One has to be totally unaware of its position in Europe not to understand just how tenuous Bulgaria’s pseudo-euro status is, due to the vulnerability of its economy to unfavourable events close to it: Geographically, it borders austerity-ravaged Greece to the south and Romania to the north. To its east, Bulgaria borders Turkey, whose own currency has fallen significantly over recent years; improving the competitiveness of a close trade rival. Bulgaria also faces Russia across the Black Sea, with the weakness in the rouble and EU-wide sanctions against it hitting the likes of Bulgaria with longstanding trade links. One also needs to be conscious of Bulgaria’s position in the EU’s per capita league table. Its workforce was once considered cheap enough to attract foreign direct investment and cheap enough to have many leave and remit monies home.

Now Europe has a glut of cheap labour, some due to the ravages of austerity and unemployment. The value of labour has been pressured down all the more by illegal migrants vying for work, a problem which the influx of asylum seekers will exacerbate.

Let me make it clear that I am perfectly aware that Bulgaria’s real GDP expanded

Devaluation is the break-glass option for an economy in need of a stimulus though 2015, growing at its fastest rate in four and a half years. The problem is that this should not be considered sustainable, given the confluence of adverse forces impacting it. Remember, too, that whilst its

real GDP has been rising, Bulgaria is in the throes of deflation, a virus which inevitably brings down consumption, investment and real GDP. I have the same concerns for Romania as those I have stated for Bulgaria. Whilst Romania’s real GDP also expanded in 2015 – its third quarter was the best growth of any EU nation, in fact – it, too, is deflation ridden. Crucially, though, the Romanian leu is not governed by a currency board and its approximate 10% decline against the euro in late 2008, should be considered a mere rehearsal of what awaits it when it next comes under selling pressure. Were one currency across Central, Eastern and Southern Europe to fall markedly, we would see many others fall domino-like in their turn.

The idea that 2016 could see a number of exchange rate fictions across Europe being exposed should not seem that controversial. Exchange rates, after all, reflect the price of one currency relative to another. If these currencies represent economies with remarkably similar characteristics, then there is every reason to believe their currencies should be facsimiles such that their exchange rate, when graphed, is essentially a horizontal line. In the event, however, that the currency of one nation is pegged to that of another with contrasting economic features, one has to ask why their currencies should be believed to be analogous. Because when one economy pegs its currency to that of another, it in effect adopts the same monetary policy. This is fine if the underlying inflationary and growth conditions are very similar. It is, however, far from fine when they are not.

I have thus far argued that one can justify a ‘fix’ in the rate of exchange between the currencies of economies sharing lots of common ground. The problem is that sharing common ground invariably creates rivalry for custom.

And when times are tough, devaluing one’s currency is a tempting tactic with which to beggar-thy-neighbour and go for land-grab. The reality, then, is that whenever presented with a graph representing an exchange rate and seeing a horizontal line, one is invariably seeing as big a “fix” as the awarding the 2022 World Cup to Qatar was. Inevitably such fixes are exposed.

www.goldnews.com.cy | GOLD | 73

| BUSINESS |

SOCIAL MEDIA AND THE FINANCIAL SERVICES INDUSTRY GIVEN THE POWER OF SOCIAL MEDIA FOR PROMOTING BUSINESS, THE FINANCIAL SERVICES INDUSTRY IS LEARNING HOW TO USE IT TO ATTRACT NEW CLIENTS AND SOLIDIFY RELATIONSHIPS WITH EXISTING ONES WHILE ENGAGING ONLINE IN A COMPLIANT AND SAFE MANNER. By Mariana Antonescu I RECENTLY HAD AN INTERESTING DISCUSSION WITH MARKETING PROFESSIONALS AND EXPERTS FROM THE BANKING, INSURANCE AND ANALYST COMMUNITY ABOUT HOW BANKS, WEALTH MANAGEMENT AND INSURANCE COMPANIES ARE MAKING THE BEST USE OF SOCIAL MEDIA. HERE ARE FOUR KEY TIPS:

1.

SECURE & COMPLY While many advanced organisations have integrated social media into their communications efforts, some in the financial sector have held back, partly due to concerns about the security of social media accounts and the potential for mistakes that could damage reputations or result in negative financial consequences. However, with the right technology and policies in place, you can secure your social profiles, safeguard your brand and keep the regulators happy. Social relationship platforms like Hootsuite have built-in compliance features to prevent your company from posting social media messages that violate regulatory guidelines, along with security features to maintain control of your corporate social media accounts. Of course, technology is only part of the compliance equation. In order to avoid blunders, your financial services company needs a policy that gives employees clear guidelines for business-related messages on social media.

74 | GOLD | The Business Magazine of Cyprus

2.

USE DATA TO INFORM DECISIONS Data can also be used to inform marketing campaigns. For example, the ING Group discovered that their marketing campaigns were losing effectiveness as, by the time they went out, many of them were no longer relevant to the bank’s customers. By implementing a centralized campaign management programme, with personalized offers in real time, delivered through multiple channels, ING has increased average campaign response rates and expects to reduce its direct marketing costs.

unproven who may claim to offer Info: Mariana better coverage at a lower cost.

Antonescu is a social How do you build and maintain media trust with clients via social media? marketing consultant, Engage, not just with content but a corporate with the audience as well. Resocial media trainer, an spond to comments or participate international in dialogue. Things you notice on speaker and social media might prompt you to author. pick up the phone or schedule a meeting. Social media, more than any other medium, provides the opportunity to establish and sustain relationships. What you choose to do with that opportunity is up to you.

SHARE RELEVANT CONTENT Social media is an excellent method for financial services companies to showcase their expertise and experience in different areas. Research shows that investment customers and prospects are hungry for advice and tips that will help them take their next steps on the road to solid financial planning. So generate content – videos, blog entries, short white papers, case studies – that helps them solve a problem or increases their awareness on a topic in the industry. Doing so will position your company as an industry leader.

As you take your next steps, watch what works and measure social’s impact on core business goals. If you put a strong foundation in place today – based on security, compliance and a focus on the social customer – your organisation will be able to confidently scale up its investments.

3.

4.

BUILD RELATIONSHIPS THAT LAST The wisest money you can spend is on customer retention. Loyal customers are crucial to the long-term viability of your business, and in today’s competitive environment, building trust is key. People continue to use the advisor who understands them, who grows with them and who they believe looks out for their best interests over someone new and

TECHNOLOGY IS ONLY PART OF THE COMPLIANCE EQUATION

BOOK SHELF

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This is the second volume in an annual series of anthologies of the best articles to appear in the acclaimed Harvard Business Review during the previous calendar year: The collection includes articles on leadership, strategy and innovation, pieces to help you manage yourself and others, plus ideas, insights, and best practices to help you get up to speed on whatâ&#x20AC;&#x2122;s driving business today.

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TED talks have become the gold standard for public speaking around the world and the techniques that top TED speakers use can make any presentation more dynamic and help convey a message successfully. Gallo provides a step-by-step method that makes it possible for anyone to create, design, and deliver a TED-style presentation that is engaging, persuasive, and memorable.

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www.goldnews.com.cy | GOLD | 75

Lunc Lunch with YVONNE GEORGIADOU

THE ARTISTIC DIRECTOR OF THE PHAROS ARTS FOUNDATION TALKS ABOUT HER PASSION FOR MUSIC, HOW SHE CAME TO GIVE UP A CAREER IN OPERA AND WHY, EVEN AFTER WINNING AN AWARD, SHE STILL AGREES WITH BARTOK ON THE SUBJECT OF COMPETITIONS.

Gold

L 76 | GOLD | The Business Magazine of Cyprus

By John Vickers

PLUS SEA venue Amathus A Limassol

€9.00 LAD €7.00 GREEK SA E DAY TH €35.00 ID U SOUP OF WHOLE SQ CAKE €7.50 D LE IL R G E 2 ME CHEES €3.50 LOW-FAT LI R T 1L WATER €62.00 TOTAL

iving in Cyprus means that most of us have, at some time, enjoyed a pleasant lunch at a seaside restaurant.

Indeed, for many of the fortunate residents of Limassol, Larnaca and Paphos, it is a frequent occurrence during the island’s long hot summers. Having a chance to savour top-quality food in warm, comfortable surroundings only metres from the stormy sea on a cold, rainy day is a much rarer experience and, I can assure you, even more special.

In keeping with the unwritten rule that my dining companions choose the venue for their Lunch with Gold, Yvonne (Artistic Director of the Pharos Arts Foundation) has pro-

posed one of her favourites: Plus Sea on the outskirts of Limassol. Invisible from the coastal road, it is located right on the beach and, unlike many local seaside restaurants and cafés, it doesn’t close in the winter. It also stands out for the superb quality of its cuisine.

She recommends the grilled whole squid as our main course, a suggestion with which I’m happy to agree, and orders a Greek salad as a starter – in the end she spends so much time enthusiastically answering all my questions that it is somewhat neglected – while I choose the delicious,

piping hot vegetable soup.

Yvonne Georgiadou was born in Limassol and still lives there, in an old part of town, which has been renovated and restored in recent years. “It has definitely changed for the better,” she says, “and I think Limassol is miles ahead of the other towns nowadays.” She does not agree with those who think that the improvements are all to do with Russian money, believing instead that the established and long-term residents of the town – what she calls Limassol’s “human fabric” – are responsible. And she describes the decision to set up the Cyprus University of Technology in the old part of Limassol, rather than outside, as ingenious.

“It has brought life back to the centre of the town; the old, historical buildings have been properly renovated and I love it there.”

Living in Limassol, of course, means a certain amount of commuting but, thanks to the ease of modern technology and the enlightened policies of Pharos Founder Garo Keheyan, she also does a lot of her work from home and even, occasionally, from where we are sitting.

Georgiadou has always been passionate about music.

Indeed, she recalls how, by the tender age of seven, she had already decided that her future lay in music and, although she was a bright pupil at school and could probably have chosen any area of higher education, she was never tempted to study anything else. “I was lucky to have

parents whose attitude was to encourage me to do what I wanted, as long as I was good at it,” she says. “They had no connection with the world of music and were thus in no position to judge. I enjoyed it and once I had started piano lessons and vocal training, that was it: music, music, music!”

She not only studied music at Royal Holloway, University of London, but she later obtained her MA and Professional Diploma in Opera Studies and went on to work for several years as a professional opera singer, singing in Paris, in London and other UK cities, in Italy and elsewhere. She had tuition from the great Montserrat Caballe… Ironically, it was when she became a professional singer that her parents started to worry about her.

“It requires a lot of sacrifices,” she explains, “and a lot of money.

Unlike most professions, where you study, get your degree and find a job, active musicians are invariably learning all the time. I remember my father asking me if I would

ever be able to earn back all the money I had put into the profession. Of course, as most musicians will also tell you, it was never about the money for me. I could not imagine myself doing anything else.

When something is your passion, you are willing to make those sacrifices and, of course, it’s quite common to be working and earning one season and to be struggling the next. What looks very glamorous to the public – travelling around the world

and giving concerts – can actually be very tiring, lonely and insecure. ” This is something that would eventually lead Yvonne to take a momentous decision about her own future.

Today, she reflects that she probably started her career too early and let it develop too fast, having received great praise for her voice, which was very mature for her age.

“My voice was mature but that didn’t mean the rest of me was or that I would use it wisely” she says, “and there came a point in my life when I no longer enjoyed what I was doing in the way I had at the beginning. I started to hate the auditioning process. I no longer felt the same excitement that I had before, even though people around me were telling me that I had a great future.”

Her growing dissatisfaction with the life of a professional opera singer culminated in her decision to give it all up.

And it happened very fast: “I went to a concert by a singer in her fifties, who had obvi-

I HAD LOVED MUSIC ALL MY LIFE BUT I HADN’T KNOWN WHAT IT MEANT TO BE PART OF THE MUSIC INDUSTRY. THAT’S SOMETHING DIFFERENT ALTOGETHER www.goldnews.com.cy | GOLD | 77

| LUNCH WITH GOLD |

ously had a superb voice when she was younger, and she was still trying to have a career,” she recounts. “It was obvious to me, and it would have been to many people, that she had no chance of rekindling what she may have had before and I thought to myself, ‘I don’t want to reach that stage’. I was only 27 at the time but I realized at that moment that I didn’t want to grow old in London, possibly still chasing my dream. I had loved music all my life but I hadn’t known what it meant to be part of the music industry. That’s something different altogether. Suddenly I felt that I didn’t love it anymore.”

Although she didn’t act on her feelings immediately, she later decided (“literally in the space of one night”) to give it all up and go home to Cyprus.

“I needed some time to think,” she tells me, “and not long after that, I received a call from what was then the Pharos Trust and started my first-ever administrative job. I’m still doing it!”

I can’t help wondering if, when she finds herself in the company of the musicians and singers that she now deals with professionally as Artistic Director of the Pharos Arts Foundation, she doesn’t feel a twinge of jealousy or a pang of regret that she could have continued as a performer. She answers in a flash: “Never! To be honest with you, I thought I would but no. And the truth is that I feel that I can offer more through what I’m doing now than I could have done as a singer. I am very fulfilled and I haven’t felt a moment’s bitterness that I am not doing what they are. I made my choice and it turned out to be the right one for me.”

Ironically, Yvonne confides that if she had the chance to do it all again, she would. “I wouldn’t want to be spending my days in hotel rooms,” she admits, “but the feeling a singer gets when performing in front of an audience is unique. However, it’s just an instant

78 | GOLD | The Business Magazine of Cyprus

and then it’s gone. And when you are your own strictest critic, as I was, it gets harder and harder to enjoy those instants. I discovered that I needed something more stable in my life if I was to be balanced and happy.”

I venture to say that Yvonne Georgiadou and the Pharos Arts Foundation was a match made in heaven. “I believe in karma,” she says mysteriously, adding with a cheeky smile, “and luck too!”

The food is truly excellent and while my dining companion resists the temptation of a dessert, I don’t and I am soon enjoying the low-fat lime cheesecake.

Yvonne has never considered herself to be a businesswoman, and so she was understandably surprised to find herself nominated in 2014 for a local award in the category Businesswoman of the Year. The surprise was compounded by the fact that she knew nothing about it until being informed of her nomina-

the second best’ and so on. I think competitions on the running track or the sports field are fine, because there is a clear way of judging who is the fastest, who jumps the highest, etc. But even in football, we can’t be 100% sure that it’s been a fair game.”

When she was shortlisted for that particular award, she made all kinds of excuses for not attending the ceremony but in the end Garo Keheyan encouraged her to go.

“When my name was announced as the winner, I was shocked,” she says, though for all her anti-competition sentiment, she grudgingly agrees that it was good that a woman was being recognized for her contribution to the Arts. “And now you can say that you had lunch with a former Woman of the Year!” she says with a great laugh.

However, as befits a musician, she prefers to quote the composer Bela Bartok who was of the opinion that ‘Competitions are for horses, not artists’.

WHAT LOOKS VERY GLAMOROUS TO THE PUBLIC CAN ACTUALLY BE VERY TIRING, LONELY AND INSECURE tion and also because, she says, she has never sought or enjoyed being in the spotlight. I suggest that this is rather strange for someone who has enjoyed performing to audiences around Europe but she says that such attention is an integral part of the profession whereas being chosen for an award isn’t.

“I don’t like competitions of any kind,” she says. “I never believed in competitions, not even in music, because I don’t think we can judge someone and say, ‘you’re the best’ or ‘you’re

As the rough sea continues to pound on the pebble shore a few metres away from our window and the rain shows no sign of abating, we say our goodbyes and Yvonne Georgiadou heads for home where several hours’ work await her.

Another ‘performance’ is over but these days she is enjoying life promoting other musicians and artists. The appreciation of audiences at the Pharos Arts Foundation’s events are obviously all she needs to feel that she did the right thing when she took the decision to come home to her beloved Limassol almost a decade ago.

BUSINESS CLASS

What is the most exciting destination you have visited for work?

And for pleasure?

How often do you travel, whether for business or pleasure?

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WHAT’S

ON

THINGS

to do CLASSICAL MUSIC MUSICAL SYNERGIES CYPRUS–ISRAEL Grammy-nominated mandolinist Avi Avital performs with the Cyprus Symphony Orchestra.

MUNICIPAL THEATRE, LARNACA WEDNESDAY, 27 JANUARY, 8.30PM RIALTO THEATRE, LIMASSOL THURSDAY, 28 JANUARY, 8.30PM PALLAS THEATRE, NICOSIA FRIDAY, 29 JANUARY, 8.30PM

performed by Nicos Pittas (violin) and Petros Gospodinov (cello).

Pallas Theatre, Nicosia Saturday, 20 February, 5pm ERATO PIANO TRIO The Pharos Arts Foundation presents one of the UK’s leading young ensembles in a programme of piano trios by Haydn, Schnittke and Brahms The Shoe Factory, Nicosia / 8.30pm Wednesday, 17 February, 8.30pm CHAMBER MUSIC CONCERTS Mozart’s String quintet in C major, and Brahms’ String quintet in G major, op.

111 performed by five musicians of the Cyprus Symphony Orchestra.

Pallas Theatre, Nicosia Saturday, 23 January, 5pm Technopolis 20 Cultural Centre, Paphos Sunday, 24 January, 5pm Two of J. S. Bach’s most popular twopart inventions open this programme, also featuring works by Ravel, Kodaly and Halvorsen for violin and cello,

80 | GOLD | The Business Magazine of Cyprus

SPYROS KYPRIANOU SPORTS CENTRE, LIMASSOL SUNDAY, JANUARY 17, 5PM

FAMILY ENTERTAINMENT FLYING SUPERKIDS A high-tempo mix of acrobatics, gymnastics, dancing, singing, comedy, tumbling and summersaults on trampolines, the show from Denmark is seen live by over 100,000 people every year.

WORLD MUSIC W 1 PIANO, 1 MANDOLIN, 9 GUITARS Manolis Neophytou (piano), Andreas Christodoulou (mandolin) and the Acordes guitar ensemble present songs A and dances from Spain, Greece, Argentina and elsewhere.

RIALTO THEATRE, LIMASSOL SUNDAY, JANUARY 17, 8.30PM

ART VALENTINOS CHARALAMBOUS OUS A major retrospective ctive of 60 years of work rk by Cyprus’ greatest ceramic artist.

BANK OF CYPRUS CULTURAL FOUNDATION, NICOSIA UNTIL FRIDAY, SEPTEMBER 30, 10AM-7PM DAILY

MUSIC & FILM ENLIVE - LIVE MUSIC IN SILENT FILM The Pharos Arts Foundation opens its 2016 season with enLIVE, which marries film and live music.

THE SHOE FACTORY, NICOSIA FRIDAY, .%29%6= Āć 8.30PM

THE SHOE FACTORY, NICOSIA WEDNESDAY, .%29%6= Āą Ć ā0PM THE GOLD RUSH (CHARLIE CHAPLIN,1925) Live Music: Andreas Zafeiropoulos (piano) + 2 other films THE LITTLE MATCH GIRL (JEAN RENOIR, 1928) THE SHOE Live Music: FACTORY, Andreas ZafNICOSIA eiropoulos (piano) THURSDAY, + 2 other films .%29%6= ĀĆ Ć ā0PM

A TRIP TO THE MOON (GEORGES MÉLIES, 1902) Live Music: Maria Avraam (flute) & Annini Tsiouti (piano) + 2 other films

THEATRE LATE LOVE Russian-language adaptation

by Moscow’s Na Maloy Bronnoy theatre of the play

by Isaac Bashevis Singer, starring Leonid Kanevsky, Klara Novikova and Daniil Spivakovsky.

LES LIAISONS DANGEREUSES The Donmar Warehouse’s production of Christopher Hampton’s adaptation of Choderlos de Laclos’ novel of sex, intrigue and betrayal in prerevol revolutionary France, broadcast from London, starring Elaine Cassidy, Janet McTeer and Dominic West.

RIALTO THEATRE, LIMASSOL MONDAY, FEBRUARY 15, 7PM

THOC NEW THEATRE, NICOSIA RIALTO THEATRE, LIMASSOL TUESDAY, FEBRUARY 16, 8.30PM

RIALTO THEATRE, LIMASSOL, K-CINEPLEX CINEMA, NICOSIA & PAPHOS SATURDAY, JANUARY 30, 7.55PM

OPERA

TURANDOT Live in HD from the Metropolitan Opera, New York, this is directed by Iro

Franco Zeffirelli and stars Nina Stemme and Marco Berti.

Anita Hartig and Leah Crocetto share the role of Liù, the faithful slave girl.

With Greek & English subtitles.

www.goldnews.com.cy | GOLD | 81

Frixos Savvides

“I enjoy my sleep and I physically need my eight hours. If I don’t get them at night, I can only function properly if I ‘top up’ the following lunchtime. I’m usually at the office around 9am.

I only have breakfast when I’m staying in a hotel abroad and I then treat myself to the full English breakfast, which I love but nobody can have this every day!

I would say that I have a monthly routine rather than a daily one. I serve on the Board of various listed and regulated companies, and I am President of CIBA, Chairman of Trust Insurance, for example, for which meetings are arranged well in advance. In the early ‘70s, becoming a chartered accountant

A DAY IN THE LIFE

The Executive Chairman of Hive Management Services Ltd on life in the ‘70s, how he became Health Minister, and why he hopes to spend his retirement... as a grandfather.

was the only way to train for a profession and, at the same time, work for a decent wage (I was paid £12 a week plus luncheon vouchers back then!). I did my articles in a firm of chartered accountants in Fleet Street, London and I was there in summer 1974.

Eventually the time came when I had to decide where to carry on with my life: the UK or Cyprus? My wife, Loukia, had a fantastic job at Citibank and was earning a lot more than me, but we took the decision to return, based on our shared conviction that Cyprus was a better place to raise a family. We’ve never looked back or had any regrets about our decision.

After a year of working in a big firm, I set up my own accounting practice with some partners in 1979. Although I was involved in politics and had never belonged to any political party, in August 1999, I received a phone call from President Glafcos Clerides who offered to make me Minister of Health.

He gave me just 10 minutes to accept or refuse. My family and my business partners said that I should refuse so I decided that, since everyone was saying no, it was probably a good thing!

Suddenly changing your routine like that is a killer, psychologically speaking, but I would not have forgiven myself for denying myself such an experience. My respect, admiration and love for President Clerides was immense.

I always say that I was not merely privileged to be chosen to serve in his government but blessed. He was a unique person. After leaving the Ministry, I developed the consulting and service provision side of the business. We’ve survived through the recent difficult times and things are looking up now.

Although my wife devours books, I don’t read much apart from the newspapers. I enjoy listening to music, especially film and musical soundtracks.

When we were studying in the

‘70s, the big ones were Hair and then Cats, which was part of the amazing Andrew Lloyd My favourite breakfast.

Weber era.

We still go to the cinema.

Watching a movie, with the popcorn and Coke, is still a good night out, Best enjoyed as it was when with popcorn. we were young.

I enjoyed Bridge of Spies recently and I’m looking forward to the new Star Wars movie.

I still love the I will contin- songs. ue to work for as long as I can. When you’ve had such an active life, it’s very difficult to stay at home. But I have three children and I’m looking forward to seeing them get married and give me as many grandchildren as possible!

I think the development of a grandchild is very special, partly because of the fact that others have the main responsibility for them so hopefully it’s going to be a new life of fun and games for my grandchildren and me!“

WHEN YOU’VE HAD SUCH AN ACTIVE LIFE,

IT’S VERY DIFFICULT TO STAY AT HOME

82 | GOLD | The Business Magazine of Cyprus

www.pwc.com.cy

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