GOLD Magazine

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

8 1016

issue 24march 14 - april 13

2013

FEATURE

THE TIME IS RIGHT FOR THE FUND INDUSTRYBy Ioannis Gaiganis 30

TURNING TO FITNESSBy Kyriakos Onisiforou 40

WHAT LIES AHEAD?By George Theocharides 56

THE NEWS MACHINE IS A HUNGRY BEASTby Peter Economides 98

RESTORING THE ISLAND’S DAMAGED REPUTATION AND ENHANCING THE

PROFESSIONAL SERVICES SECTOR ARE AMONG THE NEW PRESIDENT’S TOP PRIORITIES.

+ OPINION

22 | THE SHIPPING FORECASTHow the new government can affect the future of the Cyprus shipping industry

32 | “CALL ME LIBERAL BUT PRIVATISATION IS THE WAY TO GO”Interview with Pawel Dobrowolski, Ambassador of Poland to Cyprus

36 | HAPPINESS IS A SUCCESSFUL LAW FIRMAngelos Paphitis looks back on his first seven years

58 | THE LONG ROAD BACK TO GROWTHInterview with Antonis Vidakis of Ernst & Young.

60 | THE KING OF SOVEREIGN DEBT RESTRUCTURINGLee Buchheit, the mastermind behind Greece’s debt Restructuring, talks to Gold

64 | EVOLUTION OF A NEW MARKET Does Binary Trading represent a future Industry standard or is it just another short-lived fad?

66 | THE RELUCTANT CEOInterview with Oren Laurent, Founder of Banc De Binary

EDITORIALUP FRONTFIVE MINUTES WITH…

86 {money}

90 {business}

92 {economy}

94 {lifestyle}

CYPRUS MEANS

BUSINESS

18

SPECIAL SUPPLEMENTS41 | AUDIT, TAX & ACCOUNTING SERVICES

IN CYPRUS69 | CORPORATE TRAVEL

6660 64

93

949258

22

contents.indd 6 07/03/2013 12:41

EDITORIAL

529

1295

0005

77

00001>

ISSUE 24 MARCH 14 - ApRIl 13, 2013pRICE €4.95

powEREd by:

the international investment, finance & professional services magazine of cyprus

Cyprus Means Business

President Anastasiades on his priorities for attracting new investment and improving existing public and private sector services

bINARy TRAdING FINANCE’S FUTURE oR oNE MoRESHoRT-lIvEd FAd?

plUS: MoNEy / bUSINESSECoNoMyTAX & lEGAllIFESTylE / opINIoN

SHIppINGwhat lies ahead for the industry?

INTERvIEwSlEE bUCHHEITpAwEl dobRowolSkIoREN lAURENT

+ ANdREAS NEoClEoUS, ANGEloS pApHITIS, ANToNIS vIdAkIS

John Vickers,Chief Editor

[email protected]

Repairing the Damage

Last month’s election of Nicos Anastasiades as the seventh President of Cyprus was something of a foregone conclusion, given the mess that the administration of Demetris Christofias had got the country into. Yes, Cyprus had been affected by the global financial crisis and yes, the hair-cut of Greece’s debt had undoubtedly led to the collapse of the island’s oversized banking sector but that is only half of the story. The bailout

that was requested last year was for the economy too, and in June Cyprus needs to pay a €1.4 billion bond redemption with money that is simply does not have. It is clear that the previous government delayed reaching an agreement with the Troika in order to avoid taking responsibility for a situation for which it held a major part, if not all, of the blame. The Republic of Cyprus turns 53 this year and its voters are sophisticated enough to understand the issues and to question traditional party allegiances. There was really no way that AKEL could hold on to power.So we have a new President and a new government. It is to Anastasiades’ credit that he was quick to announce his first three key appointments: Michalis Sarris as Minister of Finance, Ioannis Kasoulides as Minister of Foreign Affairs and Christopher Pissarides, winner of the 2010 Nobel Prize in Economics, as Head of the newly-established Na-tional Economic Policy Council. All three are highly respected at home and abroad and their appointment sent out the immediate and powerful message that since the February 24 poll things have changed in Cyprus. Normally we would say that the new government now needs to be given time to deal with a crisis for which it cannot be held responsible. However, time is not on Cyprus’ side and those in power need to act fast to repair the damage to the island’s reputation caused not only by the bailout request and subsequent delaying tactics which displeased our European partners considerably, but also by the accusations of money laundering which refuse to go away despite official reassurances about the strict enforcement of legislation and regulation in this area.Nicos Anastasiades appears to mean business and in his interview (page 18) he makes it clear that, at last, the government is being led by a politician who not only understands the significance of the professional services sector to the economy but intends to prove it through action and not just words.Another key sector to which the President has made a major commitment is shipping (page 22). Our interviews with officials and members of the Cyprus Shipping Chamber reveal the importance they all place on the appointment of an Under-Secretary to the President for Shipping (a Minister for Shipping in all but name) who will have direct jurisdiction over the Department of Merchant Shipping, draft a long-overdue national shipping policy and be an internationally recognized head of the island’s important ship-ping industry.Elsewhere in this issue we look at Binary Options (or Binary Trading), the latest arrival on the financial trading scene with an article (page 68) and an interview with the CEO of Banc De Binary (page 70) and we talk to two people with strong opinions on the state of the Cyprus economy – Lee Buchheit, a leading expert in sovereign debt restructuring (page 64), and the Polish Ambassador to Cyprus, Pawel Dobrowolski, who believes that the privatisation of the country’s semi-government corporations will have a similarly ben-eficial effect as the process did in his own country (page 32).Finally, you may have noticed that this issue of Gold came out a week later than its regu-lar publication date of the 7th of each month. For various reasons, the magazine will now be published on the 14th of each month, starting with this issue, and it will cost you less!

8 Gold the international investment, finance & professional services magazine of cyprus

Managing Director: George Michail

general Manager: Daphne Roditou Tang

MeDia Manager: Elena Leontiou

eDitor-in-chief: John Vickers

senior eDitor: Kyproula Papachristodoulou

Contributors to this issue: Shoham Cohen, Peter Economides,

Ioannis Gaiganis, Kyriakos Onisiforou, Chloe Panayides, Glen Richards,

George Theocharides

Art DireCtion: Anna Theodosiou

senior DesiGner: Alexia PetrouPhotoGrAPhy:

Jo MichaelidesMArketinG exeCutive:

Kevi ChishiossALes & business

DeveLoPMent exeCutive: Phivos Karayiannis

ADvertisinG exeCutives: Irene Georgiou, Christopher Constantinou

oPerAtions MAnAGer: Voulla Nicolaou

subsCriPtions: Kevi Chishios

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 22679820e-mail: [email protected]

website: www.goldmagazine.com.cysubscriptions: [email protected]

issn 1986 - 3543PublisheD by iMh

Brought to you By

Get Gold on your tablet!

C

M

Y

CM

MY

CY

CMY

K

TFI Markets - Gold Magazine - March 2013 Ad - TFI Pay.pdf 3 05/03/2013 17:54:18

up front

F orexTime Ltd (FXTM) has announced the offi-cial start of its operations with the activation of its

Cyprus Investment Firm (CIF) li-cense and the launch of its website www.forextime.com. Established by Alpari co-founder and share-holder Andrey Dashin, ForexTime is led by an executive team of experts who share the cumulative experience of several decades.

Andrey Dashin says, “I have es-tablished ForexTime to challenge trader expectations. With Forex-Time you get the advantage of trading with sophisticated, reliable and industry-leading technology, partnered with support from a team hand-picked because of their experience and knowledge of the industry.”

ForexTime gives clients access to the global currency market and offers trading in Forex, precious metals, commodities, shares and indices. The company is also introducing solutions created specifically to different regions and intends to release new products and services throughout the year. Ensuring that the client experience is at the centre of ForexTime’s offering, the services provided are tailored to the individual needs and ambitions of each customer – novice, intermediate or experi-enced.

“Our mission at ForexTime is to maximize the value our clients derive from their most precious commodity: time. The execu-tive team’s cumulative experi-ence means we have an in-depth knowledge of the Forex industry and, with the client experience in mind, we are com-mitted to pushing the boundaries of this sector,” says ForexTime CEO Olga Rybalkina.

To meet a growing demand on the Dubai-Cyprus-Malta service, Emirates Airline has upgraded its aircraft size to a larger Boeing 777-200, offering a total of 274 seats in a 3-class configuration with

12 First, 42 Business and 220 Economy Class. The Boeing 777-200 replaces the Airbus 340-300 aircraft which had been deployed since October 2012.Emirates Manager for Cyprus Jaber Mohamed noted that “A second aircraft upgrade within four months on our flights

confirms Emirates’ commitment to Cyprus. The additional capacity will generate more trade and tourism opportunities. The Boeing

777-200 aircraft will give all our customers the award-winning ‘ice’ (information, communications, entertainment) in-flight entertainment, world-class service and gourmet cuisine, making the journey with Emirates as enjoyable as the destination.”Emirates, one of the world’s fastest-growing airlines, started its operations to Cyprus in 1994, connecting the island to new and key destinations across the world. Emirates currently flies daily from Dubai to Larnaca and on to Malta from where it returns to Larnaca the same afternoon, en route back to Dubai.

Emirates upgrades aircraft on its Cyprus service


ForexTime sTarTs operaTions

The Cyprus Fiduciary Association recently held a presentation of the new Fiduciary Law which regulates the providers of administrative

services to companies of international activities. CySEC’s Anti-Money Laundering Directive, with which all regulated persons have to comply, was also presented. The event at the Holiday Inn, Nicosia, was attended by a large number of Fiduciary Providers who had the opportunity to learn more on the provisions of the Law and its related Directives, the application process as well as the effects of its implementation. George Ioulianos, General Manager of the Association, spoke about its goals and objectives with regard to the new Law. Elena Argyropoulou, Head of the International Trust Department of Totalserve Management Ltd, gave an overview of the main provisions of the new Law while Costas Constantinides, Compliance Director of Boudica Trust Co. Ltd., presented the main points regarding anti-money laundering responsibilities and requirements. The subsequent open discussion gave participants an opportunity to put questions to the panel.

Tickets to this year’s TEDx Nicosia event sold out within three days and so “RE-Think, Re-Generate, RE-Act”, which takes place at the Pallas Theatre,

Nicosia on Saturday, March 9 from 10 am-5 pm, will be streamed live online, enabling all those unable to purchase a ticket and people worldwide to watch it on their computer, tablet or smart device. TED, a global platform devoted to Ideas Worth Spreading, began in 1984 as a gathering place for innovators and leaders in the fields of Tech-nology, Entertainment and Design. TEDx is part of a revolution in global education made possible by local organisers wanting to engage their com-munities. Over 3,000 TEDx events have taken place in 25 languages in 90 countries. At a TEDx event, video and live speakers combine to spark discussion and connection in a small group. The speakers at TEDx Nicosia 2013 are Dr. Stavros Zenios, Dr. Katerina Kaouri, Dr. Doros Polydorou, Idil Seytanoglou, Oren Simanian, Maria Vilanidou, Eloiza Savvidou, Stephanos Evripidou, Roddy Damalis, Dr. Ahmet, Jill Douka and Michael Virardi.TEDxNicosia has forged an exclusive partnership with Cytamobile-Vodafone which will facilitate the implementation of three additional events during 2013, including TEDxChange, TEDxYouth and TEDxWomen. Other TEDxNicosia partners include the Munici-pality of Nicosia, The University of Nicosia, Aon Hewitt, and Hilton Cyprus.

New Fiduciary Law PreseNted

Marina Vakana, Christina Telema-chou and Nicoletta Neophytou, trainee accountants of PwC Cy-

prus, achieved worldwide distinctions in the recent examinations of the Institute of Chartered Accountants in England & Wales (ICAEW).

Marina Vakana came first and won the Plender Prize in the overall Annual International Order of Merit for the 2012 Professional Stage examina-tions. This is the second worldwide distinction for Marina, who came first and won the Little Prize in the September 2012 Taxation exam.

Christina Telemachou came fourthand was awarded the Northcott Prize in the overall An-nual International Order of Merit for the 2012 Professional Stage examinations, while Nicoletta Neophytou came first and won the Spicer and

Worldwide achievements by PwC trainee accountants

(LefT To righT) evgenios evgeniou,

Ceo, PwC CyPrus, niCoLeTTa neoPhyTou, ChrisTina TeLemaChou,

marina vakana, PhiLiPPos soseiLos, head of

human CaPiTaL, PwC CyPrus.

Pegler Prize in Financial Accounting in the overall International Order of Merit in the December 2012 Pro-fessional Stage examination.

Evgenios Evgeniou, CEO of PwC Cyprus, noted that “The worldwide achievements of the trainee accountants of PwC and other ac-counting firms, have made us very proud, have given us hope for the future and confirm that one of the biggest strengths of our country is our people.”

uNiversity oF Nicosia iNdustry

ProFessioNaLs Lecture series

t his month, the University of Nicosia began its Spring 2013 “What the Experts Say” series of lectures with

talks by six high-calibre practitioners who will be sharing their professional expertise on cutting-edge and current issues in the context of the present economic and political situation. Each speaker will deliver a presentation to students studying for their MA in Media and Communications or MBA on a topic on which they are

recognized by their industry and academic peers for their expertise. the six speakers are: Michael Virardi, Inspiration Coach & Author; Dinos Ioannides, Country Manager, DHL; Alexandros Novicov, Director, Vivid; Linos Ermogenides, Marketing Manager, Laiki Bank; Rita Karatzia, Manager, Cyta Communications & Public Relations; Costas Gavrielides, PR Director, Electricity Authority of Cyprus.

IRI Hellas Ltd.in affiliation with the Marshall Islands Maritime & Corporate Administrators

tel: +30 210 4294 404 | [email protected]

www.register-iri.com

The Marshall IslandsCorporate Registry

The leading jurisdiction for

• Asset Management

• Vessel & Yacht Ownership

• Real/Intellectual Property Holdings

• Initial Public Offerings/ Publicly Traded Companies

©Corbis


up front

he Limassol Marathon, accredited by the AIMS and IAAF, takes place on 24 March. In addition to the full Marathon, there will also be a 21km Half Marathon, a 10km Health race, a 5km Corporate Team race and a 1km Children’s race. The flat, traffic-free route along the Limassol coastline begins and ends on the seafront promenade. The full 42.195km (26.218 miles) Marathon takes runners from the town centre, along the beachfront to the ruins of ancient Amathus and back.

LimassoL marathon

t

A s China’s new leaders move to embrace foreign direct investment to revive the global economy, market entrants and investors can find a

path to sustainable success in China with an open mind and flexible strategy, according to the latest edition of PwC’s Doing Business and Investing in China. The guidebook compiles insights and perspectives through interviews with dozens of PwC’s leading China-based practitioners. These contributors offer a wealth of on-the-ground experience in dealing with top business issues in China, such as sustain-able supply chains, risk resilience, JV and M&A deals, and government relations. The 10 chapters of the book cover the following topics: Market Entry and Growth; Doing Deals;

Managing Risks; Corporate Governance and IT Effectiveness; Human Resources and Talent Management; Finance and Treasury; Supply Chain Strategies; Government Relations, Regulatory Compliance and Stakeholder Alignment; Tax Management: Planning and Com-pliance; Accounting and ReportingWith no signs of a pickup in the eurozone and US economies, strong expectations are being placed on China for growth opportunities. Careful plan-ning, according to PwC’s specialists, is key to any China strategy, particularly in entry and growth. Doing Business and Investing in China is available online at www.pwccn.com/investchina.

New PwC business guidebook on China

© 2013 PricewaterhouseCoopers Ltd. All rights reserved

Please scan with your smartphone to find the electronic version of the publication.

Tax Facts & Figures

2013 - Cyprus

www.pwc.com.cy

The tax system in Cyprus

All of us in PwC are here to offer you our knowledge and expertise and to support you in achieving your personal and corporate tax goals. The specialised solutions we offer to you are adjusted to your own needs and will support you in structuring your tax operations in an efficient way.

The guide is available free of charge at the reception areas of the PwC offices all over Cyprus. You may also find the guide on our website.


1

2

3

4

5

6 7

8

910

1

2

5

3

4 7

6

8

9

10

AC MilAn €256.9 Million Silvio Berlusconi’s top-ranked Italian club saw its income rise by 9% thanks to a significant improvement in broadcasting revenue due to its best performance in the Champions League in five years. But while the San Siro Stadium has double the capacity of Chelsea’s Stamford Bridge, it earned one third of the revenue. The exodus of star players is unlikely to help attendance figures and Milan may struggle to hold off Juventus as Italy’s financial leader.

liverpool €233.2 Million Liverpool remains in the top ten, despite a poor season on the pitch. Total revenue increased by just 3% as the club’s domestic cup participation offset the financial hit caused by its absence from European competition. By winning the League Cup and reaching the final of the FA Cup, it increased matchday revenue by 11% to €55.9 million. New sponsorship deals have contributed to a 4% increase in commercial revenue to almost €100 million.

Juventus €195.4 Million Italy’s most successful club recaptured the league title in 2011-12, helping to fire it back into the money league’s Top Ten. Its first title since 2002-3 helped total revenue increase by 27% despite its absence from the Champions League in 2010-11. A significant increase in matchday revenue made up for the absence of the broadcasting income that Europe’s premier competition generates. This season’s return to the Champions League should propel them further up the list next year.

ChelseA €322.6 Million Chelsea maintains its place among Europe’s richest clubs thanks to its on-field success last season. The team’s European Champions League win contributed significantly to an overall revenue increase of €14%, as it meant matchday and broadcast revenues were both up 15%. The increase comes despite matchday income being restricted by the capacity of the Stamford Bridge stadium which, at 42,000, means it cannot compete with the likes of Arsenal and Manchester United in this area.

ArsenAl €290.3 Million Arsenal’s financial results reflected its on-pitch performance, which remained virtually the same as the previous season. Total revenue rose 4% while individual streams were fairly constant from 2010-11. Arsenal’s matchday revenue contributes most to its total income among the top ten clubs – €117 million. It remains in 6th place because its on-field results have stagnated, preventing broadcast revenues from increasing. Commercial revenues increased slightly to €64.9 million but much less than Manchester United’s €130 million.

MAnChester City €285.6 Million The English champions make the Top Ten for the first time, courtesy of a 51% increase in revenue. City’s first league title in 44 years and its first foray into the Champions League helped increase revenue. Commercial income provided €138.5 million, almost double the previous year’s figure. The Champions League campaign brought in €27.8 million in broadcast income, compared to just €6.1 million the previous year, when it competed in the lower-level Europa League.

reAl MAdrid €512.6 Million Real Madrid heads the list of Europe’s richest clubs for the eighth year and is the first to produce total revenue of more than €500 million. Broadcast revenue was up 9% in 2011/12, to €199.2 million and commercial revenue also increased by 9%, demonstrating the power of the brand. Matchday revenue rose 2% to €126.2 million, a figure expected to increase substantially in the future as the club plans to develop the Santiago Bernabaeu stadium.

BArCelonA €483 Million Barcelona managed to increase its overall revenue by 7% and this growth was almost entirely due to commercial factors, as its shirt sponsorship deal with Qatar Sports Investments took hold. Broadcast revenue fell by 2% despite an increased domestic rights deal, while match day revenue was up 5% to €116.3 million. Although the Nou Camp stadium capacity is over 90,000, the Catalan club has fallen behind Arsenal into fourth place in terms of matchday income.

MAnChester united€395.9 Million Manchester United is the highest-ranked English side despite total revenue declining in 2011-12. A 3% fall is primarily down to losing its Premier League title to rivals Manchester City and falling early in the Champions League and the FA Cup. The club’s poor Champions League performance contributed to an 11% decrease in both broadcast revenue (to €128.5 million) and matchday income (to €122 million). Victory in the current Premier League championship will doubtless reverse the trend.

BAyern MuniCh €368.4 Million Reaching the domestic cup and Champions League finals and finishing second in the Bundesliga helped overall revenue increase by 15%. The Champions League run was the biggest factor in a 19% rise in matchday revenue (the final was played in its home stadium) and an €11.2 million increase in broadcasting income. Commercial revenue continues to make up over half of overall income. Bayern is the first side to earn over €200 million through commercial activity.

europe’s

Richest Football clubsE

urope may be mired in a recession and austerity but the continent’s biggest football clubs are continuing to look recession-proof. Combined income

among the top 10 clubs in 2011-2012 rose by 10% on the previous season to €4.8 billion, according to the recently-published

16th edition of the Deloitte Football Money League which profiles the highest-earning clubs in the world’s most popular sport. Deloitte calculates the total revenue of each club through a combination of matchday income, broadcasting and commercial deals. The rankings are based on revenue for the 2011-2012 season.

up front


interview

still a vast amount of effort involved in updating the chapters and checking them as publication progressed. This usually had to be fitted into (or at the end of) a busy working day and I am grateful to all my colleagues for their dedication to the task.

The book is in Greek. Are there plans for any foreign-language translations?The book is aimed at lawyers practising in Cyprus and is in Greek because that is the language currently used in the laws and in the court system. At present there are no plans to publish it in other languages. Our Neocleous’s Introduction to Cyprus Law covers the needs of English readers. Perhaps one day there will be a place for a Turkish-language version, but that depends on a lot of things.

Which future legislation do you hope will be in force in Cyprus by the time the next edition of the book is published?Professionally, I hope that our government will promote legislation to increase Cyprus’s competitiveness as an international financial centre, for example by providing a framework to attract international investment funds. Personally, while the publication of a Turkish language version of the book may have to wait a little longer, I hope that we are closer to an end to the division of Cyprus.

five minutes with... I hope that our government

will promote legislation to

increase Cyprus’s competitiveness as an international financial centre

Andreas NeocleousAdvocate, Founder and ChairmanAndreas Neocleous & Co LLC

The Handbook of Cyprus Laws is published by Nomiki Bibliothiki and is available from Galaxy Bookshop, Nicosia or online from www.nb.org, price €45.

Your firm has been deeply involved in the recently-published Handbook of Cyprus Laws. What is its main purpose and who will

make up its main readership?The Handbook of Cyprus Laws is intended as a vade mecum that legal practitioners can carry with them and refer to at any time. It provides the full text of all the laws that are encountered in everyday legal practice, together with a commentary and analysis of the relevant case law compiled by a specialist in the particular field. Its main readership will be legal practitioners, but it will also be useful to others who deal with legal matters.

The fact that it is the second edition in four years suggests that there have been more than a few amendments to the country’s legislation in this period. Is this the reason for the update?For many years “painting the Forth Bridge” was a metaphor for a never-ending task, because by the time it was finished it would be time to start again. A few years ago, with the development of new paints, that metaphor became outdated and people started looking for a replacement. Perhaps “keeping a legal work up to date” would be a suitable candidate! The law is constantly developing, and, of course, there is a constant flow of new case law. But that is only part of the story. The new

edition is in a more convenient format, allowing the inclusion of more content without additional bulk.

Within its 1,770 pages, the book contains the main pieces of legislation in force in Cyprus today. How much did you leave out and why?We focused on the 33 basic laws covering the areas the practising lawyer encounters day in, day out. To name but a few, they include contract law, criminal law, family law, company law and property law. The areas that had to be left out were highly specialised ones such as competition, banking, intellectual property and securities law, that the general legal practitioner rarely encounters.

How did you go about gathering all the information? Or was the real work done for the 1st edition?A great deal of work was indeed done for the first edition, but the second edition has required a complete update and revision of every chapter, to take account not only of amendments to the laws, such as the International Trusts Law, but also of important cases in the courts that shed light on the interpretation of the laws. Every author is a specialist in his or her particular field, and is fully abreast of the latest developments, and our firm has an advanced knowledge management system to support them. However, there was

T H E F I R S T N A M E I N E T H I c S

We are a global, independent provider 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

c H R I S T O S

BUSINESSCYPRUS

MEANS

RESTORING THE ISLAND’S

DAMAGED REPUTATION AND ENHANCING THE

PROFESSIONAL SERVICES SECTOR

ARE AMONG THE NEW PRESIDENT’S

TOP PRIORITIES. BY KYPROULA PAPACHRISTODOULOU.

PHOTO BY JO MICHAELIDES.

cover story.indd 18 11/03/2013 08:48

Gold: Do you endorse the view that the professional and financial services sector has the potential to become the area of the economy which will boost growth and create further prospects amid what has been the worst financial crisis ever experienced by the island?Nicos Anastasiades: The professional and financial services sector has been the most dynamic sector of the Cypriot economy during the last 20 years. It is currently the fastest-growing sector and is indisputably a major source of future growth. Interna-tional services grew on average by 8.3% per year in 2007-11 when almost every other sector of the economy was contract-ing. It is probably the only one that has proved resilient in this recession and this resilience indicates that, if we actively try to change things for the better, the pos-sibilities are almost unlimited. The further enhancement of the sector is at the top of my agenda. I intend to devote as much of my personal time as necessary to meeting with leading professionals to discuss cur-rent problems and to agree on a mutually accepted strategy to resolve them.

Gold: Do you have specific issues in mind?N.A.: As a priority we shall address the damage done to the island’s reputation as a financial centre – I’m referring to the totally unfounded allegations of money laundering – and to the economy which is currently ranked below investment grade by the credit rating agencies. We want our economy to be assessed as an AAA econo-my and not as a junk.

Measures such as improving services at the office of the Registrar of Companies, reducing bureaucracy in the civil service, setting up specialised teams at the Ministry of Finance to work with the private sector on drafting new legislation will definitely help Cyprus develop further as a regional

business centre. But you must bear in mind that it is not only the public sector that needs to change. The private sector also needs to realise that it has to adhere to strict regulations and rules. This will also improve our reputation as a quality place to do business.

Gold: How do you plan to restore Cy-prus’ reputation? Recent developments have caused immense harm to the is-land’s prestige. Is the damage irrevers-ible?N.A.: The damage is not irreversible. If I considered it so I wouldn’t be doing this job! It is, though, an extremely difficult task. How I will do it? Well, I will get on a plane and travel whenever and wherever necessary, I will meet whoever I need to, no matter how high- or low-ranking he or she might be, and prove that we mean business and that we are ‘clean’ and reliable. Our government has no qualms about defending its businesses and its financial sector and no ideological obsessions at all. If I have to speak on behalf of Cyprus’ banks I will do so. If I have to make interventions to attract investors, to open doors for our busi-nesses and the financial sector I will do so. I intend to invest time and money in this. Restoring confidence is at this point in time of the utmost importance.

Gold: You also need to correct the coun-try’s macroeconomic imbalances. N.A.: We should balance the budget as soon as possible by reducing public spend-ing rather than imposing new taxes or changing our tax regime. Public spending has risen from around 35% of GDP 15 years ago to almost 55% of GDP today. This inevitably undermines confidence and the growth potential of the economy. Restoring and maintaining the liquidity and capital adequacy of the banking sector is also a priority. Measures to strengthen

THE INTERNATIONAL INVESTMENT, BUSINESS & FINANCE MAGAZINE OF CYPRUS 19

COVER STORY

BUSINESSIn the competitive business

environment in which we are operating, speed and efficiency are imperative

icos Anastasiades, the newly-elected Cypriot President, is aware that allegations of mon-ey laundering and the efforts by competing jurisdictions have taken their toll on the island’s reputation as a lead-ing regional professional and financial services centre and he intends to play a leading role in ensuring that Cyprus regains its lost lead as soon as possible. In this exclusive interview with Gold, President Anastasiades sets out his priorities for attracting new investment and improving ex-isting public and private sector services.

N

cover story.indd 19 11/03/2013 08:48

20 THE INTERNATIONAL INVESTMENT, BUSINESS & FINANCE MAGAZINE OF CYPRUS

the supervisory framework of the financial services sector will also have a substantial effect on our ability to regain credibility as a financial services centre. There are other measures too. In the competitive business environment in which we are operating, speed and efficiency are imperative. Our objective is to treat foreign investors as clients and our system needs to be clearly client-oriented.

Gold: What do you plan to do to accel-erate the process of registering compa-nies? Today, most of Cyprus’ competi-tors commit to and deliver registration within 24 hours.N.A.: The time needed to register a com-pany must be reduced significantly – a six-month time frame must be set to fully automate procedures, taking into consid-eration the systems put in place by the UK and Malta. Most countries competing with Cyprus offer approval of a company name within 24 hours. That is my government’s aim. The Registrar of Companies must set up a section that will immediately respond to investors’ enquiries. Additionally, the Inland Revenue Department (IRD) needs to be fully computerized and it must also set up an international tax affairs section. Very high on our list of priorities is the setting up of a one-stop shop, under the Cyprus Invest-ment Promotion Agency (CIPA), which will be given specific administrative powers so as to coordinate various government depart-ments such as the Registry of Companies and the Inland Revenue Department (IRD). Personnel from the VAT service, the depart-ment of social insurance, and the depart-ment dealing with residence permits must be seconded to help with a one-stop shop. Overall, procedures in the public sector must be simplified and to this end we will appoint a Presidential Commissioner whose terms of reference will focus on cutting down unnecessary processes and combating bureaucracy. We will also introduce Enter-prise Centres which will provide all kinds of services to businessmen and will operate based on the model on which the Citizen Service Centres currently operate.

Gold: Cyprus’ European and international competitors allocate large sums for pro-moting their jurisdictions as attractive and successful financial centres. The Cyprus Investment Promotion Agency (CIPA) lacks the funds to undertake a diversified and effective marketing campaign to pro-mote Cyprus on the same scale. How do you plan to support CIPA?N.A.: CIPA needs to be upgraded and its powers extended so that it can operate not only as an advisory body to the government but as the main vehicle for identifying po-tential investors from abroad, both for public sector projects and for the private sector. Money is definitely needed if we are going to place advertisements or have a presence in the international media. In this respect I will pur-sue better cooperation and leverage between CIPA and the Cyprus Tourism Organisation as the latter has a large budget at its disposal for promoting Cyprus abroad. Currently that budget is used to promote Cyprus solely as a tourist destination but it can also be used to promote the island as a place to do business. We need to build the brand of Cyprus as a country and as a quality business destination, as other jurisdictions do. I believe strongly that it’s not a matter of spending more mon-ey but of spending money more wisely.

Gold: Financial sector professionals in Cy-prus have told us that a major deficiency concerns the need for legislation covering the establishment of contemporary finan-cial products. Under your presidency, will Cyprus achieve the long-awaited mod-ernisation of the financial sector’s legal framework? N.A.: Cyprus must pass legislation to modernize its framework. It has been the professionals’ view for some time that we should establish as a priority the necessary legisla-tion for the registration of interna-tional funds in Cyprus – Malta has already done so very successfully – and of private jets. Also, after so many years of discussion, debate and stressing the need to put the necessary framework for leasing in place, it is about time we did it.

Gold: It has also been noted repeatedly by the professionals that any respectable finan-cial centre should have at least one major international bank.N.A.: Yes indeed and I have to say that this is an area in which I will be personally involved. I agree that we need to attract a foreign inter-national bank and I am hopeful that we will succeed.

Gold: The number of double taxation trea-ties that Cyprus has signed is often cited as an advantage but many of the treaties are outdated and need to be renegotiated (e.g. with USA, Greece, India and Kazakhstan). At the same time Cyprus needs to draw up agreements with countries such as Brazil, Mexico, Argentina, Japan, Australia, etc. How high is this matter on your list of pri-orities?N.A.: Our network of bilateral agreements for the avoidance of double taxation needs to be strengthened and expanded to cover more countries, especially emerging economies. I intend to create a dedicated tax team for double taxation treaties which will review the current agreements and negotiate their updat-ing as well as engage in discussions on the drafting of new treaties. I am also committed to the establishment of a special Tax Advisory Board comprising technocrats from the pub-lic and private sectors, with the purpose of proposing institutional changes and following developments in other competing jurisdictions. Cyprus has to keep up with the times and the competition in order to remain a competitive business centre.

COVER STORY

The further enhancement

of the sector is at the top

of my agenda

The budget used to promote Cyprus as a tourist destination can also be used to promote the island as a place to do business

cover story.indd 20 11/03/2013 08:48

SHIPPINGFORECAST

Shipping is the only truly globalised industry in Cyprus, employing some 4,500 skilled/edu-

cated people ashore and 55,000 seafarers. Its contribution to the economy is estimated at 7-8% of the island’s Gross

Domestic Product. Cyprus is the 10th largest flag globally, the 3rd largest flag in the EU and the biggest Shipmanagement

Centre in Europe and the 2nd largest in the world. The Cyprus Shipping Chamber (CSC) is one of the largest

shipping associations in the world, representing 147 shipowning, shipmanagement, chartering and shipping-related companies which own/

manage a fleet of over 2,200 ships with a gross tonnage of 49 million. The Cyprus shipping industry has always maintained a surprisingly low profile but that is

due to change, with newly-elected President Nicos Ana-stasiades committed to appointing an Under-Secretary to the President for Shipping, whose role will include drafting the

country’s shipping policy and attracting new companies. On the following pages we present the views of the people who

know shipping best: the President and the Director-Gen-eral of the Cyprus Shipping Chamber, and six of the ten

members of the Board of Directors, each of whom is the CEO of a leading shipping company. By John Vickers

SHIPPING


THE

main_story1_shipping.indd 22 07/03/2013 12:24

For almost 25 years, the Cyprus Ship-ping Chamber (CSC) has worked with the govern-ment and the maritime admin-istration to resolve problems and

improve the image of Cyprus Shipping. Gold spoke to Thomas Kazakos, Director-General of the CSC, about the Chamber’s role in upgrading the Cyprus shipping industry and how things are expected to change drastically following the new President’s commitment to appointing an Under-Secretary for Shipping.

Gold: Just how big is the Cyprus ship-ping industry?Thomas Kazakos: The 147 shipping companies that are members of the Cyprus Shipping Chamber collectively control a fleet in excess of 2,200 oceangoing ships of 49 million gross tons. To put this in perspective, the Cyprus flag is the 10th

largest fleet in the world and the 3rd largest in Europe with 1,000 oceangoing ships of 20 million gross tons. If all the ships under our control were under the Cyprus flag to-day, it would probably be the 3rd largest in the world. So Cyprus has a fully-fledged, fully operational industry in almost all sec-tors of shipping internationally. The only two shipping segments that we don’t really have here are shipbuilding and banks spe-cializing in ship finance.Our member companies comprise about 60 shipowning, shipmanagement and, recently, chartering companies plus the 90 or so, “satellite” services companies, spe-cializing in servicing shipping companies, including spare parts suppliers, marine insurance brokers, ICT specialists, and es-sentially everything that shipping compa-nies need in order to operate. Shipping is a high-value asset industry and if you bear in mind that the value of an average-sized vessel of an average age could vary from a few dozen to hundreds of millions of dol-lars and the fact that through Cyprus we control in excess of 2,000 ships, you can

understand the size of the industry we’re talking about.

Gold: Those numbers are impressive.T.K.: They are, though we are not so much concerned by numbers as by qual-ity but it is a fact that having a large registry and a large shipping industry automatically gives the resident country a very strong political presence. Why? Because a ship is an extension of national territory so whenever a ship calls at any foreign port the first thing that happens is national sovereignty recognition. For a ship to be allowed to enter any national territorial waters, let alone a port, it means that country recognizes Cyprus as an inde-pendent state.

Gold: So the Turkish embargo on Cyprus-flagged ships stems from that country’s refusal to recognize Cyprus as a sovereign state?T.K.: More or less, yes, and this has been the Achilles heel of the Cyprus flag for a number of years now. It is a negative fac-

THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS Gold 23

NO RELEVANT LAW IS DISCUSSED WITHOUT THE CHAMBER BEING PRESENT.



tor, particularly in these extremely tight fi-nancial times, because no charterer who is going to hire a ship wants it to be subject to a trade restriction, irrespective of the fact that it’s illegal, because it might one day need to go to Turkey. That’s where the impact of the Turkish ban is felt and lifting it would be a win-win situation for everyone. Apart from removing the 15% effect it has on our registry, it would also lift a barrier to Turkey’s accession process and it would benefit EU consumers be-cause we could transport Turkish goods to Europe very competitively. Don’t forget also that Cyprus is the only EU-approved open registry which means that you don’t have to be a Cypriot national to be able to register a ship. The Cyprus registry is 80-85% is owned by northern European ben-eficial interests so when we say that Tur-key is imposing a ban on a Cyprus-flagged ship, in effect the Turkish ban is against the whole of the EU shipping industry.

Gold: What does the shipping industry contribute to the Cyprus economy?T.K.: According to the Central Bank’s latest figures, the shipmanagement sector – which is only one part of our industry – showed a small but steady increase to 5% of GDP in the first quarter of 2012. If we add the contribution of the shipowning and the overall shipping sector, at a con-servative estimate I am sure it will show 7%-8% by the middle of 2012, which was one of the worst financial years for international shipping. So Cyprus has a vibrant industry and for us to compete with the biggest international players on an equal footing shows that the calibre

and the strength of the resident shipping companies are up there with the very best. That said, shipping is a cyclical business and it is inevitably affected by the global economy. Between 2003 and 2008 we had fantastically good years. Shipping tends to have 3-4 good years followed by 1-2 years of readjustment. Unfortunately, these have already been extended to 5 years of extremely bad and unpredictable freight rates.

Gold: Is there light at the end of the tunnel?T.K.: I understand from our members that we might finally be reaching the end of this long, protracted downturn. And even during these bad times when every industry has suffered, we have not lost a single company. Some have had to restruc-ture their debts from loans taken out for the building of new ships and some have gone through a heavy rescheduling of their day-to-day operations but they are all still here. They haven’t dismissed people or closed down or amalgamated. The vast majority of the shipping companies here are struggling through and this is reflected in the fact that the industry’s contribution to GDP is not going down at a time when everyone else’s is. I take pride in saying that this is an industry that doesn’t cost anything but it makes a huge financial contribution to the state.

Gold: What are the steps that will en-sure a bright future for the Cyprus ship-ping industry?T.K.: For the past year we have been working to convince the politicians that

shipping is an international industry which needs to move with international developments – and they can sometimes take place at the speed of light. When you have a ministry (Communications & Works) which is the second most complex and diversified with nine government departments, three quasi-government in-spection units and two quasi-government bodies, it is impossible for any Minister to devote enough time and supervision to monitoring shipping. Because the industry is self-regulated and controlled through the Chamber, we have in a way been vic-tims of our own success because we have been doing so much for the government and the administration that the perception has been that the industry doesn’t need any help. Constitutionally, until there is a settlement of the Cyprus issue, new minis-ters cannot be appointed but we have seen that it is possible to appoint an Under-Secretary to the President for Merchant Shipping. All three main candidates in the recent elections gave a written commit-ment that they would create this position which will have direct political supervision of the Department of Merchant Shipping.

Gold: What else will the Under-Secre-tary for Shipping do?T.K.: The appointee will also be responsi-ble for drafting a national shipping policy. It’s time to adopt a proactive approach and a long-term vision as to where we go from here. There’s a lot of business out there. And we need to bring more in more companies. We don’t have to go very far to find them. We have the infrastructure, the know-how and the quality of service.

SHIPPING

THE CYPRUS FLAG IS THE 10TH LARGEST FLEET IN THE WORLD AND THE

3RD LARGEST IN EUROPEThomas Kazakos



Now we also have a good image and an ac-claimed tax system. So we must make sure that we keep our existing shipping compa-nies and bring more. Another key duty of the Under-Secretary will be representation. We need to have someone whom the peo-ple in Brussels or London or elsewhere can identify with and recognise as the coun-try’s political head of shipping. The mes-sage that such an appointment, made near the start of the new President’s term of office, sends out to the international com-munity is extremely significant. It will say that, when it comes to shipping, Cyprus is on the right track and it has tangible posi-tive prospects, despite the huge financial turmoil in terms of low freight rates and bank liquidity problems, etc. When the global downturn ends, we shall be one step ahead of our competitors and President Anastasiades will be giving a very clear political message of support and attention to the industry. All we need now is a strong industry-orient-ed person to take us forward, hand in hand with the private sector.

Gold: What are the objectives of the Cyprus Shipping Chamber?T.K.: The Chamber is the voice of the Resident Shipping Industry in Cyprus. Like any other trade associa-tion around the world, we basically provide three services: First, the pro-motion and protection of the legitimate interests of our members both in Cy-prus and abroad. This we do through lobbying, which probably represents 80% of my work. Over the years we have developed a relationship of trust with all the relevant government departments to the extent that we are now involved in any decision-making structure with ministries, the Department of Merchant Shipping, the House of Representatives, etc. No relevant law is dis-cussed without the Cham-ber being present. We also represent the Cyprus shipping industry in the Brussels-based

European Community Shipowners As-sociation (ECSA) and the International Chamber of Shipping (ICS) in London. Importantly, we are members of the elite decision-making working groups that draft shipowners’ policy. When, about 10 years ago, the ICS decided to set up a specialized working group to draft the guidelines that shipowners worldwide should take into consideration before choosing which flag to register their ships with, only 6 of the 46 international associations were invited to join it and Cyprus was asked to chair the whole process. Those guidelines were later adopted by the International Mari-time Organisation and they are still used as a reference.

Gold: You mentioned three services. First lobbying and representation. Then?T.K.: The second is filtering and provid-ing information to our members so that they are kept informed about national, regional and international developments and thirdly, we promote social cohesion among our members. Before the Chamber was set up in 1989 (as the Cyprus Ship-ping Council), the shipping companies in Cyprus were in competition with one an-other. They did not speak with one voice and there was no corporate social respon-sibility image. We have managed to bring our members together and make them feel that they and their families belong, know one another and are friends.

Gold: For such an important in-dustry, shipping in Cyprus remains remarkably low-key.T.K.: It’s true that the Shipping industry internationally maintains a very low profile. In my view, though, we need to build up and promote our corporate image even more and, in particular, our corporate social image. If your financial and social contributions to your country remain unknown, you won’t be able to influ-ence those who take decisions for you. Over the years we’ve managed to build our own collective CSR image and, for example, we now dedicate all our efforts to assisting a single charity.

Gold: How else has the industry developed over the years?

T.K.: When the Chamber was set up in 1989, the Cyprus Flag and Registry were already suffering from a nega-

tive image. In the ‘80s there was a huge and rapid influx of ships but

the maritime administration at the time simply lacked the man-power and the ability to inspect

the ships and ensure that they met the standards required by international legislation. We worked with the administra-

tion for more than ten years to

SINCE MARCH 2010 WE HAVE HAD PERHAPS

THE MOST COMPETITIVE TAXATION SYSTEM

FOR SHIPPING IN EUROPE



correct these things and improve the image of Cyprus. The Department of Merchant Shipping was computerized, new inspec-tors were appointed, we adopted a zero tolerance policy to substandard shipping and we raised standards. Then for another ten years we worked on what is now one of our biggest achievements: the negotia-tion and approval of our tonnage taxation system. Since March 2010 we have had perhaps the most competitive taxation system for shipping in Europe. When I say competitive I don’t mean zero tax. Our system is truly transparent and legally approved by the strictest standards of the

European Commission. This ensures the viability of the Cyprus Shipping Registry and the shipping industry, as well as the unhindered continuation of the important contribution of the industry to the island’s economy.

Gold: So after two major 10-year proj-ects, what’s next for the Chamber?T.K.: Now we are ready to take the next steps to give the industry the boost it deserves. It is imperative that the efforts of the maritime administration and the Cyprus Investment Promotion Agency (CIPA), made in close cooperation with

the CSC, to advertise the advantages and benefits of this new taxation system, be inten-sified and further expanded. In this way, Cy-prus will attract more ships to the Cyprus Reg-istry and more shipping companies to establish their offices in Cyprus, which will have a posi-tive impact on the economy. Moreover, now that we have a commitment from President Anastasiades to appoint an Under-Secretary for Shipping, the Chamber is committed to developing strategies and providing practical assistance to the government in this important endeavour, through our members’ specialised knowledge in the field. There is no shortage of work to be done!

SHIPPING

For a sector that contributes an estimated 7%-8% of Cyprus’ Gross Domestic Product and controls the 10th largest fleet in the world, shipping has always

maintained a surprisingly low profile. That is due to change, with newly-elected President Nicos Anastasiades committed to appoint-ing an Under-Secretary to the President for Shipping whose role will include drafting the country’s shipping policy and attracting new companies. Capt. Eugen Adami, President of the Cyprus Shipping Chamber, sees this as a major step forward for the industry.

Gold: How important to the industry is the appointment of an Under-Secretary for Shipping?E.A.: There is an immediate need to up-grade and restructure the maritime adminis-tration and, in this respect, the appointment of an Under-Secretary to the President for Shipping will contribute to a faster and more accurate development of government ship-ping policy in accordance with international conventions, and more effective communi-cation with other state authorities or agen-cies. Merchant shipping is perhaps the only sector in Cyprus that operates on a global scale; its size and international importance go far beyond the island’s borders and the European Union pays more attention to merchant shipping than to any other sector of the island’s economy.

Gold: Another major change for Cyprus has been the discovery of natural gas. Do you see this as having a positive effect on Cyprus shipping too?E.A.: Yes. Cyprus can develop into an important Energy Centre in the Mediter-ranean. Strategic partnerships with careful management and well-prepared develop-ment plans can create new and vibrant ship-ping and energy projects with great financial benefits for the economy. At the same time, this important development will give Cyprus

and, by extension, the rest of Europe, greater political influence on a regional and global level, in matters concerning both energy and shipping.

Gold: So you are optimistic about the future of the industryE.A.: I am in no doubt that the dis-covery of natural gas in Cyprus’ Exclusive Economic Zone, in combination with the new com-petitive Tonnage Tax, the upgrading of the maritime administration structure and the potential lifting of the Turkish embargo on Cyprus ships, means that the Cyprus ship-ping industry has a very promising future. Cyprus has the potential to become one of the largest, all-embracing shipping centres in the European Union and the world. The development and diversification of almost all shipping activities in Cyprus is a must. It will enable its Maritime Cluster dynamics to grow and, at the same time, it will enhance the substantial contribution of the shipping industry to the economy.

FULL STEAM AHEAD!THE NEW GOVERNMENT HAS PROMISED TO GIVE THE SHIPPING SECTOR ALL THE SUPPORT AND IMPORTANCE IT DESERVES

CYPRUS HAS THE POTENTIAL TO BECOME ONE OF THE LARGEST, ALL-EMBRACING SHIPPING CENTRES IN THE EUROPEAN UNION AND THE WORLD


WHAT THE COMPANIESSAY

Founded in Limassol in 1978, Columbia Shipmanagement Ltd. is one of the world’s largest

independent ship managers with three hundred staff in Cyprus and more than 13,000 employees worldwide. Through its Cyprus-based head office, Columbia provides full management and crewing services to more than 420 vessels of all types around the world. It also provides ship-owners with a comprehensive range of services including ship operations, chartering, new building supervision, sales and purchase and other associated consultancy services.

1. In the late ‘70s, when Colum-bia was established in Cyprus, the island offered everything that a business was looking for, i.e. a fast-growing economy, a favour-able tax regime, well-educated people and an accounting and legal framework understood by all. These, combined with the excellent climate that every Northern European dreamed of, a good private school system, ad-vanced telecommunications and the ability to work with the Far East in the morning and the US in the afternoon, meant that few other places could compare. Since then a lot has changed. We have seen improvements to the infrastructure of the island itself, new legislation has been enacted (albeit with some delays in cer-tain instances) and an increasing

number of other shipping and shipping-related companies have been established, thus creating a healthy cluster with a voice both nationally and, most importantly, internationally in the various shipping fora. European Union membership in 2004 brought the biggest change to the island, followed up by the adoption of the euro in 2008. Over the years, Cyprus may have lost some of its comparative advantages over other countries, mainly because they have copied the Cypriot model but without the bureaucracy which has been one of the major obstacles to further growth. However, it remains attractive not only because of the quality of life that it offers which others cannot match but also thanks to the hard work put in by a lot of people in the industry to keep one step ahead of those others. The Turkish embargo on Cyprus ships and companies operating out of Cyprus has not been an obstacle as such but it has affected the further develop-ment of the shipping community.

2. It is not a matter of privileges. Cyprus retains a lot of them. What Cyprus has not managed to become is an all-round shipping centre. Despite the favourable legal framework especially after the enactment of the new Tonnage Tax legislation, it has not managed to attract owners, charterers and other shipping-related businesses from other main shipping centres. Shipping

is very traditional and shipping companies will not move from one centre to another simply because of cost considerations. They prefer to maintain their presence in more traditional maritime centres such as Lon-don, New York or Piraeus where the cluster consists not only of shipowners but of banks, insur-ance companies and law firms among others.

3. The following:• A well-structured strategy, unaffected by the political cli-mate and political parties, which focuses on marketing Cyprus’ advantages. • The announcement of the ap-pointment of an Under-Secretary to the President for Shipping is a step to the right direction.• A strong Department of Mer-chant Shipping (currently without a permanent Director) is es-sential as this is the department responsible for implementing shipping policies for Cyprus-flagged ships.• A solution to the financial crisis which, at the moment, is a deter-rent to anyone thinking of invest-ing in Cyprus and/or moving their businesses in whole or in part to the island.• The abolition of bureaucratic governmental procedures, spread across a number of ministries and departments, and the cre-ation of one-stop-shop where businesses and business people can discuss and resolve issues troubling them.

COLUMBIA

SHIPMANAGEMENT LTD

Q & ACyprus is an established European and global shipping centre in which your company has shown confidence for many years now. What attracted your company in Cyprus in the first place and what is it that continues to keep you here?

Are other shipping centres gaining ground on Cyprus because of the advantages and privileges they can offer companies such as yours?

What specific measures could, in your view, be implemented in order to improve the island’s present status as a shipping centre?

1.

2.3.

WE PUT THE FOLLOWING THREE QUESTIONS TO FIVE MEMBERS OF THE CFC BOARD.

Capt. Dirk Fry, Managing

Director, Columbia Shipmanagement

Ltd.



XXX

Bernhard Schulte Shipmanagement (Cyprus) Ltd., formerly Hanseatic Shipping Co. Ltd., was founded in 1972 as the first Shipmanagement company on the island. In 2008 Han-

seatic Shipping combined forces with three other shipmanagement organisations to establish Bern-hard Schulte Shipmanagement, a group providing an unparalleled range of maritime and engineering services. Bernhard Schulte Shipmanagement oper-ates the BSM Maritime Training Centre (Cyprus) Ltd. in Limassol. The school is an IMO-approved Mari-time Training Centre operating under the auspices of the Cyprus maritime administration.

1. Cyprus has always been an important maritime centre with tremendous commercial importance. Modern shipping history started in Cyprus as recently as 1972 and since then Cyprus has be-come a strategic player in the maritime industry and one of the most important domains for third party shipmanagement. One reason why the com-pany chose Cyprus was the island’ s advantages: good communications and geographical location,

the existing double tax treaties and the high edu-cational standards of the local population. Cyprus remains one of the most competitive locations for shipmanagement, especially following its success in gaining European Commission approval for the taxing of shipmanagement companies under the new Tonnage Tax.

2. Cyprus still remains the biggest third party shipmanagement centre internationally. However, this should not make the authorities or, indeed, the companies relax as a number of other countries within and outside the eurozone are trying to com-pete. Malta has built on Cyprus’ biggest deficiency – the Turkish boycott – but Luxembourg is also try-ing to compete by making changes to its maritime legislation. The boycott of the Cyprus flag/Cyprus management by Turkey needs to be overcome through the provision of additional benefits. The success of Cyprus two years ago in extending the Tonnage Tax system to other areas of shipping with the blessing of the European Commission raised Cyprus to another level. Certain other aspects of the general legislation also give an added advantage

to shipping companies. Another important attrac-tion of Cyprus is the availability, cost benefits and standard of its human resources. Due to the expan-sion of shipping activities on the island, the number of highly-educated, experienced personnel makes the running of operations with experienced local residents practical. From my perspective, Cyprus has been and will continue to be the place to run shipping and associated business!

3. The CSC has been trying for years to convince the Cypriot authorities to appoint either a minister or a deputy minister for Maritime Affairs. These efforts were made in an attempt to remove bureau-cratic delays and resolve other pending issues for the shipping industry and the flag. We sincerely hope that this will become reality very soon. Among the new government’s priorities is the appointment of an Under-Secretary for Shipping which will further boost the value of shipping for the island, in addition to the increased value thanks to its new-found energy resources. The human element is also important and Cyprus needs to build on this locally. This has always been one of the leading factors attracting the industry to operate from Cyprus.

BSM CYPRUS

Arthur McWhinnie,

Managing Director, BSM

Cyprus

Intership Navigation Co. Ltd was founded in 1988. A member of the Hartmann Group, it is primarily a shipowning company but it has expanded into full management for a small number of owners. Intership presently man-

ages a fleet of general cargo ships, bulk carriers and product carriers. In addition to the full manage-ment, Intership is crew manager for a further 120 vessels of a diverse group of owners. The crewing department is today employing some 5,000 seafar-ers of various nationalities.

1. Intership Navigation celebrates its 25th an-niversary this year. In the mid-late ‘80s, many German shipowners were struggling and looking for ways to reduce costs, one of which was outsourc-ing the manning of vessels, which could be done more cost effectively by dedicated management companies outside Germany. Whilst Intership was

initially established to support the Hartmann Group in its crewing needs, it quickly became a shipowner in its own right .The good shipping infrastructure, favourable taxation (the Tonnage Tax system) and Department of Merchant Shipping support for ships registered under the Cyprus flag (more than 90% of Intership’s vessels fly the Cyprus flag) have created an environment which Intership will continue to use as its base.

2. There are several ‘shipping centres’ around the world but most attract commercial management rather than the technical shipmanagement carried out from Cyprus. There are also the ‘natural’ ship-ping centres, which have developed organically over time (London, Athens, Oslo, Hamburg, etc.) and there are those centres which, in more recent years, have attracted shipping-related businesses mainly by offering tax incentives. Cyprus was established

as a shipowning/shipmanagement centre more than 40 years ago and it has developed into a fully-fledged cluster of maritime companies, including most major classification societies, suppliers and agents of major makers of ship components, insurance brokers, etc. So those shipping centres which have been established more recently will need time to replicate a similar cluster to that existing in Cyprus.

3. The existing shipping cluster should be expanded to include a broader representation of the commercial sector of shipping. It would also be a major step forward if ship financing banks could be attracted to operate from Cyprus. The Turkish embargo of the Cyprus flag and vessels managed from Cyprus continues to be a major problem for those operating ships from Cyprus. The shipping community hopes that this matter will be resolved as soon as possible.

INTERSHIP NAVIGATION CO. LTD

Dieter Rohdenburg,

Managing Director, Intership

Navigation Co Ltd

Lemissoler Navigation, established in 1996 and based in Limassol, is a diversified shipping group with many years of expertise in liner shipping, ship management services and ship-

owning activities. It manages all its owned fleet and offers third party shipmanagement services to reputable owners. The ship management division of the Group has expanded exponentially over the years and it offers a complete range of services such as crew, technical and commercial management as well as chartering and operation.

1. Cyprus has been and will remain a very attractive location for foreign and local shipping companies. As a local Cypriot company we have benefited, like all foreign companies that have

settled here, from the reputation of our legal sys-tem, the newly-established, favourable Tonnage Tax system and a pool of highly-educated em-ployees covering the whole spectrum of expertise within our industry.

2. Many countries have managed to create a positive status for themselves over the years but we at Lemissoler believe that Cyprus remains one of the key players in the global shipping industry. We hope that the government will continue to sup-port the industry and protect the Tonnage Tax sys-tem and the announced post of an Under-Secretary for Shipping should become effective the soonest possible. The Under-Secretary’s priority tasks will be to promote the tax regime as well as to intensify efforts aimed at lifting the Turkish embargo.

3. Apart from the lifting of the Turkish embargo, what Cyprus needs is strong ship financing representation by the major foreign banks and the adaptation of legislation to accommodate the operation of Hedge and specialized Shipping Funds. Furthermore, the government should sup-port research by local universities by allocating adequate funds and giving incentives to develop systems related to our industry and the protection of the environment. It goes without saying that the Department of Merchant Shipping, which is one of the most efficient governmental depart-ments in Cyprus, should continue to improve its systems, its responsiveness and attractiveness, and to promote the Cyprus Flag as one of the best worldwide.

LEMISSOLER NAVIGATION CO. LTD


Philippos Philis, Chairman and CEO, Lemissoler

Navigation Co. Ltd

SHIPPING



Interorient was established in 1979 and it has grown over the years into a diversified shipping company, involved in shipowning, ship management and shipping investments. Today the Group

employs 300 shore-based employees and over 3,000 seafarers, and manages a fleet of 130 vessels through its offices in Germany, the USA, the Philippines, Latvia, Ukraine and Russia. The group’s vessels transport a wide range of bulk cargoes including petroleum products, minerals and commodities. Interorient is a founder mem-ber of the Cyprus Shipping Chamber.

1. Interorient has been active in Cyprus since 1979, at the time when Cyprus was beginning to establish itself as a shipping centre. The attractions for a shipping company operating from Cyprus at that time are well-known and include the good taxation regime, a high level

of skilled staff and strong support from the business community. Today, as the biggest Cyprus-owned shipping company on the island, we maintain our commitment to Cyprus and, despite our international presence and several branch offices around the world, we maintain our headquarters in Limassol.

2. Many changes have taken place over the past thirty years which have seen multiple jurisdictions offering shipping companies similar benefits in order to attract them. The benefits of the Tonnage Tax system that we have in Cyprus today, for example, are also found in most if not all other EU countries. Further afield, Singapore, Dubai and Hong Kong have all become big hubs for ship management activities. It is not really a question of ranking between the different ship-ping centres. What is important is for Cyprus to continue to try and offer the most attractive

environment for shipping companies and, due to the ongoing Turkish embargo, it needs in some way to be offering a little bit more than the others.

3. We are very well covered on the conven-tional shipping side with the current Tonnage Tax law and infrastructure as it offers incentives to owners, managers and charterers/operators. What would greatly strengthen the presence of shipping companies here in Cyprus would be a solution to the ongoing Turkish embargo. However, with the island’s recent developments in the field of natural gas, there is an opportunity to create a parallel and complimentary hub of offshore and exploration activity. Many existing shipping companies and providers of ancilliary services also serve the offshore industry and I believe that Cyprus will achieve this goal within the next few years.

INTERORIENT

Themis Papadopoulos,

CEO, Interorient

Having commenced as a team in Cyprus in 1978, the Uniteam Marine Management Group is actively involved in all aspects of ship manage-

ment and has expanded into a multinational company with offices in Germany, Ukraine, Singapore and Myanmar as well as Cyprus. The group is active in full management, operations, crew management, technical management, financial administration, con-sultancy and ISM/ISO 9001:2000 and ISPS services. The company manages a fleet of more than 120 vessels, ranging from 10,000 to 177,000 dwt.

1. Cyprus enjoys a strategic location and offers an excellent infrastructure in terms of facilities, professional services and human capital. Strong support from all administra-

tions towards the maritime industry has also contributed greatly to successfully tackling legislative, tax and other industry issues. The epitome of these efforts was the ap-proval by the European Commission of the Republic’s unique Tonnage Tax system which acts as a catalyst for the continuing presence of shipping companies in Cyprus.This blend of excellent local and interna-tional support through the government, the availability of highly-educated staff and the network of lawyers, accountants and bank-ers has kept us in Cyprus since 1978.

2. The most recent serious threat is the expansion of the Maltese Ship Registry which has developed into one of largest in Europe and the world. The competitive advantages offered by the Maltese registry include various tax and non‐tax incentives

and 24/7 services. And of course it also has the advantage arising from the prohibi-tions imposed on Cyprus flagged vessels by Turkey.

3. The appointment of a dedicated Under-Secretary for Shipping is essential.Also, automated and online one-stop shop services in the public sector are needed. More recently, drastic measures by the government have become necessary to assure future visitors and current investors in Cyprus that their operations will be safe in relation to the island’s current financial upheavals and economic difficulties. The foremost measure, however, should be for the the government to do everything possible through the European Union and other fora to obtain the lifting of the Turkish embargo.

John Hadjiparaskevas,

Director, Uniteam Marine Ltd

Marlow Navigation Co. Ltd was es-tablished in 1982 by Hermann Eden who currently

holds the position of Chairman. At first the company’s activities were limited to crew management, which remains its core business. In the ‘90s, these were extended to include technical management. Marlow Navigation, and its worldwide rep-resentatives supply the full range of third party ship management

activities and is able to accompany a vessel from the drawing board all the way to her final days at sea.

1. In the first place, we were attracted by the competitive tax regime and the excellent banking, accounting and legal system in Cyprus. These are the things that have kept our company in Cyprus, together with the availability of skilled personnel for all the services provided, the excellent and efficient communications network and the

island’s geographical location with regard to international travel.

2. We would put Dubai, Hong Kong and Singapore in this category.

3. Steps need to be taken to main-tain the competitive tax advantage of Cyprus. Confidence Building Measures are needed in respect of business sustainability and a spe-cialised unit for the promotion and administration of shipping should be created.

MARLOW NAVIGATION CO. LTD

Andreas Neophytou,

Joint Managing Director, Marlow Navigation Co.

Ltd


UNITEAM MARINE LTD


OPINION

Cyprus has every chance of becoming another solid EU fund jurisdiction

The Time is Right for the Fund IndustryGrowth in the financial sector may be based on this promising key area

info: Ioannis Gaiganis is a fund management industry expert, a founder member of the Expert Fund Committee of the Cyprus Investment Promotion Agency (CIPA) and a member of the Alternative Investment Fund Managers Directive (AIFMD) Committee at the Ministry of Finance, Cyprus.

The financial sector in Cyprus is definitely in the spotlight these days, though not only for the right reasons as any positive events are inevitably overshad-owed by the banking crisis. The

evolution of the sector however, may well be based on a promising key area: the fund industry.

If anything positive may be taken from the post-Lehman and sovereign debt crises, it is the revelation of the opportunities offered to the local financial sector and particularly the fund industry. Amidst all the turmoil, it has gone relatively unnoticed that the Cyprus Securities and Exchange Commission has successfully integrated all the important European directives linked to the fund management industry and its managers while other mature fund centres are still boasting their expertise on technicalities. Or that it has authorized Beneficentia Ltd, the first UCITS fund management company, with the first Cyprus domiciled UCITS funds being imminent. The new fiduciary law is another evolutionary step impacting the fund services sector that brings Cyprus a little bit closer to the models of Malta or Luxembourg which are the inspiration behind the newly-created Cyprus Investment Fund Association. This year, the revamped International Collective Investment Scheme Law will come to complete the regulatory picture of a promising fund centre.

With 94 ICIS Funds as of November 2012 and a possibly good number of applications pending, it is undeniable that the Cyprus fund sector and the related financial services industry are growing. How-ever, now that UCITS funds will also be domiciled and serviced locally, accountancy firms may find it difficult to source enough fund experts locally, thus resorting to global recruitment networks for exper-tise and experience.

The fund industry is seeing growth in alternative funds, including hedge funds, private equity funds and real estate funds. The challenge that local service providers are likely to face is that the alternative fund sector is highly sophisticated in areas ranging from valuations, securities services or fund-related tax implications. For the Cyprus fund industry, train-ing may therefore well become a priority. To match current needs and prepare for continuous growth,

firms will need to grow or bring in experts, training staff and prepare for an increasingly complex and expanding fund sector. Cyprus has no shortfall of talent but lacks the infrastructure to build the exper-tise and grow the experience.

Unless local training firepower is developed to address this challenge, other jurisdictions are likely to start grooming people to become Cyprus fund experts. We may therefore see mobility coming into the industry and while it is certainly healthy to be-come more multi-cultural, local expertise in sectors like accounting or tax must also be maximized to address the needs of this industry.

2013 is likely to be a continuation of 2012 in that fund industry momentum will continue to accelerate. ICIS (International Collective Investment Scheme) enquiries may continue to dominate the market place but with UCITS IV already in force in Cyprus, the regulator is about to authorise locally-domiciled UCITS vehicles which, while capitalising on their UCITS status, are doing so by boasting the benefits of a quality service environment at a much more competitive cost.

In the meantime, the immediate growth is com-ing from the non-UCITS funds (ICIS) rather than UCITS and while this may continue in 2013 both types will continue to increase in numbers. The introduction of the alternative investment fund managers directive (AIFMD), despite its regulatory burden, may still offer more flexibility to alternative funds than through UCITS. As a result, Cyprus may continue to attract a lot of start-up funds and related businesses with innovative structures and products.

Cyprus may start by being a small player in the fund sector but it can dramatically increase its market share as it exploits existing business links with regions and countries that are still untapped by other mature fund centres and with which it enjoys unique longstanding relationships. Further expansion of the fund sector seems unavoid-able, considering the island’s tradition of offering corporate services and its ideal positioning as an EU financial services centre close to key regions in need of EU fund solutions. If local expertise increases at a rate that supports and accelerates growth, Cyprus has every chance of becoming another solid EU fund jurisdiction.

By Ioannis Gaiganis


opinion_ gaiganis.indd 30 07/03/2013 11:50


INTERVIEW

CALL ME LIBERALBUT PRIVATISATIONIS THE WAY TO GO

THE POLISH EXPERIENCE HAS SHOWN THAT A CHANGE OF OWNERSHIP IMPROVES THE EFFECTIVENESS

AND ATTRACTIVENESS OF COMPANIES.By Kyproula Papachristodoulou. Photo by Jo Michaelides

main_story2_Polish Ambassador.indd 32 07/03/2013 11:35

BUT PRIVATISATIONIS THE WAY TO GO

Pawel Dobrowolski



INTERVIEW

THE EUROZONE ENTRY TARGETS ARE WITHIN OUR REACH. THE POLISH WILL GAIN THROUGH THE ADOPTION OF THE EURO

value of our food exports alone in

2012 was equal to the entire GDP

of Cyprus

THE

Pawel Dobrowolski, Ambassador of Poland to Cyprus, is not afraid to be labelled a ‘liberal’. On the controversial issue (at least in Cy-prus these days) of privatisation, his stance is clear: privatisation is the best way to achieve competi-tiveness, lower prices for consum-ers and benefits for the taxpayer.

Gold: The global financial crisis has affected every country in one way or another. What happened in Poland and how has your government tackled the problems?Pawel Dobrowolski: After five years of crisis we are all definitely wiser. We are now able to draw a “disaster map” showing where it started, how it spread and what country-and EU-specific measures were taken to control it. Each country has its own assessment of what had happened, and how it affected its economy. Poland has experienced continuous economic growth since 2007. There have been no signs of banking system collapse, Polish bonds performed well, and still do. One might say that we were looking at the crisis from a safe distance. The shortest answer to the question “why we were so lucky” would be the following: if one defines the euro crisis as a byproduct of the “spend more than you earn” symptom, which had plagued Europe for many decades than, paradoxically, I might say that Poland was not yet wealthy enough to fall into a trap of uncontrolled spend-ing and “credit frenzy”. Our GDP per capita index shows enormous dynamics and yet it is still below the European average. As an emerging market we had to implement financial regulations which effectively prevented real-estate bubbles or “poisoned bonds” traffic, while at the same time we did our homework: invested in the infra-structure, kept the debt-to-GDP ratio within set limits, and maintained healthy and transparent bank and finan-cial governance. A healthy and large internal consumer market has also helped. One important measure taken by the Government I would like to mention is the extension of retirement age to 67: it regulated and stabilized the labour market in view of the aging population – another common European issue.

Look at the economic performance of the EU27 for 2012. Poland is among the only five countries that regis-tered growth above 2% and it is by far the largest. In the crisis-troubled EU we are the “healthy case”, which is not to say that we are trouble free. We began 2012 with over 4% growth but it has been another difficult year for the whole of Europe. The Polish economy is 70% export-based, so Europe’s problems immediately become ours.

Gold: Poland is currently one of the fastest growing countries within the EU. What are the main drivers behind your country’s positive growth environment?P.D.: I could probably say that we have survived the crisis because we work hard, possibly the hardest in Europe, but that would be too simple. Among the main drivers

I will mention only a few. One is a very healthy financial and banking system: every Polish bank passed the stress test with flying colours, with its core tier 1 capital well above 10%. Another is a care-fully managed public debt: its ratio to GDP is – and has to be due to constitutional restraints – below 60%. You may also add a signifi-cant internal mar-

ket of 37 million, a steady investment policy with a high rate of EU funds absorption as well as substantial Foreign Direct Investment (about €10 billion annually), and the maintenance of good export levels. You might like to note that the value of our food exports alone in 2012 was equal to the entire GDP of Cyprus.

Gold: One of Poland’s most important tasks for the near future is the preparation of the economy to meet the strict criteria for entry into the eurozone. When does Poland plan to adopt the euro and what is the strategy it has adopted in order to meet this target?P.D.: For a country of our size and potential, the euro debate is vital. On paper we are ready to meet the criteria but, in reality it is as much a social and political debate as it is an economic one. The target is already set for 2015 and we should be ready by then but questions still remain. We are carefully studying individual cases, such as Cyprus or our neighbour Slovakia, and we are trying to balance the arguments for and against. There remains – and not only among the sceptics – a recurrent issue: What “kind” of eurozone will we be entering? The next few years will be crucial, both for the concept of the eu-


THE CHANGE OF OWNERSHIP EXERTED A CONSIDERABLE INFLUENCE ON THE EFFECTIVENESS AND ATTRACTIVENESS OF EACH PRIVATISED COMPANY IN POLANDrozone and its integration as well as for us. The eurozone entry targets are within our reach. The Polish economy is open and vibrant and, in this respect, it will gain through the adoption of the euro.

Gold: In recent years, Poland has undertaken some major privatisations of state-owned companies. Which ones have been privatised and what were the main considerations behind the decision to privatise them?P.D.: The share of the private sector stands at about 70%. You may label me a “liberal” – which is not always a compliment these days! – but I firmly believe that privatisation is the best way to achieve competitiveness, lower prices for consumers and benefits for the taxpayer. The mix between private and public sector ownership is a matter of choice for each individual country but in the case of Poland, the general tendency over the last 20 years has been clear and we have privatised sectors such as coal-mining, once the “flagship” of the cumbersome economy of pre-1989 Poland and now brought back to life. The Polish government has also successfully priva-tised the country’s biggest insurer (PZU), the biggest bank (PKO BP), companies such as PGE, PGNiG, Enea and Tauron in the growing energy sector, and TPSA, the Polish Telecommunications Authority. Analyses of the largest privatised companies in Poland confirm that the change of ownership exerted a considerable influence on the effectiveness and attractiveness of each company. In privatised companies, productivity usually increases at a faster rate, and of course their international competitive-ness grows too.

Gold: In its latest evaluation report on Poland, the European Council has asked the country to imple-ment a permanent expenditure rule by 2013. What is the government doing in this respect? P.D.: This new rule applies to all member states and it needs a thorough preparation phase to fit into each national fiscal framework, although some of the require-ments already exist. At the government level, the Polish system includes a debt rule, set out in the Constitution, which places a limit on the debt-to-GDP ratio, while an expenditure rule limits the annual growth of all newly-enacted expenditure items to the inflation rate (CPI)+1%. Work is now in progress and the 2013 deadline is not threatened.

Gold: What can Cyprus learn from the Polish econom-ic experience of recent years and the strategy followed to tackle the severe economic and financial crisis?P.D.: It is always difficult, or even risky to give advice. Comparisons may not be wholly productive; Cyprus and Poland represent very different types of economy. How-ever, some general patterns of reacting to a crisis can be identified. In Poland we advocate and try to implement strict financial management and control of public debt; we try to maintain a healthy and regulated banking system; we seek to use privatisation as means of boosting economic growth, and we concentrate on using our assets – and here both countries stand to benefit from their gas deposits – to minimize and break up monopolies and to obtain lower costs while enhancing efficiency. I don’t think this is advice – just common sense.

Gold: Poland, together with the other three countries which constitute the Visegrad Group or V4 (Hungary, Czech Republic and Slovakia), is organising an Invest-ment Forum in Cyprus next month entitled “Safety amid crisis”. What is the aim of the Forum? P.D.: It’s aimed at our Cypriot partners. As they experi-ence the crisis, we believe it’s useful and productive to offer them opportunities for successful business coopera-tion with enterprises in the countries of Central Europe which are coping well despite high-risk challenges to their own economies. We have a number of good examples of business-to-business cooperation and I hope that the idea to organise the Forum, proposed by the Polish Presidency of V4 and supported by my Czech, Hungarian and Slovak colleagues, offers added value to our economic and finan-cial cooperation.

Gold: What are the common characteristics of the four countries that justify the Forum’s title “Safety amid crisis”? P.D.: First, we share something that perhaps has no de-fined market value but is crucial in creating a common mindset and an ability to cooperate. We have a common history, we are neighbours who share the same values, in many cases we speak a similar language, and we have cre-ated a strong political affinity capable of providing answers to the major European questions. We serve Europe in many fields: we share 22% of all EU military missions, we are important partners in NATO. The V4 group was established in 1991 so it is older than the Maastricht treaty and the creation of the EU with its present name in 1993. In the mid-1990s our collective GDP stood at some $260 billion, today it is four times larger. Central Europe pro-vides a good case for “integrated resistance” to the recent European crisis. All four Visegrad countries have managed to keep their heads above the water. One can obviously argue that some do better and some less so; however I believe that these so-called “new members” of the EU and their ability to withstand the crisis justify the title we have given this Business Forum. We hope that Cyprus business environment will profit from this experience.

The “Safety Amid Crisis” Forum takes place on 12 April at the Hilton Park Hotel, Nicosia.


CORPORATE LAW


HAPPINESSIS A SUCCESSFULLAW FIRM

ANGELOS PAPHITIS WAS IN HIGH SCHOOL WHEN A FRIEND MENTIONED THAT HIS FATHER WAS A LAWYER. SOMETHING CLICKED AND HE HAS NEVER LOOKED BACK. By John Vickers, Photos by Jo Michaelides

Ten years ago, the then 24-year-old Angelos Paphitis returned to Cyprus, ready to begin his legal career after obtaining his law degrees and

completing his training as a barrister in London. Had he been given a glimpse of the future, even he would have been pleasantly surprised to see where he would find himself a decade later: running his own award-winning firm of ten lawyers, housed in offices that he designed himself and enjoying a growing reputation in the corporate and company law sector. He would have been even more surprised had he foreseen as a youngster the way his chosen career would develop, since everything happened by chance. Unlike many lawyers, Paphitis was not born into the profession, nor did he have family members working in the legal sector.

“My choice had nothing to do with the family,” he recalls. “I was talking one day with my best friend at school about what we were going to do in later life and he mentioned that his father was a lawyer and I just liked the sound of it! The same day I went home and told my Dad that I wanted to become a lawyer”. And did the reality turn out to be close to how he had imagined it as an impres-sionable youngster? He has no doubts about this:

“Yes and I have absolutely no regrets. I would do the same thing all over again,” he says. This would mean again giving up his great love and interest in graphic design but in reality he did not abandon it entirely. When it came to designing the firm’s offices, there was no need to appoint an interior decorator: Angelos did it all himself.

That was almost 7 years ago. When asked to analyse the reasons for the firm’s success, Paphitis puts it partly down to the fact that he decided from

the outset to offer a specialized service:“When I started work as a sole prac-

titioner, I could see that the market was already full of lawyers so I realised that I needed to focus on what I knew best. I had always been interested in corporate law and company law and in 2006 I obtained a postgraduate diploma in tax law in Zurich, so before opening my own firm, my whole background had been formed by the corporate legal pro-fession. With this in mind I decided to promote myself exclusively as a specialist in company law and this is one of the main reasons why I have managed to attract the corporate clientele”.

As the years have passed, the firm has expanded to become a full service firm and ten lawyers are currently working at A.G. Paphitis & Co LLC. At 34, the founder is delighted to be leading what he describes as “the best team that I have ever had”, citing the fact that all his as-sociates share his philosophy of putting service to clients above all, “even if this means sacrificing our personal lives” as one of the keys to their combined suc-cess.

The focus of the firm continues to be on corporate law, and most of the awards that it has won in recent years are related to its specialist areas – com-pany law, corporate governance, etc – and, in particular, international business.

“As we grow as a firm we are deal-ing with more local clients but we have always worked mainly with international companies, Paphitis explains. “Two years ago I would have said that 90% of our business is international. Today it’s prob-ably 70% because we have more local clients. And this is why I spend a great deal of time travelling. I believe in the importance of developing and maintain-ing personal relationships with clients so I visit them frequently”.

Ten or 15 years ago, finding interna-tional clients was much easier than it is today. The days of being able to sit back

main_story3_paphitis.indd 36 07/03/2013 11:42


UNTIL RECENTLY

THERE WERE COMPANIES AND

INDIVIDUALS OPERATING

IN THE SECTOR WHO DIDN’T KNOW THEMEANING

OF THE WORD‘FIDUCIARY’

Angelos Paphitis


and wait for a knock on the door are long gone as Cyprus feels the pressure of other destinations competing for its business. Angelos Paphitis knows all about this, which is another reason for his busy travel schedule. One of the first things he did when starting the firm was to arrange a two-week trip to Russia and Ukraine and he still travels frequently to both countries as well as to major European capitals.

“It is essential to go out looking for clients,” he says. “Competition is growing all the time from new places like Malta and the Netherlands as well as from the older-established ones such as Luxembourg, and they have become quite aggressive in their marketing. Unfortunately, the big organisations that once allocated large bud-gets to promoting and sponsoring Cyprus are no longer doing so. As a result, our competitors are overtaking us. So each individual firm needs to do whatever it can to promote itself and the country. We can no longer afford the luxury of waiting for clients to come and find us. Since there has been a reduction in private sector promotion of Cyprus and increased promotion in other countries, including negative publicity about us, we need to do even more”.

The provision of legal services to the corpo-rate sector is an area which, like every other, has been affected by the global financial crisis. “We see a lot of restructuring these days and startups tend to be more solid than they might have been before,” Paphitis notes. As for the prob-lems in the local banking sector and the broader economy, they are also affecting business, nota-bly when it comes to payment:

“It’s actually a chain of problems: the bank won’t provide a loan facility so the company owner doesn’t pay the construction company, for instance, which in turn doesn’t pay the sub-contractor who won’t pay the supplier and so it goes on… I see it every day. The local market has been badly affected by the situation”.

The legal profession could hardly remain untouched by such a wide-ranging crisis and, says Paphitis, people have even started to think twice and three times before deciding to go to court: “Just to file a claim you need to pay a lawyer and clients are now coming to us much more often and asking us to tell them what their chances are of winning. No-one wants to lose more in the course of trying to recoup money owed. The ‘no win, no fee’ proposition which is familiar in the UK has never been part of the Cyprus legal process but it is being brought up much more often these days”.

One option in dispute resolution is, of course, arbitration and it is a process that Angelos Paphitis supports and actively promotes. “There is now a very good arbitration court in Cyprus [CEDRAC – the Cyprus Eurasia Dispute Reso-Cyprus Eurasia Dispute Reso-lution and Arbitration Centre] with arbitrators who are well-established and respected profes-sionals,” he explains, adding that “our firm

promotes it by including it in many agreements that we draft. Its use is not particularly wide-spread in Cyprus, where people are used to go-ing to court, but because there are now so many delays in the court system I believe that arbitra-tion will grow in importance and popularity for resolving disputes between companies”.

Few professionals would deny that the next 2-3 years are going to be difficult for the economy but Angelos Paphitis believes in taking a proactive approach

“The state of the economy depends greatly on the private sector and on every individual,” he says. “Some months ago when I realised that things were heading in the wrong direction, I immediately arranged half a dozen business trips. I was not willing to sit around and wait for things to get worse so I went out and brought business in”.

The lawyer puts the current state of affairs down to politics (“I’m glad that I am not involved in politics because I think it is what has destroyed Cyprus. No-one is willing to take necessary but unpopular decisions because the parties put themselves above the people”.) and he warns that the recent enact-ment of the law governing providers of fidu-ciary services could not have come at a more crucial time: “Until recently there was no regulation and there were companies and in-dividuals operating in the sector who didn’t know the meaning of the word ‘fiduciary’, let alone the extent of their obligations and duties! The law was definitely needed and personally I think it should be stricter. Audi-tors and lawyers are exempt and although I am a lawyer I don’t agree with this”.

Recent instances of Russian businessmen seeking to take legal action against fiduciary

companies have given Cyprus bad publicity, Paphitis notes. “When they are not happy with Cyprus they let their local media know about it so we need to set and maintain the highest standards”.

Having seen that “the good things about Cyprus, such as the tax regime, have not changed for a long time so, theoretically we are just as good as we were five years ago,” he is now surprised to be frequently asked questions about Cyprus and why people should choose to invest in the island rather than another jurisdiction. “These questions are being raised by our competitors and as a result of this we have held seminars in Russia and Ukraine in which we analyse the differences between Cyprus and its competi-tors such as Luxembourg, the Netherlands, Malta and Switzerland and I’m happy to say that people are responding positively to what they see. Cyprus is by far the best juris-diction for many things but at a time when it is crucial to promote the country we seem to have stopped. A major initiative needs to be undertaken by everyone involved – CIPA, the government, the banks and the private sector”.

Angelos Paphitis is confident that “the sky is the limit” for Cyprus if things are done prop-erly. “I have a great deal of trust in Cypriot professionals who are very good at what they do,” he says. “Everyone is talking about Malta which is far behind Cyprus on a professional level – I have worked with Malta and I have seen the difference. However, we need proper regulation and controls on who can offer what. When you go online and you see a service be-ing offered for a specific fee and then another firm offering the same service for one tenth of this amount, you will not have faith in the system. There needs to be a proper schedule of minimum costs, minimum fees, etc. Other-wise we are losing the game by ourselves. The regulatory and supervisory authorities claim that they cannot do anything about this but it is holding Cyprus back”.

Having achieved plenty during his firm’s first seven years, Angelos Paphitis says that he simply now wants to maintain the quality of service that it is providing and to continue receiving serious business from major groups of companies in need of representation. “There is no finish line. We will keep on working as we do now. Over the past 18 months we have been involved in a lot more high-profile work, both in and out of court, and I am confident that this will continue” he says.

Seeing the firm grow is more than a profes-sional ambition. It is a personal one too. The firm is, after all, his “baby”. Beyond this, he says, he is very happy with his life. “There is basically absolutely nothing I would change. I’m a very happy man”.


I BELIEVE THAT ARBITRATION WILL GROW IN IMPORTANCE AND POPULARITY FOR RESOLVING DISPUTES BETWEEN COMPANIES

CORPORATE LAW


OPINION

By implementing wellness and exercise programmes, companies reap the rewards that come from having healthier employees

Turning To FitnessHealthier people means healthier profits for an industry that is steadily growing

info: Kyriakos Onisiforou has a university degree in Physical Education and Sports Science. He has been involved in the fitness industry for the past 10 years, working as a personal trainer, group fitness trainer, health club manager and fitness business consultant.

We all know that exercise is good for us but how many of us do it regularly? More-over, how many employers recognize the economic

benefits of exercise? It is a fact that investment in workforce wellness results in notable savings per year through reduced absenteeism, improved productivi-ty and morale, reduced costs and medical claims and a return on the investment. By implementing well-ness and exercise programmes, companies reap the rewards that come from having healthier employees. Forward-thinking organisations see this as an impor-tant contribution to the culture of their business and they may offer in-house fitness facilities, subsidize gym memberships or offer their employees educa-tional courses on nutrition and smoking cessation. When Motorola invested $6 million in its wellness initiative programme, for every $1 invested, $3.93 was saved. In 1998, the ROI for all of Pfizer’s on-site fitness centres was 4.29:1.

Despite the economic conditions of the last few years, the worldwide fitness industry has been grow-ing slowly but steadily and attracting greater public interest thanks to increased media exposure. In the US, Michele Obama launched the ‘Let’s Move’ ini-tiative in 2010 to raise a healthier generation of kids through exercise, while in the UK, Jamie Oliver’s 2011 ‘Food Revolution’ movement aimed not only to bring healthier food to schools but also to educate children about proper nutrition. Now, rapper 50 Cent is preparing a new book on fitness, airports are becoming workout-friendly by installing easy-to-use exercise equipment in waiting lounges, Madonna is opening another ‘Hard Candy’ facility in Rome, Nike is working on fitness video games, LesMills New Zealand is entering the home fitness market by partnering up with BeachBody USA, and well known doctors are speaking in favour of exercise either through talk shows and books (Dr Oz) or online (Dr. Mercola). These successful individuals and businesses know what gets their potential target market excited and what it is looking for, and they are heavily leveraging their offerings to the growing demand for fitness and influencing public opinion.

New online platforms now deliver fitness educa-tion to the end user in the convenience of the home, fitness applications for smartphones are booming, young and aspiring entrepreneurs are storming social media networks and gaining over 8 million views for three-minute fitness videos produced in their living rooms.

And what of Cyprus? The wellness tourism industry is cited as an emerging investment sector by CIPA but the fitness industry – a basic pillar of wellness – doesn’t get a lot of attention. However, global trends indicate that companies (and whole countries) of any size can benefit from a turn to wellness, even in hard financial times. Cyprus is no exception and during the island’s most difficult financial period, it has the potential to act as an emerging industry that can give the market a natural ‘feelgood’ medicine that doesn’t have to cost much to the end user.

A fitness business startup in Cyprus, depending on the targeted niche, can range from:• Less than €1,000 initial investment by using an Internet connection for an online fitness informa-tion provider• €25-€50,000 to equip a small 150sq.m. room for private or small group training /education sessions• €500,000- €1 million to rent and equip a facility or buy an existing business• €3-5 million to acquire land and build a large facility that provides a combination of wellness-related services

The market has taken a long time to get the message but it seems that it has finally done so and it now appears ready to buy into fitness like never before. People have realized that the only way to get results is by investing in time and in knowledge of fitness and this will create many opportunities to capitalize on growing demand in so many different fitness service niches. It is now time to take a serious look at the wellness industry and turn to fitness, not just for our health’s sake but also, to quote from the title of economist and social entrepreneur Paul Zane Pilzer’s 2002 bestselling book, for the opportunity to make a fortune in the next trillion dollar industry.

By Kyriakos Onisiforou


opinion_onisiforou.indd 40 07/03/2013 11:54

AUDIT, TAX &ACCOUNTING SERVICES

IN CYPRUSAs an essential component of Cyprus’ thriving professional

services sector, accountancy firms play a key role in the provision of audit, tax and accounting services to international and local companies. More and more of them are playing an increasingly

proactive role in attracting business to the island, thereby enhancing its reputation as a regional financial services centre. On the following pages, several of the country’s leading accountancy

firms present details of their taxation, financial advisory, legal, accounting, audit and consultancy services.

SPECIAL SUPPLEMENT

supplement_audit.indd 41 07/03/2013 11:57

WHO WE AREBaker Tilly Klitou is a leading firm of auditors, accountants and business advisors. It operates through offices in Nicosia, Limassol and Larnaca in Cyprus, Bucharest in Romania, Sofia in Bulgaria and Chisinau in Moldova. 14 partners and more than 200 people offer services of the highest standard to more than 4,500 busi-nesses operating both nationally and internationally.

Synergy, determination and pro-fessionalism are among the key ingredients that make our teams able to successfully handle all tasks assigned. Whatever the size of the assignment, we can provide an ex-perienced individual or team to meet each client’s specific needs.

Baker Tilly InternationalBaker Tilly firms in Cyprus, Romania, Bulgaria and Moldova are indepen-dent member firms of Baker Tilly International. Baker Tilly International is the 8th largest accounting network in the world by fee income and is represented by 156 firms with 672 offices in 131 countries, with a global fee income of $3,3 billion and 26,000 people worldwide (January 2013). We help privately-held businesses and public interest entities meet challenges, proactively respond to opportunities and stay competitive. International capability and global

consistency of service are central to the way we work.

OUR SERVICES• Audit and Assurance Services• Accounting Services• Corporate and Personal Taxation

Services• Internal Audit Services• IFRS Services• Corporate Finance and Capital

Markets • Business Advisory and Consulting

Services

AWARDS/ACCREDITATIONS/ACHIEVEMENTSCyprus Special Exports Award for Services 2011In February 2013, the Cyprus Special Exports Award for Services 2011 was awarded to Baker Tilly Klitou. The annual export awards fall un-der the auspices of the Ministry of Commerce, Industry & Tourism and the Cyprus Chamber of Commerce & Industry. This award recognises the quality of our services and the dynamism and persistence of our people in achieving great results for the promotion of our services and our country as a business and financial centre.

“ICPAC Quality Checked” Baker Tilly in Cyprus has been awarded the “ICPAC Quality Checked” certificate by the Institute

of Certified Public Accountants of Cyprus (ICPAC). “ICPAC Quality Checked” is a quality assurance scheme introduced by ICPAC to promote best practices and to help improve standards across the pro-fession in Cyprus. It promotes the adoption of practical quality control procedures that are generally consid-ered to be best practices by the ac-countancy profession worldwide.

Eligibility to Audit World Bank Fi-nance ProjectsFollowing an assessment of Baker Tilly Klitou and Partners, the World Bank included our firms in Roma-nia, Bulgaria and Moldova among the entities fully acceptable to audit World Bank financed operations in the respective territories.

ISO certificate for Baker Tilly Ro-maniaIn addition, following a due diligence undergone in Romania, Baker Tilly Klitou was successfully awarded ISO certification for financial, audit and related activities.

ICAEW-Approved Training Practice We are authorised by the Institute of Chartered Accountants in England and Wales (ICAEW) to train Chartered Accountants in Cyprus.

ACCA- Approved CPD Employer We have been awarded Approved

BakerTilly Klitou

SPECIAL SUPPLEMENT


CPD Employer status by the Associa-tion of Chartered Certified Accoun-tants (ACCA) in recognition of the continuing professional development scheme our firm provides to our peo-ple who hold ACCA membership.

ACCA- Approved Employer – Train-ee development Platinum level We are authorized by the Chartered Association of Certified Accountants (ACCA) to train Certified Accountants.

WORKING WITH BAKER TILLY KLITOUThe characteristics that shape a suc-cessful organisation are often difficult to define. Size is not the deciding fac-tor. “Big” is no guarantee of quality. The essential differences are defined by people with a clear vision of where they want the organisation to go. Our ambition is to be a leading firm in the countries where we operate, focused

on delivering exceptional client ser-vice. We have a dynamic manage-ment team with the vision to realise this ambition.

We service clients in almost every industry and of any size, and we do so whilst maintaining the personal attention and partner involvement that clients demand.

Our membership of Baker Tilly In-ternational provides us with a range of resources that facilitates access to the specialist knowledge, experience and intellectual property of thousands or recognised experts worldwide. In addition, it affords us access to a recognised global brand, customised training and leadership and people development programmes, industry tools and international technical and practice management resources to complement our own resources.

We maintain our quality services to the highest of standards as we have to meet the strict quality guidelines laid down by the network’s technical team. Regular Quality Assurance and Peer review visits of member firms are car-ried out. Sharing good working prac-tices helps to maintain high quality and consistency in the approach to work carried out by member firms.

CONTACT INFORMATIONBaker Tilly Klitou & Partners Ltd

Corner C Hatzopoulou & 30, Grivas Dighenis AvenueCY-1066 Nicosia P.O. Box 27783CY-2433 Nicosia Tel: (+357) 22458500Fax: (+357) 22751648e-mail: [email protected]: www.bakertillyklitou.com


WHO WE AREBDO Ltd is amongst the largest ac-counting and professional services firms in Cyprus, employing over 100 people in our offices in Nicosia and Limassol. We are a member of BDO International Ltd, the world’s 5th largest accountancy network with almost 48,800 people working out of 1,118 offices in 135 coun-tries.

Through a unique combination of international strength and local excellence we provide custom-made solutions and integrated quality services to individuals and enterprises, ranging from the small, owner managed businesses to large groups with international activities.

We are focused on helping our clients navigate ever-changing economic and market conditions by providing high quality advice and service on a consistent basis.

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

OUR SERVICESWe offer a wide range of profes-sional services including: Assurance Services:• Statutory audit• Internal audit• Governance services• Control Assurance

IFRS reporting and technical support

Tax compliance services:• Preparation and filing of corporate

tax returns • Appeals against tax assessments

issued by the Inland Revenue • Negotiations with the Inland

Revenue • Obtaining rulings from the Inland

Revenue• Preparation and filing of VAT • Obtaining VAT rulings• Personal Tax Compliance

Tax advisory services:• International tax planning• Efficient repatriation of funds • Loss utilisation• Cross-border financing and trea-

sury solutions • Restructuring services

Financial advisory services:• Mergers and Acquisitions, includ-

ing negotiations support to help maximise the offered value

• Acquisition due diligence • Vendor due diligence reports • Sale and purchase agreement

advice • Valuations and fair value opinions • Preparation of business plans,

feasibility studies and financial projections

• Restructuring of businesses • Assessing the available sources

of finance and restructuring of finance

• Design and development of busi-ness strategies

• Developing and recommending optimal capital structure

Global Corporate Compliance and Support Services:• Establishment of corporate ve-

hicles • Corporate statutory compliance• Bookkeeping, accounting and

financial reporting• Payroll outsourcing • Expatriate and relocation services

BDO Ltd

CONTACT INFORMATIONBDO LtdNicosiaMembers of the Board: Karlos Zangoulos (in charge of office)Panicos Constantinou Terry KielyAntonis Zenios Building,1, Erehthiou Street, Engomi, NicosiaPO Box 25277CY2413, NicosiaTel: (+357) 22495707Fax: (+357) 22495717e-mail: [email protected] Website: www.bdo.com.cy

Limassol Members of the Board: Rois Potamitis (in charge of office)Yiannis KapetaniosAndreas SavvaChristos Andreou146, Arch. Makarios III Avenue,Alpha House, 4th floorPO Box 51681, Limassol 3507Tel: (+357) 25735450Fax: (+357) 25735455e-mail: [email protected] Website: www.bdo.com.cy

SPECIAL SUPPLEMENT


From left: Christos Andreou, Andreas Savva, Terry Kiely and Panicos ConstantinouStanding from left: Rois Potamitis, Karlos Zangoulos and Yiannis Kapetanios

Pho

to b

y Jo

Mic

hael

ides


SPECIAL SUPPLEMENT

D eloitte, with more than 500 professionals operating out of offices in Nicosia, Limassol and Larnaca, is one of the largest

professional services organisations in Cyprus, providing a full range of services to a diverse client portfolio. Our services include audit, tax, consulting, financial advisory, wealth advisory and an integrated services offering addressed primarily to the international business community, focusing on accounting and payroll, tax compliance and the formation and administration of companies, partnerships and trusts. As part of the Deloitte global network, with more than 200,000 people in over 150 countries, we have the advantage of a global sharing of knowledge with a local adaptation and personal approach, built on the solid foundations of more than 55 years of successful operation in Cyprus.

Our vision is to be the Standard of Excellence, standing out in our markets through the impact we have on the reputation and success of our clients and being the first choice for talent.

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

Our client service teams, under the leadership of a Lead Client Service Partner, help create powerful business solutions for organisations operating all over the world. This integrated approach combines insight and innovation with business knowledge and industry expertise to help our clients exceed their expectations.

Our wide range of professional services includes:

•Audit & ERSIn today’s changing global economy, businesses need trusted advisors. Because our audit professionals take time to understand our clients’ business and needs, we help them identify major risks and opportunities over and above performing the traditional financial reporting function. We offer our clients a broad range of audit and enterprise risks services.

Our audit services include statutory audits of financial statements, non-statutory audits and other attest opinions, International Financial Reporting Standards (IFRS) services and governance services. Our ERS services include internal audit, IT audit and control assurance.

Deloitte Audit is the latest generation of Deloitte’s transformed audit platform, which is purposefully designed to address the complexities of modern businesses, incorporating new methodologies, content, and technologies to ensure relevant, high quality audits in a constantly changing environment.

•Tax & Legal The provision of taxation services is core to Deloitte’s business both in Cyprus and in the international arena. Deloitte has one of the largest teams of taxation experts in Cyprus, providing a full range of business and personal taxation services.

Our Tax & Legal services team keeps our clients up to speed on the developments that may affect their business, help them interpret their significance and integrate tax considerations into their strategy, with special emphasis on business tax, personal tax, indirect tax (including VAT), global employer services (including solutions for high net wealth individuals) and cross-border tax.

•Integrated ServicesOur Integrated Services team provides a broad range of professional services which are tailored to support both international and local clients with offices in Cyprus and also clients who elect to outsource specific accounting and administration processes.

Our team of highly trained and suitably qualified accounting professionals recognise the specific needs of our clients and offer an extensive range of accounting and administrative services, providing the necessary assistance and professional support to enable our clients to operate their business enterprises smoothly and efficiently.

Our integrated services include accounting and payroll, contract administration and other, tax compliance and formation & administration of companies, partnerships and trusts.

•ConsultingOur consultants help our clients improve business performance and increase shareholder value. We combine expert business strategy and financial skills with the ability to deliver major business change programmes.

Our consulting services include human capital services, strategy transformation schemes, technology specific solutions and actuarial & insurance solutions.

•Wealth Management Our wealth management team has the resources and capabilities to deal with all aspects of the financial affairs of high net worth clients under one roof and to look after the client’s finances on a long term basis. Our team provides practical and imaginative wealth management solutions combining sound investment advice, with tax efficient structures and long term succession planning.

Deloitte Limited

Working together with our clients As OneAlways One Step AheadThe success of our firm is defined by the strength of the relationships we have with our clients.Helping the success of their business is at the core of everything we do.



COVER STORY

In addition our team provides transaction advice, international advice as well as family office services.

Our investment fund services team which includes investment, tax, wealth management, accounting, audit, corporate finance and consulting specialists provides tailor made multi-disciplinary solutions to investment funds. The team can assist with the formation of a fund, ongoing tax consulting and compliance, audit, investment compliance and the raising and introduction of capital.

•Financial AdvisoryOur Financial Advisory Services professionals provide strategic and financial advisory services to clients throughout every phase of the economic cycle. By managing our service offerings, we can extract synergies, from our deep specialisation to provide added value to our clients.

Our Financial Advisory Services team provides corporate finance, M&A transaction and valuation services, feasibility & reorganisation studies. The team also undertakes forensic and dispute resolution services and advice on grants & incentives.

IndustriesUnderstanding the implications of the services we provide is one of the ways we ensure success. Multifunctional industry groups representing each of our service areas create client specific solutions that add value across an organisation.

Our main industry groups include:• Financial Services

• Oil & Gas• Energy & Resources• Shipping• Consumer Business• Travel, Hospitality and Leisure • Technology, Media & Telecommunications • Public Sector• Real Estate & Construction• International Business

People and TalentThe power of Deloitte is its people, and the future of the organisation lies on their continued delivery of exceptional service and innovation. Our aim at Deloitte is to be the first choice of the most sought after talent. To achieve this, we focus on three priorities: make explicit our employer value proposition, build a true coaching culture, and focus on our differentiators - flexibility, diversity, mobility and performance excellence.

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

Corporate Social Responsibility At Deloitte, corporate responsibility is the heart of everything we do: our approach to quality, leadership, talent and our clients. Our business is built on the quality of our work, on strong ethical principles and integrity, on an understanding of our impact on wider society and the trust placed in us by our clients. We understand that our business has wide and far-reaching impacts and that being responsible in every aspect of the way we conduct our work is crucial to our own long-term success.

We are already renowned for the quality of our clients, for our own business performance, for the influence we have and how we set the agenda on matters that transcend our business self-interest. We want to continue to build on our reputation and be regarded as the responsible business.

CONTACT INFORMATIONDeloitteNicosia: 24 Spyrou Kyprianou Ave CY 1075 NicosiaTel.: 22 360300, Fax: 22 360400 E-mail: [email protected]

Limassol: Maximos Plaza, Tower 1 3rd floor 213 Arch. Makarios III AvenueCY 3030 LimassolTel.: 25 868686, Fax: 25 868600 E-mail: [email protected]

Larnaca: Patroclos Tower, 4th floor 41 - 43 Spyrou Kyprianou CY 6051 LarnacaTel.: 24 819494, Fax: 24 661222 E-mail: [email protected]

www.deloitte.com/cy

Investors in People (IIP)Gold & International Champion

In Business Award for Best Workplace of 2012

ISO Certification 9001

Deloitte Investment Services Ltd is the Wealth Management Advisory Firm of 2012 in Cyprusby Corporate Intl magazine


WHO WE AREHorwath DSP Limited is a member of Crowe Horwath International, one of the top 10 global accounting networks. The Crowe Horwath network consists of more than 150 independent accounting and advisory services firms in over 100 countries around the world. Crowe Horwath member firms are known for their local knowledge, expertise and experience balanced by an international reputation for the highest quality of service.

Established in 1987, Horwath DSP Limited is an accountancy firm with offices in Nicosia and Limassol, offering audit, tax, risk and advisory solutions to a diverse clientele in the local market and abroad.

OUR SERVICESOur greatest strength is our ability to understand the strategic needs of our clients combined with the business experience of the

professionals we bring to create customised solutions and meet those clients’ needs.

Horwath DSP Limited offers its local and international clients a wide range of services. The company specialises in:

• Audit and Assurance• International Tax Consulting• VAT Advice• Global Corporate Consulting• Provision of Business Services• Enterprise Risk Management

THE TEAMWith 4 partners, 80 professionals, 40 trainees and over 2,500 clients, Horwath DSP is one of the leading accountancy firms in Cyprus.

The firm employs some of the most highly-trained, educated and experienced individuals in the Cyprus market who are able to provide the highest level of client service. All key members of the

team are either qualified ACA or ACCA and they fully appreciate the need to add value to the service offered to the client as well as the importance of delivering on time.

The firm’s service teams are committed to delivering value to multinational clients doing business across borders. Horwath DSP is part of an international network of business experts with whom it shares a commitment to delivering technical excellence and the highest standards of client service.

Horwath DSP LimitedMember Crowe Horwath International

CONTACT INFORMATIONHorwath DSP Limited8, Stassinos Avenue, 1st Floor,Photiades Business Centre,1060 NicosiaP.O.Box 22545, 1522 Nicosia Tel: (+357) 22755656 Fax: (+357) 22452055 e-mail: [email protected] Website: www.crowehorwath.com.cy

SPECIAL SUPPLEMENT


Left to right: Marios Agathangelou, Ioannis Demetriades, Chrysis Pegasiou, Andreas Pifani

Pho

to b

y Jo

Mic

hael

ides


WHO WE AREKyriakides, Savvides & As-sociates Ltd is a dynamic, fast-growing, reputable Cyprus Accountancy firm providing professional services in the fields of audit and accounting, tax, business consultancy and international business manage-ment. We focus on providing personal, high-quality services, in-depth, comprehensive and practical solutions that help our clients gain a competitive advantage.The firm is experiencing one of the highest growth rates in its sector, driven by the profes-sionalism, competence and commitment of the directors and its staff.

We believe that our success is based on:• The personal service we offer• The experience and qualifica-

tions of our directors and staff• The extensive range of pro-

fessional services we offer• Our concentration on offering

quality services to our clients

Our firm was established in 1993 by Elias Kyriakides and Neophytos Savvides. The firm now employs a team of pro-fessionals who are dedicated to exceeding their clients’ expectations and helping them achieve their business objec-tives. The firm has just moved to its own modern offices with new facilities and high-tech-nology equipment, offering an excellent working environment.We are committed to offering value for money in providing a package of audit, accountancy, taxation and business advisory and administration services. At KSA we have always placed great emphasis on building close working relationships

with our clients and we main-tain personal and regular con-tact in order to offer them the best service and advice.

OUR SERVICESAudit & Financial ReportingOur audit function addresses the needs of business in a way that goes beyond meeting the current statutory obligations. We aim to service our clients by adding to their value chain and helping them meet their business objectives. The annual audit is an op-portunity for an independent expert to objectively assess a client’s business. The results of the audit and overview can allow us to provide our clients with positive recommendations to help them improve internal control systems, efficiency and future profitability.Our audit clients include hun-dreds of local and international companies, large and small, operating in almost all indus-tries. We aim to provide our clients with an effective and efficient service that adds value to their business. TaxationOur comprehensive knowl-edge, combined with the prac-tical experience acquired from years of working on tax laws, allows us to be able to meet all of our clients’ requirements and provide local and interna-tional tax advice. We deal with tax planning in order to take advantage of the tax incen-tives provided by the law. We are continually assessing the changes to the tax legislation in order to provide our clients with the proper advice. Our tax consultants have special-ist knowledge of international tax matters and can provide

Kyriakides, Savvides & Associates Ltd

SPECIAL SUPPLEMENT



COVER STORY

Kyriakides, Savvides & Associates Ltd

CONTACT INFORMATIONKyriakides, Savvides & Associates LtdDirectors: Elias Kyriakides MBS, CPA, Neophytos Savvides BSc (Acc), CPA5, Spatharikou Street,4004 Mesa Geitonia, LimassolP.O Box 56245, 3305 LimassolTel: (+357) 25343477Fax: (+357) 25343484e-mail: [email protected] Website: www.ksapre.com

assistance to business and individuals by developing tax that maximise tax benefits.

Our taxation services include:• Preparation and submission of tax

returns• International tax planning services and

optimal group structures• Application of Double Tax Treaties, etc. AccountingOur firm’s highly-trained staff provide complete accounting services, based on the International Accounting Standards, to local and international companies. Our accounting department can provide day-to-day support in the preparation of the accounting records of any company.

Our accounting services include:• Bookkeeping• VAT/VIES returns

• Payroll services• Management accounts

In addition to preparing the VAT and VIES returns of a company, our specialist team of VAT experts can also advise on the VAT treatment of complex transactions within or outside the European Union.

Business Consulting & Financial ServicesOur aim as financial advisers is to make any business become more successful. We help our clients overcome problem areas and search for alternatives that will add value to their business. Our objective is to help our clients become more profitable, increasing the efficien-cy, economy and effectiveness of their operations.We advise our clients on setting and achieving their short and long-term strategies.

Our main services in this area are:• Strategic planning and development

of business plans and proposals• Development of budgets• Feasibility studies• Pricing and cost reduction policies

From left: George Panayiotides, Neophytos Savvides, Stalo Katsifli, Elias Kyriakides, Neofytos Proteriotis

Pho

to b

y Jo

Mic

hael

ides


WHO WE AREWe strive to offer our clients the value they are looking for, value that is based on the knowledge that our teams draw from 180,000 experts in 158 countries and on experience adapted to local needs. PwC Cyprus focuses on two main areas: Assurance & Advisory Services and Tax & Legal Services. We work closely with our clients. We ask questions. We listen. We learn what they want to do, where they want to go. From all our international knowledge we share with them the piece that is more suitable for them and thus we support them on how to achieve their goals.

In the operation of the world’s capital markets we play an important role and, as business advisors, we help our clients solve complex business problems. We aim to improve their ability to manage risk and improve performance. At the same time we take pride in our

quality services which help improve transparency, trust and consistency of business processes.

Our position is strengthened with our almost 1,000 professionals and our offices throughout Cyprus.

OUR SERVICESSome of our services are:

Assurance & Advisory ServicesOur Financial Assurance Services comprise statutory and regulatory audit services, which include the evaluation of information systems, advisory services for capital market transactions, and accounting and regulatory issues for all types of businesses through specialist industry divisions: Financial Services (FS), Consumer and Industrial Products and Services (CIPS) and Technology, Information, Communications, Entertainment and Media (TICE).

Our Risk Assurance Consulting (RAC) offers expertise on internal audit services, internal controls optimisation, corporate governance and reporting, as well as assurance and advisory services related to security and controls of information technology systems including Enterprise Resource Planning (ERP) systems (e.g. SAP, Oracle, Navision), Project Implementation Assurance (PIA), Computer Assisted Audit Techniques (CAATs), Spreadsheet Integrity and IT Risk Diagnostic and Benchmarking. A particular focus of the team is on supporting the financial services industry on matters related to regulatory compliance, licensing and risk management.Our Performance Improvement Consulting (PIC) offers specialist advisory services on strategy and operational effectiveness, process improvement, cost reduction, people and change and sustainability issues. Our Deals & Corporate Finance

PwCCYPRUS

SPECIAL SUPPLEMENT



COVER STORY

(DCF) provides consulting on M&As, valuations, feasibility studies, transactions support and crisis Management.

Tax & Legal ServicesOur PwC network’s tax and legal services include Global Compliance Services, Direct and Indirect Tax Ser-vices, Services to Small and Medium Enterprises and Legal Services.Global Compliance ServicesOur Global Compliance Services cover the whole spectrum of company administration and corporate statutory compliance services, bookkeeping, accounting and payroll services as well as specialised services such as private client services, advice on the establishment and administration of local and international business companies, collective investment schemes, UCITS, investment firms and trusts.Direct Tax Services Corporate: Advisory Services for tax planning, international tax structuring,

mergers and buyouts and other business issues, tax returns administration, agreement with Tax Authorities and obtaining tax rulings. Personal: Tax planning, completion submission and agreement of tax returns, tax services to expatriates, pensioners and other non-Cypriot individuals.

Indirect Tax Services VAT: Advisory services for VAT, VAT recovery and VAT minimisation and tax compliance (administration of VAT returns, communication with VAT authorities, agreement of disputed assessments, etc).

Services to Small and Medium Enterprises (SME)The Services to Small and Medium Enterprises are addressed to individuals, small- and medium- sized enterprises with local activity and cover the whole spectrum of accounting, tax, VAT, family business and financial structuring and statutory compliance services.

Legal ServicesThe legal firm, a full member of the PwC international network, offers legal services that cover the whole spectrum of corporate and business law, including advising and representing clients in M&A transactions, re-organisations, European Union law and Competition law, setting up and regulating private companies, setting up joint ventures and other forms of businesses and carrying out legal due diligence.

CONTACT INFORMATIONPwC CyprusJulia House, 3 Themistocles Dervis Street, CY-1066 NicosiaP O Box 21612, CY-1591 NicosiaTel: (+357) 22555000Fax: (+357) 22555001Website: www.pwc.com.cy

The Management Board of PwCFrom left: Liakos M Theodorou, Evgenios C Evgeniou (CEO), Costas L MavrocordatosStanding from left: Theo C Parperis, Christos M Themistocleous, Philippos C Soseilos, Angelos M Loizou

Pho

to b

y Jo

Mic

hael

ides


Successful Connections32,000 minds, 700 offices, 100 countries, 1 network.

Connect to www.rsmi.com.cy and connect with success.

RSM Stylianou is a member of RSM - a leading audit, tax and advisory network with 32,000 staff and 700 offices in over 100 countries throughout the world.

Our membership of RSM allows clients to be expertly connected wherever their business takes them.

RSM Stylianou LtdKennedy Business Center, 12-14, Kennedy Avenue, 1087 Nicosia, CyprusT +357 22 751140 F +357 22 751145 E [email protected] · ATHENS · THESSALONIKI · TIRANA

RSM Stylianou is a member of the RSM network. Each member of the RSM network is an independent accounting and advisory firm each of which practices in its own right. The RSM network is not itself a separate legal entity of any description in any jurisdiction. The RSM network is administered by RSM International Limited, a company registered in England and Wales (company number 4040598) whose registered office is at 11 Old Jewry, London EC2R 8DU. The brand and trademark RSM and other intellectual property rights used by members of the network are owned by RSM International Association, an association governed by article 60 et seq of the Civil Code of Switzerland whose seat is in Zug. © RSM International Association, 2013

FINAL_A4 Adverts_RSMStylianou_208x280_5mm.indd 1 2/21/2013 11:20:06 AM

WHO WE ARERSM Stylianou 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 connected to our ability to affect the development and future of our clients in a positive way, something that is based on our experience, our specialisation and the high level of our services.

The RSM brand is a promise to clients that we will listen and endeavour to understand their needs and determine how we can add value for their future success.

The firm has long experience in some of the most important business sectors and industries such as shipping, raw materials, public sector, energy, commerce, food and beverages, technology and telecoms.

OUR VALUESTo ensure that you always receive the highest quality service, we aim to uphold the following principles:

• Excellence comes as standard Rigorous quality control procedures ensure the highest possible standards across the network.• Trust is assured Short lines of communication mean you will always have swift access to partner level advice.• Quality is paramount Around the world, only member firms that match our standards of quality, integrity and professionalism are selected.• Teamwork is second nature RSM partners know each other very well, so we can get things done quickly for our clients.• Agility is instinctive Clients shouldn’t see the work behind the scenes, just the results, regardless of the number of countries or disciplines involved.• Stability is key Clients tend to stay with RSM member firms for

the long term. They appreciate our understanding of their business and dedication to making things happen.

OUR PEOPLEA significant part of RSM Stylianou’s success is directly related to the high quality of its services along with the specialiSation of its key people. RSM Stylianou consists of well-trained executives with a high level of specialiSation in their sectors and extensive experience in the field of economic and business activity. RSM Stylianou also has offices in Athens, Thessaloniki and Tirana.

Athos Stylianou is our Managing Partner. He 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 – England.

He is a past Chairman of the British Hellenic Chamber of Commerce, a past President of the Association of Certified Accountants and Auditors of Greece and a past Chairman of the Round Table Greece. Before setting up our firm, he was the Managing Partner of Deloitte Haskins & Sells and Ernst & Whinney in Athens.

OUR SERVICES RSM Stylianou combines the benefits of the international network of RSM International, together with the in-depth knowledge and experience of the local economic and financial business environment. Our people have the experience and the know-how to be able to provide the full spectrum of professional

services according to our clients’ needs.

The fields of specialisation of RSM Stylianou are the following: • Audit and Assurance • Risk Management Services • Transaction Services • Human Capital Services • Corporate Finance • Advisory Services • Accounting and Tax Services

RSM INTERNATIONAL: LEAD SPONSOR OF THE EUROPEAN BUSINESS AWARDSRSM has become the lead sponsor for the European Business Awards to April 2014. This is the sixth year in which RSM has supported the Awards programme but the first time the network has chosen to become lead sponsor and spearhead the prestigious European awards.

The European Business Awards have been spotlighting the most innovative and successful European businesses since 2007. Entrants are judged on three main criteria: success, innovation and ethics. Awards are presented in ten categories, including the RSM Entrepreneur of the Year Award. As lead sponsor, RSM member firms are able to nominate the companies that enter for the Awards, as it has done in the past six years. Entries for the 2013-14 Awards programme are open until 21 June 2013. Companies interested in entering for the awards can contact us at [email protected]

CONTACT INFORMATIONRSM Stylianou LtdKennedy Business Center 12-14, Kennedy Avenue, 1087 NicosiaTel: (+357) 22751140Fax: (+357) 22751145 e-mail: [email protected]: www.rsmi.com.cy

Member firm of RSM International, one of the largest networks of independent accounting and consulting firms worldwide. RSM has over 700 offices in 100 countries around the world, with more than 32,500 people on hand to serve clients needs.

RSM STYLIANOU

SPECIAL SUPPLEMENT



COVER STORY

Successful Connections32,000 minds, 700 offices, 100 countries, 1 network.

Connect to www.rsmi.com.cy and connect with success.

RSM Stylianou is a member of RSM - a leading audit, tax and advisory network with 32,000 staff and 700 offices in over 100 countries throughout the world.

Our membership of RSM allows clients to be expertly connected wherever their business takes them.

RSM Stylianou LtdKennedy Business Center, 12-14, Kennedy Avenue, 1087 Nicosia, CyprusT +357 22 751140 F +357 22 751145 E [email protected] · ATHENS · THESSALONIKI · TIRANA

RSM Stylianou is a member of the RSM network. Each member of the RSM network is an independent accounting and advisory firm each of which practices in its own right. The RSM network is not itself a separate legal entity of any description in any jurisdiction. The RSM network is administered by RSM International Limited, a company registered in England and Wales (company number 4040598) whose registered office is at 11 Old Jewry, London EC2R 8DU. The brand and trademark RSM and other intellectual property rights used by members of the network are owned by RSM International Association, an association governed by article 60 et seq of the Civil Code of Switzerland whose seat is in Zug. © RSM International Association, 2013

FINAL_A4 Adverts_RSMStylianou_208x280_5mm.indd 1 2/21/2013 11:20:06 AMsupplement_audit.indd 55 07/03/2013 11:58

OPINION

We shall emerge from the crisis as a much more solid and structured economy, with more fiscal discipline and a healthier banking sector

What Lies Ahead?Expectations are high after the Presidential Elections

info: George Theocharides is an Associate Professor of Finance at the Cyprus International Institute of Management (CIIM). He is also the Director of the MSc in Finance & Banking.

At last, the elections are over and the new Cypriot President, Nicos Ana-stasiades, has taken office and formed a government. Expectations are high and there seems to be a renewed op-

timism among citizens that a new government, with fresh and innovative ideas, will resolve sooner rather than later the numerous problems that the country faces. Psychology plays a major role in shaping the future and the first signs are that this has improved, both inside the country and also in the way that foreign officials and investors view Cyprus.However, massive problems remain and the new government has a very difficult task to accomplish. First, there has to be a final agreement and signing of the memorandum, by the end of this month at the latest. The reason is that it will take some time for the funds agreed by the Troika to arrive and we all know that on June 3 €1.4 billion worth of gov-ernment bonds will have to be repaid. Thus, June 3 can be considered our own “fiscal cliff” and Cyprus needs to make sure by that time that the funds are available to honour its obligations, otherwise that would imply default with all of the negative conse-quences that such a development entails. Before arriving at a final agreement, a great deal of work still needs to be done. First, the govern-ment may need to secure a short-term loan, either from the Europeans or a third party, in order to have enough funds for its immediate needs before receiving money from Troika. The government also needs to prove to the other members of the Europen Union that it means business by signing the Memo-randum as well as taking all the necessary steps to accomplish the reforms and fiscal/banking adjust-ments under the agreement. Cyprus also needs to convince its European partners that they are wrongly and unfairly accusing the island of being a tax haven or a money-laundering location. Unfortunately, the prolonged delay reaching agreement with the Troika meant that we were caught in the middle of an election campaign in Germany. One outcome has been that the German government and politicians have been extremely harsh on Cyprus in an effort to prove that they are not willing to use their taxpayers’ money for bailouts of “corrupt” countries. Furthermore, measures need to be taken that will

make the country’s debt sustainable, so that an end us put to this damaging discussion about haircuts either on government debt holders, or on uninsured depositors in the banking system. First, a meaningful haircut on government debt holders (which would substantially lower the debt level) is extremely dif-ficult to achieve given the fact that only a small por-tion of government debt is owned by foreign private investors (less than 21% of GDP). Given the fact that the debt level in the near future could exceed 140% of GDP, such a haircut would not make a huge difference. Second, a haircut on uninsured depositors (i.e. deposits above the level of €100,000 that are guaranteed by the Central Bank) could eas-ily cause bank runs and the complete destruction of the financial and banking sector. The government therefore needs to find alternative ways to make the public debt sustainable, so as to avoid the privatisa-tion of profitable state-owned enterprises which is strongly supported by the Troika. Over and above the much-anticipated recapitalisation of the local banks, the government needs to adopt anti-austerity measures that will promote growth and help solve what seems to be the country’s biggest problem – unemployment – by creating new jobs. These measures could be incentives for the swift recovery of the crucial construction/lreal estate sector, the utilisation of government land, the development of technological parks, the creation of casinos, and the drastic reduction of bureaucracy in the civil service, among others. Obviously, the prospects relating to the recent finds of natural gas in Cyprus’ Exclusive Economic Zone are one reason to be optimistic about the country’s future but it will take time to see the benefits and start earning revenues that will substantially lower the level of public debt.Overall, although many obstacles lie ahead, I am optimistic that, with the right and carefully-thought-out moves, we can get soon the economy back on track. I would even say that, in the medium to long run, the changes that are being forced upon us by the Troika and the Memorandum will actually make our economy more resilient. By implementing the provisions of the Memorandum, we shall emerge from the crisis as a much more solid and structured economy, with more fiscal discipline and a healthier banking sector.

By George Theocharides


opinion_ theoharides.indd 56 07/03/2013 11:53

PROFESSIONAL SERVICES

Antonis Vidakis, who leads the Transaction Advisory Services (TAS) team at Ernst & Young in Cypru, has more than 12 years of experience around corpo-rate finance with Ernst &

Young and other ‘Big Four’ Audit firms (PWC, KPMG Athens/London) on a wide range of projects related to valuations, fairness opinions, business plans, restructuring and transaction support. He recently spoke to Gold on a variety of issues, ranging from his firm’s TAS services to the boost that the new energy sector will eventu-ally give to the professional services sector and the broader Cyprus economy.

Gold: What exactly are the relatively new Transaction Advisory Services that Ernst & Young is offering?Antonis Vidakis: Our Transaction Advisory Services (TAS) team works with organisations to help them take better and more informed deci-sions about how they strategically manage capital transactions in a changing economic environ-

ment. We work with our clients to help them understand the issues, challenges and

opportunities around their Capital Agenda in the key four areas of preserving, opti-mising, raising and investing capital. We offer a unique range of services around valuations and business modelling, operational and financial restructuring, transaction support, transaction tax, NOMAD Services, M&A advisory and project finance.Gold: Are there specific areas you can point to as being those where Ernst & Young and its TAS stands out from its main competitors?A.V.: I think our competitive advantage lies in the fact that we have an integrated

growthNATURAL GAS WILL PLAY A KEY ROLEBy John Vickers, Photo by Jo Michaelides

back toroad

the long

Antonis Vidakis

main_story5_vidakis.indd 58 07/03/2013 11:44

XXXX

team of over 50 professionals based in Ath-ens and Nicosia. We have the largest and most experienced pool of experts that can offer these specialised advisory services at the highest quality and competitive pricing. Moreover, we are part of a worldwide team of around 9,000 TAS professionals who can bring together a unique combination of skills, insight and experience and be readily avail-able from day one if they are needed to work with us on local projects. Another important differentiator is the offering of business mod-elling services as part of our portfolio of TAS services. We are a world leader in this field with dedicated professionals in 60 countries, including Cyprus. This month, those Cypriot companies that accept our invitation will have a unique opportunity to attend a free work-shop on efficient decision-making through business modelling, with case studies and practical applications across different sectors.

Gold: You recently co-authored two ar-ticles in Gold on investing in distressed assets. Given the current economic climate in Cyprus, do you think this is something that you will be seeing more of during 2013?A.V.: I believe so, yes. As mentioned in the articles, Cyprus is already undergoing a con-traction in economic activity and things are expected to deteriorate. The combination of a maturing public and private “wall of debt”, a deepening banking sector crisis, a lack of li-quidity and austerity measures underway cre-ates a toxic cocktail which will eventually lead to a deleveraging process for banks and corpo-rates. Inevitably, a lot of these assets will have to be sold under distressed terms. So for some players – mainly foreign – local distressed asset investing may represent a powerful op-portunity for growth and higher returns.

Gold: How have the local economic and banking crises affected Ernst & Young?A.V.: I think that in general we will start to see the full effects of the crisis in the economy

after the Memorandum of Understanding with the Troika is finally signed and austerity measures spill over into the economy. How-ever, our experience from the Greek market has shown that, at least for advisory services, while there will be an ongoing pressure on fees by clients or a lack of demand for certain services but there will definitely be a need for other services like operational and financial restructuring, optimisation of working capi-tal, or business modelling for short-term cash flow planning. Our large-scale bank restruc-turing projects in Greece and Cyprus fall into this category.

Gold: Are you optimistic that the Cyprus economy can return to growth within a relatively short time?A.V.: As you know, Cyprus’s bailout, while much smaller compared to those of Ireland, Portugal and Greece on an absolute basis, has a size relative to the country’s GDP that could increase debt to levels that are considered “unsustainable” by the IMF and the German government. Based on the current discus-sions, and without any relief provisions, the bailout would stand at circa €17 billion. This would increase the country’s debt to GDP ratio to 140% by 2015 (the end of the three-year programme) and it would make it the highest in the eurozone apart from Greece. I think that the bet that Cyprus will return to growth soon is a difficult one to win. The only catalyst for growth in the medium- to long-term will be the speed at which Cyprus makes the most efficient use of its natural gas resources without adding to the huge burden of public debt.

Gold: Are there any specific proposals that you would make in order to improve the island’s reputation and attract more for-eign investments? A.V.: Cyprus has recently become a target of caustic criticism due to the delay in signing the MoU with the Troika and its handling of the anti-money laundering issue and this is damaging the reputation of the island. Cy-prus needs to work more actively to integrate further into the EU and to change the per-ception that it is a tax haven where complex entity structures are thriving. We must prove to the global community that we are now un-dergoing a process of reshaping the economy through structural reforms; that we are fixing our budget and focusing on raising competi-tiveness while, at the same time, retaining the high quality of our services; and that we will complete the banking sector clean-up and re-structuring it needs to become a viable model. Finally we need to promote a concrete, clearly planned and transparent process that will lead


to the best possible production sharing and project development agreements with inter-national groups for the use of our natural gas resources.

Gold: How do you view the future of the professional services sector in Cyprus and the broader aim of the island to become a competitive jurisdiction internationally?A.V.: Over the last ten years, the professional services sector has contributed the most to the country’s GDP growth. During this peri-od, expertise in financial, corporate, fiduciary and tax advisory services has evolved and, together with the common law system, has attracted the registration of a considerable number of new entities. However the ability to evolve further and innovate will become imperative as the way business has been done over the past years is changing quickly and radically. The sector needs to adopt and adapt to new challenges ahead and close the gap with competitor countries such as Malta, Ireland or Luxembourg. To this end, the list of suggestions is a long one which includes the modernisation of the tax system, the leveraging of technology and Internet use and so on. Above all I would highlight the opportunity that the professional services sector has been given to build up capacity over the next two to three years in the energy sector and to welcome new players that will diversify the current overdependence on one foreign market (Russian clients). The energy sector is a new economic sector that will re-shape the landscape of the Cyprus economy. This opportunity, arising not only from the exploitation of gas resources but also from renewable energy sources (RES), will bring in sophisticated players from several coun-tries with a need for high-quality services. The professional services sector needs to strengthen and be prepared to serve those needs. This will certainly give a boost to the island to become a more competitive juris-diction internationally.

The bet that Cyprus will return to growth soon is a difficult one to win

The energy sector will reshape the landscape of the Cyprus economy

main_story5_vidakis.indd 59 07/03/2013 11:44

DEBT


On June 3, 2013, a €1.4 billion Eurobond issued by the Cyprus Gov-ernment has to be repaid.

By that date, the island will have to have secured – one way or another – the neces-sary funds. Bearing in mind the examples of Ireland and Portugal, whose economies were bailed out by EU and ECB funds, one might be forgiven for saying “So what’s the problem for Cyprus?” The new government is, after all, expected to finalise a Memo-randum of Understanding with the Troika shortly.

But things are not quite as simple as that. While the island’s debt-to-GDP ratio cur-rently stands at around 84% (the same as the present EU average), the net cost of the bailout could push it up to around 135% or 140% of GDP, a figure which, accord-ing to EU and IMF officials, is not sustain-able. And this is where the main problem arises.

Over the past weeks, analysts have writ-ten papers, rating agencies have issued warnings and a number of respectable in-stitutions have published announcements. Many – though not all of them – have

come to the same conclusion: very few op-tions are open. Imposing losses on Cypriot bond holders or unsecured depositors is a move that would reduce the debt burden and potentially make it sustainable but it is not recommended for a number of reasons re-lated to the survival of Cyprus as an interna-tional financial centre, contagion risks in the eurozone as well as the view that “a material shift in public policy on bank bailouts would be credit negative for European banks”, as Moody’s noted in a recent report.

Lee Buchheit of Clearly, Gottlieb, Steen and Hamilton LLB, is the international legal expert from the US who crafted the restructuring deal that cut Greece’s debt by €100 billion and inflicted huge losses on bondholders in March 2012. Buchheit says that the Greek case, despite the repeated claims of European leaders, is neither unique nor exceptional. “What was done for Greece was indeed unique and exceptional and it will stay so until it is done again,” he says with a cynical smile. “In order to get the debt

THE MESSAGE TO CREDITORS IS THAT, IF THERE IS A FUTURE DEBT PROBLEM IN ANY OF THE EURO AREA COUNTRIES, THEY WILL RESTRUCTURE ITS DEBT

The King of Sovereign Debt Restructuring

main_story6_Bunchheit.indd 60 07/03/2013 11:45


relief that the IMF was saying they needed, they really had to impose pretty severe terms. In the end it was a 53.5% nominal haircut and a 79% net present value haircut. That’s pretty severe.” He adds that “If you turned the clock back to 2010 and restructured everybody upfront, they wouldn’t have had to ask for as much debt relief from individual creditors as they did because they would have spread out the burden over all.”

So what are the lessons learned from the case of Greece? One, says Buchheit, is that

if you do not buy the existing debt back at par and thereby force the existing holders to stretch it out, then one of two things must be true in the future: either the optimistic view will prove to be correct and no haircut will be necessary or the pessimistic view will prove to be correct and a debt restructuring will be necessary. The difference is that, in this case, private creditors would be the ones to bear it, not the taxpayers.

So, what should one make of all the cata-strophic scenarios set out in academic papers

and analyses that strongly recommend avoiding any kind of debt restructuring in the future? Another debt restructuring in the euro area, analysts say, would have a detrimental contagion effect on countries like Italy and Spain which are practically on the edge of the bailout cliff. Lee Buchheit disagrees with them. “I think the conse-quences are being overstated. The eurozone countries are about to use their taxpayers’ money to try and stabilize the situation. It’s perfectly legitimate for them to say, ‘I don’t want to pour my taxpayers’ money into your country and end up to paying holdout creditors’. The alternative would be to say to the hedge fund which bought the bond at 30 cents of the euro, ‘We will pay you in full because we don’t want to send the message that we are not credible debtors’. At that point the investor says, ‘Let me get this straight: I buy a bond of country X and I can buy it for 30 cents of the euro. When it matures, if country X doesn’t re-pay me, the eurozone will. I will buy that bond! Why should I buy a German bond that would pay me 75 basis points when I can buy a bond of country X at a yield of 14%? As long as the debtors are the same I will buy the 14% bond of country X, even if it may not be as stable and prosperous as Germany!’” Bucheit reminds me that the

The King of Sovereign Debt Restructuring

FOR 30 YEARS, PRESIDENTS AND FINANCE MINISTERS HAVE TURNED TO US LEGAL EXPERT LEE BUCHHEIT TO HELP CALL OFF CREDITORS WHEN THEIR GOVERNMENTS HAVE RUN OUT OF MONEY. THE MASTERMIND BEHIND GREECE’S DEBT RESTRUCTURING HAS BEEN DEALING WITH SOVEREIGN DEBT PROBLEMS OF ONE KIND OR ANOTHER FOR SO LONG THAT “IT’S SORT OF BECOME MY LIFE STORY,” HE TELLS GOLD.

By Kyproula Papachristodoulou

THE RELATIVE SMALLNESS

OF CYPRUS IN THE OVERALL

SCHEME OF THINGS CAN BE SEEN AS EITHER GOOD OR BAD



DEBT

countries of the euro area have mandated the inclusion of an aggregated collective action clause (CAC) in every eurozone sovereign bond issued after January 1, 2013. Collective action clauses are a supportive tool to debt restructuring. “They have clearly sent the message to creditors that, if there is a future debt problem in any of the euro area coun-tries, they will restructure its debt,” he ex-plains. “For bonds that mature in the future, the Europeans have already philosophically embraced debt restructuring. CACs say that if there is a super majority of affected creditors who decide that the restructuring is necessary, this majority should be able to bind any mi-nority that takes a different view,” Buchheit notes, adding, “Otherwise, if the minority are allowed to recover the full amount of their claims, the money will have to come from the people who have been restructured.”

So is he suggesting that investors should assume responsibility for buying sovereign bonds? “Exactly! Every investor who buys a corporate bond or a loan knows that if the company gets into trouble he might find himself in Chapter 11 or some equivalent bankruptcy regime. That has not stopped investors from buying corporate bonds. It is a fantasy to think that an investor in sovereign debt would run away from all debt instru-ments because he might be brought into a debt restructuring against his will.”

Public or official sector involvement (OSI) in sovereign debt restructurings is currently considered anathema, as eurozone leaders’ statements and the facts have shown. Will there be a time when the official sector will get involved? “I do not think that it is pos-sible before the German election this year,” says Buchheit. “Ask me the same question the same day next year and I will answer ‘yes’.” For Buchheit, OSI is the almost inevitable consequence of the policy that Europeans have chosen to implement. “They chose to pay out the existing creditors in full. In doing so, they took the risk that if the country even-tually needed a debt restructuring in order to achieve a sustainable debt profile, that restruc-turing was going to affect them. Why they could not see that at the beginning I don’t know but they certainly have seen it now! The moment they perceived that as a threat in Greece, they instantly switched to saying, ‘Bring the private creditors in to save us from doing something’. In fact there has already

been OSI. It hasn’t involved a haircut but they have extended for a very long time, they have cut the interest rate all the way down. They already done everything they could apart from haircutting the principal. So OSI has already come. This time next year they may decide to extend the maturities until the end of time. That is something which will not change the debt-to-GDP percentage of a country but it will certainly give the country decades in which it can borrow from the private market without worrying about the official sector repayments.”

According to Lee Buchheit, the world’s debtor countries have five options at their disposal to deal with their debts. One of them has been adopted by Spain and Italy which have announced and implemented voluntary fiscal adjustment programmes. “Their aim, of course, is to restore their fis-cal situation and convince the markets to continue lending them at reasonable interest rates,” he explains.

Option two is to give yields a “massage”, in other words to have active official state intervention or ECB purchases of bonds to keep market rates low. Alternatively the state could offer asset-backed bonds, allowing them to be accepted by the market but for these, Buchheit points out, “the track record is not considered good”.

Buchheit’s third option entails a full bail-out in the case where the debtor state is una-ble to pay its maturing loans (as in the case of Cyprus). Germany and other eurozone coun-tries (i.e. their citizens) pay the cost through loans. There is, though, a fourth option: debt restructuring which might include a morato-rium on payments, extending the repayment period or reducing the interest rates. In such a case, the lenders pay part of the cost either in terms of current prices or through a loss of net present value. The fifth and final option is a Greek-style restructuring that includes a haircut loss for lenders.

IT IS A FANTASY TO THINK THAT AN INVESTOR IN SOVEREIGN DEBT

WOULD RUN AWAY FROM ALL DEBT INSTRUMENTS BECAUSE HE

MIGHT BE BROUGHT INTO A DEBT RESTRUCTURING AGAINST HIS WILL

What is Lee Buchheit’s prediction for Cyprus? He is not entirely sure.

“Cyprus has a maturity of €1.4 billion due in June, which is roughly equal to 8.5% of the country’s GDP. I don’t think Cy-prus has the money to pay that on its own and it does not enjoy access to the markets that will allow it to borrow the money. So, one of two things must happen,” he says. “Either the official sector gives Cyprus the money to repay its loans or it doesn’t. If it doesn’t, that’s just another word for restruc-turing. If it does, it puts itself on the path that started in Greece but was reconsidered. We will have to wait and see. I honestly don’t know what choice they are going to make. The relative smallness of Cyprus in the overall scheme of things can be seen as either good or bad. You can argue that the amount of money necessary to bail out Cyprus is so small that even if the official sector ends up taking all the Cypriot debt stock on its own shoulders and then has to restructure it, it’s not that much money. The other side of the argument says that if you want to send the message that the Europeans are no longer in the business of monetizing debt instruments and paying back existing creditors who have made a bad decision, what better place to do it than in a small country?”

Doesn’t the fact that a large part of the Cypriot debt is owned by Cypriot institu-tions place a serious obstacle in the way of any kind of debt restructuring or haircut? “That is a complication,” Buchheit ac-knowledges.

”Everyone knows that the banking sector will need to be recapitalized. So, if you were to try to restructure Cypriot sovereign debt in a way that caused losses to the holders, it’s another way of saying that the amount the Republic will save in debt services will have to be paid back in the form of recapi-talization. This is a crucial point.”



The universe of online trad-ing platforms began in the 1990s and quickly grew in popularity thanks to its convenient accessibility for retail traders. Nearly two

decades later, we have a multitude of trading avenues due to the availability of multiple platforms as well as thousands of financial in-struments and trading mechanisms. They have become an integral part of the global economy and financial institutions, both large and small, design their brokerage business around them. As technology advances, new online trading

technologies are emerging which have the potential to revolutionize the industry. One of the most recent and exciting products is known as Binary Trading – a clear evolution from the approach represented by traditional online trading platforms.

BINARY TRADING - A DESIGN HYBRID FROM FINANCIERS AND GAMERSWhat makes the Binary Trading market so innovative is its DNA, which is the progeny of professionals of two different fields of math-ematics – financial trading and gaming theory. The result is an innovative and simplified trading platform with traits suitable for users of both industries. Experts agree that it is the single biggest breakthrough in online trading in a decade and the new possibilities opening up are almost endless. Yet, as with all new products, the market is the ultimate decider

of success and Binary Trading is currently at a critical point in its lifecycle whereby it will either become the industry standard or only a short-lived fad.

Some experts estimate that Binary Trading could become as popular among retail end users as the Forex market was throughout the 1990s. I believe that this new platform could become as successful as the Forex market – es-pecially as end users have come to understand that trading simplicity is the key requirement. The simpler the trading experience for financial asset classes, the better, not only for existing traders but also for the next generation of new

traders who lack understanding and confidence. Binary Trading will attract an additional large market segment of its end users from the gam-ing industry, who are attracted to the most straightforward gamification elements of the platform. It is interesting to note that 2012 was a bad year for Forex in Japan and Binary Trad-ing provided a comfortable balancing cushion.

WHAT IS BINARY TRADING?A Binary contract is a financial instrument that offers end users contracts in various financial asset classes such as Commodities, Currencies, Stocks and Indices. The contracts present a predetermined fixed return at the beginning of the contract. Therefore the contracts are binary in nature because they offer only two pos-sible outcomes, providing both operators and end users with reduced risk when compared with other online trading instruments. In ad-dition, there is no leverage available, making

it a considerably safer financial instrument. Binary Trading has a variety of contracts avail-able: High/Low, One Touch, Boundary and Touch/No Touch. One of the interesting ele-ments is the expiration of the contracts, from 60 seconds and upwards.

BINARY TRADING ORIGINSIn 2003, “Binary Betting” was first introduced in the UK and in 2005 it fell under the regula-tion of the Gambling Commission as it was considered to be fixed odds betting. In 2007, the Options Clearing Cooperation (OCC) ap-

proached the Securities Exchange Commission (SEC) to allow the inclusion of Binary Trading on exchanges. In 2008, following SEC ap-proval, the Chicago Board Options Exchange (CBOE), the US Commodity Futures Trad-ing Commission (CFTC) and the American Stock Exchange (AMEX, known today as NYSE Euronext) introduced Binary Trading officially. Between 2007 and 2008, Binary Trading Technologies started to emerge, iden-tifying the future potential of this emerging financial sector. By 2009 the North American Derivatives Exchange (NADEX) launched a basket of Binary Trading vehicles, marking the start of a new era in which Binary Trading was being considered as a financial instrument by professionals. In 2012, the European Commis-sion (EC) defined Binary Trading as a finan-cial instrument under its directive.

Over the past two years, Binary Trading has experienced a rapid growth in popularity,

EVOLUTION OF A NEW MARKET

EXPERTS AGREE THAT IT IS THE SINGLE BIGGEST BREAKTHROUGH IN ONLINE TRADING IN A DECADE

DOES BINARY TRADING REPRESENT A FUTURE INDUSTRY STANDARD OR IS IT JUST ANOTHER SHORT-LIVED FAD? By Shoham Cohen

main_story7_binary.indd 64 07/03/2013 11:47


marked by a successful development phase and current introductory phase into the mar-ket. Additional technology firms specializing in Binary Trading have come into being and to date the European Union is the lead-ing player of the product, followed by Asia, North America and South America.

BINARY TRADING REGULATIONAll the available statistics show that Binary Trading is growing in popularity and more technology firms and operators are partici-pating in this emerging sector. Naturally, regulators are taking notice and looking at regulating these instruments. Binary Trading is primarily regulated as a financial instru-ment by major regulators although in some jurisdictions it is still viewed as a gaming instrument.

Following the EC’s approval of Binary Trading in 2012, the Cyprus Securities and Exchange Commission (CySEC) became one of the first EU members to regulate Binary Trading as a financial instrument, as defined by the Markets in Financial Instru-ments Directive (MiFID).

It is anticipated that during 2013, ad-ditional EU regulators will be looking to regulate Binary Trading (such CONSOB in Italy). It is notable that due to the passport-ing mechanism under MiFID, brokers that offer Binary Trading will be able to offer this product legally throughout the eurozone. In Asia, the Japanese Financial Services Agency (JFSA) will be announcing a new set of regu-lations relating to Binary Trading in the first quarter of this year.

At this very interesting point in time, now that Binary Trading has gone through more than five years of development and introductory phases, it is time to study whether or not this market is ready to take off and enter the mainstream. Will the bold move of a relatively small regulator such as CySEC (and the MFSA) to become the first to regulate Binary Trading as a financial product represent the beginning of a new era for this market? Was CySEC able to identify yet another potential market parallel to the triumphant Forex market? I certainly believe so. As mentioned earlier, I recognise some commonalities between the evolution of the retail Forex market and Binary Trading. The retail Forex market is now in its growth phase while the Binary Trading market is still in its introductory phase.

One could see how Cyprus, taking a stra-tegic decision to position itself as a reputable Forex hub back in 2006, is now looking to add a new prominent trading theme under its regime. It is the right move for the island and a natural step, after successfully becom-

ing a Financial Forex hub with over 60 regulated FX firms, to leverage that position and to create a Binary Trading hub. Since May 2012, CySEC has reportedly received more than 30 applications for Binary Trading licenses.

FINANCIAL INSTRUMENT OR GAMING INSTRUMENT?There is still an ongoing debate over whether Binary Trading should be considered as a fi-nancial instrument or a gaming instrument. In Japan, for example, the JFSA is struggling to decide whether some of the applications of this unconventional technology fall more under gaming than financials. The way the JFSA de-cides to regulate or de-regulate this market will determine the future of this industry in Japan and, perhaps, in other jurisdictions as well.

The sad truth is that Binary Trading inher-ited an historic misinterpretation and confu-sion with an industry that started in 2003 under the name of Binary Betting in the UK and fell under the control of the Gambling Commission. Moreover, the rather short-term contracts provided, such as 60 seconds, and/or five minutes, are perceived and interpreted as non-financial instruments, despite the clear fact that Binary Trading is based purely on financial instruments, real-time market prices, statistics and financial modules. Interestingly, the technology firms behind Binary Trading platforms and solutions are able to approach financial firms as well as online gaming firms with their products.

It could be suggested that the more com-monly-used name “Binary Options” is also misleading and is one of the causes for this confusion. It is important to note that Binary “Options” are not similar to traditional Op-tions. Consequently, it might be more proper to consider moving from the name “Binary Options” to “Binary Trading” which may make it easier to more accurately define.

BINARY TRADING IS A FINANCIAL INSTRUMENTAlthough Binary Trading has gaming char-acteristics, the EC has made it very clear that Binary Trading is a type of a derivative contract settled in cash. Consequently, all 27 EU mem-bers are required to create common and proper grounds in regulating Binary Trading under their jurisdictions; and all members are able to offer Binary Trading as a financial instrument.

CySEC, for example, has decided to incor-porate the highest and most restrictive license for that purpose, providing stringent measures to protect end users on the one hand while promoting a fair, transparent and protective trading experience through the operators on the other.

BINARY TRADING

Info: Shoham Cohen is an adviser on online trading technologies and solutions, with over a decade of experience in the financial industry, and nearly 15 years of international business experience. He is highly familiar with regulations relating to the Binary Trading Industry and is an advisor on European and Asian regulatory issues. [email protected]

WAS CYSEC ABLE TO IDENTIFY

YET ANOTHER POTENTIAL

MARKET PARALLEL TO THE TRIUMPHANT FOREX MARKET?

I CERTAINLY BELIEVE SO

Another important result of the EC’s deci-sion is that should a licensed operator of Bina-ry Trading passport its Binary Trading license to the UK, as the UK falls under the jurisdic-tion of the EC, then the FSA in the UK will have to cater for this and not the Gambling Commission, as the FSA is the competent au-thority to deal with such an application. There is no real nor solid element within Binary Trading that would prevent it from falling under the jurisdiction of the FSA.

THE FUTUREUndoubtedly, regulators face a lengthy process in order to create a proper regulatory environ-ment for Binary Trading. I feel that more regulations will be proposed and, overall, there will be more knowledge and competence to further and more accurately regulate this mar-ket. However, this should be done through an understanding and an appreciation of the fi-nancial applications derived. I believe it would be a poor decision to restrict it and to limit the type of tools and contracts available.

As Binary Trading continues to grow glob-ally as an emerging financial instrument and the user base grows, regulators are looking to fasten the regulatory belt around this market. I strongly believe that Binary Trading is only at the very beginning of its life and with the right education, understanding, participation and regulatory environment, Binary Trading will become a service offered by most brokerage houses globally.


BINARY TRADING

BANC DE BINARY, THE WORLD’S FASTEST-GROWING ONLINE BINARY OPTIONS TRADING BROKERAGE, RECENTLY LAUNCHED IN CYPRUS WITH A BRAND-NEW OFFICE IN LIMASSOL. THE CYPRUS OFFICE WILL SERVE AS THE COMPANY’S EUROPEAN AND MIDDLE-EASTERN HEADQUARTERS AND REPRESENTS A MULTI-MILLION EURO INVESTMENT IN THE ISLAND.BANC DE BINARY FOUNDER AND CEO OREN LAURENT SPOKE TO GOLD ABOUT HOW HE STARTED THE COMPANY, HIS PLANS FOR CYPRUS, HIS OPTIMISTIC VIEW OF THE ISLAND’S FUTURE AND WHY HE DOESN’T HAVE HIS OWN DESK IN ANY OF HIS COMPANY OFFICES. By John Vickers. Photograph by Jo Michaelides

How many com-pany offices do you walk into and right there, in front of you, is the CEO sitting at his desk? That’s

what might well happen to you when you go to meet Oren Laurent, founder and CEO of Banc De Binary, though he will doubtless point out that the office isn’t his. Laurent, a bright, funny, charming, hyperactive Ameri-can doesn’t actually have an office of his own in the Limassol building that houses his company’s European headquarters, nor does he have one at any of Banc De Binary’s other addresses (including one on Wall Street, where he started his career as a retail trader).“I don’t really believe in myself as a proper CEO,” he says with remarkable candour. “I’m very eccentric, I walk around, I yell, I shout, I move my hands, I’m not interested in sitting alone on the top floor. I don’t need an office because I have to be out and about, moving all the time. I’m not able to sit in an office”. So when he needs to be at the computer, it’s a matter of finding the nearest one that no-one else is using. Laurent, 28, is acutely

aware of his own talents and limitations: “I have my creativity, which drives me forward and will drive the company forward but in the end, a company needs management and I learnt very quickly to make sure that I have very good people around me, people who are much more intelligent than I am. If I had to manage the 230 people who are currently employed in our four offices, I would drive everybody crazy and they would receive their salaries either two months in advance or two months late because the organisation simply wouldn’t exist!”For someone whose personnel numbers have soared from four to 230 in the space of 30 months, Oren Laurent is remarkably mod-est, almost blasé, about his achievements. But over the past decade he has seen much more – and made more money – than most. “I started off as a retail trader as everybody on Wall Street does,“he recalls. “Back then, in 2004-2005, Wall Street was boom-ing and people like me would graduate in economics and go to work in some small, unknown firm and suddenly we were taking home huge cheques and being paid amazing commissions. You know how young guys are – buying new cars, leading a flamboyant lifestyle, etc., in New York – and it was all

about that. I had originally been thinking along the lines of ‘I just want to go and get a good stable job with a big company like Lehman Brothers!’ and the sales side wasn’t that appealing to me at first but when I saw how much my friends were making I de-cided to give it a try. I became a retail broker, meaning that I was essentially pitching stock to clients. I did that for about two years and made a lot of money. It was just so easy! We were young and reckless and we didn’t think what could happen later on”. Laurent was later approached by some hedge funds which were the latest trend (“Suddenly everybody wanted the exotic adventure of a hedge fund”) and he admits that while he had made money as a trader, he was now making “serious money”. “That was the time of my life!” he remembers. “Ten of us were put into a room by a hedge fund supported by Credit Suisse and we were told, ‘You guys have a week to come up with a new concept’. I was the youngest in the room by at least 10 years and all of a sudden I had an idea and I said, ‘Right now, everybody is defaulting on their life insurance poli-cies because they believe that they can take that money and put it into the market and make more money. Why don’t we buy that


THE RELUCTANT

CEO



off people?’ They looked at me strangely but I said ‘Do your research’. They did and they saw that 90% of those policies were defaulting so we found a way to purchase those insurance policies, turn them into bonds, sell them off (that would never work today, by the way!) to Dean Witter and we made something like an average guaranteed 17% on every policy that we bought”. Those heady days were not to last. The regulations were tightened up and from making lots of money, Laurent and his colleagues went to making no money and then to losing money. It was time to move on and it was then that he came to a key conclusion that was to affect everything he has done since: ”I realised that all finance is basically the same thing and it’s just packaged differ-ently. What’s the difference between an ETF and a Mutual Fund? Packaging! What’s the difference between spread betting and Forex? They are almost identi-cal. One is on stocks, one is on currencies. I was fortunate to understand this from a young age”. Based on this realisation, Oren Laurent decided that he would work for companies and start packing up financial products for them. He did this for some time and then 2008 came. “And we all know what happened then!” he laughs.Did he know that the crisis was coming or was it as big a shock for him as it was for people “on the outside”?“Oh yes. We all knew it was coming because we were aware of the recklessness that was going on in the market,” he says. “Things had reached the point where I could call up a client and get $20 million on the phone from a guy who had never met me before, just because I worked at XYZ. Life was too easy; some-thing was obviously wrong. The mortgage crisis was just coming into play and people were talking about it, but when you are making money you think it’s never going to end”. In 2008, as Laurent puts it, “Every-thing crashed” and he and his friends and colleagues found themselves sitting around and trying to figure out what to do with their lives. “We weren’t doing anything else at the time,” he recalls. “We couldn’t call up Joe and say, ‘Hi Joe, do you want to trade a little?’ because Joe didn’t want to talk to you Joe didn’t want to know you and God forbid Joe’s wife should pick up the phone!”

Cyprus is going to gain a tremendous amount of outside capital in the next 3-4 years,

especially from hedge fund businesses



stayed in any country that I’ve built an of-fice in. I’ve bought a house here and I see myself being here for quite a while”.He is also confident that, ”with a new busi-ness-oriented government in place, Cyprus is going to gain a tremendous amount of outside capital in the next 3-4 years, espe-cially from hedge fund businesses which are now being stringently regulated in the US and which will find it much easier here, especially in Limassol. I think you’re going to see a whole new Cyprus very soon”.In the past four months, Banc De Binary has taken on 80 employees and it plans to more than double that number by the end of the year. It has begun investing in properties and in certain infrastructures, it is about to sponsor a local football team. These are indications of the company’s long-term intentions for Cyprus where Lau-rent predicts that it will employ 1,200 peo-

ple here by 2017. Worldwide, he hopes to have half a million clients by the end of this year and eventually to have regional offices in all the world’s major financial hubs but his Wall Street experience taught him a ma-jor lesson: “You can’t make safe predictions in the financial sector, and especially in an online industry,” he says. “You can predict 10% growth per year but you could grow by 300% without understanding why. I’ve learned that anything I plan in the online industry doesn’t really have much meaning. I’m going with the trend right now. The only sure prediction I can make is that there will be no CEO office in any of Banc De Binary’s buildings!”

It turned out to be so attractive that it was overwhelming for the company at the start of operations. The first trader joined in June 2010 and the first office had four bro-kers. Today there are four offices employ-ing 230 brokers. Did Laurent anticipate such rapid growth?“Not at all,” he concedes. “In my original business plan, I hoped to have 10,000 cli-ents by now. In fact, we have 230,000”How does he respond to the criticism that binary trading is little more than gambling?“You can look at binary options as a bet or you can look at them as an actual trade. If you are simply guessing and you don’t do any research into where you’re going to put money, then you’re definitely gambling,” he acknowledges, but, he explains: “I like to look at it this way: it is a fact 92% of restau-rants globally fail within two years. Why is this? Because a young guy decides to build

a restaurant, get a few chefs and waiters together and he thinks it’s easy. He doesn’t do his research, as opposed to the successful 8% who have done their homework, they know exactly what they’re getting into and they have a business plan. Now, would you call the 92% gamblers? Just because it’s a restaurant you wouldn’t call it a gamble? I look at binary options in the same manner. If you do your research – and we provide he research, which is another of the reasons for our success – then you become part of the 8%. If not, you’re definitely gambling”.Oren Laurent originally came to Cyprus to hold talks with Barclays but having seen the country he decided that it was the perfect location for Banc De Binary’s European headquarters. When talking about Cyprus, he is extraordinarily positive:“There is something very magical about this place,” he says. “Whether it’s the peo-ple, the warmth, the acceptance, there’s something about Cyprus that will allow it to succeed very much in the near future and it will attract a lot of investors. The new laws relating to property and passports are going to attract a lot of people here”. He speaks of “a sense of belonging” which, he says, foreigners feel very easily in Cyprus. “I’ve been attracted to the place and it’s keeping me here and I believe that others will feel it as well. This is the longest I’ve

Then one day Laurent read an article about the CBOT (Chicago Board of Trade) approving binary options. “I didn’t pay much attention to it at first but eventually I decided to find out more,” he says. “I took a trip to Cyprus because there was some interest on the part of Barclays in binary options and all of a sudden I saw that there was an opportunity to start a business here. The cooperation with Barclays didn’t work out but I got to see Cyprus for the first time and it stuck in my head. And that was the start of the whole journey of Banc De Binary. The name came to me while I was sitting in the airport lounge in Larnaca and one of the first things I decided I wanted to do when I came back here was to sponsor the lounge”. It will soon become the Banc De Binary Lounge. The French-sounding name, he says, is all “down to the heritage. It’s the family’s roots coming out!”What made Oren Laurent choose binary op-

tions as the focus of his own venture? Why not hedge funds, for example?“Binary options was new and I knew that I could sell something fresh,” he says. “My anal-ogy was with the old story of the CEO of the shoe business who calls his two salesmen and tells them to go to Africa and see what they think. And one of them returns and says, ‘I don’t know why you even bothered sending us. They don’t even wear shoes there’ while the other one says ‘It’s a goldmine! It’s a market waiting for us!’ I wanted something new and fresh that no-one had ever heard of. Hedge Funds we’ve heard of. We know about them. We know the damage they have done, we know that some people make money but they are not new. At the end of the day you have to think of a concept and my concept was this: To simplify trading so that anyone can trade, even against the market, and to provide them with the tools that let them do what they want.”The newness was what attracted Laurent to binary options but was that the key to their success with traders?“No,” he says, “it was the simplicity that caught everybody’s attention in the end and it hap-pened much faster than I could have imagined. My job was to package and market it but I never thought it would get this big this fast. People caught on to the simplicity of it and the fact that they could profit so easily from it”.

We all knew the crisis was coming because we were aware of the recklessness

that was going on in the market

In my original business plan, I hoped to have

10,000 clients

by now. In fact, we have 230,000

BINARY TRADING


SPECIAL SUPPLEMENT

A directory of travel agents, airlines and other companies servicing the corporate world of Cyprus

CORPORATETRAVEL GUIDE

supplement_travel.indd 69 07/03/2013 11:59

CORPORATE TRAVEL GUIDE

We all know the advan-tages of online res-ervations, e-tickets, etc., but

there are still many advantages to making use of Travel Agents and their services

Take advantage of the experience, knowledge and skills of a Travel Agent who is, in fact, your personal Travel Consultant who will ensure that every journey is a memorable experience.

There are many good reasons why you should consult a Travel Agent, including these:

• Reliable Expert The Travel Con-sultant has the necessary knowledge and experience to organise trips according to the personal needs and requirements of each individual traveller. You will value the personal touch and the fact that the Travel Consultant understands and ca-ters to your specific travel needs.

• Efficiency and Service The Travel Consultant offers a wide range of prod-

ucts and services from a variety of suppli-ers (tour operators, hotels, airlines, rental cars, etc.) and will do everything he/she can to fulfil the needs of the traveller in a single visit. The Travel Consultant wants to build a long-term relationship with you and not just make a one-off sale.

• Simplify the process of organizing your trip The Travel Consultant will save you time and money and offer you peace of mind by relieving the stress of researching all the details and removing any worries concerning the organisation of your trip and your efforts to find the best available options.

• Adding Value The Travel Consult-ant provides free advice and can offer additional services and experiences that enrich the product (e.g. transport to/from airport, a personal guide with minimal additional money, wine and fruit in the hotel room upon arrival, etc.) which you will not find so easily on the Internet.

• Inspiring Confidence The Travel Consultant inspires confidence, because he/she is “always with you” and you can contact him/her directly to help you

solve any problem that you may encoun-ter.

• A recognised professional The Travel Consultant who is a member of the Association of Cyprus Travel Agents (ACTA) is a reliable professional who attends the training seminars and professional lectures organised by the Association. He/she is licensed by the Cyprus Tourism Organisation and his/her ACTA membership is recognized as a guarantee of integrity, competence and a high standard of service.

ACTA is a member of the European Travel Agents’ and Tour Operators’ As-sociations (ECTAA) and of the Cyprus Chamber of Commerce & Industry (CCCI).

THE ROLE OF THE TRAVEL CONSULTANT

CONTACT DETAILS Association of Cyprus Travel Agents (ACTA)

House of TourismP.O Box 22369, 1521 NicosiaTel: (+357) 22666435 Fax: (+357) 22660330e-mail: [email protected]: http://www.acta.org.cy


74 IN BUSINESS

Lufthansa German Airlines, the premium European carrier, serves 199 destinations in 81 countries on four continents, with dedication to quality

and innovation, safety and reliability. The Lufthansa Group (Lufthansa, Austrian Airlines, Brussels Airlines and SWISS) serves altogether 253 destinations in 103 countries offering a great variety of choices and plenty of attractive offers. Lufthansa has emerged as the number one carrier in Europe with the most extensive network, offering passengers highly frequented and attractive international connections, high standard ground and onboard services as well as state-of-the-art technology.

During summer 2013, Lufthansa will offer 9 weekly direct flights from its main hubs Frankfurt and Munich to Cyprus (6 flights per week to/from Frankfurt and 3 flights per week to/from Munich). In addition, Austrian Airlines will offer up to 12 flights per week to/from Vienna Thus, Lufthansa Group will be offering Cypriot travelers a total of 21 flights per week to/from Cyprus, providing a convenient and reliable journey, with seamless connections to Europe and the United States.

LUFTHANSA’S INNOVATIONSWith its ongoing expenditure in fleet re-newal, the Lufthansa fleet currently consists of more than 350 cost-efficient, modern and environmentally friendly aircrafts. Lufthansa’s investment in cutting edge technologies is reflected in its flagship, the A380, as well as the new “jumbo” Boeing 747-8i. Four Boeing 747-8s are already in service on routes from Frankfurt to Wash-ington, Bangalore, Delhi and Los Angeles.

Among its innovations, the new Busi-ness Class stands out, as it is equipped with a seat that converts into a lie-flat bed,

FLY WITH LUFTHANSA GROUP ALL OVER THE WORLD



1.98 meters in length. The new seat offers exceptional comfort for passengers, either in a sitting or a recumbent position, intuitive adjust-ment features, additional storage space and an enhanced entertain-ment system. Six aircrafts have already been fitted with the new Business Class seat which, by 2015, will have been installed across the entire fleet.

Lufthansa focuses on its premium class product and service and this is globally recognized. In the lat-est Skytrax Star Ranking review, Lufthansa has been awarded 5-Star Ranking for its First Class product and service package. On the ground, Lufthansa’s dedicated Frankfurt First Class Terminal has scored 5-Star ratings across many of the assessment categories. Onboard the aircraft, the Lufthansa First Class cabin offers superb comfort, with ergonomically shaped, 5-Star ranked seats that convert into a fully flat, two-meters-long bed. At bedtime, you receive a turndown service with a high-quality pillow and a soft duvet.

Lufthansa inflight entertainment offers a comprehensive range of videos with movies in up to eight languages, numerous TV programs, news and sports highlights, music magazines from around the world, CDs, audio books, radio stations, computer games, language courses and service information. First Class Onboard Dining experience offers collaboration with luxury hotel chains, serving delicious regional dishes and fine wines to accompany them.

Lufthansa has been proving itself as being one of the most innovative airlines in the world and constantly offers improved customer services through www.lufthansa.com. In addition to its regular Internet pres-ence, Lufthansa has provided a mo-bile website and tailored its design and service offerings to the needs of travelers on the move. Recently Lufthansa revamped its mobile portal mobile.lufthansa.com, which is designed especially for smartphone users. With this latest Lufthansa app, users of iOS- and Android-powered

smartphones can receive automated flight status notifications in the event, for example, of gate changes or delays to their flight. Users have the option to store their login details for the personal area of the website in an encrypted form on the device. This means they do not have to re-enter this information each time they visit the site. In future, app users will also be able to save and file their travel documents (e.g. passport) or visa details and file them electronically. The app also notifies passengers if their travel documents are close to expiring.

Another Lufthansa innovation is the FlyNet, an in-flight broadband internet service across its intercon-tinental network. Lufthansa is the first airline to offer its customers broadband Internet access on board. Satellite coverage for the high-speed FlyNet system is generally available across Lufthansa’s entire long-haul network (with the exception of China and South Africa). The next Boeing 747-8s will already be equipped with FlyNet ex works. With Lufthansa FlyNet, the pas-sengers can surf the web with any common WLAN-capable device (e.g. laptop, tablet or smartphone), send emails with file attachments in real time, browse the latest news on the Internet, access social networks or access their company’s Virtual Private Network (VPN).

Last, but not least, Lufthansa has one of the best European frequent-flier programs, the famed Miles&More program, which has already been successfully accepted by Cypriot frequent travelers, with more than 50.000 members. Together with the Cypriot part-ners, such as Lambouri Winery, Parousiasi stores, Piraeus Bank and www.eshopcy.com.cy, Lufthansa Miles&More has become the most attractive loyalty program in Cyprus.

CONTACT DETAILS Lufthansa German AirlinesXenos Tower, 4th Floor Office 401 3 Nikis avenue, cy-1086 Nicosia Tel: (+357) 22 873330Fax: (+357) 22 676654Website: www.lufthansa.com



Sixt in Cyprus became the Sole Franchisee of Sixt international in 1999 and since then, true to our German partners, Sixt in Cyprus emphasizes service,

product quality and customer satisfaction above all else. As a result of these rigor-ous standards, Sixt has become the pre-ferred mobility service provider for cor-porations and high-end private clientele, offering both car rental solutions and car leasing, and we are also the sole car rental partner of the Cyprus Airways bonus programme, Sunmiles. This partnership comes to complement the many other partnerships Sixt has with companies such as Lufthansa, Emirates and many other airlines and hotels.

2012 was a very special year for Sixt Rent a Car International which was founded as a family business in Munich back in 1912, having survived two world wars by hiding some of its cars from confiscation it is now celebrating its 100 years of existence this year, Sixt Rent a Car International is now a worldwide mobility service provider that specializes in supplying top-class cars to its custom-

ers at low prices. With the world’s largest fleet of BMW and Mercedes Benz, Sixt easily distinguishes itself from its market competitors. Now available in 105 coun-tries and, since 2011, expanding in the USA, Sixt is growing steadily to become the leading car rental company in the world.

A family business that cares of its cus-tomers, Sixt International has also de-veloped an enviable social responsibility programme, an idea of Mrs. Regine Sixt who, through her ‘Drying Little Tears’ Foundation has been helping children in need all over the world for over 10 years. Sixt in Cyprus supports this cause.

Sixt in Cyprus has established itself as one of the leaders in the island’s car rental market, offering both car rental services and leasing solutions. With sta-tions at both international airports and in all the main towns, we can meet your every car rental need. In 2013 Sixt in Cyprus will introduce the VW Golf to its fleet, another first for Cyprus.

With our partners Unicars, the local dealer of the Volkswagen group, we are looking to satisfy our customers’ needs

with cars from the VW Group, and Audi, Volkswagen, Skoda and Seat are all present in our fleet. We do, of course, offer other brands and are continuously looking to make the fleet as interesting as possible, taking into account the Cyprus market and aiming to remain among the top players.

Our leasing solution offers companies a customized solution for their fleet needs, from small vans to luxury SUVs. We can offer customers any car for a leasing period from 1 to 5 years. The choice is yours: simply select any brand of vehicle, adapt it to your requirements or wishes and then obtain the best leas-ing quotation for that specific model. In this way, each customer can drive his/her dream car for the duration of the lease.

We look forward to providing you a service to remember and we wish you a pleasant holiday or a successful start to your business on our island.

SIXTRENT A CAR

CONTACT DETAILS Find us at our reservations centre: (+357) 25312345 or 7777 SIXT (3498)Or online at www.sixt.com.cy



WHO WE ARE Travel House was established on 01 Janu-ary 2011 as a result of the merger between Evzonas Travel and Tours and Hi Flyers Travel. Although a new company, the merg-ing companies and its people have a 25-year history in providing unique travel solutions to corporate clients.

OUR SERVICES Our services are trusted by some of the big-gest and most prominent commercial firms in Cyprus, as well as government ministries, semi-government organisations, banks, ac-counting firms, offshore enterprises, event organizers and many other organisa-tions.

Our team is committed to achieving high standards of service, operational efficiency and significant cost reductions, by offering more options to the corporate traveller. We work to identify needs and evaluate opportu-nities and organise travel arrangements more effectively, thereby gaining more value from the travel budget.

This is accomplished through a blend of experience and state-of-the-art travel technol-ogy systems. We are able to provide competi-tive air fares through our association with the Sabre travel network, which also provides our team with training on the latest technology so as to assist us in obtaining the maximum possible benefit for the corporate traveller.

Best Fare Guarantee We offer this through our Sabre reservation system managed by our dedicated travel management support team.Pre-Trip Approval We forward various

flight options and rates, which are filtered by the traveller or the company and sub-sequently selected.

Hotel Accommodation and Serviced

apartments Through our extensive network of suppliers, 250,000 hotels are integrated into a single system.Group Travel Our team has successfully made travel arrangements for a number of trade missions abroad.Ground Transfers These are undertaken locally from Nicosia to Larnaka Airport and in major European cities.Rail Travel This form of travel within Europe is becoming more popular with the Cypriot corporate traveller, especially from Paris and Amsterdam airports to the centre of Brussels, to where there is no direct flight from Cyprus.Exhibitions/Trade Shows/Events We provide services for all the major trade fairs in Europe, from finalising air and hotel ar-rangements and transfers to registration at the exhibition or trade fair.Visa Assistance In the eventuality that this service is required, we offer advice both through the electronic system and via embas-sies and consulates. Specific Seat Reservations For Business and First Class Passengers.

TRAVEL HOUSE


Web Check-In For economy class passengers.Traveller Profile Database This records membership details and personal travel prefer-ences such as seats or meals.Management of Frequent Flyer Pro-grammes To gain maximum benefit from the accumulation of free tickets.SMS Alerts For reminders of flight times or changes to schedules.24/7 Support In case of emergency. there is always a contact from our office who can assist.Management Reports These are sent at the

end of each month and provide a clear insight into cost breakdown.Financial TransparencyConfidentialityAll our services such as hotels, car hire, low-cost carriers, transfers, tours, etc., are all inte-grated into one system, allowing us to offer a wide choice – the hotel system alone offers 250,000 options – whilst our low-cost software gives the option of 124 carriers to worldwide destinations, and enables the comparison of the rates of up to 3 carriers to any one destina-tion.

When the corporate traveller is in need of a rest, we can provide city breaks, tailor-made packages, entertainment (concerts, theatre, sporting events, such as Premier League, La Liga, Serie A and Champions League football matches, and also Formula 1 around the world We can also pre-book attractions and make restaurant reservations in all major cities.

FUTURE PLANS The merger was initiated with a view to the future, by creating a small organisation which would be better placed to serve its clients’ needs, both in terms of corporate and leisure travel. Our inroads into the leisure market will go as far as accommodating individual pack-ages, tailor-made packages and city breaks at very affordable and competitive rates.

We have already begun implementing many of our plans, especially with regard to interna-tional sporting events, concerts, theatres and incentive groups.

PROFESSIONAL & BUSINESS ASSOCIATIONS IATA (International Air Transport Association)ACTA (Association of Cyprus Travel Agents) with a seat on the Board of Directors) Cyprus Chamber of Commerce.

CONTACT DETAILS Antonis Evzonas Managing Director [email protected] Costas Theodosi Business Development [email protected]

Travelhouse Ltd91, Athalasas Avenue, Office 201, Nicosia 2012 P.O Box 16188, 2086 NicosiaTel: (+357) 22871100Fax: (+357) 22777474e-mail: [email protected]: www.travelhouse.com.cy



CONTACT DETAILS:

T: 00357-22451700F: 00357-22662966W: www.utravelair.comE: [email protected]: 29, Diagorou Avenue, 1097, Nicosia-Cyprus


Пользуетесь услугами нашей компанией ежедневно 24 часа в сутки без выходных.

Русскоговорящий персонал

- Управление корпоративными поездками- Сервис по корпоративным поездкам- Консультанты по корпоративным поездкам


Lessons from the Francis report on an English failing hospital

Expert, former Boardmember, Honorary Treasurer of International Society for Quality inHealthcare (ISQua), UKSir John Oldham

Assessing clinical and financial performance:The CHESS Model

M.D, M.H.A., CEO of Chaim Sheba Medical Center, Israel

Prof. Zeev Rotstein

Management, control and accounting in the Healthcare Sector: Public versus Private Dichotomy

Professor at Instituto Politéc-nico de Leiria, Portugal, Researcher at TECSI, Brazil - Portugal

Prof. Raquel Alves

Investment opportunities and processes in medical establishments

Director of WHO Collaborating Centre for Public Health Training and Education, Imperial College London, UK

Prof. Salman Rawaf

A day in the life of aHospital General Manager

Director of Assuta Hospital Ltd., Chairman of Maccabi Institute for Health Services Research, Israel

Prof. Joshua Shemer

Computerized tools for quality assurance: From electronic health records to business intelligence

MD, MHA, Associate Director of Rambam Health Care Campus, Israel Dr. Yaron Bar-El

The importance of organizational restructuring and change in healthcare

Professor at Instituto Politécnico de Bragança, Portugal, Researcher at TECSI, Brazil - Portugal Prof. Humberto

R. Ribeiro

Public-Private Partnership, The experience of Ribera Salud

CEO of Ribera Salud Group, Spain

Mr. Alberto de Rosa Torner

EXCELLENT NETWORKING OPPORTUNITIES AVAILABLE

1st Announcement

{March 14 - April 13 2013}

90 AuditEXP An Innovative Service for Audit Firms from Intercollege Globaltraining

92 How the Global Financial Crisis affected European Consumption2008-2011 figures reveal that consump-tion was not as severely affected as one might have expected

93 Cyprus’ gas fortunes will be highly dependent on IsraelA new report assesses possible future scenarios

ISSUE

24

86 {money}86 Location of ChoiceCross-border pension funds could gener-ate huge financial benefits for the Cy-priot professional services industry

88 Same but DifferentHow does your personal measure of in-flation compare with the government’s?

89 Non-core LoansEuropean banks expected to trade €60 billion in 2013

102 Get Your Motor Running Investing in Classic Cars

90 {business}

MONEY: An Introduction to Global Financial MarketsBy Stephen Valdez & Philip Molyneux 95

ECONOMY: The Physics of Wall Street: A Brief History of Predicting the Unpredictable By James Owen Weatherall 99

LIFESTYLE:Gone Girl By Gillian Flynn 105

+ BOOK REVIEW 92 {economy}

94

102 {lifestyle}

THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES OF CYPRUS Gold 85

88

gold_plus.indd 85 07/03/2013 11:24


{MONEY}

The European Pensions Di-rective has fundamentally changed the way pension funds are managed and operate on a pan-European level as it has created the

opportunity to establish cross-border pension funds, covering participants located in multiple European Economic Area (EEA) countries. Such pension funds can be established by single employers or by financial institutions for groups of participants.

Total EU pension assets under management are close to €3-€4 trillion. At the moment, the vast majority of employees are covered under pension funds established in their own countries. But things are changing. Philippos Mannaris, CEO of Aon Hewitt Cyprus has been more active than anyone in the country in endeavouring to increase awareness of the wide range of opportunities arising for Cyprus after the adoption of the EU Directive in November 2006. He told Gold that there are currently 84 registered cross-border pension plans, most of which are sponsored by single employers. Cross-border pension fund as-sets amount to approximately €30 billion. A number of financial services providers are using the EU pension directive to offer retirement products on a multi-country basis. Mannaris highlights the fact that a number of EEA juris-dictions are actively promoting themselves as

locations of choice for cross-border European pension funds but, he says. “Cyprus is notice-ably absent to date.”

The DirectiveEuropean Union Directive (2003/41) on

Activities and Supervision of Institutions for Occupational Retirement Provision (IORPs), commonly known as the Pension Fund Direc-tive, sets out prudential supervisory rules for funded occupational pension funds across the EEA. The Directive specifically allows for the mutual recognition of pension funds within the EEA. This means it is legally possible to establish cross-border or pan-European IORPs, i.e. a pension fund established in one country with schemes and participants in other coun-tries. Although the Directive does not cover tax, the European Commission has issued a tax communication backing up several rul-ings of the European Court of Justice, making membership of a cross-border IORP at least as tax efficient as membership of a local pen-sion fund. The Directive can also extend to cover participants in non-EEA locations such as Russia and the Middle East. It covers most funded occupational pension plans established separately from the sponsor in the EEA.

Cross-border IORPS are always authorised and regulated by the “home” country (i.e. the country in which the pension fund is estab-lished) rather than the “host” country (where

the schemes originate and participants are located). In contrast to domestic-only IORPs, they must always be fully-funded and must comply with “host” country social and labour laws. For example, it is never possible to pay lump sum retirement benefits to Dutch-based participants, irrespective of where the IORP covering those participants is based. In addi-tion, countries have the option to impose fur-ther information, ring-fencing and investment requirements on cross-border IORPs, although they may cannot be more discriminatory than those applying to domestic IORPs.

Importantly, “host” countries do not have the opportunity to approve cross-border IORPS; there is simply a notification by the home country authorities and a request for information about social and labour law re-quirements. There is a defined process (the Budapest Protocol) which sets out the cross-border registration process and details concern-ing the cooperation of supervisors. The proce-dure makes the establishment of cross-border pension funds a very easy process as there is no opportunity for “host” supervisors to reject an application.

As Mannaris points out, multinational com-panies lobbied very hard for many years for the European framework to establish cross-border IORPs as they believed there were considerable financial benefits and reduced operational risks and costs from consolidating retirement plans

LOCATION OF CHOICE


CROSS-BORDER PENSION FUNDS COULD GENERATE HUGE FINANCIAL BENEFITS FOR THE CYPRIOT PROFESSIONAL SERVICES INDUSTRY

money_location of choice.indd 86 07/03/2013 11:49

pension funds

using the 3rd Life Directive. The Pension Di-rective provides a viable access to other markets through the principle of mutual recognition and freedom of services of IORPs.

Philippos Mannaris explains that two routes are open for financial institutions: “The first route is to create an in-house IORP subsidiary. Operating through an IORP subsidiary means a different regulatory framework, with differ-ent funding requirements, different applicable laws, different cross-border procedures, etc. These IORP subsidiaries are multi-employer vehicles, which can accommodate various clients. The second route is to set up single-employer IORP vehicles for clients. In this case, the financial services provider acts as a “building block provider of services to clients, such as investment management, re-insurance, administration services, and so on”.

Opportunities for CyprusThe CEO of Aon Hewitt Cyprus believes that Cyprus can expect major potential benefits if this initiative leads to a fully developed, ef-ficiently- functioning and competitive frame-work making Cyprus a location of choice for cross-border European pension funds (IORPs).

“We anticipate that major benefits for Cy-prus will arise from Cyprus-based financial institutions offering occupational pension arrangements in multiple jurisdictions, and potentially attracting other large institutions to Cyprus for the same purpose,” he says. “Fur-thermore, there will also be significant benefits from multinational companies establishing their own multi-country pension trust using Cyprus as a home country and as a point of entry into the EU for non-EU parties.”

A Cypriot plan could and should accom-modate employers all over the EU and beyond. In all cases, the additional business will serve to strengthen the Cypriot professional services sector, to enhance Cyprus’ reputation as a lead-ing financial services centre and contribute to economic growth.

The local Cypriot pension market is cur-rently using sub-optimal governance structures with a limited use of professional service pro-viders. “We believe that establishing Cyprus as a country of choice for cross-border pension funds will both improve the visibility of do-mestic second pillar pension funds and increase the level of utilization of the professional ser-vices industry by these local Cypriot IORPs,” says Mannaris

Further, the area of International Pension Plans (Employee Benefit Trusts) is attract-ing increasing attention from employers in Russia and the Middle East, providing the opportunity to use International Trusts in

Cyprus as vehicles for their employee savings programmes. “The development of the cross-border framework with the accompanying growth in the specialized services market”, Mannaris says, “will act as a catalyst to grow this important sector further.”

What Needs to be DoneThe four current key locations of choice for cross-border pension funds are Belgium, Lux-embourg, Ireland and the Netherlands. Cyprus could also become a location of choice, given that it is already a major international financial centre, has an established pension market, a competitive tax framework and a reputation for offering International Trusts.In order for this to become a reality, Cyprus needs to take a number of key steps. Philippos Mannaris believes that the most important step is “to develop an appropriate, competitive and flexible legislative and regulatory framework which offers an attractive IORP vehicle capable of supporting cross-border pension arrange-ments, with a broad scope and flexible funding regime. This should ensure full flexibility in terms of plan sponsors both within and outside the EEA.”

Mannaris’ further proposals are specific:• Legislation should be simple, with minimum

regulation and with discretionary powers to the regulator to allow tailor-made solutions.

• An English translation of all relevant leg-islation and documented relevant practice should be provided which should also be readily available (e.g. online) for potential pension fund sponsors and their advisors.

• Cyprus should ensure that the regulators continue to be accessible and supportive, participate in good training and are willing to discuss tailor-made solutions with market participants.

• Cyprus should ensure adequate publicity in order for pension fund sponsors to be aware of the unique opportunities offered by Cy-prus (e.g. brochures, conferences, website, leading pension magazines, trade press…).

• Cyprus should aim to implement successful test cases.

“WE ANTICIPATE THAT MAJOR BENEFITS FOR CYPRUS WILL ARISE FROM CYPRUS-BASED

FINANCIAL INSTITUTIONS OFFERING OCCUPATIONAL

PENSION ARRANGEMENTS IN MULTIPLE JURISDICTIONS

and their assets together in cross-border or Pan-European Pension Funds. More important-ly, he notes, some loca-tions permit non-EEA employers to establish retirement arrangements through their IORP vehicles covering em-ployees both within and outside the EEA.

Financial institutions also recognize the oppor-tunities presented by the EU Pensions Directive. Insurers, asset managers, administrators, consult-ants and even banks and custodians could benefit from the new market opening and reach out to clients via IORP

vehicles. Mannaris indicates that in the past, entering other occupational pensions markets within the EEA has been costly in terms of local regulatory requirements or impractical


How to Earn€50 million

Aon Hewitt has estimated the potential financial benefits that the development of Cyprus as a location of choice for cross-border

pension funds could generate for the Cypriot professional services industry, considering the following service sectors: Legal & Audit, Administration, Custody, Asset Manage-ment, Brokerage and Consulting. “We have analysed the potential fees for each service sector and applied this to conservative esti-mates for Cyprus’ market share of total pen-sion assets in each distinct opportunity. The overall fee basis assumed was priced very

competitively at a total of just above 100bps of assets under management”, Philippos Man-naris says.On the above basis, the com-pany estimates that these opportunities could generate

an additional €50 million per year in professional service fees in Cyprus. This currently is equiva-lent to around 0.3% of Cyprus’ GDP.

money_location of choice.indd 87 07/03/2013 11:49


inflation

{MONEY}

By Glen Richards

ccording to the Oxford Eng-lish Dictionary, “Inflation” is ‘a general increase in prices’. However, a perhaps more contemplative definition from

the same dictionary is ‘a fall in the purchasing value of money’. But while one meaning re-fers to the government’s measure of the rise in the cost of goods and services, it is also a mea-sure that is more specific to each individual’s spending and saving habits.

The most common measure of inflation we see is the Consumer Price Index (CPI). The Statistical Service of Cyprus compiles the CPI by measuring the price change in a basket of goods and services acquired, used by, or paid for by households in all major towns across the island. The CPI measure quite rightly includes food & non-alcoholic drinks, cloth-ing, footwear, utilities, and so on.

The goods that actually make up the basket come from the Household Budget Survey carried out by the same Statistical Service. You may be surprised to learn that the last Household Budget Survey was carried out in 2009...

And here, in my opinion, lie some worries for the average citizen when considering infla-tion and whether or not his/her hard-earned savings are seeing a “fall in the purchasing value of money”.

The World Development Indicators Data-base, compiled by The World Bank, puts Cy-prus’ position in the table of GNP per capita at 41 out of 214. I don’t think it’s any secret that the ‘good years’ across many industries in the not-too-distant past had a big impact: many people in Cyprus became affluent. This can be

seen by the number of larger-than-life houses that continue to be built, the expensive restau-rants at every turn, and the €100,000+ cars we pass every day. Some would argue that, when the good years return, and with the welcome addition of Cyprus’ newly-found national natural gas resource, more will become rich and the rich will become even richer.

I would suggest that it’s a fair assumption that, as we have acquired more wealth, our spending habits have changed. Even without a general increase in wealth across the popu-lation, one could argue that the goods and services we buy now are very different to those we bought in 2009, when the last Household Budget Survey was conducted.

This is something we should all take into ac-count when considering our personal finances: Are they keeping up with inflation as a govern-ment measure or are they keeping up with inflation as it relates to us individually?

Towards the end of 2012, Forbes magazine published its latest Cost of Living Extremely Well Index. Whilst the Index is based on US prices, Forbes identifies an upward trend in the prices of luxury goods outweighing the CPI index by a long way. If your ‘personal basket’, for example, consists of expenditure on spas, lawyers, private schooling or a dozen bespoke cotton shirts, the price rises you will have seen will be 15%, 6%, 4%, and 5% respectively – far more than the Government’s CPI measure of 1.8% (Jan ’13 – Statistical Service of Cyprus). Of course, rises in fuel surcharges on flights, prices in upmarket restaurants, and even the price we pay for coffee in a popular café are all reminders that some things seem to continu-ally increase in price at a rate that feels much

info: Glen Richards Cert PFS, Cert CII (MP) is Managing Partner at Pembridge International Ltd and has been providing analysis & financial services for over a decade - both in the UK and internationally. He has been based in Cyprus and assisting clients in Cyprus for the past 4 years. He is a Member of the Personal Finance Society, the Chartered Institute of Insurance, and CIFSA. www.pemrbidge-international.com.

HOW DOES YOUR PERSONAL MEASURE OF INFLATION COMPARE WITH THE GOVERNMENT’S?

Same butDifferent faster than anything else. Of course, the Forbes

study cannot be true of every country, nor can it accurately reflect the rises in this type of expenditure in Cyprus, but it can serve as a reminder that we each have our own personal rate of inflation, and that our own ‘personal basket’ can in fact be very different from the basket constructed from a survey carried out in 2009.

So what can we do to fight this neverend-ing battle against inflation? Many people are of the opinion nowadays that the banks only ever take action to help themselves – I would say that this has been the case for many years but that public awareness of it has risen since the fault lines in different national economies began to appear. So it’s important for us all to make our own informed, educated decisions about where we put our hard-earned savings and investments, and to take advice if and when appropriate, instead of simply accept-ing the best our bank has to offer. Even at an attractive savings rate of 2%, with the effects of the special defence contribution (SDC) on interest in Cyprus (15%) and using only the government’s measure of inflation (1.8%), the end result is in fact a loss of -0.1%. The true result over the course of a year could vary (and the loss could increase) in line with changes in the CPI level, especially considering the effects of the increase in VAT; in addition, the Janu-ary inflation figures used above may understate the true level, since they cover the festive sales period, which means that some goods in the basket were temporarily cheaper than they otherwise would have been.

When we use CPI as a basis for measuring how well our savings and investments are do-ing, it’s important to remember that the CPI measure can be a long way off our own person-al rate of inflation, as our individual baskets all vary. There is merit in taking the time to con-sider this when dealing with our own personal finances, and taking advice where applicable. Some advisory companies specialize in this area, have many years of experience, and can often have solutions that may not be available from your local bank or advisors.

money_inflation&loans_2.indd 88 07/03/2013 11:48

banking

AN INTRODUCTION TO GLOBAL FINANCIAL MARKETSBY STEPHEN VALDEZ AND PHILIP MOLYNEUX (PALGRAVE MACMILLAN, 2012)

RRP: £29.99 (£28.49 FROM AMAZON.CO.UK)

A rguably the best introduction to the study of world financial markets, this book has long been essential reading for anyone studying how

global financial markets work and looking for insights as to how they may work in the future. Given the importance of the financial system in the midst of the ongoing worldwide financial crisis, this new 7th edition of Valdez and Molyneux’s classic text could not have come at a better time. The authors cover virtually everything, including money and bond markets, stock exchanges, hedge funds, commercial banking, investment banking, central banking, and derivatives. Furthermore, the financial crisis, regulatory responses and the recent trends in the markets are all analysed in detail. Merrill Lynch recommend this book to everyone who works for them and it does indeed provide an accessible treatment of the major issues affecting the modern financial system. This latest edition is an indispensable resource for all finance professionals as well as for students and non-specialists with an interest in a massive and constantly changing subject area.

BOOK REVIEW

{MONEY}

UNWANTED LOAN

PORTFOLIOS TOTAL MORE THAN €2.5

TRILLION ACROSS EUROPE

Stelios Constantinou

EUROPEAN BANKS expected to trade €60 billion in non-core loans in 2013

Non-core loan portfolios with a face value of at least €60 bil-lion are expected to

be traded by European banks in 2013, as they step up their deleveraging activ-ity, according to predictions from PwC. This compares to around €45 billion of such deals in 2012 and the €36 billion recorded in 2011.

To date a large amount of loan portfolio transactions have involved real estate-backed lending. In future, PwC expects an increased focus on corporate and leveraged lending, together with loans with a longer maturity profile.

However, the banks have some way to go at their current rate of disposal as PwC estimates that unwanted loan portfolios to-tal more than €2.5 trillion across Europe.

Analysis by PwC’s European portfolio advisory group shows there has been an uptick of activity in the UK and Spain and considerable potential for deals still to be done across the eurozone as a whole. It expects this momentum of high value and volume of transactions to continue for the next few years.

Stelios Constantinou, Partner in charge of the banking industry at PwC Cyprus said: “In 2012 we saw a large number of different banks bringing their portfolios to market, trying to capitalise on first-mover advantage and recognising that basic laws of supply and demand mean that the higher the deal volumes in future, the lower the price. This issue of price will clearly remain a key challenge in future for sellers in countries that are already developing as more mature markets. We are also seeing greater transparency among many banks as to the scale of their non-core portfolios. Looking forward, PwC’s own pipeline of potential transactions is the longest we’ve ever seen and we believe there will be an active market for at least the next five years, and probably a lot longer.”


money_inflation&loans_2.indd 89 07/03/2013 11:48

Over the years, due to increased and constantly-changing requirements of the profession, small and medium sized audit firms

have been seeking hands-on consultation services to assist them in meeting the growing demand for professional standards provided in a cost-effective manner.

At Intercollege Globaltraining, we have developed the AuditEXP service line, that provides invaluable support for small and medium sized audit firms in the form of tools, professional advice and training.

Intercollege Globaltraining commenced its operations in 1991 and has been involved in providing training for numerous professional qualifications ever since. It now operates both in Cyprus and abroad, both through its permanent establishments in Greece and Romania and its ‘Live-on-line’ modules. Our standards have remained high throughout our years of operation and our commitment to excellence is reflected in the numerous awards that we have obtained as an organisation as well as in the national and international prizes awarded to our students whilst training with us. Through AuditEXP, we are proud to be

{BUSINESS}

ADVERTORIAL

cooperating once again with many of our students who have progressed in their careers, some of whom now belong to the manage-ment teams of leading professional services firms. These students were, in fact, the initia-tors of our recently introduced service line. Whilst seeking solutions for how best to organise their firms, so as to ensure compli-ance with professional standards in the most efficient manner, they had requested advice from us on the development of a targeted methodology as well as both pre- and post-implementation support.

This was the birth of AuditEXP.

AuditEXPAN INNOVATIVE SERVICE FOR AUDIT FIRMS

FROM INTERCOLLEGE GLOBALTRAINING


From left: Maria Kitromelidou - AuditEXP Manager Georgia Cottis - Senior Manager

Andreas Kitsios - VP of Marketing Yiannis Ioannou - AuditEXP Manager

Photo by Jo M

ichaelides

business_audit.indd 90 07/03/2013 11:56


MORE ABOUT AUDITEXPAuditEXP is a bespoke service that includes an in-house Audit Methodology in electronic for-mat which assists auditors in complying with the requirements of the International Stan-dards on Auditing (ISAs) and International Standards on Quality Control 1 (ISQC1).

Furthermore, we provide assistance and con-sultation to audit firms in ensuring the smooth implementation of the new methodology, as well as adherence to professional requirements, through consultation and training on techni-cal updates, covering a wide range of topics including ISAs, IFRSs, taxation and regulatory requirements.

This innovative service is extremely valuable to small and medium sized audit firms seeking to find the means to increase their effective-ness and efficiency in compiling their audit files whilst, at the same, time adhering to the relevant professional requirements.

FEATURES OF AUDITEXP ELEC-TRONIC AUDIT METHODOLOGYThe AuditEXP methodology has been de-signed by professionals who have worked in both large and medium-sized audit firms and are currently involved in professional training. The methodology is designed to address the requirements of small and medium-sized en-gagements for local and international business clients. Furthermore, the software has been developed in such a way as to allow for further tailoring to address the more targeted needs of particular client profiles. Specialized features within the software provide tool tips, guidance to users and directions as to how to complete the templates, ensuring that the requirements of a risk-based audit are complied with in a more simplified and targeted manner.

The benefits of AuditEXP are enhanced even further as the methodology is the only product that is currently available in both Greek and English language versions and includes templates to be used for both Perma-nent and Current Audit Files (PAF and CAF). All documents are available in both languages and it will be to the user’s discretion and/or company’s policy which language they wish to use for a particular assignment. The availability of terms in both languages can also assist users in fully understanding the data requirements for the relevant fields.

Furthermore, the software has been designed as web-based and this provides increased mo-bility as the system can be accessed anytime and anywhere via an Internet connection. The technology and framework used ensures that files are safeguarded, thereby meeting the re-quirements for the safe custody and confidenti-ality of clients’ audit files.

Moreover, the service’s web-based structure enables the users’ documents to be updated to meet any new requirements of professional standards. This will be activated automatically and centrally via the web, thus eliminating the need and the inconvenience of having to up-date each unit from CDs or other devices.

ONGOING SUPPORT AND ADVICE: ONE-STOP SHOPOur AuditEXP services extend beyond the provision and development of the audit meth-odology, allowing clients to benefit from a one-stop shop. These services aim at providing expert assistance and support to clients and, among others, include the following: Address-ing technical queries, the organisation and delivery of targeted seminars meeting clients’ needs, and providing feedback on the auditors’ file documentation and the implemented poli-cies and procedures of individual firms.

For further information about AuditEXP, visit www.auditexp.org

MORE INFORMATION ON OUR ONGOING SUPPORT SERVICES:TRAINING AND COACHING TAI-LORED TO THE FIRM’S REQUIREMENTSOur organisation, as a leader in profes-sional training, has successfully deliv-ered numerous seminars addressed at meeting clients’ specific needs. The training schedules and approach are developed in close communication with the client, incorporating both theoretical and practical illustrations and case stud-ies to exemplify concepts and address common pitfalls. Audit workshops are organised to demonstrate the AuditEXP methodology, where both theoretical and practical concepts are explained. Furthermore, training can cover other areas of professional requirements such as IFRSs, taxation, legislative and pro-fessional requirements subject to the client’s requirements and learning objec-tives. All specialized training sessions are delivered by experienced personnel who have sound technical knowledge and solid practical experience in their specialist areas.

COLD FILE AND COMPLIANCE REVIEW Our team of professionals can provide you with feedback on the adherence of your audit files to professional stan-

dards, thus assisting you in monitoring the quality standards within the firm. Our findings are detailed in a written re-port that will is sent and later explained to you at an arranged consultation meet-ing, setting out the key points arising from the review. More importantly, our report will also include recommended action to be taken in order to rectify any potential weaknesses identified.

Furthermore, a Compliance Review concentrating on the requirements of ISQC1 can be undertaken for documen-tation of the firm’s policies and proce-dures. A review of practice procedures including acceptance and reappoint-ment, independence, fit and proper, skills and competence, money launder-ing regulations, consultation and Profes-sional Indemnity Insurance will also be addressed within this review. Again, the findings of this review will be highlighted in a written report delivered and dis-cussed with the client accordingly.

POST-IMPLEMENTATION REVIEW AND ONGOING SUPPORTPost-implementation review and ongo-ing support is very important to ensure that a firm has gained the maximum benefit from the implemented changes and improvements. It includes a review of file(s) after the appropriate training or other action plan has been implement-ed, providing ongoing support on tech-nical issues, discussing with partners/ managers and assisting clients with respect to technical issues and quality assurance procedures.

business_audit.indd 91 07/03/2013 11:56

As the world economy began to crumble in 2008, it was largely expected that consumption would be badly hurt. When the retail-ers’ turnover figures came

out, those expectations seemed to have been confirmed.Yet, overall consumption in Europe – as Eu-rostat figures for the period 2008-2011 reveal – was not as severely affected as one might have expected. Rather, specific components of consumption suffered a notable decline. The impact of the crisis on the actual individual consumption of households was relatively moderate, as rising government consumption counterbalanced at least partly a more significant contraction in house-hold consumption. As shown by the Eurostat analysis, consumption patterns varied significantly among member states and the impact of the crisis on specific expenditure categories was also quite varied.The cases of Greece and the Baltic countries were quite remarkable. Household spending in Greece was deeply affected and grew worse year by year due to the deepening recession.

The fall was sharpest in 2011. The Baltic econ-omies, on the other hand, which suffered most in 2009 – the worst year of the crisis – started to recover in 2010 and by 2011 the effects of the economic recovery had driven individual consumption back onto a positive path. Both in the Baltic economies and Greece, the loss of actual individual consumption (in volume terms) amounted to 12%-15% between 2008 and 2011. In 2011 the contraction was more acute in Greece and losses between 2008 and 2011 increased to nearly 15%.By comparison with a drop of 4.6% in GDP in 2009, the impact of the global financial crisis on EU-27 household consumption was less marked, falling by 1.8% that year. Actual individual consumption – a wider measure of the goods and services consumed by house-

holds, which notably also encompasses

individual government consumption – fell even less (-1%) as government expenditure continued to grow by 2% in 2008 and 2009. Since then, household final and actual con-sumption grew by 1% in 2010 and by 0.3% and 0.1% respectively in 2011, while growth in government consumption declined to 1% in 2010 and 0.3% in 2011.In Romania, Hungary, Bulgaria, Ireland and Poland, actual individual consumption fell by between 5% and 9% from 2008 to 2011, while it expanded by between 5% and 8% in Luxembourg, Sweden, and Poland. However, in 2011, the situation improved in most Member States, with Ireland, Portugal and Greece being the main exceptions.An examination of the detailed expenditure breakdowns allows a more detailed analysis of the impact of the crisis. Focusing only on 2009 as the worst year, data shows that housing rentals and related energy and service costs (the main consumption component), as well as education, health, communications and food were less affected than total expenditure, while the most significant impact was on housing equipment, maintenance, clothing and leisure-related activities.

consumption

{ECONOMY}

OVERALL CONSUMPTION IN EUROPE FOR THE PERIOD 2008-2011 WAS NOT AS

SEVERELY AFFECTED AS ONE MIGHT HAVE EXPECTED

2008 to 2009

Source: Eurostat

IMPACT OF THE CRISIS ON ACTUAL INDIVIDUAL CONSUMPTION (VOLUME FIGURES, CHANGE IN %)

2009 to 2010 2010 to 2011

10

5

0

-5

-10

-15

-20

LT EE CY ITLV BG UK

RO PT

EU-2

7

EA-1

7

MTEL IE SKHU

DK

NL FI CZ

FR SI AT

DE SEBE PLLU


How the Global Financial Crisis affected European Consumption


economy_global financial crisis.indd 92 07/03/2013 11:22

energy

{ECONOMY}

NEW REPORT ASSESSES POSSIBLE FUTURE SCENARIOS

vention on the Law of the Sea (UNCLOS). But the objections also arise because the Turk-ish Cypriots and Turkey regard exploration as involving the exercise of sovereign rights at the international level which, they maintain, the Turkish Cypriots and Greek Cypriots jointly possess, by virtue of their being the equal con-stituent communities of the 1960 RoC. While it is clear that the international community sup-ports the right of the RoC to explore for oil and gas, various statements underline that it also has strong expectations that hydrocarbons revenues will be shared in the context of a solution to the Cyprus problem.

“The Turkish Cypriots have now developed a ‘policy of reciprocity’, whereby exploration activities undertaken by the RoC are met with similar activities by the Turkish Cypriots (in collaboration with Turkey), in areas to which the Turkish Cypriots feel they have an equal claim in principle”, said Gürel.

As regards the economic aspects, the authors conclude that, in the context of uncertainties about the impact on prices of shale gas and the current economic environment, the financing of a liquefied natural gas (LNG) plant will take many years, unless there is additional supply, either from Israel or from blocks granted in the second licensing round. LNG would gener-ate around the same revenue as a pipeline to Greece, but less than a pipeline to Turkey.

“We found that a pipeline to Turkey – which of course is unlikely under the current circum-stances – would generate €15 billion more net revenue, after major investment costs, than rev-enue from an LNG plant,” said Mullen.

The authors complement their analysis with a range of scenarios on how successfully the gas can be exploited. How fast the RoC can earn

The discovery of natural gas in the Eastern Mediterranean is changing the geopolitics and economics of the region in ways that are still evolving, accord-

ing to new research. This also means that the extent to which the Republic of Cyprus (RoC) can exploit natural gas will depend, to a large degree, on factors that are out of its control, in particular on developments in Israel and on the latter’s evolving relations with Turkey.

The report, entitled The Cyprus Hydrocarbons Issue: Context, Positions and Future Scenarios, by Ayla Gürel, Fiona Mullen and Harry Tzimitras, is published by the Cyprus Centre of the Peace Research Institute Oslo (PRIO).

Recognising that the hydrocarbons issue is a complex topic with manifold aspects, the report sets the topic within the geological, geographi-cal, legal, political and economic contexts, outlining the positions of the various parties and concluding with an assessment of possible future scenarios.

“The presentation of the parties’ positions should not be taken as an attempt to defend any one’s particular stance,” said Tzimitras. “Our aim throughout the work is to contribute to a better public understanding of the issues at stake and the reasons they are important to each of them.”

The 7 trillion cubic feet of projected reserves in Block 12 of the RoC’s Exclusive Economic Zone (EEZ) are currently estimated to be enough to supply less than 2% of EU demand per year (assuming 25 years’ supply). Yet, al-though exploration has only just begun, the dis-coveries have generated much interest because even a small amount helps the EU diversify natural gas sources from dependence on Russia.

“It is not inconceivable that gas from Cyprus and Israel could eventually cover perhaps 10% of Europe’s annual gas needs,” say the authors.

The exploration has also attracted attention because of objections by both the Turkish Cypriots and Turkey to it. These partly relate to Turkey’s stance on the United Nations Con-

THE PHYSICS OF WALL STREET: A BRIEF HISTORY OF PREDICTING THE UNPREDICTABLE BY JAMES OWEN WEATHERALL

(HOUGHTON MIFFLIN HARCOURT, 2013)

RRP: £16.87 (£14.96 FROM AMAZON.CO.UK)

This is a great book, bursting with ideas, science, mathematics, biographies of great thinkers and lots more. It tells how

scientists and mathematicians went to Wall Street, analyzed huge amounts of stock price data and quantified it (they were called ‘quants’ for this reason), creating models that would forever change the way people and their computers invest. That may sound like a dry subject but Weatherall’s skill lies in making it totally fascinating by telling the stories of the people involved, how they grew into their fields and how, against the odds in many cases, they came to make their signature contributions to investing. This book may not include a foolproof formula for your personal investment success but it explains the place of mathematical models in investing, their strengths and weaknesses, and more importantly, the fact that all models can break down under certain circumstances. Weatherall makes a persuasive argument for the view that the ongoing financial crisis was due to institutions using models while not exercising scientific judgment and misunderstanding risk.

BOOK REVIEW

GAS FROM CYPRUS AND ISRAEL COULD EVENTUALLY COVER PERHAPS 10% OF EUROPE’S

ANNUAL NEEDS

hydrocarbons revenue will depend, to a large extent, on factors that are out of its hands, namely on whether Israel decides to export gas and whether it is comfortable exporting it from an LNG facility located in Cyprus. Gas revenue flowing to the RoC would be most vulnerable, the authors conclude, if Israel and Turkey bridge their differences and Israel re-sponds positively to Turkey’s recent overtures about building a gas pipeline between the two countries.

CYPRUS’ GAS FORTUNES WILL BE HIGHLY DEPENDENT ON ISRAEL

economy_global financial crisis.indd 93 07/03/2013 11:22

classic cars

{LIFESTYLE}

THEY ARE WORKS OF ART, SYMBOLS OF LUXURY AND ENGINEERING EXCELLENCE EXEMPLIFIED. HEAD OUT ONTO

THE HIGHWAY OF CLASSIC CARS, AND TAKE A RIDE ON THE WILD SIDE OF INVESTING. By Chloe Panayides

Running…Get yourmotor

lifestyle.indd 94 07/03/2013 13:29


hilst generational wisdom advises against dwelling upon regrets, American busi-ness magnate and investor Warren Buffett knows that regrets are life’s lessons and should be duly embraced. Buffett recently confessed to the UK’s Daily Telegraph that failing to invest in the classic car mar-ket some 30 years ago remains, to this day, one of his most profound regrets.

In 1980, Buffett was approached with the option of purchasing the entire Harrah Collection of over 1,400 classic cars, with a price tag of less than €750,000. He de-clined, and a mere four years later in 1984, the very same collection sold for over €51 million. Lesson learnt, no doubt.

Until recently, the classic car market had been almost solely dominated by passionate car aficionados and wealthy baby boomers: ardent alchemists turning their boyhood dreams into a gilded reality, complete with a 3.0 litre V12 engine, fawn leather upholstery and crimson paintwork.

However, with ongoing stock market volatility spurning negligible returns, coupled with falling property prices, inves-tors are increasingly choosing to bypass traditional routes, heading instead for alternative highways; physical assets with intrinsic value and in limited supply. It

would be hard to come by an asset that better embodies this combination than classic cars.

Dietrich Hatlapa, who worked in finance for 20 years prior to launching the Historic Automobile Group International Index (HAGI Index), says: “We’ve discov-ered that classic cars move independently of any other investment area. That’s an attractive attribute for collectors and inves-tors alike.”

Indeed, the HAGI Top Index – a performance measure of the top 50 classic cars – reveals that the prices of the latter rose by a commendable 13.89% in 2011, compared with gold (considered a reliable investment), which grew by just 9.93%. Leading classic cars rose by a further 19% in the first nine months of 2012, and

by 25% over the past year as a whole. Indeed, overall, the HAGI

Top Index has increased 30 times in the past 30 years, equivalent to a com-

pound annual growth rate of more that 12%; over the same period, gold managed just 2.17% per annum.

What do these percentage increases look like in solid figures? At 2012’s Pebble Beach Concours d’Elegance in Monterey, California, over €194 million worth of classic cars were sold; another sale, held

by RM in Battersea, London in the last quarter of the same year, generated over €16 million in a single evening.

According to the latest Classic Car Auction Yearbook, major auction houses reported sales of classic cars in 2012 worth more that €455 million; and that was only up until July 31. For the same period eight years ago, the figure stood at €105 million. Average prices of models increased by 15%, with 94 cars speeding through the three-quarter of a million barrier; that’s twice as many as two years ago.

As impressive as these figures are, they represent less than a third of classic car sales; with two-thirds of sale transactions passing through private passages, experts may only imagine the true numbers being revved up.

Consider the experience of John Collins, owner of the Ferrari dealership, Talacrest. Collins himself has sold 30 cars worth over €46 million since the start of April 2012. “They’ve all been cash buyers. Some cars don’t even get on the website because they’re sold so quickly,” he says. With the HAGI Index suggesting that, since 1980, Ferrari collectible models in particular have grown on average by more that 15% every year, it almost seems incredible that a Ferrari 250 GTO originally built for British racing legend Sir Stirling Moss, sold for €26 million in 2012, compared with its 2002 sale of €6.3 million: almost.

Currently, a purring Ferrari 330 P4 is parked at Collins’ dealership, one of only three in the world, respectfully priced at €18.5 million. He explains: “I’ve had some big offers, but I’m in no rush to sell. What am I going to do with all the money?”

Considering that the geography of classic car ac-

CLASSIC CARS MOVE INDEPENDENTLY OF ANY

OTHER INVESTMENT AREA. THAT’S AN

ATTRACTIVE ATTRIBUTE FOR COLLECTORS AND

INVESTORS ALIKE

Running…

W

lifestyle.indd 95 07/03/2013 13:29


classic cars

due to mechanical shifts and advancements, classic car investors must confront – honestly and devoid of delusion – the financial burden of maintenance and the possibility of it affect-ing overall profitability.

An additional confrontation that investors must be aware of before shifting investment gears is the now universal societal demand that everyone should be conscious of their environmental footprint. Boulding says of decidedly un-environmentally friendly classic cars: “In the future, they may not appeal to people who want to show that they are up with the latest trends. I’m mindful of Menzies Campbell, who quietly dumped his 12-cyl-inder Jaguar the moment he became Liberal Democrat leader as it didn’t convey the right environmental credentials”.

Far surpassing the severity of societal peer pressure, the EU published proposals in July of 2012 for new rules on MOT tests, in an attempt to improve road safety as well as combat harmful emissions, and this may have serious implications for classic car owners.

In keeping with the new proposals, any vintage car that has been repaired using new parts – be it engine, suspension, steering or brakes – or has undergone changes to appear-ance, would not qualify when subjected to a roadworthiness test.

Bob Owens, deputy chair of the Federation of British Historic Vehicle Clubs legislation committee, warns: “At the moment, anyone buying an expensive vintage car which they knew had been re-bodied ought to be aware of what the regulations say, and measure the probability from a financial risk point of view.” Besides the financial risk, Owens also alludes to the diminution of pleasure of purchase should this proposal pass: “Very valuable cars will just become valuable objects, and not cars.”

Unsurprisingly, objections have already been reported, no doubt from vintage car enthusiasts in high places.

Indeed, elite members of society have, in re-cent years, joined forces to offer an alternative avenue of investment for those with under-standing of the benefits of tangible assets, yet perhaps lacking in depth of pocket or breadth of knowledge and know-how. Allowing a wider audience to partake in the classic cars’ investment race, funds such as IGA Automo-bile have garnered great attention of late.

The latter, backed by Ray Bellm, Monaco-based World Sportscar champion and former British Racing Drivers Club chairman, Grant

THE CELEBRITY FACTOR

W hilst the exact definition of what constitutes a classic car varies from society to society,

and individual to individual, it seems universally accepted that the term ‘classic’ is denotative of a car with enduring appeal long after production of its specific model has ceased.

The appeal for some may lie in a car’s engi-neering feats, its sheer beauty or perhaps the nostalgia it inspires. For others, it’s the thrill of hoping to catch Frank Sinatra’s cologne still lingering deep in the upholstery, or disposing of your ash in the same tray used by John Len-non. The lure of feeling like a celebrity knows no bounds.

John Lennon - Rolls Royce Phantom V, $2.29 million

Notorious for his dabbling in psyche-delic drugs, John

Lennon had his Phan-tom V repainted in colours

representative of his ‘trips’. A Rolls Royce spokesperson disapprovingly

described the finished result as ‘unfortunate’. Feverish fans felt differently, with one purchas-ing the vehicle in the mid-1980s for $2.29 million. Not bad for a car that would otherwise have cost ₤30,000.

Paul McCartney - 1964 Aston Martin DB5, ₤344,000This car sold at Battersea in London in Novem-ber 2012 for over ₤344,000, beating its estimate of ₤300,000. McCartney ordered the DB5 shortly after The Beatles completed the filming of A Hard Day’s Night and just before they embarked on their 1964 world tour.

Winston Churchill - Land Rover, ₤129,000Expected to sell for ₤60,000 pounds, this Land Rover, specially built for the British legend, more than doubled its estimate, sell-ing for ₤129,000.

Elton John - Ferrari Testarossa, $200,000A birthday gift from his grateful record company on his 40th birthday, Elton John’s 1987 flat-12

super car sold for more than three times its book value.

Frank Sinatra - Jaguar XJS, $178,000 Whilst this particular model was a bestseller in its day, its value has ebbed in recent years, with early V12s being traded for as low as $2,000.

Still, Frank Sinatra’s car fared much better, amassing

an incredible 178,000 back in 1989.

tivity is presently potent in the West, yet only stirring in the East, Collins is probably wise to brake and pause.

Due to restrictions on importing used vehicles into China, the classic car market has yet to accelerate there. However, in view of the hunger of enthusiasts, investors and sellers alike, a relaxation in the laws is on the horizon.

Adrian Boulding, pensions strategy director at Legal & General and a classic car devotee, explains: “A successful investment in clas-sic cars will require foresight to guess which vehicles will become more popular over time. We haven’t seen big Chinese or Indian money coming into the market as we have with fine wines, so a speculator might go for marques that have some historical connections in the East, such as Daimler or Lanchester, but which are still very moderately priced in the West.”

The increasing ties between the oil-rich

Middle East and Europe may likewise serve the classic car market, due to the former’s understanding of tangible assets and its long-standing tradition of owning vintage vehicles.

Of course, whilst historical performance and the contemporary market boast of being healthy, there are hindrances to be considered; speed bumps on the highway, if you will.

The necessary restoration that needs be undertaken to counter depreciation and main-tain one’s investment is an expensive business in itself. The practice of collecting dividends from shares and interest payments from bonds permitting an income of sorts is entirely ab-sent with classic cars; contrarily, good money must be spent to run repairs and ensure up-keep. With model parts becoming sparse and more expensive as the car’s lifespan thickens, as well as the expertise that may be required to work on the vehicle diminishing year on year

lifestyle.indd 96 07/03/2013 13:29


GONE GIRL BY GILLIAN FLYNN (PHOENIX, 2013)

RRP: £7.99 (£3.85 FROM AMAZON.COM.UK)

First published in May 2012, this brilliant psychological thriller is now out in paperback and is set to become one of the

bestsellers of the year. When Nick’s young wife Amy suddenly goes missing on their fifth wedding anniversary, he claims to know nothing about her disappearance but, as new facts unfold, the police become suspicious. The narrative is constructed through chapters telling of the disappearance and search from Nick’s point of view, interwoven with Amy’s diary entries dating from the beginning of their relationship. Soon the reader is thrown into confusion as the two narratives throw up many inconsistencies and expectations are overturned time and time again as the author repeatedly manipulates our understanding of the facts and our emotional reaction to them. This has the classic thriller’s ability to make you unable to stop reading until you have got to the bottom of the mystery. It’s clever and highly entertaining and will definitely persuade you to seek out Flynn’s first two books (Dark Places and Sharp Objects) which are every bit as good.

BOOK REVIEW

Tromans, a property fund manager, Nick Lancaster, a luxury car dealer, and Nick Ma-son, the drummer of Pink Floyd, has erected a flag high above its finishing line marked by the figure €112 million to be used acquiring select classic cars; it blows in the wind of good intentions to make annual returns of 15%.

Still, all good intentions may be marred by harsh reality, as was the case when the fund’s launch coincided with the Arab Spring, meaning that the money anticipated from the Middle East never came. With Americans barred by regulatory hoops and a minimum subscription set at €370,000 for small inves-tors, there have been setbacks.

Participants are wise to fully consider before partaking in a fund, with placement fees being as much as 3% on their investment, and annual manage-ment fees amounting to 1.5%. Similarly, as an

individual buyer, one’s profit will be free of capital gains tax, compared with a fund which is subject to tax on income and gains.

Lancaster explains of the fund posi-tively: “We’re looking for a straightforward in-and-out return on our assets. This is the first classic car fund that’s purely for finan-cial returns, rather than passion.”

Truly, a red light should be illuminated with this caveat, for Hat-lapa advises that without passion, investing in cars becomes pure liability. In a highly segmented market that is affected by changing tastes and trends, having foresight

and being able to understand its changing tides is paramount. And how might one be able to do this if devoid of complete and utter veneration for this art form, the car? Hatlapa explains: “Simply because a model or marque has performed well in the past does not mean it will continue to advance at the same rate in the future.” His best advice? Aspire to buy the best that you can afford in terms of history, condition, originality, and provenance. “It’s all about desirability, sports car pedigree and great engineering.”

Some examples for your consider-ation: according to the above criteria,

a decent Ferrari may cost €115,000; returns, however, will be supreme and

swift, no less.Looking for a less expensive buy, one

may do well with the iconic Jaguar E-Type series 1 coupe, which goes for around €58,000. With the market still liquid,

A non-profit club in Nicosia has been working slowly and steadily to promote classic

cars in Cyprus. Friends of Historic & Old Cars of Cyprus (FIPA) is supported by the Cyprus Automobile Association (CAA), offering enthusiasts the opportunity to nurture their passion and practise their hobby by participating in a variety of organised activities and exchanging ideas and inspiration with fellow members.FIPA’s objectives include recovering and restoring vintage vehicles, collecting the particulars of classic cars – in books, photos, newspapers and magazines – for use by its members, and encouraging the development of tourism in Cyprus, projecting the country internationally through exhibitions and sporting events for those with sympathies for such cars.

SPORTING

FRIENDSlots of spare parts and experts to service, it’s considered a winner.

Still, being a little less obvious may also be worthwhile. The Facel Vega, for example, an incredibly rare French marque from the ‘60s, served one investor particularly well. Bought for €58,000, it sold within five years for €230,000.

This is the classic car investment highway: widely exciting returns born from the past, and an open road of future opportunity. Enough to get your motor running for a test drive? Start your engines.

WITHOUT PASSION, INVESTING IN CARS

BECOMES PURE LIABILITY

Last year saw the organisation host the 24th International Historic Car Rally on May 25-27. Cars produced between 1905 and 1983 were invited to participate; the rally covered a total of 420 km, and marked a clear expression of the sport still left in these vintage models.

lifestyle.indd 97 07/03/2013 13:29


Greece is entering its fifth year of recession. The severe wage and pension cuts called for by the toughest austerity programme in mod-ern history are taking their toll and affecting the lives of every Greek citizen. The sacrifices that are being made are monumental. They affect life today and they will continue to af-fect the life of the next generations.

Yet the European rhetoric is focused on the lazy and corrupt stereotype. And this stereotype is, I am afraid, the prevailing view amongst European policymakers as they de-cide the fate of this nation.

Then there is another story about Greece. It plays out in the streets of Athens, within a stone’s throw of the Acropolis, the symbol of so much that is sacred in the Western world. It’s the story of a proud ancient city in flames... played out by riot police and hooded gangsters with innocent citizens, exercising their democratic right to protest, often caught in the middle.

Greece does not sell cars, television sets and washing machines to the world. And the Greeks have undersold their superb olive oil to Italian repackers at just €2 per litre. The Greeks rely on tourism for the bulk of their revenue and the media focus on the flames of Athens does not build tourism.

I read a brilliantly honest piece last week by Barnaby Phillips, a journalist at Al Jazeera.

In his article, he answered a Greek who confronted him asking, “Why do you only show what is bad in Greece?”

Here is Mr. Phillips’ answer:“What happens next in this small country

on the edge of Europe affects all of us. So, be it economic salvation, or else disastrous default, we’ll carry on reporting this story.

Reporters based in the former war zones of the Balkans now rotate in and out of Greece, in time for the latest strike or debt deadline. We bring tripods, light cases and satellite phones.

We look for defining images – riots in Syn-tagma Square! – and the worst of us have got our clichés ready for our scripts: Greek Tragedy! Greek Drama!

Never mind that for most, local language skills don’t extend beyond ‘Kalimera’. That won’t stop the confident-sounding analysis on the 24-hour news channels.

And our appetite is voracious. The modern news machine is a hungry beast, and we have to keep on feeding it.”

I understand his point. And I understand the media well enough to know that his an-swer is right. That’s the way things work.

But the Greeks need a break. The major-ity of Greek people are honest, hardworking citizens who pay their taxes (as long as they can afford to.)

They are Europeans who aspire to a Euro-pean future. They understand that there is a price to be paid. And they are paying it. Just walk the streets of Athens to affirm this.

European policymakers need to understand this. And with all the media coverage, it’s not surprising they don’t. The risk is that their judgment is clouded.

The Greeks need their continued support. And they also need the breathing space to do what they know needs to be done.

Hey, it’s their future we are talking about. And the future of their children.

The News Machine is a Hungry Beast

info: Peter Economides is a Brand Strategist and founder of Felix BNI. He is a former Executive Vice President and Worldwide Director of Client Services at global adver-tising agencies McCann-Erickson Worldwide and TBWA\Worldwide. He has worked on some of the world’s most iconic brands including Coca-Cola, Apple, Absolut, illy, Audi and Nike. In Cyprus, he has been involved in branding projects for Bank of Cyprus, Sigma Television and easy-forex. Peter is based in Athens. Follow Peter on facebook at http://www.facebook.com/economidespeter or on Twitter @petereconomides

The sacrifices that are being made are monumental

THE LASTWORD

Media coverage is clouding the judgment of European policymakersBy Peter Economides

last_word.indd 98 07/03/2013 11:25

More than just a holiday destination with pristine white beaches and 300 days of sun-shine, Cyprus can also cater to your business needs ranging from registering and setting up your company’s operations to managing your EU, North African and Middle Eastern clients at a considerably lower cost.

As well as being an EU country and a mem-ber of the European Monetary Union since 2008, Cyprus enjoys the lowest corporate tax rate in the EU of 10%. Cyprus belongs to those jurisdictions on the OECD White List which have substantially implemented the internationally agreed tax standard.

In addition to this, Cyprus provides efficient business services, has a transparent legal and regulatory system and is committed to sustainable growth.

Cyprus welcomes both visitors and investors to work here, so, if you are searching for a new business base, consider Cyprus. It’s more than just beaches and sun.

“Columbia’s growth and expansion over the years is attributed to the uniqueness of Cyprus; being the is-land’s strategic position at the cross-roads of three continents, its compre-hensive legal framework, double tax treaties regime, communication sys-tem, banking system, infrastructure in general and last but not least its highly educated labor force.”

Captain Dirk Fry, Managing Director Columbia Ship Management Ltd

“The favorable business climate, the excellent telecommunications infra-structure, the well educated and skilled human resources, the favorable tax rates and the proximity to the Middle East and Africa markets, were some of the key factors that enabled NCR to de-cide to move its regional offices to Cy-prus in the 80’s. Gradually, NCR man-aged to expand the office in Cyprus to cover also all the African Countries.”

Managing Director of NCR Cyprus,Mr. George Flouros

Ministry of Commerce, Industry & TourismTrade ServiceTel: + 357 22 867100Fax:+ 357 22 375120www.mcit.gov.cy/[email protected]

Cyprus InvestmentPromotion AgencyTel + 357 22 441133Fax + 357 22 [email protected]

Barclays.A bank with a tradition of strength.It’s a tradition that has lasted in Cyprus for over 70 years, delivering the highest levels of local knowledge combined with unrivalled international reach. As one of our clients you will have access to our team of highly experienced professionals who provide seamless banking and corporate solutions. They are your gateway to the vast range of support and expertise available from Barclays globally. Whether you operate locally or internationally, our tradition of strength will help you create a culture of success.

To find out more about how Barclays can help, go to barclays.com/wealth or call us on +357 22 654477* for our Nicosia office or +357 25 208000* for our Limassol office.

*Available between the hours of 0830 and 1700 Monday to Friday. Calls may be recorded for security reasons and so that we may monitor the quality of our service. Call costs may vary. Please check with your telecoms provider. Barclays offers banking, wealth and investment management products and services to its clients through Barclays Bank PLC and its subsidiaries. Barclays Bank PLC is registered in England and is authorised and regulated by the Financial Services Authority. Registered No. 1026167. Registered Offi ce: 1 Churchill Place, London E14 5HP. Barclays Bank PLC is authorised by the Central Bank of Cyprus to conduct banking and investment business.

GOLD Magazine

Documents

Transcript of GOLD Magazine