Publications

Cyprus rides the storm and strengthens scope as a sound financial services and business centre with global reach.

 The services sector continued to perform strongly. In evaluating the aftershocks of the global credit crunch Central Bank Governor said vibrations from such a convulsion cannot leave Cyprus totally untouched. Regarding the banking sector Governor said that it remains healthy. The strict monitoring framework has protected Cypriot banks from exposure either to risks of liquidity or to excessive investment dangers. The Finance Minister said that “we remain cautiously confident we will do much better than the rest of EU”.

Mergers and acquisitions involving Cypriot companies have dropped ending four years of deal growth. However total deposits with Cyprus banks were up. Advertised 3-month bank deposit rates average 6.5% reaching 7.25%. Loan growth increase is maintained.

Cyprus with a uniform corporation tax rate of 10% offers the lowest tax regime in the EU still complying fully with EU and OECD. An EU member state having successfully introduced the Euro equipped with one of the widest networks of double tax treaties offers an attractive basket of tax and business solutions. Cyprus is firmly established as one of the most efficient business locations in Europe.

Tax costs are significant in investment structures, regulation and adherence to sound financial practices are more important now than ever. Cyprus also offers excellent business infrastructure and professional services, well trained English – speaking staff, English legal system, excellent air routes and telecommunications. Further the hot climate and cosmopolitan lifestyle as a prime tourist destination.

The island’s strategic location at the cross-roads of Europe, Asia and Africa has shaped its history and its development into an attractive financial centre   particularly for Central and Eastern Europe, Russia and ex C.I.S. Countries.

The financial services sector is rising to the challenges ahead with the Investment Services and Activities and Regulated Markets Law which implements the MiFID, and introduction of the Capital Requirements and all relevant EU Directives.

At this historic moment of re-defining business strategies and re-evaluating business options Cyprus stands out to be chosen as a superb location.

The eclipse of capitalism?  New vision of market economy in a new era of globalised financial inter- dependence.

The inability of the system to withstand failure of some of its prominent financial institutions leading to massive bailing out through state intervention has dealt a serious blow to a vision the free world has cherished for years.

The market economy has worked so well and survived for so long that it would take a genius to be able to destroy it. Robert Jenkins, Chairman of the IMA, brave voice in the wilderness of capitalism idolatry said referring to the bankers. “These people created the problem, then denied it existed, then projected its quick resolution, then begged regulators for help …” But Mr. Jenkins was far too lenient saying “capitalism cannot succeed unless capitalists are allowed to fail”.  We beg to disagree.  Capitalism may not have the luxury of failing once again. The spending of hundreds of billions of tax payers’ money has not as yet proved enough and may not prove so in the future to restore investor/depositor confidence the lifeblood of banking.

Those conceived to be the protagonists of the de-railing of the world economy must account for the events leading up to and including the crisis in the markets, must justify their acts or omissions or defend themselves in front of an International Committee of Investigation.

In a free society we must feel safe to stand up and be counted. We cannot be impartial between right and wrong. We have all witnessed events repugnant to the ethics of free society. It is within the realm of possibility that those who caused a downward spiral in the economy were ill- prompted in reckless disregard to the interests of investors.

In the operation manual of every single tiny tax haven purporting to exercise elementary supervision on financial services compliance requirements exist such as conduct of business with integrity and honesty, exercise of skill care and diligence, proper management, effective grip on affairs, safeguards for market abuse, organizing affairs with prudence. How far fetched is it for “these people” to have violated one or more of the principles outlined in the manuals of not only  the most strictly regulated financial markets but also of the so called tax paradises remains to be seen once such an International Committee of Investigation is set up.

Public morale must be lifted and investor confidence must be restored. Caesar’s wife must be seen to be honest. We must perform a face-lift on the traditional values of free economy to turn them from static to dynamic. We all have a role to play in the building of a new vision of market economy we can all share with pride and confidence in a new era that the whole world may stand or fall together.