Cyprus – mythology is in our past, not in our future

Cyprus profile magazine

To many holiday visitors to this warm and friendly Mediterranean island nation, Cyprus is an idyllic, picture-book retreat from the hustle and bustle of modern life. With its many classical sites such as Kourion, Kalavasos and Kition and numerous other wonders from the pages of history, clear bathing waters and uncrowded beaches, it is easy to think it’s simply a sunny holiday destination steeped in Mythology and ancient cultures but not much else.

Venture just a short distance from these sights and you will see a very different world of bustling commerce, world-class corporate activity and an economy very much “on the up” after weathering its own financial crisis.

Those of us who lived through the 2013 Cyprus banking crisis will remember very well the queues at ATMs where, if you were lucky, there may be some cash available. The closing of the island’s second-largest bank and the feverish negotiations between politicians and the Troika during which a “haircut” was endured by some, a bail-out secured and the recovery put into train.

Unpleasant memories which echoed across much of the developed World in fact – not just in Cyprus. Few countries escaped with all their banking institutions trading normally and their national pride intact. No other country took the bitter medicine that Cyprus was prescribed – and few other countries have moved on quite so comprehensively.

Much of that “moving on” has been inspired by the Cypriot stoicism that has enabled the economy to show signs of a solid recovery and the first signs of new industries and property developments, begin to flourish once again.

One such industry is the creation, management and distribution of investment funds. Now that its representative body, the Cyprus Investment Funds Association (CIFA), is a fully-fledged member of the pan-Europe funds promotion organisation EFAMA, we can see how this important component of the Cyprus economy is set to grow.

Let’s look at a few key Cyprus numbers relevant to the Funds Industry:

• The service industry makes up almost 82% of GDP totalling €17.6 billion (2015)
• The funds sector assets under management totals €2.9 billion
• Regulated investment firms (MiFID) 218 (+51 new applications under review)
• Administrative service providers 162 (+23 new applications under review)
• AIFMD managers 13 (+8 new applications under review)
• UCITS management companies 4 (+4 new applications under review)
• Custodian banks: 7
• International memberships: IOSCO, ESMA, EFAMA, ESRB

Let’s also look at some numbers relevant to Cyprus generally as a business centre:

• EU compliant legal framework based upon English Common Law
• Double Taxation Agreements with sixty countries
• Thirty-nine banks operating in Cyprus
• Ranked 47th out of 189 countries for ease of doing business
• Corporate tax rate 12.5%
• IFRs accounting standards and EU and OECD-compliant tax framework

What does this all mean?

Cyprus, as a full EU member, has “put in the hours” and now has a thriving economy and an energetic and contemporary business environment where standards of governance and business conduct are at a high, internationally-accepted level of quality.

In the Funds Industry specifically, activity in this sector is growing. Enthusiasm at Government and Industry level is growing. Demand for new and creative investment funds and structures is growing.

The potential for Cyprus to excel in this arena is also growing. A new energy in Cyprus is evident, a new future for its Funds Industry is on the horizon and there are plenty of reasons why this should become more than a dream. It can become a success story.

The myth that Cyprus is a sleepy backwater with out-moded and opaque business practices is long dead. Remember – Mythology is in our past – not in our future.

(Statistics quoted provided by CIFA Cyprus Investment Funds 2016/17 )

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