INTERVIEWS Michael Dobbs Tim Potier Colin Wright INVESTMENT Record-breaking sales for alternative assets PLUS: MONEY / BUSINESS ECONOMY TAX & LEGAL LIFESTYLE / OPINION BANKING Bank of Cyprus launches Premier Club + DAI LINGYUN, SAVVAS SAVOURI, GEORGE & ALEXIS TSIELEPIS THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS ISSUE 45 DECEMBER 14, 2014 - JANUARY 13, 2015 PRICE €4.95 POWERED BY: LET’S SEE ACTION! 5 291295 000577 00001 >
Transcript
INTERVIEWSMichael DobbsTim PotierColin Wright
INVESTMENTRecord-breaking sales for alternative assets
+ DAI lINGYuN, SAVVAS SAVOuRI, GEORGE & AlEXIS TSIElEPIS
the international investment, finance & professional services magazine of cyprus
ISSuE 45 DECEMBER 14, 2014 - JANuARY 13, 2015PRICE €4.95
POWERED BY:
let’s see
action!
529
1295
0005
77
00001>
CALIBRE DE CARTIER DIVERM A N U F A C T U R E M O V E M E N T 1 9 0 4 M C
WATER-RESISTANT TO 300 METRES, THE CALIBRE DE CARTIER DIVER WATCH IS AN AUTHENTIC DIVING WATCH.
FITTED WITH THE 1904 MC MOVEMENT, IT COMBINES THE HIGH TECHNICAL REQUIREMENTS OF THE ISO 6425: 1996
STANDARD WITH THE ASSERTIVE AESTHETICS OF THE CALIBRE DE CARTIER WATCH. ESTABLISHED IN 1847,
CARTIER CREATES EXCEPTIONAL WATCHES THAT COMBINE DARING DESIGN AND WATCHMAKING SAVOIR-FAIRE.Dis
cove
r th
e ne
w m
ovie
on
cart
ier.c
om
Nicosia - Limassol - Tel. 22 897 361
Expect our knowledge to keep you ahead of the curve
Expect our kno l
Risk. Reinsurance. Human Resources.
Aon Hewitt
Planning for success means being two steps ahead, not running to catch up. At Aon Hewitt, we embrace a culture of progress. Our talent, retirement, and health solutions are proactive, practical, and bold. Our focus is on the success of your people and your business. Aon Hewitt partners with you to empower results.
For more information about our talent, retirement and health solutions, visit aonhewitt.com.
Aon HewittRetirement Solutions
Building a strategy today can empower your tomorrow
Risk. Reinsurance. Human Resources.
6 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS
28 | THE CLIENT IS KINGBank of Cyprus launches its Premier Club
30 | BROTHERS IN ARMSInterview with George and Alexis Tsielepis – Managing Director, and Director, Head of Taxation – of Costas Tsielepis & Co.
34 | PERFECT PITCHMore than ten Cypriot start-ups par-ticipated in last month’s Web Summit in Dublin, described as “the best technology conference on the planet”.
38 | DOING THE RIGHT THINGDr. Tim Potier, Head of the School of Law at UCLan Cyprus, says that it has the
8 1016
Issue 45December 14, 2014 - January 13, 2015EDITORIAL
UP FRONTFIVE MINUTES WITH…
potential to become world-class, which is the vision of the whole university.
42 | ENRICHING CUSTOMER VALUEChris Christodoulou, Financial Control-ler of Fileminders, on how the recession has affected business and how he sees the future for his company and Cyprus.
44 | THE 5TH LIMASSOL ECONOMIC FORUM Considered by many as the best annual gathering of its kind in Cyprus, and attracting the crème de la crème of the island’s international business scene, this year’s event saw global economists, finan-cial sector representatives and high-calibre speakers from the Government and the private sector come together to discuss the future of the European economy.
48 | SCHIZOPHRENICS, WEREWOLVES, SCREWED-UP POLITICIANS AND EUROZONE MADNESSAn exclusive interview with Lord Dobbs of Wylye, best-known as Michael Dobbs, author of House of Cards, who was one of the speakers at the recent Limassol Eco-nomic Forum.
50 | STRAIGHT TALKSeemingly radical ideas, not easy answers, are what Cyprus needs if it is to recover from its present plight, says Dr. Savvas Savouri.
WHY GROWTH COULD REMAIN ELUSIVE IN 2015By Fiona Mullen 33TIME FOR CHANGEBy Dr. George Mountis53FROM EGGS TO BEPSBy Costas Markides 61
+ OPINION
66 {money}
70 {business}
74 {economy}
76 {tax & legal}
78 {lifestyle}
32FEATURES
18
54 | BIG IN JAPAN As the local subsidiary of a Japanese company, Furuno is a rarity in Cyprus but it has already established itself in what is a significant niche market.
56 | THE CYPRUS INVESTORS SHOW 2015The Cyprus Investors Show 2015 presented opportunities to Cypriot investors interested in schemes de-signed to protect their own or their clients’ wealth.
58 | IN VINO VERITASWould you pay €2,000 for a bottle of Commandaria? We meet a man who is confident of finding a clien-tele that is happy to purchase – and drink – what he is marketing in ex-clusive diamond-studded collector’s edition bottles.
62 | TAX ‘BADS’, NOT GOODS!Time for a Green Tax Reform in Cyprus
LET’S LET’SSEESEE
ACTION!At the behest of the Cyprus Fiduciary Association (CFA), stakeholders gathered on November 6 to share their experiences and views in an attempt to demarcate the way forward for Cyprus, correcting the mistakes of the past, and ensuring that only deliberate, purposeful steps are taken from here on. We present their 30 proposals and more.
54
WWW.ST-DUPONT.COM
THE BLAZON COLLECTION
EXCELLENCE, NOBILITY, PRIDE & LOYALTYAT YOUR SERVICE.
EDITORIAL
THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS
Twelve months ago we were all looking to 2014 with a certain amount of trepidation. Cyprus was still recovering from the shock of realising that the country had been close to bankruptcy and people had not entirely come to terms with the idea that survival meant, in part, the winding-up of the
second-largest bank, a sizeable ‘haircut’ of deposits in the largest, and being at the mercy of the Troika of international lenders, who were determined to see the Government take measures to ensure that its successors will be in a position to repay the €10 billion that the country was granted. Could things possibly get worse?
Well, we can now see that those ‘nasty foreigners’ knew what they were doing and while 2014 is unlikely to be remembered as anyone’s favourite year, things have devel-oped better than even the most optimistic forecasters expected, especially in the bank-ing sector, thanks to some valuable – and massive – foreign investment. The Troika’s reports were positive (until the House of Representatives tried to fool the international lenders by passing legislation that neutralised essential changes to the law. This led, as anyone knew it would, to an immediate halt to funding. Fortunately the Supreme Court ruled that their bills were unconstitutional), the rating agencies have been up-grading the banks and the country’s creditworthiness, and all the indications are that Cyprus will exit the economic adjustment programme ahead of schedule.
Of course, things are not all rosy. Unemployment remains unacceptably high, tour-ism is still suffering and relations with Russia have deteriorated following EU sanctions over its annexation of Crimea and its role in the Ukraine crisis, and more recently its new laws on ‘de-offshorisation’ and its call for Russian expatriates to send their money home as part of a tax amnesty. Much still remains to be done, as the outspoken (and somewhat pessimistic) economist Savvas Savouri told us (page 50).
That said, this final issue of Gold for 2014 is packed with positive articles, beginning with our cover story which sets out specific proposals for improving the island’s practic-es and reputation as an international business centre (page 18). We have an interview in which Bank of Cyprus presents its new Premier Banking service (page 28), a piece on 10 Cypriot start-ups that created quite a buzz at last month’s 2014 Web Summit in Dublin (page 34) and we talk to the Head of Cyprus’ only university School of Law (page 38). Much has been said over the past two years about the possibility of attracting Chinese investor interest, not all of it well-founded. This month, we feature a Chinese investor who has not only purchased property (and persuaded several of his friends to do so) but is marketing Commandaria as a luxury item in his country (page 58).
Last month’s Limassol Economic Forum, recognised as the most important annual gathering of key figures from the local and international financial communities, was a great success. You will find photos and information on the speakers (starting page 44) as well as an exclusive interview with one of the keynote speakers, Lord Dobbs of Wylye, better known as Michael Dobbs, author of House of Cards.
Add to this interviews with executives from Costas Tsielepis & Co. (page 30), Fil-eminders (page 42) and Furuno (Cyprus) Ltd (page 54), and you have another excellent issue in your hands.
This time last year, I also announced the launch of the Gold News website and daily newsletter as an online complement to the magazine. I am delighted to report that the response and feedback to the website has been phenomenal, showing IMH, our pub-lishers, that its bold decision to invest in a new venture (just as it had done with Gold in 2011) was the right one. Thank you for your support over the past 12 months and here’s to a successful 2015!
8 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS
MANAGING DIRECTOR George Michail
GENERAL MANAGER Daphne Roditou Tang
MEDIA MANAGERElena Leontiou
EDITOR-IN-CHIEF John Vickers
JOURNALISTSEffy Pafitis, Chloe Panayides
CONTRIBUTORS TO THIS ISSUE Mariana Antonescu, Philippos Aristotelous, Eleni Hoplaros, Andrew Lumley-Holmes,
Costas Markides, Dr. George Mountis, Fiona Mullen, Artemis Pnevmatikou,
Stavros Supashis, Theodoros Zachariadis
ART DIRECTION Anna Theodosiou
SENIOR DESIGNERAlexia Petrou
PHOTOGRAPHY Jo Michaelides
MARKETING EXECUTIVE Kevi Chishios
SALES & BUSINESS DEVELOPMENT EXECUTIVE
Phivos KarayiannisADVERTISING EXECUTIVES
Irene Georgiou, Christopher ConstantinouOPERATIONS MANAGER
+ DAI LINGYUN, SAVVAS SAVOURI, GEORGE & ALEXIS TSIELEPIS
THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS529
1295
0005
77
00001>
529
1295
0005
77
00001>
ISSUE 45 DECEMBER 14 - JANUARY 13, 2015PRICE €4.95
POWERED BY:
30 STRATEGIC PROPOSALS TO RESTORE CYPRUS AS AN INTERNATIONAL BUSINESS CENTRE
LET’S LET’SSEESEE
ACTION!
We support you create the value you are looking for by providing specialised solutions based on quality. Together we build relationships based on trust and we say things as they are, to assist you deal with issues that tomorrow will prove important. We adapt our expertise and the power of our global network to your specific needs helping you make the difference.
10 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS
GEORGE STYLIANOU DEPARTS FXTM
Prominent low-cost European airline easyJet has re-
vealed its financial re-sults for the year ended September 30, 2014, reporting an increase in total revenue of 6.3% The airline posted £4,527 million in yearly revenue, with profit before tax amounting to some £581 million. Total revenue per seat increased by 1.2% on a reported basis and by 1.9% on a constant cur-
rency basis to £63.31 million. The growth in revenue per seat was driven, in part, by a number of digital and revenue management initiatives and a con-tinued focus on capital allocation, the company commented.“easyJet has continued to execute its strat-egy, delivering another strong performance and enabling easyJet to deliver record profits for the fourth year in a row,” Carolyn McCall easyJet Chief Executive affirmed.
The company, she con-tinued, is also proposing to increase the propor-tion of profits after tax paid in dividends from one third to 40%, re-flecting its confidence in the future of easyJet. “easyJet has opened up clear blue sky between us and our competitors – both legacy and low cost - with our unique and winning combina-tion of the best route network connecting Eu-rope’s primary airports, with great value fares and friendly service,” McCall concluded.
Otkritie FC Bank Acquires 20% Stake in RCB
Bank
RCB Bank LTD has completed an equity capital increase through the issue of additional shares and the attraction of Otkritie Financial Corporation Bank as a
new strategic investor, the Limassol-based bank has revealed.
Otkritie FC Bank will own a 19.85% stake
the issue of additional shares, the stake of VTB Bank decreased to 46.29%. “Prior to the completion of the issue of additional shares and capital increase, RCB Bank LTD successfully passed the European Central Bank’s stress tests exceeding by almost twice the minimum requirements,” stated RCB Bank CEO Kirill Zimarin.
“However, our development plans on the local and international markets imply an active assets growth, which required both the expansion of the capital base and the number of strategic partners.”
Otkritie is one of the largest and most
Zimarin explained, with extensive expertise in developing lending projects for small and medium-sized businesses, as well as in the successful implementation of retail projects and high-quality investment bank-ing services.
In addition to its evaluation of Cyprus Best Golf Hotel at the first-ever World Golf Awards ceremony which took place on November 15 in Algarve, Portugal, the Aphrodite
Hills Resort’s golf course also won Cyprus Best Golf Course. The World Golf Awards celebrate and reward excellence in golf tour-ism, world class courses and golf destina-tions. The inaugural awards focused on the leading 130 nations that are perceived to be shaping the future of the industry. Golf tourism constitutes a vital segment in the
global travel and tourism marketplace. An estimated 600 million golfer visits will take place in 2014 to the 32,000 golf courses and resorts worldwide. Voting was by professionals working within the golf travel and tourism in-dustry – senior executives, travel buy-ers, tour operators, agents and media professionals, as well as the golf tourism consumers.
George Stylianou, Executive Director and Chief Market-ing Officer of Limassol-based ForexTime (FXTM),
announced his decision to leave the company last month. “I am grateful to FXTM for all I have received and feel proud of what I
have offered back. Now is the right time to move on to bigger projects as the entrepreneur in me is ready for greater personal and professional challenges,” Stylianou told Gold.Prior to his appointment at FXTM in 2012, Stylianou held a number of senior roles in several FX broker and provider firms, including Alpari, FxPro and Easy Forex.
“We can confirm that George Stylianou and FXTM have parted ways by mutual agreement,” an FXTM statement noted.“George has been an integral member of the team since the company’s launch and we are grateful for his ef-forts in helping to build the brand into the strong position it is in today.”
EASYJET REVENUE INCREASES 6.3%
110100100111010010101010101001111101010101110100111110100000001111111100000000000001111111000 GGGGGGGG lG llGGGGGG lllGGolG lGolllGGGGGGGooooooGooooolGollGolGGGGGGGGGG dddddddddddddddddddddddddddd THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MA
Limassol Marina launched its first festive season on No-vember 29, in the presence of its property and marina residents, project staff and
visitors.The event featured an extensive line-up of entertainment including London West End singer Riana Athanasiou, the percussion group Batukinio, the Diastasis Children’s Choir and the Limassol municipal band. Following the entertainment, mulled wine and treats were served in the Square.
Limassol Marina Kickstarts the Festive Season
PLANSfor Paphos Tower 2017
Paphos will soon have its very own skyscraper, according to
architects Vangelis Mav-ronicholas and Anna Ma-vronicholas. The building, named Paphos Tower
2017, is to be funded by the private sector, ahead of the town’s role as the European Cultural Capital 2017. Expected to become a landmark in the town, the 90-metre high tower, to be located near the Alexander the
Great Hotel, will operate as an observation point,
views of the sea and the town. According to local reports, both local and foreign investors have expressed interest in the development.
VTT VASILIKO LAUNCHES OPERATIONSF
ollowing the announcement of the completion of the first phase of construction at VTT Vasiliko, the terminal has already welcomed its first vessel last month for testing
purposes.The oil products delivered were used to
test the operational system of the jetty as well as the storage areas onshore. Once the system and procedures of the terminal are successfully evaluated, the company will launch the terminal’s operation and will be ready to offer its services to oil trading com-panies.
The company officially took delivery of the terminal from contracting company J&P on November 28. The project includes 28 tanks of 544K m³ storage capacity and a jetty with the capacity to service over 500 tank vessels per year. The second phase of the terminal, which is currently under evaluation, will in-clude 13 additional tanks which will increase total capacity to 850K m³. This phase is expected to be completed in 2016.
12 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS
UP FRONT
ARISTO DEVELOPERS SHOWCASES
PORTFOLIO TO RUSSIAN BUYERS
Prominent Cyprus develop-ment and real estate firm Aristo Developers has continued its contacts with Russian buyers, participat-
ing in yet another property investment event in the country. The firm participat-ed in one of the largest property events held throughout the Autumn ’14 exhibi-tion season in Russia, the St. Petersburg International Property Show.The event, which took place in Novem-ber, attracted some 70 companies from 25 countries, showcasing over 3,000 available properties located internation-ally. Aristo Developers, together with Sunter-ra Homes, a permanent exhibitor at the St. Petersburg International Property Show, presented its portfolio to poten-tial buyers. In addition to promoting the island’s real estate market, Aristo Devel-opers also informed attendees about the Government’s residency and citizenship scheme, as well as the educational op-portunities available to foreign students on the island both via public and private educational institutions.
FACTA AGREEMENT SIGNEDCyprus signed an intergov-
ernmental agreement with the US for the implementa-
tion of the US Foreign Account Tax Compliance Act (FACTA) on Tuesday December 2, in what was described as a further step in boosting mutually beneficial economic and political ties. The agreement was signed by Finance Minister Harris Georgiades and the US Ambassador to Cyprus, John Koenig (left). Under the agreement, the Cypriot authorities will provide the competent US Authorities with financial information regarding bank accounts held by US citizens, as stipulated in the agreement. The US government has thus far signed in excess of 40 intergovernmental
agreements, in what has been described as a model in the US administration’s effort to curtail tax evasion and boost transparency. “The signing today of the FACTA agreement is another important step in this very direction,” said Georgia-des. “It is also a significant develop-ment in strengthening the excellent political and economic ties between Cyprus and the US, he added. On his part, Koenig welcomed Cyprus’ commitment to intensify coopera-tion in the field of international tax compliance. “Today’s signing marks a significant step forward in our countries` common effort to work collaboratively to combat offshore tax evasion, an objective that ben-efits both or countries,” he said.
Caesars Entertainment, one of the most prominent gaming companies worldwide, is reportedly interested in the operation of a casino resort in Cyprus. The Ameri-can public gaming corporation owns and operates over 50 casinos and hotels, as well as seven golf courses, under several brands. According to international
sources, representatives of Caesars have already visited the island to discuss the invest-ment opportunity with local authorities. The bill for casino operations in Cyprus stipulates that each casino must have at least 1,000 gaming machines, 100 tables, and must feature a hotel of at least 500 rooms. A 15% tax rate on all gross revenues is to be implemented,
CAESARS ENTERTAINMENT TO OPERATE CYPRUS’ FIRST CASINO RESORT?
Monarch Airlines has an-nounced a new Cyprus route from the UK, to be launched during the summer 2015 sea-son. The airline will operate a
Airport. Monarch has also announced
Rhodes, to begin during the same sum-
mer period. “We recently underwent a strategic review of our network, looking at
Marisa Blanco, a spokeswoman for Mon-arch Airlines. The airline conceded that the
customer demand, focusing particularly on adding leisure destination to its Summer 2015 schedule.
MONARCH AIRLINES TO LAUNCH LARNACA-GATWICK ROUTE
t a
ESEESSESESSSSESSESSSSSSEEE
14 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS
C an you imagine a single company with a workforce that is more than twice the popu-lation of Cyprus? Well, there are at least two on Fortune
FactSet Research Systems, annual reports, and other
UP FRONT
THE WORLD’S BIGGEST
EMPLOYERS
6
3
8
2
7
Wal-Mart Stores is the world’s largest retailer, with nearly 11,000 stores in 27 countries. The company was founded in 1962 by Arkansas businessman Sam Walton; the Walton family remains one of the richest families in the world, with a 50% stake in the company. Out of its 2.2 million employees worldwide, about 1.4 million work in the US. International revenues amounted to $136.5 billion, 29% of its total revenue.
Compass Group is the world’s largest contract food service company, generating 90% of its revenue from more than 50 countries outside the UK. It serves four billion meals a year at
buildings, schools, and sports venues. Compass’s operations in North America account for 40% of its workforce and 47% of total revenue. The company has increased its workforce by more than 30% over the
Hon Hai Precision is the parent company of Foxconn Technology, the world’s largest electronics manufacturer. Founded in 1974, the Asian tech giant now assembles everything from smartphones to display panels for Apple, Cisco, Dell and Sony. Apple contributes about 40% of the company’s revenue. Earlier this year, Hon Hai hired 100,000 people in mainland China to help meet production demands for Apple’s iPhone 6.
Agricultural Bank of China is one of China’s “big four” commercial banks and the biggest employer of the
presence with 23,547 domestic branches serving the largest population in the world. The massive lender went public in 2010, pulling in $22.1 billion from Hong Kong and Shanghai in what was the world’s largest IPO until
this year.
G4S is the world’s largest security company with a massive global footprint spanning 125 countries (including Cyprus). It is now the largest publicly traded employer in Europe, and boasts a strong and consistent track record of
combination of personnel, project management, risk management and technology solutions to commercial and government organisations, which account for 75% of its revenue.
The world’s largest cleaning company was founded in Copenhagen in 1901 as a small security company with 20 night watchmen. Since then, it has expanded
services, including cleaning, catering, and property and facilities management. The Danish company is notable for having an employee turnover rate of only 52% versus the average 65% seen in the facility services sector.
PetroChina is China’s largest oil and gas com-pany and the world’s second most valuable
Mobil. Founded in 1999, it is the publicly traded arm of the China National Petroleum Corp., which
Half of its employees work in exploration and production, while the rest are responsible for mar-
company has increased its workforce by more than 13% over the past
The McDonald’s workforce total includes employees
company-owned restau-rants, but excludes workers at its 29,179 franchisee-owned restaurants. McDon-ald’s has faced problems across the globe but one element of its turnaround strategy is a plan to in-stall self-ordering kiosks and mobile ordering at its restaurants – a move that should improve operating
headcount.
4
9
Volkswagen reported sales of 9.73 million vehicles worldwide in 2013, putting the company in second place for the year, well behind Toyota and slightly ahead of General Motors. Volkswagen is the biggest employer of the three, though in terms of productivity measured by revenue per employee, Volkswagen lags behind both of its rivals. Every weekday, 572,800 employees worldwide produce some 39,350 vehicles.
Industrial and Commercial Bank of China (ICBC) is the biggest China bank by sales,
value, as well as the leader in productivity. With business coverage across the six continents, ICBC provides
and services to 4.7 million corporate customers and 432 million personal customers through its network of 19,000 locations worldwide.
vehicles.hich account for 75% orevenue.
1
10COMPASS GROUP Employees: 506,699 Country: United Kingdom Industry: Food Services Sales: $27.4 billion Market value: $27.0 billion
