“Now is the time for Cyprus to become a regional services centre,” says Marios Klitou, regional chief executive officer at Baker Tilly Cyprus.
“The most important asset we have in Cyprus is people,” Klitou continues. “This is particularly true of the professional services area, but also in many other areas of business. For professional services, in accounting, auditing, etc. we have a very high standard. Many people are trained in UK and have an understanding of international business.”
Cyprus should take advantage to build on its talent pool to do business globally, and certainly in Europe. “This is an aspect of Cyprus that the government’s promotional services should develop. We have good airports, so our people can travel.”
Consider that Cyprus professionals are price competitive, Klitou notes.
“Our charges for services are lower than those of many other markets in Europe. This is a chance to address our competitivity.”
Klitou points out that the number of companies registered in Cyprus that are actually paying the annual levy is only at about 50 per cent. “We have to do something else. We’re not getting the numbers of companies coming in. This is in stark contrast to our competitors in Romania and Bulgaria, where there are very large numbers of companies coming in.”
We are not attracting large international companies to do business with or to bring into Cyprus, Klitou complains. “Rather, we are dealing with a great many smaller companies, and while this is good business, we need to be more ambitious.”
Can Cyprus make that transition?
“This is in correlation with the levels of salary and the availability of staff. It depends on the ability for these companies to set up in Cyprus easily, and to find the people they want. And this has to be done in the correct manner which is sometimes difficult for us in Cyprus,” Klitou says, as employment is at very high levels
“We have the potential to do great things in Cyprus, if we can work in accord with a unified vision for the future,” Klitou insists.
Klitou feels that such actions would be significant because the Cyprus economy has to recover under difficult conditions.
“Tourism will be the gaping hole in the Cyprus economy for some time. There are simply not enough arrivals. We can deal with this, but it will take some time to recover,” he warns.
Then the construction industry is seeing negative results and lack of foreign investment for the moment. “This is a challenge to be addressed.”
And the development of professional services has changed, and is facing new challenges. “The Double Taxation Treaty with Russia is a significant challenge that we must confront, one that is very important for Cyprus as many companies provide services to Russia. Then there is Brexit, with the departure of UK from the EU – this is also a game changer for the country.”
One area that is seeing growth is the funds industry. “This industry is slowly growing, but the income derived from it for the Cyprus economy is still very small compared with what we are losing as companies depart – the number of holding companies is declining.”
What Cyprus significantly lacks in terms of attracting more and larger companies is one of the major international banks. “We used to have HSBC, Natwest and Barclays but they are gone. There is nothing wrong with the local banks, but in order to make large international companies feel comfortable here, we need a major international bank.”