THE CYPRUS International Business Association (CIBA), which represents the interests of the offshore sector, should be happy about EU membership, but it feels the Cyprus government did not adequately capitalise on selling the island as a strategic business location in the run-up to accession.
President Chris Koufaris said there had been a lot of uncertainty over the developments on the Cyprus issue. “So the timing is not so good,” he said. “But I think that a lot more could have been done in the year that has gone by in terms of promoting the Cyprus international business centre, but for reasons that are very clear to everyone, perhaps not the maximum effort has been put forward. Perhaps the decision making was postponed to see how things will develop.”
Koufaris said the recent changes to the tax system, which equalised taxation between offshore and local companies to a standard ten per cent, still gave Cyprus the edge as it has the lowest rate in Europe. “This opened the way to promote Cyprus,” he said.
“While certain things have been done, I’m sure once the political scenery is clear, the developments in Cyprus could be rosy.”
However, he said a lot more needed to be done by the authorities to capitalise on what the island has to offer for international business. “A lot more organised effort is needed in terms of approaching different countries,” said Koufaris.
This should include not only European countries, but also well-established business centres such as Dubai and Singapore where it should be made known that Cyprus was now part of Europe.
“We can offer not only the tax advantages but also a strategic location, and the fact that Cyprus is officially recognised as being European territory, which is something not a lot of international business centres can claim,” he said. “Cyprus is well established and organised and it has a long history behind it. Becoming a part of Europe offers it a rubber stamp and a location that can be of interest to countries in Asia who want to have access to Europe.”
Koufaris said part of the problem was the lack of a centralised system for international business on the island, due to moving responsibilities from the Central Bank to the Finance Ministry.
“It’s not as centralised and focused and hasn’t been focusing on the promotion and development of the island in the same way that the Central Bank used to do years ago,” he said, adding that he had been discussing the issue earlier in the week with the powers that be.
Koufaris said he had been trying to find out how many offshore companies were currently registered, how many might have left the island and how many new companies were registered in recent month. He hit a blank wall: “This is a handicap,” he said.
“That information should be easily traceable and obviously it’s of interest in terms of monitoring and concentrating on what to do next, but its not clearly available.” he said.
“So the mixture of organisations because of the changes and the uncertainty of political developments have been holding back the sector. The ideas and targets and plans to concentrate on a strong campaign have not happened to the extent that they could have.”
