It is a great pleasure and an honour to be
here tonight among such distinguished friends.
First of all, allow me to praise the
Chairman of the Cyprus Securities and Exchange Commission, Mrs Demetra
Kalogirou, as well as the Board and personnel of the Commission, for their hard
work and efforts in establishing a well-regulated and supervised securities
market in Cyprus, ensuring the highest of standards of investor protection and
the steady growth and development of the securities market.
At the same time, I would like to
express my utmost appreciation to all of you present tonight, and especially
the Directors and shareholders of the entities from abroad under the
supervision of the Commission, as by your business and investment initiatives
you have actively supported our efforts for economic growth throughout all
those years and have thus demonstrated real solidarity.
We greatly value your business and
investment endeavours and we look forward to supporting the growth of the
financial services sector in Cyprus, a sector that has shown remarkable and
dynamic progress in the last decades.
And my presence here today serves
exactly this purpose: To demonstrate my sincere commitment in supporting your
business and investment activities and to listen and seriously take into
account any suggestions, proposals, or even complaints you might have as
regards the way forward for the investment services sector in Cyprus.
This year finds Cyprus going through one
of the most critical periods in its modern history. The violent restructuring
of the Cyprus banking sector, the continuous negative external environment and
the necessary correction of unbalanced public finances are factors that
adversely affect economic growth.
Within this context, on March we launched
an ambitious and comprehensive development strategy that aims to restore stability,
modernize the state and put the economy back on a course of growth and
progress. Without undue delay, we are taking bold decisions to implement
prudent fiscal policy, we are modernizing the state and the public
administration and we are proceeding with structural changes, in order to turn
the crisis into an opportunity.
And I am pleased to note that until
today we have had two positive evaluations by the Troika, which proves that if one
is committed to the precise and timely implementation of the provisions of the
Memorandum one has the prospect of creating the conditions for stabilizing and restoring
confidence to the economy and attracting even more investments faster than
anticipated.
With regard to the banking sector in
particular, the significant steps achieved have been positively acknowledged.
For example, the full recapitalization of the Hellenic Bank with a contribution
of investors from abroad has been achieved and the restructuring of Cooperative
Institutions has commenced. Furthermore, the Bank of Cyprus is proceeding with
its restructuring plan with a permanent Board of Directors and a new CEO.
In parallel, restrictions
on transactions and capital movements have, to a substantial extent, been
lifted; including on international business
activities. Our aim is for
conditions to permit for all restrictions on financial transactions to be
abolished as soon as possible.
At the same time, I am pleased to assess
that our efforts are bearing fruit and are acknowledged at the international level,
as evident by the fact that deposits by residents of third countries during
October showed an increase of €400 million in a month, while this past week
Cyprus’ economy received its first upgrade by an international Rating Agency after
three years of successive downgrades.
Such messages, undoubtedly, reinforce
the gradual restoration of confidence to the Cyprus economy and positively
contribute to the stabilization and gradual growth of the market and the
services sector.
In addition, we should also not ignore
the fact that, according to the latest data, it becomes apparent that the extent
of the economic recession will be smaller than expected, at least for 2013.
It is important to emphasize that Cyprus, despite its
current economic difficulties, remains an attractive investment destination and a highly competitive center for international businesses, offering a
platform for their operations and
a preferential access to markets like Europe, Russia, Middle East, India
and Asia in general.
This is due to the following comparative advantages
which Cyprus enjoys:
·
A strategic location at the crossroads of the three
continents of Europe, Asia and Africa;
·
a well-developed infrastructure;
·
almost
50 double tax treaties
in force;
·
a
highly qualified and professional workforce, especially in
the financial services field, and an ease of doing business;
·
a
fully internationally harmonized tax and legal system and, of course; one
of the lowest and most competitive corporate tax rates in Europe at 12.5%;
Having said these, I must stress that a
priority of utmost importance for the Government is not only to ensure that
Cyprus will retain the substantial comparative advantages it offers to foreign
investors, but will further develop this conducive environment. This can only
be achieved by boosting innovation and enhancing the efforts of the business and
investment community to operate in a more effective, efficient and business-friendly
environment.
To this end, the following measures have
been adopted, which I believe are of particular interest to all of you present:
·
The amount of time required to issue planning
permissions has been reduced to a maximum of one month for small projects and three
months for large projects.
·
Broadening
of the range of permitted land development in off-limit areas for large
projects;
·
Permits for joint tourist developments such as
condo hotels will now be given.
·
Increase of the building
coefficients for large-scale commercial developments, including golf courses,
or for large-scale properties in tourist zones.
·
Licencing
of casino operation.
Concerning residency and citizenship
permits, which are of course interlinked with issues of foreign investment, the
following have been adopted:
- Non EU residents have the opportunity to acquire a permanent residency permit with the purchase of a private home of at least €300,000 and deposits of minimum €30,000 in a local bank for three years.
- Non EU residents can acquire the Cypriot nationality with:
-
investment
of minimum €2 million in a state company and €500,000 investment in the
Research and Technology fund;
-
direct
investments of €5 million;
-
bank
deposits of €5 million in a local bank for five years;
-
payments
of income tax or VAT of more than €500,000.
Simultaneously, the Government and I
personally have launched a campaign to attract foreign investments from a
number of third countries which have shown an interest. In this respect, I
recently visited Kuwait, together with the Ministers of Foreign Affairs, Energy
and Finance, and the signals which we have received are really encouraging. At
the same time, by the end of January I will be visiting Qatar, while I am also
planning to visit other Gulf countries, as well as Russia and China.
Further, the discovery of natural gas reserves within
Cyprus’ Exclusive Economic Zone creates tremendous prospects for investment and
cooperation in the energy sector and auxiliary services and has created a new impetus in
encouraging opportunities for co-operation between Cypriot and foreign
businesses, especially if one also takes into account the Government’s decision to
construct a Liquefied Natural Gas Terminal.
Promising
opportunities for growth also exist across many other sectors, such as shipping,
tourism, large-scale development projects, education, health, research and
renewable energy.
The task of
returning to growth is not an easy one, but we are convinced that with the
right measures and a more business-friendly administration we will succeed and
we will pave the way for greater growth, both for you
and our country and its people.
Your contribution, just as in the past
and in even worse economic conditions, is once more vital in assisting the
efforts of the Government to demonstrate that we are well-equipped, determined
and able to overcome the challenges which lie ahead.
In this respect, the high quality of
investment services you offer to local and International clients and businesses
is highly significant in conveying that, in line with all the measures and
decisions adopted by the Government towards the aim of encouraging foreign
investments and promoting growth, Cyprus retains its competitive advantage and
its position as a significant international investment hub.
Concluding, I am certain that the Cyprus
Securities and Exchange Commission will continue its proactive efforts to
further upgrade the national framework for the supervision and regulation of
the investment services sector. I consider that its mandate to protect the investors
and its role in reinstating investor confidence in the financial markets is of
paramount importance.
I would like to once more thank you all,
for your positive contribution,
but mostly for your trust and faith in Cyprus, and congratulate the organizers
for this wonderful event.
___________
