Gold Magazine February - March 2013, Issue 23 | Page 42

ELECTIONS

WE INTEND TO

INCREASE
THE BUDGET

OF THE CYPRUS
INVESTMENT
PROMOTION AGENCY
(CIPA) FROM

€1.2
MILLION TO
€10 MILLION
in place what we have called the “Knowledge
Economy”.
Furthermore, we will jump-start the
Pentakomo Technological Park, an initiative that began when I was Minister of
Commerce & Industry but which has not
materialized. We will put in place the necessary infrastructure as well as tax and other
incentives in order to attract international
high-tech companies to Cyprus, based on
India’s successful “IT buildings” model.
To further promote growth, we will allocate more funds for the speedy approval of
strategic investments for amounts as low as
€5 million instead of today’s €50 million.
Expanding the network of Double Tax
Treaties (DTT) that we have with other
countries is vital to maintain and enhance
the momentum for growth in our services
sector.
The financial services sector stands to
gain significantly from the emerging new
area of business activity on the island that
will be both a direct and indirect result of
the hydrocarbon finds in Cyprus’ Exclusive
Economic Zone (EEZ).
Finally, we will examine incentives for
small and medium size businesses to encourage new investments and job creation by
providing tax incentives.
Our banking sector faces unprecedented
challenges. Banks in general are a vital
component of any economy. In our case,
however, they play an even more important
role as they are a vital link in the chain of
services that our professional sector offers to
international clients.
In view of this, it is imperative to protect

our banking system’s reputation and its ability to continue to offer essential services to
both the local economy and to international
clients.
The recapitalization of the banks is the first
step in this direction. The amount of recapitalization, however, appears to be an elusive
figure and one that is on the rise as only a few
months ago, when I met with the Governor
of the Central Bank, I was told that the
amount needed for the recapitalization of the
two largest banks was about €2 billion. The
amount we are now discussing, excluding any
amount needed for the Cooperative banks, is
about four times a s much. This is something
we need to investigate and understand.

Stavros Malas
Private-Public
Sector Cooperation

T

oday our country is in the
middle of a recession. It
is my strong conviction
that we can exit this dire
phase by giving emphasis
to those sectors of the
economy that can achieve fast growth.
International financial and professional
services represent such a sector. It is an area
of economic activity in which the people of
Cyprus have been successful. This success
has been built on hard and persistent work.
It is generally accepted that Cyprus possesses
certain competitive advantages: geographical location, pleasant climate, excellent
infrastructure, a respected legal framework,
well educated people, many double taxation avoidance treaties and a favourable tax
regime.
Our success in this sector is a practical
example of productive cooperation between
the private and public sectors. I intend
to strengthen this cooperation and make
changes to bureaucratic procedures where
this is needed. The State must always assist
growth.
I have suggested the creation of an Investment Chamber as a joint venture between
the public and private sectors. The Investment Chamber must have a local and permanent presence in the countries from which
our international business clients originate.
Such a presence is paramount in terms of
direct investment. It will also assist the international financial and professional services
sector. I wish to note that, when negotiating
with the Troika, our side managed to keep
our tax system intact. We should, however,
be alert since recently we have seen a number

of articles and statements in the international
media which cast a shadow over the transparency of our laws and practices. I will stand
firm on this issue.
The fact that, in the face of what is
predominantly a liquidity crisis, Cyprus has
applied for financial assistance to the ESM,
may have caused some anxiety among international clients and investors. It is up to us,
however, to turn this crisis into an opportunity for change and improvement. Hopefully,
we will end up with a more stable and better
regulated banking system that will enhance
our international business sector.
Finally, I wish to stress that, if elected, I
will strengthen the cooperation with professionals in the sector so that we sign more
double taxation treaties and improve the
existing ones. Furthermore, I do recognise
that the international financial services sector
is in a state of constant change. I will suggest
the creation of an Advisory Board made up of
sector professionals of all the main specialities.
This body will propose to the Government all
the necessary moves and measures so that Cyprus may retain and enhance its competitive
edge as a strong and reputable international
business centre.

IT IS UP
TO US
TO TURN THIS

CRISIS INTO AN
OPPORTUNITY

FOR
CHANGE
AND IMPROVEMENT

40 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

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01/02/2013 13:41