The professional services sector in Cyprus is expected to remain on a steady course of growth in 2017 despite increased regulatory demands, says Christos Evagorou.
Parker Randall International (PRI) is a UK-based worldwide organisation of independent professional firms and businesses, as well as legal, management and IT advisers, represented in more than 50 countries by more than 100 offices and a 2,000-strong staff. PRI members are selected based on exacting requirements for size, reputation, quality of practice, diverse technical capabilities and geographic location. Parker Randall Cyprus is the local member firm of Parker Randall International and it holds operations in two locations in Cyprus, through its Nicosia Head office and Larnaca.
Could you give a brief overview of your core business and key markets?
We are predominately an audit and accountancy firm, but our capabilities and capacity extend far beyond these and into the provision of advisory services, corporate finance consultancy, and international tax consultancy to name just a few. We have recently established a unit within our firm that undertakes projects in business turnaround and debt restructuring, and we have had significant results thus far. Our client portfolio is quite diverse, but significant expertise has been accumulated in wholesale, retail, manufacturing and shipping operations both locally and internationally. Our portfolio comprises of about 65% local clients and 35% international clients from countries or areas such as the UK, Middle East, Greece and many others.
What can your portfolio in retail and manufacturing say about the current performance of these sectors?
Consumption is on the rise and is creating a positive impact on retail. This is partly due to a small element of a rise in prices resulting from an increase in operations. Large retailers are showing growing interest in establishing operations in Cyprus, such as the Swedish retail giant H&M for example, who set up its first store on the island in Nicosia in 2016. By definition, wholesale follows suit and numbers are encouraging. As regards manufacturing, we have seen a drop since 2013, but the current tendency goes towards stability, with the main concern being to maintain ongoing operations and becoming leaner.
What sectors of Cyprus do you see providing the best opportunities for growth and investment?
There are a number of sectors that provide opportunities for investment, such as the renewable energy sector and the medical sector. However, I believe that the traditional sectors, such as the tourism and hospitality industry and the financial and professional services sector, will remain by and large the driving forces of the Cyprus economy.
The tourism industry is coming off a record-breaking 2016, which facilitated significant investment for the current year, whereas the financial and professional services sector held its ground following the 2013 crisis and is recovering at a good pace and has even exceeded expectations. These two areas are leading the way and will hopefully have a positive effect on the rest of the economy. Another sector with immense potential to significantly contribute to the economy is the maritime sector, which keeps attracting more shipping-related companies to establish in Cyprus. It will also be interesting to see the effects of the upcoming new multi-million-euro casino resort project and the recently introduced gaming industry, as expectations are indeed high.
On the other hand, and unlike general perception, I can’t see the exploitation of natural resources materialising anytime soon, as the energy industry is influenced and driven by factors beyond our country’s reach. Similarly, as a country we still have significant ground to cover in terms of start-ups and innovation, as the current business environment is not yet what it should be to encourage and promote more innovation.
What advantages do recent regulatory measures in Cyprus offer international business and foreign investors?
International businesses and foreign investors are looking for economic and political stability, coupled with a business-friendly taxation system and legal framework that adequately supports and promotes entrepreneurship. The measures introduced so far, as well as the ongoing agenda of further reforms and incentives sufficiently address this. At the same time these are also in line with the regulation, transparency and compliance guidelines prescribed by the EU and other organisations, such as the OECD, thus improving the overall business environment for both domestic and foreign investors. It also enhances Cyprus’ overall position as an international financial services centre.
What are your expectations for the professional services sector in 2017?
As far as the professional services sector is concerned, I expect it to do well and remain on a steady course during 2017, provided that it will continue to undergo the necessary adjustments to address increased regulation that extends within the sector itself as well. Recent developments, such as Brexit, should be closely monitored in order to mitigate any risks stemming from such developments and to turn these into opportunities for Cyprus.
What are your expectations for the wider economy in Cyprus over the next few years?
All studies and international reports show a positive outlook for 2017, and that Cyprus will continue on its recovery path despite the significant challenges that are present due to factors such as the high level of non-performing loans (NPLs), and the still relatively high percentage of unemployment. Over the last 20 years, the biggest investment in Cyprus by any terms was made both individually and collectively by the people of our country, who invested in the education of its youth. Cyprus boasts one of the highest percentages of college and university graduates in the world, and with this highly educated population and new graduates entering the market place we can continue developing our country. I firmly believe that over the next five years, barring any external factors and using the experience gained from 2013 onwards, Cyprus will be re-ignited by its human resources once again into a dynamic and vibrant economy that will offer both investment opportunities and quality of life.
Christos Evagorou is the Executive Director of Parker Randall Limited and in charge of the Advisory Service Line. He has been heavily involved with business valuations, mergers and acquisitions as well as corporate governance projects. He has a Bachelor’s Degree in Accounting and is a member of the American Institute of Certified Public Accountants and the Institute of Certified Public Accountants of Cyprus. He received relevant training and has been successful in professional examinations held by the National Association of Securities Dealers (N.A.S.D) in the United States. Following his Bachelor’s Degree, he received extensive professional training in the US and in Cyprus with a Big Four firm. He is also an accredited Insolvency Advisor licenced by the relevant authority (license no. SA00259). In 1999, he joined a top 10 international accountancy network in Cyprus, where he served as the Managing Director/Partner and International Liaison Partner. At an international network level, he successfully participated in the Quality Control Committee of the Network, with his duties involving Quality Control Reviews of member firms in the European Region. In 2009, he accepted a position as the CEO of a cooperative banking institution in Cyprus. During his position, Christos gained significant experience in the banking sector and was instrumental in a four-way merger between cooperative banking institutions.