articles | 01 July 2015

Cyprus Remains a Magnet for Forex Companies

In spite of the current economically challenging environment that Cyprus is experiencing, the forex sector continues to flourish, creating many employment opportunities for Cypriots and expats living in Cyprus.

Placement data from GRS shows that the foreign exchange sector is particularly flourishing and forex is the largest recruitment sector that the company is placing candidates in overall, with 30% of GRS’ job vacancies being filled in the forex sector during 2014 and 49% in 2013.

Second to this are the accounting, audit and corporate services sectors, with 25% of GRS’ job vacancies being filled during 2014. Looking at the historical data of GRS from the last 5 years, it is apparent that the upward trend continues. In 2010, 10% of all available vacancies recruited by GRS were in the forex sector and as the industry grew, more and more vacancies were filled. Gradually, this figure rose to 11.2% in 2011 and 33.45% in 2012, peaking to 49% in 2013 and decreasing slightly to 30% in 2014.

Forex Sector Continues to Drive Growth

The past two years have without doubt been incredibly challenging for Cyprus’ economy following the sovereign debt crisis that hit the island in March 2013. Once the country was bailed out by the Eurozone, Cypriot banks were forced to downsize as stringent austerity measures were put into place, leading to double digit unemployment figures that spiralled as high as 16.9% by October 2013. From here, countless businesses were forced to cut salaries, downsize or even cease operations.

Despite Cyprus’ economy experiencing major setbacks as a result of the economic downturn, its employment sector has managed to keep its head above the water and the country has successfully managed to overcome the temporary obstacle of the banking crisis. Whilst the ripples of the banking crisis affected many businesses and individuals, it did not have a significant impact on the forex sector. In fact, many of the redundant employees from the banking sector have been rehired into the forex sector, creating a strong transfer of talent, particularly for those operating in risk, compliance, back office and relationship management.

The environment and infrastructure of Cyprus for brokers remains positive and has led to considerable growth of the sector since the first forex company, Windsor Brokers, established operations in Cyprus in 1988. In 2008, Cyprus’ esteemed regulator, CySEC, added retail forex as a duly regulated financial product under MiFID, making Cyprus only the second EU Member State to do so in Europe after the FCA in the UK. As a result, this legislation led to a high number of international forex brokers choosing Cyprus over other jurisdictions and registering in Cyprus to take advantage of passporting to Europe. Today, there are currently 193 CySEC regulated and registered entities operating across the island.

Elaborating on the attraction of Cyprus, Donna Stephenson, Co-Founder of GRS, affirmed: “Brokers have been using Cyprus as a hub for more than 20 years. The last decade has seen particular growth in the number of retail forex brokers locating their operations to Cyprus, thanks to its low corporate tax rates and excellent infrastructure, including the regulatory framework of CySEC which is fully aligned with EU directives and European MiFID regulations”.

Binary Options Contributing to Economic Growth

Today, Cyprus continues to attract a high number of international brokers with a particular emphasis on retail forex brokers and binary options firms. In 2012, CySEC was the first financial regulator globally to recognise and regulate binary options as a financial instrument.  

Binary options trading rose in prominence and popularity afterlegislation was approved to allow binary options to be traded on major international markets. Despite being perceived by many as untrustworthy, CySEC had the vision to embrace the product, regulating and legitimising binary options trading and bringing a whole new marketplace into Cyprus.

Since then, online binary options trading, which is regarded as ideal for beginner traders, has exploded in popularity and been embraced by millions.

Some of the world’s biggest financial institutions now add binary options to their repertoire of trading instruments. In addition, major binary options firms such as 24option and Banc De Binary have become established entities in Cyprus, attracting countless traders from across the globe. Platform providers Spot Option and Hello Markets have also become established entities, servicing many of their partners’ brands that are also located in Cyprus.

Speaking on the appeal of binary options, Miss Stephenson asserted: “Today, it is not just forex operating from Cyprus, but binaries too, and this has also led to more platform providers, more technology providers and more payment processing companies establishing a presence in Cyprus too. This overall presence of local and international brokers and suppliers to the industry continues to drive growth in Cyprus and provide plenty of employment opportunities”.

Demand for Talent High

Demand from the forex and binary sector on the local and expat talent pool requires a constant supply of employees in sales, back office, compliance and regulation, accounting, finance and general management, plus the key positions that CySEC sets as a minimum staffing requirement.

Speaking about the demand for forex talent, Philippa Stephanou, Business Manager at GRS, cited that “from a talent perspective, Cyprus has a developing workforce and strong talent pool of educated English speaking candidates that understand forex and binary options, regulation, working guidelines and working in a highly regulated environment. There exists a limitless talent pool for any forex or binary firm that is thinking about establishing a presence in Cyprus.”

Situated at the crossroads of Europe, Asia and Africa, Cyprus remains an attractive location amongst expats, offering the ideal balance between work and relaxation, a welcoming lifestyle and an excellent infrastructure. This large expat community continues to compliment the local workforce, particularly expats that are fluent in several European languages. 

That being said, problems do exist in attracting talent to Cyprus and the demand for this talent is highly competitive amongst the forex and binary industry players. Speaking on the matter Hayley Evans, Business Manager at GRS states “...people commonly move from one firm to the next, which presents both positives and negatives. On the one hand, talent is essentially being regurgitated from firm to firm, thus enabling a business to bring in an industry experienced employee; on the other hand, this is not always a positive move as these individuals cannot be trained from scratch and may bring with them the inconsistencies that they were carrying at their previous positions.”

Attracting new, fresh talent from other countries to Cyprus is also a challenge especially following 2013’s negative spotlight on Cyprus due to the banking crisis. Furthermore, salaries are not particularly attractive in Cyprus when compared with other financial jurisdictions, such as the UK.  Salaries do vary from one organisation to the next, with experienced talent commanding a premium.

Over the years, Cyprus has developed into a strong hub for both retail forex and binary options firms and the island has a niche employment environment that no other jurisdiction can complete with. There is an excellent network of talent available which presents a great opportunity for any forex or binary firm to expand to Cyprus. And as the market becomes increasingly competitive, it is still possible to hire employees at a relative good cost in comparison to other markets, lowering overall labour costs of more expensive jurisdictions, such as the UK.

Although retention can be an issue there are ways to overcome this, provided businesses offer attractive benefits and are able to maintain a positive working environment that employees can thrive in. For instance, through reward comes motivation and heightened responsibility, and through motivation and responsibility come bonuses, incentives and promotions. This in turn leads to stronger employee loyalty, thus addressing the retention issue.

As more and more well-known forex and binary options firms continue to position themselves in Cyprus, the industry continues to grow at an unprecedented rate, contributing significantly to Cyprus’ low tax rates and favourable working environment. Provided Cyprus is able to offer a consistently positive environment for businesses and individuals alike, the availability of attractive placements will continue to remain high.

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