De­off­sho­ri­sa­tion will boost Cyprus em­ploy­ment sec­tor

Financial Mirror (Cyprus) - - FRONT PAGE - The new leg­is­la­tion has cre­ated more jobs, at­tracted more tal­ent, in­creased em­ploy­ment

The new for­eign com­pany leg­is­la­tion for the ‘de­off­sho­ri­sa­tion’ that was ap­proved in Novem­ber 2014 and came into ef­fect from Jan­uary 1, 2015, has al­ready had a pos­i­tive im­pact on the busi­ness ser­vices sec­tor, as well as the em­ploy­ment sec­tor in gen­eral.

Ac­cord­ing to a lead­ing ex­pert in the re­cruit­ment in­dus­try, the new leg­is­la­tion af­fected count­less off­shore com­pany struc­tures es­tab­lished in Cyprus, forc­ing them to make ad­just­ments to their off­shore en­ti­ties in or­der to fully com­ply with the new law.

“The new leg­is­la­tion af­firms that any in­di­vid­ual or com­pany with a 25% or more own­er­ship in a for­eign com­pany or or­gan­i­sa­tion must now be cat­e­gorised as a ‘controlling en­tity,’ mean­ing that changes to their le­gal form will need to be made,” said Donna Stephenson, co-founder of GRS Re­cruit­ment that main­tains of­fices in Li­mas­sol, Ni­cosia and Malta.

“Th­ese changes pri­mar­ily fo­cus on the greater need for sub­stance within an off­shore or­gan­i­sa­tion, mean­ing a Cyprus off­shore struc­ture now needs to di­rectly ap­point phys­i­cal per­sons to their struc­ture – rather than out­sourc­ing the role to an ac­count­ing ser­vice provider, for ex­am­ple,” she said.

“To­day, sub­stance has be­come an ex­tremely im­por­tant is­sue. A grow­ing num­ber of coun­tries are look­ing deeper into the ‘sub­stance over form’ doc­trine as in­ter­na­tional devel­op­ments and leg­isla­tive changes are also push­ing in that di­rec­tion,” Stephenson added.

As an es­tab­lished in­ter­na­tional busi­ness and fi­nan­cial cen­tre there are count­less ad­van­tages to cre­at­ing sub­stance in Cyprus, in­clud­ing a busi­ness-friendly and stable tax en­vi­ron­ment, low op­er­a­tional costs, an ex­cel­lent in­fra­struc­ture, ac­cess to EU di­rec­tives and mod­ern leg­is­la­tion.

Since the leg­is­la­tion came into ef­fect, count­less off­shore struc­tures have made changes to their oper­a­tions and GRS Re­cruit­ment has seen a no­table in­crease in ac­tiv­ity from th­ese clients, es­pe­cially from Rus­sian clients and in­ter­me­di­aries. As a re­sult, th­ese clients and in­ter­me­di­aries are build­ing up sub­stance in their struc­tures by hav­ing an op­er­a­tional of­fice in Cyprus – rather than a brass plate com­pany with no sub­stance.

Tes­ta­ment to this is one of many ex­am­ples where GRS re­cently as­sisted a Rus­sian-owned com­pany with hir­ing a team of 15 ac­count­ing employees. This fol­lowed a de­ci­sion by the Rus­sian own­ers to es­tab­lish sub­stance in Cyprus and re­lo­cate oper­a­tions and per­son­nel to the is­land. The re­cruit­ment firm has helped count­less other busi­nesses to hire the right can­di­dates and en­sure their struc­tures are fully op­er­a­tional in line with ap­pli­ca­ble law.

GRS, co-founded by Donna Stephenson and Steve Slo­combe in 2005, is Cyprus’ lead­ing re­cruit­ment agency. The com­pany pos­sesses more than a decade of ex­pe­ri­ence as well as highly spe­cific, in-depth in­dus­try knowl­edge. Fur­ther­more, the agency has built up a large data­base of skilled in­di­vid­u­als from Cyprus and over­seas and as such, is able to fill avail­able po­si­tions in a timely, pro­fes­sional and confidential man­ner.

The new leg­is­la­tion has thus far proven highly ad­van­ta­geous to Cyprus, en­abling the is­land to cre­ate more jobs, at­tract more tal­ent, in­crease em­ploy­ment and boost the econ­omy.

Off­shore com­pany struc­tures are now rent­ing of­fice space, pur­chas­ing and rent­ing prop­er­ties for their employees and direc­tors, us­ing GRS’ pro­fes­sional ser­vices to source and hire new employees to ul­ti­mately en­hance their pres­ence in Cyprus.

Cyprus is a highly at­trac­tive ju­ris­dic­tion for cre­at­ing sub­stance due to the many ad­van­tages of­fered by the coun­try that are en­cour­ag­ing busi­nesses to trans­fer their ac­tiv­i­ties to Cyprus and cre­ate sub­stance.

“It’s not just the new law that has pos­i­tively im­pacted in­vest­ments and em­ploy­ment in Cyprus. The gov­ern­ment’s Cyprus cit­i­zen­ship schemes have also re­sulted in in­vest­ment in Cyprus of more than 2 bil­lion eu­ros over the past two years, which has also led to em­ploy­ment op­por­tu­ni­ties with th­ese in­vestors es­tab­lish­ing busi­nesses in Cyprus,” Donna Stephenson said.

Var­i­ous reg­u­la­tions en­forced across the fidu­ciary, funds, bank­ing, le­gal and fi­nance sec­tors have also cre­ated em­ploy­ment op­por­tu­ni­ties such as for hires in com­pli­ance, reg­u­la­tion and anti-money laun­der­ing (AML). As a re­sult, the sec­tor as­so­ci­a­tions are con­tin­u­ally im­prov­ing ac­cess to learn­ing and de­vel­op­ing meth­ods to up­skill the tal­ent avail­able in Cyprus, as was seen re­cently at the Cyprus In­vest­ment Funds As­so­ci­a­tion (CIFA) Sum­mit.

Run­ning a one-day sem­i­nar, the sum­mit was aimed at the in­vest­ment fund in­dus­try in Cyprus which in­cluded as­set man­age­ment com­pa­nies, fund man­agers, in­vest­ment man­agers and con­sul­tants, le­gal ad­vi­sors spe­cialised in the funds in­dus­try, ac­count­ing, au­dit and tax firms, banks, in­vest­ment banks, pri­vate banks and other fi­nan­cial in­sti­tu­tions, cus­to­di­ans and fam­ily of­fices.

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