President Christodoulides: Investment funds have a lot to offer the Cypriot economy

President Nikos Christodoulides has highlighted what he described as the Cyprus Investment Funds Association's substantial contribution to the development of the investment funds sector in Cyprus, underlining the sector's importance to the country's economy.

Addressing CIFA's AGM in Nicosia on 15 February, Christodoulides also congratulated the association on its strong international activity, "which is an example of healthy extroversion that brings concrete positive results for the Cypriot economy."

The President also said that his presence at the AGM, together with four Ministers, was "a clear indication of the recognition, importance and important work you are doing."

"Last October, during your event at the Presidential Palace, as part of the organisation of your international conference in Cyprus, I myself had the opportunity to speak with your counterparts from abroad and I truly felt proud of the recognition of your work and how high you are in the estimation of your colleagues for your professionalism," he continued.

Christodoulides went on to say, "Your contribution to the impressive, I would say, growth of the investment funds sector in Cyprus, in which funds of approximately nine billion euros are now under management, is indisputable and universally acknowledged. It is also with great satisfaction that I see your optimistic estimates for 2024, for further development of the sector which, by extension, also establishes Cyprus as a European hub for international investment funds and managers."

"Investment funds have a lot to offer the Cypriot economy, beyond direct income from taxation. I am referring in particular to the creation of specialised and well-paid jobs - and I welcome the fact that university institutions in our country already offer this kind of studies, it is a long-term goal of the Government to connect education with our economy - but also to the possibility of strengthening alternative financing, at a time of increased financing needs for productive investments," the President underlined.

He suggested it was noteworthy that a significant part of the funds under management, approximately 27%, is invested in Cyprus, in important sectors, cutting-edge sectors, such as Shipping, Energy and FinTech.

"At the same time, international investment funds benefit significantly from operating in a jurisdiction with a stable regulatory environment, highly qualified human resources, competitive costs and an attractive tax framework," Christodoulides continued.

He noted that, to further strengthen the sector and its important work, and after consulting and listening to the needs of the Association and its members, the bill to regulate the Establishment and Operation of Collective Investment Organisation Management Companies was approved last November. The bill aims to provide further security to investors and to establish Cyprus as an even more attractive destination for Investment Fund Managers, the President said.

"At the same time, high on the list of our priorities is the strengthening of the competent supervisory authorities, as strong supervision is not only a prerequisite for the orderly operation of an internationalised market, such as Cyprus is today, but also acts as a reinforcement in efforts to attract further quality investments. And it is precisely for these reasons that we are constantly promoting the further strengthening of the Cyprus Securities and Exchange Commission that I must publicly acknowledge the very important work it is doing," Christodoulides went on to say.

He continued, "Within this context, our clear political will is also particularly important, which is transformed into a specific systematic effort to fully restore and protect the reputation and credibility of our country as a jurisdiction that faithfully and effectively applies European regulatory framework and sanctions. This is an effort that, in order to be effective, should be supported by real data, and I believe that in recent years many steps have been taken, such as the progress recorded in the relevant reports of MoneyVal , the close cooperation with experienced international Authorities, as well as many others."

"In exactly the same context," he noted, "We are proceeding in the immediate future with the establishment of the National Sanctions Implementation Unit and the Single Supervisory Authority. Also relevant are my reports a month ago at the Parliamentary Assembly of the Council of Europe, where, among other things, after admitting mistakes made in the past which cost the Cypriot people more than any other, I defended what we have been doing for years, the faithful implementation of European decisions on the subject of Russian sanctions by the Republic of Cyprus."

Christodoulides said that he had repeatedly publicly formulated both the medium-term goal for a new development model and the actions through which Cyprus will achieve this goal. "The facts and challenges we have to face every day require the expansion of the productive base of our economy and the promotion of new productive sectors. At the same time, it is particularly important to strengthen the existing sectors that present a significant perspective, such as the professional and financial services sector, which also includes investment funds," he elaborated.

The President went on to say, "About two weeks ago I had the opportunity to present in detail and specifically the Government's Planning for 2024. I referred to the seven main pillars of our strategic orientation which: a prominent place is the need to ensure a strong and resilient economy. Our economic policy and any decision taken at the level of the Council of Ministers on matters of the economy and beyond, is based on the tripartite of fiscal responsibility, financial stability and the implementation of bold reforms, necessary components for the successful transition of our economy to the green and digital time."

He continued that despite the positive developments in the economy - which he described as something that satisfies the state - and reflected by the fact that rating houses have now all upgraded our economy to investment grade, which Christodoulides said was also a vote of confidence for the decisions made and the policies followed, the state would allow positive macroeconomic indicators to allow it to rest on its laurels, and would not ignore any challenges to the real economy and people of the country.

"For this reason, moreover," he said, "We have placed issues concerning the stability of the financial sector high on our agenda, succeeding, for example, after many years in passing the framework for the management of non-performing loans. In the same context of the prudent fiscal policy and in full alignment with the goals of the green transition, but also the need for a Housing Policy, which is a great challenge, especially for the New Generation of our country, we announced measures and actions against the higher cost of living and inflation, amounting to €196m."

Christodoulides revealed that these measures and actions were currently being evaluated and that new decisions would be announced soon, targeted in particular for those facing real challenges.

"Upon assuming the governance of the country, we also started with the very important task of tax reform – something that is needed in our country, the last tax reform was done in 2002 – with an emphasis on the green and digital transition, fairer distribution of burdens, as well as attracting productive investments," the President went on to say.

He continued that a necessary condition for the preservation and further development of Cyprus as an international financial centre was the strengthening of the operation of the state and the services it offers, a strengthening which will become possible through the faster implementation of extremely important reforms he noted had been inherited from the previous Government and naming them as the Judiciary, the Civil Service and Local Government.

"In closing," Christodoulides went on to say, "I would like to reiterate that the presence and activity of large multinational providers of investment services and investment funds is a strong vote of confidence for our country as an investment destination."

He pledged the government's ongoing openness to dialogue and support with the experts attending the AGM, towards attracting even more investment to Cyprus.