Christoforos Ioannou: “The fiduciary industry is going through a transformation process”

The General Manager of the Cyprus Fiduciary Association (CYFA) Christoforos Ioannou recently spoke to CBN about the ASP industry's rapid transformation and the sector’s future in Cyprus.

He touched on the decline in the island’s reputation and suggests how the country’s rebranding as an international business centre could be carried out. Ioannou also talked about CYFA’s aims, and his personal goals as its General Manager.

When was the Cyprus Fiduciary Association (CYFA) established? What are the main aims of CYFA and how do firms benefit from membership?

Our Association was established in 2011 and aims to serve administrative service providers by promoting their interests, supporting their operations and educating their staff. Our vision is to increase sector awareness and assist in creating a strong corporate international business sector in Cyprus, operating on high professional standards and integrity. Members benefit primarily through the representation of their firm by a professional and recognized body before public authorities and decision-making bodies. In addition, participation in the Association provides the opportunity for firms to network with other industry professionals, , exchange opinions and ideas on current industry developments, attend seminars and events related to the sector and ultimately join the efforts to promote Cyprus as an International Business Centre.

The ASP industry is transforming rapidly. What are the main challenges?

The industry is indeed transforming in a fast pace and is facing several challenges. Latest developments such as the imposition of sanctions, the increased regulatory framework in relation to the automatic exchange of information, the stricter compliance rules and the general risk aversion approaches of market institutions are with no doubt changing the way the market is operating. A major change compared with the past is that the traditional business of nominees, anonymity and tax avoidance is becoming obsolete. Firms in the industry are now called, at a much higher cost, to adjust their business models and operations in order to comply with the new regulatory framework. In addition, all the above pressures and the expected difficulties of many firms to adjust their business models, are pointing out to a possible consolidation of the industry.

Despite the above, new challenges do bring new opportunities and this transformation if aligned with the design of a new International Business Model for Cyprus could lead to positive outcomes ensuring the long-run viability of the sector.

What actions are necessary to rectify the reputational "gap" in the future and rebrand Cyprus as an international business centre?

It is indeed a fact that there has been a decline in our country’s reputation that is threatening to jeopardise the functionality of Cyprus as an international business jurisdiction. Rectification in my opinion requires undertaking specific actions and policies, both on a political and industry level and finding ways to communicate the right message across. For example, the intention of the government to proceed with international communication campaigns as recently announced in the press and the engagement of government funded bodies such as Invest Cyprus is a step towards the right direction. We do need to reverse the current perceptions and move forward by establishing a new business model in line with international requirements that will assist Cyprus evolve and re-establish itself as an international business centre (i.e the current tax reform is a positive development). We do need to improve the efficiency of government authorities and bodies through more automated processes, and we do need to change our culture and improve good business practices. Finally, we need to be as a country more proactive and to achieve that coordination of all industry stakeholders is vital.

How do you envisage the future of the sector, in Cyprus, and on a global level? Does Cyprus offer any particular advantages?

The industry is going without any doubt through a transformation process and considerable pressures are imposed on the industry and the firms operating in the sector. However, we are confident that the industry will adapt and will continue to operate successfully in the future. In practice the viability of the sector will call for the traditional fiduciary concept to be transformed as the new regulatory changes need to be absorbed. In addition, the scope of services for the Administrative Service Providers as currently defined is expected to broaden and include new services for them to be able to attract, set up and support client structures and operations with real substance. Further the expected consolidation of firms in the industry suggests that the number of firms in the industry is expected to be lower in the future. In addition, Cyprus as a country does and will continue to offer advantages considering the high quality of labour available, business incentives and the increasing infrastructure.

At this point I would also like to state that our Association is undertaking all possible initiatives to increase awareness and assist in the formation of a business environment that will continue to support, attract, and provide certainty to potential investors.

On a more personal note, when did you take up the position of General Manager of CYFA? What attracted you to the post?

I took over the position of General Manager of the Association back in May 2018. What attracted me to the position was the opportunity to be part of an industry that is extremely challenging, dynamic and vital for our economy. In addition, the post gave me the possibility to join one of the most respectful Associations in Cyprus and be part of the initiatives undertaken to promote and develop the industry even further.

And, further to the above, what is your personal goal as General Manager of CYFA?

My personal goals as the General Manager of CYFA are aligned with the main goals and objectives of the Association. It is a privilege for me to represent the interests of some of the most esteemed firms in Cyprus and I am committed to continue doing so in the most efficient and effective way. The industry has common goals and objectives and together with the Board, the staff and the Committees of the Association I am dedicated to further enhance awareness, explore the huge potentials of the Association and expand our operations and the standards of the industry as a whole.