Kypros Ioannides: Public-private partnerships should be leveraged to promote Cyprus globally

The government needs to clearly deliver the messages of its ‘Vision 2035’ plan to all stakeholders, towards making Cyprus one of the best countries to live, work and do business in, Kypros Ioannides, Partner Hadjianastassiou, Ioannides LLC (Member of Deloitte Legal Network) suggests.

Sharing his view on the state’s efforts to rebrand Cyprus, Ioannides elaborated, “Its messages should be clearly delivered to all stakeholders to ensure consistent communication. Furthermore, public-private partnerships should be leveraged to promote Cyprus globally, a strategy which has worked well in the past.”

Discussing the current state and future of the island’s legal and wider professional services sector, Ioannides also talks about the state’s plans for a single supervisory authority for the professional services, the e-justice system, the challenges faced by the legal sector and how they are being managed.

What strategies should be adopted if a substantial rebranding initiative is to be undertaken with the aim of restoring Cyprus’ reputation within the international business community?

The Government has already paved the way for sustainable growth through its ‘Vision 2035’ plan, with the main objective of transforming Cyprus into one of the world’s best countries to live, work and do business in. Its messages should be clearly delivered to all stakeholders to ensure consistent communication. Furthermore, public-private partnerships should be leveraged to promote Cyprus globally, a strategy which has worked well in the past. Our firm is committed to contributing to these efforts by upholding the highest standards of legal practice and actively participates in initiatives that promote Cyprus’ business environment.

The Finance Ministry plans to introduce a single authority to supervise the whole of the professional services sector, as part of broader efforts to improve the country’s image abroad. What are your thoughts on this?

The professional community in Cyprus welcomes regulation and fully aligns with the EU’s efforts against money laundering and terrorism financing. Notably, Moneyval’s December 2023 3rd Enhanced Follow-up Report has acknowledged our country’s improvements in tackling these risks. A single (or umbrella) regulator could be a positive reform if it balances the need for proper industry regulation with protecting fundamental rights enshrined in the EU Treaties. Such a regulator should not replace established competent and regulatory authorities but rather set policy, monitor compliance and oversee the supervisory role of other bodies. Any reform should recognise that certain sectors, particularly the provision of legal services, should retain a degree of self-regulation. As the new AML Regulation confirms “for certain obliged entities, Member States should have the possibility to designate an appropriate self-regulatory body to be informed in the first instance instead of the FIU. […] a system of first instance reporting to a self-regulatory body constitutes an important safeguard for upholding the protection of fundamental rights as concerns the reporting obligations applicable to lawyers.”

Let’s move on to the failed rollout in January of the e-justice system. How did the profession react to this setback and how has it affected your firm’s operations in particular?

The delayed implementation of the e-justice system caused significant frustration within the legal community, as the system was expected to modernise judicial processes, reduce case backlogs and improve overall efficiency. While the interim i-justice solution is acceptable as a short-term fix, it lacks the functionality and data security expected of a modern system. According to the EU Justice Scoreboard for 2024, digital technology use in Cypriot courts remains significantly lower than the EU average. Our firm continuously invests in technology to enhance service efficiency and quality for both our clients and our people. We remain optimistic that the implementation of the e-justice system will bring about the long-awaited advancements, aligning our legal processes with modern standards and expectations.

Macroeconomic challenges and geopolitical strife have led to the contraction of the local industry in recent years. How do you assess its present state?

The past few years have indeed been challenging, testing our resilience. The economy in general and the financial services sector in particular have rebounded from the notable post-pandemic contraction. Despite the heavy impact of the sanctions regime which inevitably affected a large part of the industry, we have fared well. The current state of the industry reflects cautious optimism, with the economy and professional services sector showing resilience and adaptability in the face of global challenges. Caution is warranted ahead of unpredictable challenges that may arise, particularly in the months to come.

Given these challenges, are Cyprus law firms identifying and pursuing new revenue opportunities by tapping into new markets or introducing new service offerings?

Cyprus law firms are increasingly looking beyond traditional markets for new opportunities. Key sectors of growth include technology (particularly fintech, data, and cybersecurity), energy, healthcare and education. The rise of M&A transactions in these areas underscores this trend. For instance, the healthcare sector has seen substantial interest due to the introduction of the General Healthcare System and foreign investment has fuelled growth in private medical facilities and healthcare services. Private equity has also become a significant player, especially in the technology sector. The growing private equity ecosystem in Cyprus is driving investment in innovative tech startups and established firms, creating opportunities for legal services in fundraising, compliance and intellectual property protection. The influx of investment boosts these sectors, creating opportunities for legal firms to provide specialised advisory and regulatory services. Our firm has strategically expanded its services in these sectors, providing services for cross-border transactions, regulatory compliance and strategic investments.

Meanwhile, other industries are taking market share from law firms by providing ‘one-stop solutions’ to clients. Do you foresee this trend driving consolidation within the legal sector? Can law firms adapt to this competitive landscape?

Today’s clients are looking for comprehensive and innovative solutions by multidisciplinary teams that can collaborate across borders. Richard Susskind, a prominent legal futurist, emphasises that “the market will show no loyalty to the traditional way of working.” This shift is expected to drive some degree of consolidation within the legal sector as firms merge to pool resources, expand their service offerings and enhance market competitiveness. By embracing the provision of comprehensive services, law firms can remain competitive and aptly navigate changes, enhance client decision-making and deliver added value, as indispensable business partners.

This interview first appeared in the August edition of GOLD magazine. Click here to view it.