Christos Christodoulou: Cyprus has to maintain its tax attractiveness and offer a competitive package

Christos Christodoulou, Managing Director of CSC Christodoulou, discusses the need to maintain Cyprus as an international business hub, by upholding compliance and regulatory standards while making taxation and banking more business-friendly.

Given the rapidly evolving global business landscape, what role do you expect accounting firms to play in the future and how do you envision their function and influence?

I believe that ‘accounting firms’ are no longer considered as such. At our firm, at least, our motto is “We provide more than numbers” and this is what we deliver to our clients. As you correctly state, we are living and operating in a rapidly evolving global business landscape. Similarly, the traditional accounting firm has evolved as well. Businesses expect professionals like us to contribute in a multi-functional way, providing a variety of professional services, alerts and guidance relevant to many aspects of their business interactions, which affect their performance, compliance and exposure, both directly and indirectly. Businesspeople expect us to initiate action and influence them towards implementing better practices and approaches and to make recommendations to all actors involved for the creation of a more business-friendly environment.

What are the most significant challenges you currently face as Managing Director of a prominent professional services firm?

Technology, and recruitment! There is a continuous struggle to keep up with changes in the technology tools and applications we use in our work and also to find personnel at any level. Technology requires huge investment and needs the proper personnel to use it. Advances in artificial intelligence (AI) in particular have taken us on a continuous search to find the most appropriate and cost- efficient solutions. On the other hand, the scarcity of suitable, qualified personnel is increasingly a challenge, as the younger generations seek very flexible working conditions, which are not so demanding as those that the profession requires.

With revenue streams from professional services evolving significantly, how do you see the future of traditional services like Audit/Assurance, Tax, and Advisory/Consultancy? Which service lines do you anticipate seeing the most growth over the next five years and are there emerging areas or new opportunities that you are exploring?

Our firm has experienced steady growth over the past 20 years. In my opinion, everything has to do with our strategy and it is our commitment to that strategy that has paid off. We have opted to serve Cypriot businesspeople rather than being distracted by perhaps more attractive foreign clients, which is why we have enjoyed steady growth, irrespective of the so-called ‘Russian effect’ or other external factors seen in recent years. We expect this growth to continue and we are investing in this highly successful strategy, while expanding into business sectors that we haven’t covered fully yet, like the hotel and tourism industry.

What major trends, both global and local, do you see reshaping the professional services industry and how is the accountancy profession adapting to these changes?

Banking and taxation are the drivers that affect the professional services industry (in addition to technology and personnel, as mentioned earlier). Both have become extremely demanding and less business friendly! Together with the increasing requirements of overall compliance, they have become factors to struggle with. Of course, as professionals, we will always adopt and react accordingly but, if one thing needs to be reshaped, it is undoubtedly the environment around these two main factors. I strongly believe in compliance and regulation but they must be blended and balanced with business-friendly practices.

How do you envision the future of Cyprus as an international business hub and what steps are essential to enhance the country’s global appeal and competitiveness?

Cyprus has to maintain its tax attractiveness and offer a competitive package for those who choose to live and work in Cyprus. This requires numerous actions that involve not only tax and banking but also social, business and other measures that will attract foreigners to move to Cyprus and work from here. Areas of concern include the lack of direct flights to and from specific countries, accession to the Schengen Agreement, education and health for the family, public transport and more. Obviously, these require huge investment but this is the way forward if we wish to remain competitive. As far as taxation is concerned, I look forward to a total redesign of our tax model to make it simpler and less bureaucratic while remaining attractive to both Cypriot and Foreign businesspeople.

As the industry evolves, what new skills or competencies do you consider critical for your workforce to maintain a competitive edge in the professional services sector?

As new generations join our profession, we need to think carefully about whether they or we (the elders) are the ones that need to adopt new skills! Today’s business and services are evolving at such an unbelievable speed that we need to have people that can easily adapt, follow and, even better, lead so as to maintain a competitive edge in our profession. Although technical/professional skills remain a core requirement of the workforce, those who are flexible and can adapt easily to technology need to be at the forefront.

This interview first appeared in the November 2024 edition of GOLD magazine. Click here to view it.