COMPANIES LEAVE THE CYPRIOT MARKET

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The sharp decline in the registration of new firms in Cyprus is a matter of serious concern, while at the same time there are signs of an uncontrolled exodus of the Cyprus-registered companies from the island. This was observed by the President of the Cyprus Fiduciary Association (CFA) Christos Michael.

Recent directives of the Central Bank of Cyprus, as well as new global measures to combat money laundering and tax evasion have put strong pressure on banks, and forced them to close the accounts of some of their customers.

In expert opinion, closing shell companies is a right measure. At the same time, Cypriot authorities are too eager to implement the new rules. This strategy, intent to reduce the risks for the island's banking sector, also affects honest lawful companies. The result is their closure without any serious reason, which is a major concern for the Cypriot bankers.

As a result, the service delivery model in Cyprus is changing rapidly, without any new strategy. This, as Christos Michael explains, is a direct risk for the economy, as it will affect both the tax revenues and the unemployment rate.

The registration data shows that in March the number of applications for new companies in Cyprus decreased by 23% compared to the same period last year. More specifically, by the end of March there were 1,105 applications filed, while the first 3 months of 2018 saw 1,436 applications.