1

3 A Rapidly Emerging MarketA look at Cyprus as a dynamic emerging market

6 The Business ChampionA new era of shopping starts on the island as the Shacolas Group inaugurates the Mall of Cyprus

9 A Villa by the SeaQuality Group's Enalia Beach Residences,one of the star real estate projects in Cyprus

15 A Hometown HeroHassapis Land Developers looks to put Larnaca on the map by focusing on exclusive development projects

16 Both Sides of the CoinLoizos Iordanou has positioned itself as a leader in both real estate construction and development

18 Welcome HomeAristo Developers welcomes Russians in Cyprus by creating lifestyles rather than just homes

20 An Innovative Approach to DevelopmentLanitis Development looks to bring top quality integrated resorts to the island

22 A Selection of Key Players in Real Estate DevelopmentConversations with top executives from some of the key Cypriot real estate developers

28 A Global Bsuiness CenterA look at Cyprus as a global business center for foreign investors

31 Exceeding ExpectationsAndreas Neocleous & Co was the first Cyprus law firm to establish an office in Moscow and is dedicated to serving the growing Russian market

32 An Established Bank with Young IdeasThe Laiki Group prepares its entrance to the Russian market

33 Providing the LinkDeloitte & Touche provides insight regarding the advantages Cyprus has to offer to Russian investors

34 The Most International of the Cypriot BanksOperating in Cyprus for more than 20 years, BNP Paribas is seeking to consolidate its market position by utilizing its extensive global network

35 Bank of Cyprus Opens its First Branch in RussiaThe bank plans to open 15 branches during the next three years, capitalizing on solid relationships with existing clients in Russia

36 Leading the Way in Financial ServicesTotalserve continues to provide tailor-made consultancy services on all matters related to international tax planning, corporate services and trusts

37 Solid Advice, Flexible SolutionsThe Aspen Trust Group's philosophy is to tailor its services to meet the needs of its clients investing into Russia

38 A Leading Russian Bank in CyprusThe Russian Commercial Bank in Cyprus provides a mix of global expertise and market intelligence to its international clients

39 The Trusted Business AdvisorPricewaterhouseCoopers, aims to further strengthen its growth through its quality people, quality services and quality clients

40 When Experience Makes a DifferenceChristos Mavrellis offers a wealth of experience for investors to tap into

40 Quality and Reliability -- CertifiedCSC Christodoulou sets internationally recognized standards of excellence in accounting practices

41 Advice You Don't Want to Go WithoutA selection of key business consultants in Cyprus

44 Cyprus Consolidates its Position as a Telecommunications HubCyprus is considered to be one of the most important telecommunications hubs in the eastern Mediterranean and the Middle East

44 A Sustained CommitmentMTN Cyprus remains committed to enhancing its infrastructure to further develop mobile telephony on the island

45 From Monopoly to Dynamic CompetitorCYTA has re-engineered itself into a dynamic, flexible and customer-driven provider of communications solutions

46 A True FriendshipThe Cyprus Tourism Organization is looking forward to strengthening Cyprus's friendship with Russia through the power of torurism

50 The Father of Cypriot TourismFounded in 1935 by the late Mr. Louis Loizou, the Louis Group is one of the leading travel, tourism, cruising, hotel and catering groups in the Mediterranean

51 A Pioneer in the Luxury Hotel Business keeps Raising the BarThe Four Seasons Hotel keeps pushing ahead with upmarket amenities for its distinguished clientele in Limassol

52 Sixt Rent a Car Leads the Pack in the Cypriot Car Rental BusinessTrue to its German heritage, Sixt emphasizes service, product quality and customer satisfaction above all else

54 Rolling Out the Red CarpetTop Hoteliers in Cyprus Share their Views on Luxury Hospitality

56 Aselection of hotels offering value for money in CyprusOur selection of hotels offering value for money, and the people that manages them

Contents

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At first glance, it is easy to see that Cyprus is going through a very happy period inits economic history.While most of the international media has reported extensively onthe country's upcoming adoption of the Euro in January 2008 and the sound macroeco-nomic performance that accompanies it, the most interesting stories come from thespecific sectors of the economy. One only has to scan the local financial press to comeacross an endless stream of impressive headlines. After a stellar year 2006 that madeCyprus's stock market the world's best performer after Peru, the CSE General Indexrose 27 percent during the first half of 2007--supported by the doubling in profits ofCSE-listed companies during the same period. Despite these sky-rocketing prices, excit-ing investment opportunities remain in the bourse, as pointed out in an investmentupdate published by Citigroup in September 2007 that recommended a buy target of17 Euros per share for the Bank of Cyprus, implying an upside potential at the time ofwriting of 42 percent.The same analysts from Citigroup joined the ever-increasing num-bers of international observers announcing that the booming Cypriot property marketoffers similar opportunities, as high-end prices are still not high by European standards.The number of tourists visiting the island, especially high-spenders from Russia, is reach-ing record-breaking levels.

But to go beyond the headlines and give our readers a fresh perspective on Cyprus'seconomic boom, investment opportunities, and ever-evolving choices for tourism, wedecided to spend five months on this beautiful island interviewing a selection of its keyeconomic leaders in the private sector and government, experiencing first-hand theenergy with which they are taking its economy to the next level and the enthusiasmwith which they are consolidating their country's friendship and business partnershipwith Russia. The final product is this very first annual Who's Who Cyprus guide. Wehope that our readers enjoy it as much as we enjoyed writing it--and that it encouragesthem to come to Cyprus to explore the innumerable business opportunities for them-selves.We promise that the greatest business challenge they will find in this country isbeing able to concentrate on work in light of the endless number of opportunities forpleasurable leisure that Cyprus has to offer.

Olga ArndtCountry ManagerFOCUS International

Country Manager: Olga Arndte-mail: olga.arndt@focusinternational.com

Editor and Contributing Writer: Alan Furthe-mail: alan.furth@focusinternational.com

Contributing Writers:Matthew FirestoneTim HiscockAntonis P. Loizou

Editorial Coordinators:Naser AshourAmeer SalehMohamed Berray

Design:Javier Dumont

Burjuman Tower, 18th floor

P.O. Box 43659, Dubai, U.A.E.

Tel: + 971 (0) 4 509 6690

Fax: + 971 (0) 4 509 6797

3

Investing in a Time of MarketUncertainty

Although the major stock indexesfrom New York to London and HongKong to Tokyo are reporting recordhighs at the time of writing, therecent sub-prime mortgage crisis inthe United States and the resultingglobal economic turbulence have putinvestors on edge. As a result, anincreasing number of investors aremoving away from traditional mar-kets, and hedging their bets on a num-ber of emerging markets around theworld.

These days, the buzz in the invest-ment world is centered firmly on the

soaring stock prices in China andIndia, which have attracted a wholeslew of new investors into the arena.However, despite the fact that for-tunes are being made in record time,analysts are beginning to warninvestors that a slide in the market isinevitable, and that the recent explo-sive growth in Asia is not guaranteedto be sustainable.

As a result, cautious investors aresearching for emerging markets thathave the potential for lucrative gainswhile simultaneously offering anacceptable degree of risk. One suchemerging market is Cyprus,which hasreported a wide range of positiveeconomic indicators following its

ascension into the European Union(EU).

Analyzing the Economy ofCyprus

Although economic forecasts donot always predict actual market per-formance, an analysis of several keyindicators suggests that investing inCyprus is a wise decision. Specifically,data on economic growth, fiscaldeficit, stock prices and foreign directinvestment (FDI) flows offer strongevidence that Cyprus has solid poten-tial as a rapidly emerging market.

The Cypriot economy is based ona free enterprise system with the pri-

vate sector being thebackbone of economicactivity. Currently, thegovernment is pursuingan economic policyagenda aimed at pro-moting and maintainingfavorable investmentconditions and sup-porting private initia-tive. Per capita grossdomestic product(GDP) is one of thehighest in theMediterranean at17,500 US Dollars, andin recent years theeconomy has beengrowing at an averagerate of 3.4 percent.

It is extremely diffi-cult to quantify thequality of life in a par-ticular country, but it ispossible to make gen-eralizations based on a

number of socioeconomic factors.For instance,Cypriots enjoy excellenthousing conditions, a pollution-freeenvironment and a relatively lowcrime rate, which might indicate thatthe quality of life on the island is bet-ter than that reflected by the percapita income indicator alone.

In fact, the economy is operatingat near full employment, with anunemployment rate of around 4.3percent for the end of 2007 accord-ing to IMF forecasts. Inflation has alsobeen relatively modest, with the IMFforecasting a figure of 2.2 and 3 per-cent for the end of 2007 and 2008,respectively.

Adopting the Euro and itsImplications

Starting in January of 2008,Cypruswill abandon its current currency, theCypriot pound, and formally adoptthe Euro. Although this is somethingof a controversial issue in Cyprus atthe moment, Honorable MinisterMichalis Sarris, who serves as theCypriot Minister of Finance, is alltogether optimistic about theimpending transition.

According to Hon. Minister Sarris:"The Ministry believes that macro-economic stability, which passesthrough a fiscal consolidation and asensible monetary policy, has tounderpin economic development andeconomic growth. As a result, wehave made strides towards makingsure that our expenditures grow at aslower pace than our revenues, andhave made intelligent prioritizationsfocusing on developmental and socialexpenditures."

A Rapidly Emerging Market

ollowing its ascension into the European Union, Cyprus has reported a wide range ofpositive economic indicators, which places the country on the list of the world's mostrapidly emerging markets for foreign investors

F

H.E. Michalis Sarris,Minister of Finance,Republic of Cyprus

4

He continues: "We also believethat the benefits from the member-ship of the Euro zone are substantialfor both the business community andfor ordinary citizens. For a small openeconomy like us in a world with allkinds of imbalances and volatility, wecan look forward, after the adoptionof the Euro, to currency stability.Although Spain, Italy and Portugalfaced challenges after the adoption ofthe Euro, we are in a better situationsince we will be transitioning to abetter currency."

Assessing the Cypriot StockMarket and FDI Flows

Since 1996, approximately onehundred and fifty companies haveshares listed on the Cypriot StockExchange (CSE). The exchange ismonitored and regulated by theCouncil of the Stock Exchange, and atpresent a fully computerized on-linetrading, clearing and settlement sys-tem is in operation.

During the first half of 2007, thecombined profit of CSE listed compa-nies more than doubled to reach a

“In January 2008Cyprus

will formally adopt the Euro”

“During the first half of2007, the combined profit ofCSE listed companies more

than doubled to reach a valueof over 880 million Euros”

5

value of over 880 million Euros.Thesenumbers, combined with the fact thatthere was a 27 percent increase inthe general index, is significant evi-dence to suggest that the profitabilityoutlook of the CSE is all togetherbullish.

In regards to foreign direct invest-ment flows, there has been a contin-uous and sustained upward trendsince 2004,with annual total revenuesreaching 2.55 billion Euros in year2005. Although the vast majority ofCyprus-bound FDI flows originatedfrom other European countries, therehas also been a slow and steadyincrease in Russian investment.Russian financial investment on theother hand, has been substantial overthe last decade and continues on astrong upward trend (see below).

Hon.Minister Sarris is quick to putthe economic data into perspective:"FDI brings with it technology andgood quality jobs that go hand inhand with a well educated popula-tion. It also helps to foster growth,create services and materialize mod-ern approaches that are succinct witha high-income economy."

Transitioning of Key EconomicSectors

In recent years, the Cypriot econ-omy has transitioned from a tradi-tional construction and tourism-based economy to other more pro-ductive areas, which has resulted inthe modernization of the public sec-tor.This transformation is being her-alded by Hon. Minister Sarris, whobelieves that Cyprus must continueto modernize in order to participateto a greater extent in the new global-ized world.

He explains: "We believe that aneconomy like ours has to adapt in

order to maintain its dynamism. Atpresent, we are focusing on reducingthe cost of business by establishingmore streamlined regulations andreducing unnecessary bureaucracyrequirements. It is our hope that thisliberalization will improve partner-ships between the public and privatesectors, which inevitably results ingreater flexibility and productivity foreveryone involved."

Following the collapse of theSoviet Union, there has also been ahuge increase in the number ofRussian entrepreneurs pursuinglucrative ventures in Cyprus.Considering the historical, politicaland cultural connections betweenboth countries, this strengtheningrelationship is also influencing therapidly changing nature of theCypriot economy.

According to Hon. Minister Sarris:"In recent years, we have seen anincreasing number of Russians bank-ing here in Cyprus, which hasprompted us to take the necessarysteps to privatize banks so that theycan expand their operations andimprove their investment services.

Thus far, we have been pleased withthe results, especially considering thefact that a number of existing Russianbanks have already indicated that theywould like to establish a presence inCyprus.”

He adds: "We have also seen anincreasing number of Russians buyingsecond homes here in Cyprus, whichis a testament to the common cultur-al values and strong economic tiesthat we share. Since we believe thatthere is room on the island for agreater number of investors, we areworking alongside developers toadvertise the merits of Cyprus tooverseas potential partners andhome-buyers."

“In recent years, we haveseen an increasing number ofRussians banking in Cyprus”

6

From Agro Entrepreneur to Retail Tycoon

Mr. Nicolas K. Shacolas, a promi-nent Cypriot businessman, is thefounder, owner and Chairman of theShacolas Group of Companies, thelargest trading, distribution and retailgroup in Cyprus, with an annualturnover exceeding 700 million Euros.

With over 9,000 employees, theShacolas Group is the largest employ-er in Cyprus after the government,and is involved in a wide range of busi-ness sectors across the island.

Without a doubt, the ShacolasGroup is the undisputed businesschampion in the country. Mr. Shacolashas been engaged in business since1953, and today his group is years

ahead of the competition. Shacolashimself, at almost 80 years of age, is anenergetic, hands-on, no-nonsensebusiness leader full of enthusiasm forthe economic future of Cyprus.

The resume of Mr. Shacolas is atestament to the strength of his com-pany, as well as the potential for oneman to revolutionize the businessenvironment of his country.

The humble origins of Mr. Shacolaslie in agricultural export, though fol-lowing the incorporation of his firstoverseas company in London in 1963,he ventured into shipping, insurance,investing and real estate. Since then,the Shacolas Group's internationaltrading activities have spread to awide range of countries includingGreece, Nigeria, the Arabian Gulf andRussia.

he Shacolas Group of Companies, which isthe largest trading, distribution and retailgroup in Cyprus, has single-handedlytransformed the island's economic, com-mercial and cultural landscapes

Nicolas K. Shacolas, Chairman, Shacolas Group

The Business Champion

TT

The Mall of Cyprus

7

Mr. Shacolas has also broughtstrength, stability and success to hiscompany by bridging the gapsbetween the leading industries inCyprus.

Today, the Shacolas Group hasmajor stakes in a number of publicand private companies includingCyprus Trading Corporation Plc, thecountry's largest trading organization,Woolworth (Cyprus) Properties Plc,

the country's largest commercial realestate company, Ermes DepartmentStores Plc, the country's largest retailorganization, Hermes Airports Ltd,the country's major airports opera-tor and CTC-Ari Airports Ltd, the

country's major airports retail opera-tor.

Mr. Shacolas is just as passionateabout success in business as he is aboutsocial responsibility.

To date, the Shacolas Group hasbeen one of the great benefactors,donors and sponsors for various proj-ects and activities on the island.To date,the group has been particularly active inpromoting Cyprus on the international

stage, establishing museums, education-al and cultural centers on the island,and funding scholarships for the bright-est Cypriot students. Mr. Shacolas hasalso contributed heavily to relief proj-ects throughout the world that range

from earthquakes and fires in Greeceto the 2005 tsunami in South East Asia.

Although it is hard to summarize hislong and impressive career,Mr. Shacolasoffers these succinct words: "It isimportant to have creative imagination.I believe that I am a creator and avisionary, and it is very natural for meto convert my imagination into reality.At the same time though, I am a hardworker, and I believe in methodologyand consistency. Without hard workand teamwork,one cannot achieve any-thing."

Landmark Projects

Currently, the Shacolas Group isinvolved in three landmark projects onthe island, namely the Mall of Cyprus,the building and operation of theLarnaca and Pafos airports, and devel-opment of Limni as a resort and golfingdestination.

“It is important to have craetive imagination, butwithout hard work and teamwork, one cannot

achieve anything"

Mr. Shacolas, in company of top-level buisness and governmentpersonalities, rings the bells for the opening of the Mall of Cyprus,

and the start of a new era in Cypriot shopping

8

The Mall of Cyprus, which had itsgrand opening on September 27th2007, symbolizes a new era for shop-ping in Cyprus. Hosting the world'sbest brand names in retail and fash-ion, the project is the result of twen-ty-six years of planning, developmentand construction. At the officiallaunch of operations of the Mall ofCyprus,Mr. Shacolas stated: "The ideacame to me while on a visit toCanada in 1981 where I wasimpressed by the shopping mallsthere.After I came back to Cyprus, Iimmediately started work on theproject." He also added: "The Mall ofCyprus is a dream come true."

The Mall of Cyprus is the flagshipof the Shacolas Emporium Park,which spans a total area of 106,035square meters, and will eventuallyhouse dozens of cafes, restaurantsand retail shops as well as a Multiplexcinema, children's play area and cov-ered parking. Currently, the Mall ofCyprus is home to the first everCarrefour in Nicosia and IKEA onthe island.

A perfectionist by nature, Mr.Shacolas has high expectations forthe future of the Mall of Cyprus. "Wehope that the Cypriot governmentwill grant extended working hoursfor the mall, especially the capacity tostay open on Sundays.We hope thatthese extra hours will allow the peo-ple of Cyprus and visitors fromabroad to utilize the mall to itsfullest. By the end of 2008, we plan toorganize shopping trips from Russiaand other neighboring countries, andto also give foreign visitors specialpackages for luxury weekends. In fact,we believe that in a few years' time,Russia will be the largest supporterof Cyprus in many fields, includingtourism."

Recently, the Shacolas Groupsigned an agreement with theCypriot government to build newairports in Pafos and Larnaca (open-ings are scheduled for 2008 and 2009respectively), while concurrentlyoperating the existing airports until

2031. According to Mr. Shacolas,"We believe that airport opera-tions are mainly a retail businesssince the primary source ofincome is derived from advertis-ing space, retail shops, bars andrestaurants. As the largest retail-ers in Cyprus,we have a great dealof experience in the retail busi-ness, which is why we developedthe ambition to build airports."

Mr. Shacolas continues: "Thenew airports will cost 700 millionEuros, and they are currently thelargest and the most importantprojects in Cyprus. Since the gov-ernment didn't have theresources to launch a project ofthis caliber, they would have beenforced to incur a debt, whichwould have contradicted thestrict fiscal requirements for entryinto the European Union.Although we will eventually takefull control of the airports, weestimate that they will generate asmuch as 2.5 billion Euros incomefor the Cypriot government.Clearly, it's a win-win agreementfor both parties."

The third landmark project ofthe Shacolas Group is the devel-opment of Chrysochou Bay onthe northwest coast of Cyprus asa resort and golfing destination.Dubbed the "Limni Project," theShacolas Group is currently layingout plans to develop three millionsquare meters of property thatextends from the coastline to thepine-forested hillsides. Given thepopularity of Cyprus as a touristdestination, the group has decidedto create a high quality, integratedmixed-use resort developmentthat will include a five-star hotel,luxury villas, a developed beach-front and two premier golf cours-es designed and signed by JackNicklaus and Gary Player.

Needless to say, Mr. Shacolas isincredibly enthusiastic about theLimni Project. "Now that we havebeen granted permission from thegovernment to construct two golf

courses at Limni, we are aiming toput this location on the map.We areemploying the best golf professionalsin the world, and we are paying thempremium fees so they will construct

for us the best golf courses inEurope."

Given their lengthy historystretching back to the 1950s, as wellas their current plans to furtherdevelop the island, it's not hard tounderstand why the Shacolas Groupof Companies continues to single-handedly transform the economic,commercial and cultural landscapesof Cyprus.

"We believe that airport operations are mainlya retail business"

Model for the new LarnacaInternational Airport, which will be

ready to operate by the end of 2009

9

C yprus is quite attractive forRussian real estate investorsand this came about for

many reasons. The very good rela-tions that the two countries havesince 40 years ago, a common reli-gion, the most favorable (for Cyprus)double taxation treaty with Russia,the existing low taxation system inCyprus, the regular flights and astrong tourist number (120,000 p.a.)which is ever increasing, are the main

plusses. The Russians' favorite placeof living-investment is the seasidetown of Limassol, which practically

attracts 60 percent of all Russianinvestors/livers. The town's cosmo-politan environment, with its numer-ous luxurious hotels, the existenceof a Russian church and schools, aswell as the English speaking ones,facilitate the Russians to live mainlyin Limassol, which is also the centerof the offshore business in Cyprus.

In terms of the real estate marketbuys, the Russians can be divided

mainly in three broad categories.The very top end, with a budget ofaround 1 -3 million Cypriot pounds

Russian Buyers in theCypriot Real Estate Market

Paphos 45%

Limassol 20%

Larnaca 20%

Famagusta 14%

Nicosia 1%

PAPHOS LIMASSOL LARNACA FAMAGUSTA

British 50% 20% 15% 15%

Germans 10% 20% ----- -----

Russian 20% 60%* 10% 10%

Russian Buyers and Others by Location (main layers)

Foreign Buyers of Property in Cyprus, percentage ofdemand in terms of location

By Antonis P. Loizou

12

The Quality Group, one of themost respected propertydevelopers in Cyprus, built its

performance on years of experiencethrough an uncompromisingapproach to quality. The QualityGroup offers an extensive portfolioof contemporary, freehold housingand luxury lifestyle concepts, all withguaranteed Title Deeds in enviablelocations.

Mr. Savvas Kakos serves as themanaging director of the QualityGroup. "The Quality Group wasestablished in 1991 under the nameSavvas Kakos and Associates. In 1999,in order to fulfill our vision, weempowered the company with newbrains and resources, and we alsogave shares to key people in ourteam. Thus, in 2001, the name waschanged to the Quality Group."

Offering a proven model of “one-stop shopping,” the Quality Groupguides investors through each stagefrom ground-breaking and construc-tion to move-in and property main-tenance. Clients are further reward-ed through unrivalled customer serv-ice and after-sales benefits, includingmortgage and investment schemes,property management, rentals andlifestyle programs.

Kakos explains: "Our team ismade up of graphic designers, mar-keters, civil engineers and sales per-sons, and divided into property man-agement, quality management and

after-sales service divisions. In short,our company is composed of quali-fied staff that runs the company'soperations from the moment of buy-ing a plot to the time of finishing thebusiness."

The latest project of the QualityGroup is the Enalia Beach Residences(www.qualitydevelopments.com), anexclusive community of just sixteenocean-side villas offering the higheststandards of luxury, privacy andresort amenities. The name "Enalia"means "land on the water" in ancientGreek, a concept that serves as theguiding philosophy of the project.

Built on one of the island's most sce-nic beaches, each villa will serve as anoasis of serenity perched on the edgeof the Mediterranean Sea.

Each of the sixteen villas will boasta unique interior design scheme thatwas selected and implemented bythe renowned Greek designerAngelos Angelopoulos. Although theinterior designs of the villas defy cat-egorization, the overall scheme ismodern and contemporary with asophisticated attention to minutedetails and overall elegance.

Each villa will have four floors: the

first floor is a basement that sits onemeter above ground to ensure natu-ral ventilation. The basement floorcan be converted for different usesdepending on the needs of the client.For example, the space can easilyserve as a storage area, a guest bed-room, a workspace or even as ahome cinema.

The second level of the villa has akitchen, dining area and storage area,while the third floor is the main livingand sleeping space. The top floor isan open area with enough space toorganize barbecues, cocktail partiesor whatever it is that your imagina-

A Villa bythe Sea

nalia Beach Residences, the latestproject by the Quality Group, sets thestandard on the island for unparal-leled luxury and ocean-side living

E

Savvas Kakos, Managing Director, Quality Group

10

(1.7 - 5.1 million Euros) is interestedprimarily in right-on-the-beach prop-erty. This price range refers to luxu-

rious accommodation with parking,garden and pool, 4-5 bedrooms and

an extent of around 400-600 squaremeters. The second category is thatof the 300-400 thousand Cypriot

pounds (510-680 thousand Euros)with buyers interested in villas situat-

ed on hills, offering attractive seaviews, or very near the beach. Thisprice range refers to villas with pri-vate gardens and pools, 3-4 bed-rooms and around 120-150 squaremeters. The third category referes toa budget of around 200,000 Cypriotpounds (340,000 Euros) whose inter-est is mainly for apartments, havingapproximately 130-150 squaremeters, of a 3-bedroom capacity.

The Russian market deviates con-siderably and there are sales ataround 7 million Cypriot pounds forhomes (very limited) and buyers alsofor lower priced units (around150,000 Cypriot pounds). The pricesquoted above mainly refer to newaccommodation, with second-handunits priced at around 25 percentless. A number of Russian investorshave teamed up with local businesspeople and have undertaken proper-ty development, whereas others arebuying land as an investment.Opportunities for investment in themarket are there and the Cypriot realestate market has shown an annualappreciation in terms of land ofaround 12 percent p.a., projected tocontinue at a rate of 10-12 percentp.a. over the next few years. Similarly,increases are expected forhouse/apartments, with a recordedannual increase of 10 percent over

the recent years, with a projectedappreciation of around 7-8 percentp.a. Beach land and beach units areexpected to show a higher apprecia-tion than inland properties, due tothe shortage of beach land. For the“serious” (in terms of cash) investors,Cyprus is now offering added realestate market opportunities. Thereare three marinas at the stage of ten-ders, and in addition to the marinadevelopment activity, these projectsinclude extensive building develop-

ment. Also the Larnaca Port will havea building development of around200,000 square meters, in addition tothe cruise port and marina (tendersare under consideration).At the sametime, there are at present six golfcourses which have received an initialpermit issue, and each golf course willinclude development of around100,000 square meters of buildingsfor sale. All these projects requireextensive private investment, where-as others could be sold outright for aprofit, as on paper projects once thefinal permit is obtained. These proj-ects are most suitable for an extend-ed cash investor and they are direct-ed mainly towards the foreign mar-ket.

Although the second home is acompetitive market,Cyprus attracts atotal value of real estate sales to a fig-ure of approximately 700 million p.a.According to the Central Bank themain buyers are British, with 7 per-cent of buyers from the total fromRussia (but of a much higher budgetthan the average).

In terms of living, Famagustaregion has the best beaches, but itstourist season is limited to 4-6months, whereas in Paphos andLimassol it is all the year round, withLarnaca region having a summer peri-

od (for outside the town) of around6 months.

The market is changing and thedescribed projects/competition willcause numerous local potential devel-opers to seek cooperation withinvestors from abroad. To the plussesof the island, the two new airports ofLarnaca and Pafos, now under devel-opment, as well as the constant infra-structure improvement, must benoted.

PRICES VILLAS ON BEACH VILLAS OFF BEACH APTS ON BEACH APTS OFF BEACH

Limassol £5,000/sq.m. £2,200/sq.m. £4,000/sq.m. £1,500/sq.m.

Paphos £4,500/sq.m. £2,500/sq.m. £---- £1,400/sq.m.

Larnaca £3,500/sq.m. £2,000/sq.m. £3,000/sq.m. £1,200/sq.m.

Famagusta £3,000/sq.m. £2,000/sq.m. £----- £1,400/sq.m.

Indicative Prices of New Accomodation of Prime Interest for the Russian Buyer

“Competition will causenumerous local developersto seek cooperation with

foreign investors"

13

tion can create. Each of the floorsboasts sweeping sea views andextended balconies, which give thesensation that the entire house isfloating on the water.

The materials used in the projectare of the highest quality, and theyensure maximum comfort, durabilityand aesthetic value.The villas are alsoconnected to a centralized satellitemusic and television system, whichwill allow residents to tune into anyradio or TV channel in any part of theworld.

The houses were designed withthe simple but crucial idea that eachresident should be allotted absoluteprivacy from their neighbors. As aresult, the villas are scattered andwell-spaced amongst impeccablymanicured gardens of tropical plantsand flowers that are fed by a fresh-water stream. If a particular housedecides to host a private party, theyare insulated from the eyes and earsof their neighbors.

As a residential developmenthowever, there is an ample amount ofluxury resort facilities on site aimedat fostering a communal atmosphere.Although four of the villas also havetheir own private pools, all residentsand their guests can congregate inthe 240 square-meter freeform pool.Other amenities include bars, restau-rants, a state-of-the-art fitness areaand a multi-purpose court that canbe used for volleyball, tennis, andfootball. In short, there is alwayssomething to do at every time of theday.

Security at Enalia is extremelytight, and only residents can enterinto the premises. There is also anelectronic button at every villa thatresidents can press to open the gatesshould they have guests. Finally, thereis an underground parking lot that

can accommodate approximatelyone hundred cars for residents andvisitors.

Mr. Savvas Kakos also serves asthe project head for the Enalia BeachResidences. "Our aim is to set thestandard on the island for unparal-leled luxury and ocean-side living.Wewant to offer residents an exclusivevilla in a pristine location that willenable people to experience asophisticated level of both pleasureand relaxation. Because Enalia BeachResidences will offer both privateand communal services, we considerresidents to be buyers of a lifestyle,not just buyers of a house. "

To date, Kakos is extremely satis-fied with the pace and the outcomeof the project. "We put all of ourtime and resources into constructingthe Enalia Beach Residences, and

already our expectations have beenexceeded. Our beach location is themost expensive and prestigious onthe island at the moment, and I thinkthat in the coming years, this proper-ty will be the star landmark of theMediterranean Sea. Upon comple-tion, the Enalia Beach Residences willbe entered into an internationalcompetition for the best beach villasin the world, and we are fairly confi-dent that the project will stand outamongst the competition."

Kakos goes on: "The finishing dateof the project is expected to besometime during the summer of2009, though we are still working outsome of the finer details of thedesign.As a result, at present we havenot started selling the villas becausewe want to give the correct pictureto people upon completion of ourdesign. However, we estimate that

the starting price for a villa in theEnalia Beach Residences will beabout 750,000 Cypriot pounds. Forsome of our larger and more luxuri-ous villas, the top end of the rangewill be approximately 2 millionCypriot pounds."

Of course, Kakos is confident thatthe villas are not just an amazing placeto live,but also a lucrative investment."The price of property on the islandhas almost tripled over the past fewyears. For instance, following the con-struction of the new airport, Cyprusis establishing itself as a major com-mercial and residential centre muchlike Dubai.With that said, we on theisland believe that Cyprus is a muchmore sustainable business locationthan Dubai, especially consideringthat it's much cheaper for foreigninvestors to buy commercial and res-idential property here."

15

Mr George Hassapis, Chief Executive Officer, Hassapis Land Developers

assapis Land Developers looks to put Larnaca on themap by focusing on exclusive development projects

With twenty years of experi-ence on the island, HassapisLand Developers strives to

bring buyers one step closer to theirvision of a home in the warmMediterranean sun. Established in 1987,Hassapis Land Developers has garnereda well-earned reputation as a groupthat designs and builds attractive, com-fortable and high quality homes inCyprus.Whether they're building a styl-ish villa or a luxury hotel,Hassapis LandDevelopers always adheres to a rigor-ous step-by-step process, whichdemonstrates sound business practicescombined with serious efforts torespond to market demands.

The founder and CEO of HassapisLand Developers is Mr. GeorgeHassapis, a hometown hero who wantsto share the beauty of Larnaca with therest of the world. "If you take a walkaround Larnaca, you will agree with methat it's one of the most beautiful spotson the island. However, I can honestlysay that we are still very much behindNicosia, Pafos, and Limassol in terms ofinfrastructural development. But thishas advantages for investors, especiallysince the time is now to put Larnaca onthe map."

If you spend a few minutes convers-ing with Hassapis, it's not hard to sharein his optimism for the future of

Larnaca. "Firstly, our customers canattain a property for a reasonable pricecompared to other areas.The price dif-ference between us and Limassol is ashigh as 20-30 percent for the same plotsize. I think this is great margin consid-ering the quality of the products thatwe offer here."

Hassapis continues: "There are threeclasses of major projects currently tak-ing place that will improve the face ofLarnaca: a series of golf courses, a newregional airport and a complex of mari-nas. At the moment, there is a seriousrestructuring of Larnaca going on, andbecause of these baseline projects, anynew project coming into Larnaca willbenefit greatly. As a result,we have con-structed a total of 2,000 units in

Larnaca, all of which are high-profileinvestment properties."

For Russian investors choosing alocation in Cyprus, Hassapis offers thisbit of advice: "The reason why I thinkpeople should consider Larnaca asopposed to other areas such asLimassol is that we have an abundance

of land here. Unlike other heavily devel-oped areas on the island, Larnaca stillboasts virgin land, which has the poten-tial to be adapted to the individualneeds of the customer."

In regards to the future of Russian-Cypriot collaboration, Hassapis is alltogether optimistic. "Our future collab-orations with the Russian market willbe mainly in the areas of exclusive proj-

ects like golf courses, Dubai-style resi-dential towers and resort hotels. Wehave a number of these types of proj-ects in the pipeline, all of which areopen to whole or partial investors.However, we are looking for the righttype of partners -- the right partner isnot just somebody who has the money,but someone with the right expertise

who shares our long-term vision ofLarnaca."

In the end, Hassapis offers a clearand simple philosophy that HassapisLand Developers adheres to: "Landdevelopment is a privilege and aresponsibility.The privilege lies in offer-ing people the home they have alwayswanted. The responsibility is to makesure that their investment is justified."

H

"The time is now to put Larnaca on the map"

"Land can be 30 percent cheaper in Larnacathan Limassol for the same plot size"

Hassapis Land Developers2nd Floor Millenium Lion House - 1 Georgiou Aradippioti6016 Larnaka, CyprusTel: + 357 2481 5488 - info@hassapis.net - sales@hassapis.netwww.hassapis.net

A Hometown Hero

17

Loizos Iordanou Constructions Ltdhas been a highly respected name inreal estate construction and devel-

opment in Cyprus since its establishment in1991. During nearly 17 years of service, thecompany has earned an enviable reputationfor innovation, reliability and integrity, andhas a formidable track record of engineer-ing and producing a range of high profileprojects.The firm’s portfolio is a testamentto their work in a wide range of marketsincluding large contracts to build infrastruc-ture projects, as well as commercial, resi-dential, and institutional facilities. “We haveembarked on large scale projects, such asthe residences at Aphrodite Hills, and theMall of Cyprus in Nicosia, which is one ofthe largest privately owned constructionprojects in Cyprus,” explains Mr. Iordanou.

Mr. Iordanou’s experience in the indus-try extends beyond starting his own com-pany back to 1980 when he first becameacquainted with construction and engineer-ing. He began his operations with a succes-sion of partnerships primarily in Pafos, andlater formed his limited company in 1991,

starting with small projects and developingthe business through reputation and wordof mouth. The company has since thenbecome synonymous with quality and relia-bility in Cyprus: “Our experienced staff,unique family culture, innovative manage-ment skills and advanced control systemshelp us build mutually beneficial relation-ships,” said Mr. Iordanou. “We have theexperience, resources and processes tohelp customers plan, improve and manageprojects of varying size and complexity.”

Loizos Iordanou’s success in Cyprus hasenabled the company to launch projects inother countries such as Greece, Romania,and is now planning the commencement ofa first venture in Bahrain.The internationalgrowth has been determined but carefullymanaged, focused on projects where thecompany has proven experience to deliver.According to Mr. Iordanou, “We are selec-tive when accepting contracts, only partici-pating in projects where we can effectivelyutilize our expertise and technology.”

Mr. Iordanou is now actively investigatingopportunities within the Russian market,where he is confident that the company’svalues and reputation will meet the expec-tations of Russsian investors and develop-ers. “We are not just a developer, we arealso a construction company, and we pro-vide them with quality which is the number-one characteristic of our organization. Wedo not subcontract the construction toanyone. This is the best way of lookingafter our customers’ interests, and the rea-

son why we are growing so rapidly,” heexplained.

The company’s new development web-site will be launched in several languages,including Russian, and is planning to hireRussian-speaking staff to boost the effortsto reach the market.

Mr. Iordanou started his career in con-struction, immediately following the com-pletion of his military service. He beganworking as a sub-contractor, as well as col-laborating on joint ventures. Following the1974 war, the government launched anextensive scheme of house building for thecountry’s 200,000 refugees, an initiative thatMr. Iordanou became actively involved in,and by gradually developing a reputation forexcellence, honesty and reliability, succeed-ed in earning for his company an image asan important player in development andconstruction.

Mr. Loizos Iordanou, Managing Director, Loizos Iordanou Constructions Ltd

Lambrou Katsoni Street / Flora Cout B, 2nd floor Office 209, 8011 Paphos, CyprusTel: +357 26 938 238, Fax: +357 26 948 676,www.liordanou.com.cy / info@liordanou.com.cy

P.O. Box 53400 / 3302 Limassol, CyprusTel: +357 25 87 83 21 / Fax: +357 25 87 83 67www.grow-withus.com / info@grow-withus.com

Both Sides of the Coinoizos Iordanou has positioned itself as a market leader inboth real estate construction and development in CyprusL

18

Aristo Developers is among thepioneers of the new wave ofquality developers in Cyprus,

with an admirable track record of build-ing residential properties, world-classgolf courses, water parks and otheramenities.The company's stated missionis “To identify the most exclusive andsuitable property locations in Cyprusand Greece and utilize our creativity,experience and technical expertise tointegrate in an environmentally friendly

manner the most extensive variety ofhigh quality properties, aimed to becom-ing our clients' dream homes.”

Aristo has demonstrated a particularability to understand and meet theexpectations of Russian investors.

Theodoros Aristodemou, whofounded Aristo Developers some 30years ago, explains: “We believe thatCyprus is a very good place forRussians to buy second homes andinvest in, for three important reasons.First, there are good relations betweenthe governments and the peoples ofCyprus and Russia, and there are manyCypriots who now speak the Russianlanguage. Second, the majorityChristian denomination in both Cyprus

and Russia is Orthodox, thus creatingsimilar religious identity for the twocountries. Third, Cyprus and Russiahave very strong historical ties. Theseare very important factors, becausefrom our experience,Russians are veryappreciative of cultural accommoda-

tion and hospitality. Russians thereforefeel comfortable with Cyprus as aninvestment location and for settling as asecond home.”

Earlier this year, the investmentgroup Dolphin Capital acquired amajority shareholding in Aristo, a movethat is likely to give Mr.Aristodemou'scompany an opportunity to expand itsactivities further, while consolidating itsdeliberate upmarket moves, benefitingfrom Dolphin's renowned experiencein the development of quality hotelsand leisure complexes.

As a company with 30 years ofexperience in Cyprus, AristoDevelopers is committed to a longterm, sustainable strategy,which stress-es the importance of quality service atall stages in the process, something thatAristodemou believes Russianinvestors appreciate.“We are proud ofour commitment to honesty in ouroperations and we give our clients thesecurity of knowing that they can haveconfidence in the products they buy.Our clients know that we have owner-ship of our products, and they knowthat there is quality and security in ourservices. We are looking at the longterm prospects of the company, and itis thus our policy to give good pricesand quality services to our clients.Russian clients are cautious and alwaystry to ensure that they can trust thebusiness partner they are dealing with.

Once they are sure that a company canbe trusted, they will bring their friendsand other people as new customers.Russia is a market that demands forlong term partnerships and customerrelationship management."

This long-term approach is demon-strated by Aristo Developer's wellresourced after-sales team, who is on-hand as soon as the sale is completed,to provide advice and support andensure that the buyer gets completesatisfaction. The after-sales team isequipped to help with virtually everyconceivable need, including the pur-chase of electrical equipment, furniture,curtains and upholstery, the arrange-ment of landscape gardening, car hire,travel and leisure arrangements.

The team is also able to providehelp with any problems that may arisewith the property itself. Not only doesthe purchaser enjoy the benefit of anextensive guarantee included in thepurchase price, but the after-salesteam's free support provides the capac-ity to quickly liaise with the appropriatesuppliers or service providers to assureabsolute satisfaction.Aristo Developerssees Russian clients as strategicallyimportant to further success, and isactively developing its service facilities,both through new investment in theirMoscow office and also in furtherextending the dedicated customerservice that the company offers.

Theodoros Aristodemou, Managing Director, Aristo Developers Plc.

Welcome HomeAAristo Developers

is providing a special welcomefor Russians inCyprus by creating lifestylesrather than justhomes

20

anitis Development looks to bring top qualityintegrated resorts to the island of Cyprus

Angelos Markides, CEO, Lanitis Development

An InnovativeApproach to

Development

Lanitis Development is ownedby Thalassa Holdings, a newlyestablished joint venture

between RREEF (an internationalinvestment fund, member of theDeutsche Bank Group), which owns75 percent of the above joint ven-ture, and the Lanitis Group whichowns 25 percent.

In June 2007, Thalassa Holdingssubmitted a public offer to the share-holders of Lanitis Development forthe acquisition of 100 percent of itsissued share capital, which wasaccepted and completed successfully.

Lanitis Development was foundedin 1990 by the fourth generation ofthe Lanitis family, founders and own-ers of the Lanitis Group, which is oneof the oldest and biggest businessconglomerates on the island, involvedin most sectors of the local economy.Today, Lanitis Development is thelargest property developer and man-ager of integrated, large scale projectsin Cyprus. The company was estab-lished to plan, design, develop andmanage integrated resort projects,having secured the exclusive cooper-ation of strategic partners of interna-tional reputation and expertise.

RREEF's initial interest in acquiringLanitis Development principallystems from their flagship projectknown as Aphrodite Hills, the firstintegrated golf, leisure and real estatedevelopment in Cyprus. The projectwas executed with the participationof the international hotel chainInterContinental, Carnegie Ltd forthe golf facilities and other strategicpartners.

To visit Aphrodite Hills in Cyprusis to experience a higher level ofrelaxed opulence, superior serviceand deluxe accommodation.The lux-urious resort is set amid a backdropof stunning natural beauty in theMediterranean coast near Pafos, andoverlooks the very spot whereAphrodite, the Goddess of Love, issaid to have emerged from the

waves.The award-winning resort fea-tures an InterContinental resorthotel, an 18-hole championship golfcourse, an extensive spa, a villagesquare with shops and restaurantsand luxurious properties for sale andrent.

The uniqueness of AphroditeHills, both in terms of its dimensionsand design, will serve as inspiration in

the future for other projects of simi-lar character in Cyprus and abroad.This vision is echoed by the CEO ofLanitis Development, Mr. AngelosMarkides. “We aspire, through ourteam spirit, attention to quality, andcustomer focus, to become the bestdeveloper and manager of the topintegrated resorts in Europe. Ourcompany's strategy is to utilize ourexperience on large-scale projects topurchase big pieces of land withunique characteristics, and to devel-op these into fully-fledged resorts.”

Russian investors are takingnotice of Lanitis Development, par-ticularly since there is an increasingdemand in the Cypriot real estatemarket for luxurious villas offering

privacy and exclusivity. Furthermore,since the products and servicesoffered by Lanitis Development aregeared towards the high-end luxurymarket, Markides believes that thereis potential for future Cypriot-Russian collaboration. “Generallyspeaking, our development projectsare considered to be a risky invest-ment because of the magnitude andsize of our operations. However, if a

project succeeds along the samelines as Aphrodite Hills, then thereturns are extremely high,” hepoints out.

According to Markides, “Webelieve that Russian buyers' priorityis not the price of a villa -- they wantluxury, privacy, exclusivity and com-fort, while the location and environ-ment must support this. As a result,we try to preserve the natural beau-ty of the landscape whenever possi-ble, while the resort has a 24-hoursecurity patrol. We also realize thatRussian clients are extremelydemanding, and we are currentlystriving to offer services and facilitiesthat are aimed at this increasing seg-ment of the market.”

LL

aspire, through our team spirit, attention to quality, andcustomer focus, to become the best developer and managerof the top integrated resorts in Europe"

““We

visit Aphrodite Hills in Cyprus isto experience a higher level ofrelaxed opulence, superior serviceand deluxe accommodation”

““Too

22

Antonis Loizou isthe largest realestate consult-

ant in both Cyprusand in the EasternMediterranean. Fromland evaluation and com-mercial construction toproperty managementand educational publica-tions, the firm is involvedin virtually all aspects ofthe real estate market.

Antonis P. Loizou,Senior Partner, is veryclear about why his firmis distinguished from the

competition. "We do not compare our-selves with developers who make a 25-30 percent profit on the property thatthey sell. We only make a five percentprofit, and instead use our time andenergy to expand conservatively and totarget specific areas of the market."

At the moment, Antonis Loizou isworking hard to attract more Russianinvestors to the island. Compared withsimilar locations in Greece and Spain,real estate in Cyprus is extremely afford-able for Russian investors. Furthermore,recent infrastructural improvementsincluding new airports, golf courses andresidential developments bode well forthe future of the market.

Mr. Loizou explains: "At present,Russians comprise nearly 70 percent ofthe upmarket real estate business herein Cyprus, and about 30 percent of thelower end. Our firm recognizes thistrend, and strives to offer our Russianclientele the real estate services thatthey require."

He continues: "The advantage ofdealing with our firm is that we haveaccess to the whole of Cyprus. If ourclients want homes in any specific loca-tion on the island, we will get it forthem regardless of their budget. Otherdevelopers simply cannot offer thisvaluable service."

A Selection of KeyPlayers in Real Estate

Development

Established in1980, the D.Zavos Group is

one of the leadingCypriot land and buildingdevelopment companies.Having garnered a stronglocal and internationalreputation for buildingcutting-edge residentialestates and commercialproperties, the D. ZavosGroup currently oper-ates offices in Limassol,Larnaca and in London,U.K., and has representa-tive offices in Athens,Bahrain and Moscow.

The managing director of thegroup, Mr. Michalis D. Zavos, stronglybelieves in the power of innovation."We were the first company on theisland to convert hotel accommoda-tions into luxurious residential apart-ments. This unique concept allowsour clients to indulge in the privacyof a luxury apartment, while simulta-neously enjoying the amenities of aresort hotel."

Mr. Zavos is also quick to pointout the appeal of Cyprus as an inter-nationally-renowned real estateinvestment destination. "A lot ofclients we deal with could afford togo to many other countries in

Europe and the Americas, but theyinstead choose to purchase propertyin Cyprus.We believe this is becauseCyprus is a very secure country, andit's a great place for family holidays."

Looking towards the future, Mr.Zavos offers these words: "We arepresently expanding our businessoperations in the UK in order toallow our Russian clientele to moveinto other markets. We believe thatthis is an attractive option forRussian clients, especially sinceLondon is becoming popularamongst families who want to sendtheir children there to study."

Michalis D. Zavos, Managing DirectorD. Zavos Group

Antonis P. Loizou, Senior PartnerAnotonis Loizou & Associates

23

T he history of the QualityGroup dates back to 1991when Savvas Kakos founded

and formulated Savvas Kakos andAssociates Ltd. with the specificpurpose of providing design andconstruction services in Larnaca.After a decade of rapid growth, thefirm changed its name to the QualityGroup in order to acknowledgetheir commitment to deliveringutmost quality to their expanding

clientele base. Today,the company is prima-rily focused on proper-ty design and develop-ment in the Larnaca,Famagusta andLimassol areas.

Coinciding with the2004 entry of Cyprusinto the EuropeanUnion, the turnoverof the Quality Groupincreased from3,900,000 to11,100,000 Cypriotpounds (an increase of285 percent).Turnoverin 2005 and 2006 was

14 million and 27 million Cypriotpounds respectively, and the fore-cast for 2007 exceeds 75 millionCypriot pounds.

Mr. Savvas Kakos, the ManagingDirector of the Quality Group,attributes this success to his compa-ny's "one-stop shop" approach toreal estate. "Our company is com-posed of qualified staff that guidescustomers through each stage, from

ground-breaking and constructionto move-in and property mainte-nance. In this manner, we believethat we can further establish ourreputation on the island and aroundthe world.”

The strong growth figures of thecompany prove that its approach oftotal commitment to quality hasbeen well received by customers,both end users who become happyowners of “homes for life” (just likethe company's slogan states) and forinvestors:“Annual returns on capitalappreciation for our properties arein the range of 5 to 10 percent, andthe annual yield on rentals is in therange of 5 to 8 percent.Furthermore, in Cyprus thesereturns can be expected to be muchmore stable than in other boomingemerging markets in the region,”says Kakos.

This past July, the Quality Groupwas proud to announce theiracceptance by International HomesMagazine as one of "The LeadingInternational Developers."Membership into this prestigious

group is based on a number of strictcriteria relating to property quality,presentation, marketing and publicrelations. A very limited number ofdevelopers from around the worldare allowed to join.

Quality Group is currently devel-oping a number of high profile proj-ects, including luxurious beachsidevillas and contemporary commercialpremises with ergonomic officespace in Larnaca. Overseas, they arepioneering a state-of-the-art resi-dential tower in Dubai, and a multi-facility apartment resort in Bulgaria.Their recent expansion of satelliteoffices in Russia, Bulgaria and theUK, has further increased their net-work of professional expertise andclient accessibility.

In the context of Quality's inter-national expansion, this is what Mr.Kakos has to say about his outlookof the Russian market: “Russia isdefinitely in our plans, and our start-ing steps will be to participate inexhibitions held in Russia that haveto do with unique luxury and life-style projects.”

The Kanika Group of Companies is aname that is synonymous with theconstruction and development of

hotels and resorts in Cyprus. Since 1975,the company has been associated with anumber of major projects throughoutCyprus,some of which are now regarded asprominent landmarks.

The key specialization of the KanikaGroup is hotel construction and manage-ment, particularly luxury four- and five-starresorts.As a result of their continued suc-cess in the construction industry,the KanikaGroup has been publicly traded in the stockexchange since December of 2000, and is

today one of the most profitable compa-nies in the whole of Cyprus.The compa-ny is also certified with the QualityAssurance system ISO 9002 and theHazard Analysis of Critical ControlPoints system HACCP.

For instance, in response to thegrowing demand from the tourism sec-tor in Cyprus during the 80's and the90's, the Kanika Group completed theconstruction of four high-profile luxuryhotels and resorts.Today, the Alexanderthe Great Beach Hotel in Pafos, theKanika Pantheon and Elias Beach hotels

in Limassol, and the Lagoon Resort in AyiaNapa are ranked amongst the most estab-lished properties on the island.

Mr. Spyros Karaolis, the ExecutiveChairman of the Kanika Group, firmlybelieves that his company is easily distin-guished from the competition. "Our corpo-rate slogan is simple:value for money.This iswhat we have achieved in the past, and whywe are continuously raising the bar, yearafter year."

He continues: "As one of the oldest andmost established hotel chains in Cyprus,weare keeping a watchful eye on the develop-

ments in the industry,and are committed tocontinually upgrading our facilities throughongoing, extensive renovation plans.At thesame time, we are aware of the latestadvances in relevant technology, and areimplementing quality management systemsthat will support our efforts to offer thehighest possible standard of service whilemaintaining our competitive edge."

For over four decades, the KanikaGroup of Companies has beeninvolved in the building of both resi-

dential and commercial properties in theLimassol area and other parts of Cyprus.These properties include quality villas,

apartments and office premises. Kanikaalways allows for tailor-made building to suitthe client's needs to the highest level ofspecification.

One such project is the well-knownKanika Enaerios Complex, which sitsprominently on Limassol's main beachfrontavenue, and incorporates over 750 apart-

ments, 150 shops, office space and anupmarket hotel.

The Kanika Group is guided by theexpertise of its general manager, Mrs.Dora Onouphriou. "We are one of thefew companies on the island that pro-vides property management servicesalongside property development. As aresult, the investor that comes to Kanikareceives legal and tax advice about howto invest in property and subsequentlymaximize revenues."

In regards to the Russian market,Mrs.Onouphriou is excited about the poten-

tial of increased cooperation between bothcountries. "The growth potential vis-à-visthe Russian market is not just about sellingproducts to individuals, but about creatingconglomerations with investors interestedin Cyprus."

Spyros Karaolis, Executive ChairmanKanika Group

Dora Onophriou, General ManagerKanika Group

Savvas Kakos, Managing DirectorQuality Group

S ince 1991,Loizos IordanouConstruct ions

Ltd has garnered a repu-tation as one of the lead-ing real estate construc-tion and developmentcompanies in Cyprus.Today, the company isinvolved in the island'smost high profile proj-ects, including the exclu-sive residential develop-ment of Aphrodite Hillsas well as the CyprusMall, in Nicosia.

Mr. Loizos Iordanou, the

Managing Director of the company,believes that honest and hard work is thekey to success in his industry.“Our expe-rienced staff, unique family culture, innova-tive management skills and advanced con-trol systems help us build mutually benefi-cial relationships.We have the experience,resources and processes to help cus-tomers plan, improve and manage projectsof varying size and complexity.”

As a result of their success in Cyprus,Loizos Iordanou Constructions is current-ly expanding their operations to Greece,Romania,Bahrain and most notably Russia.However, unlike other multinational realestate companies that sometimes empha-size growth over sustainability, Loizos

Iordanou Constructions is being carefulnot to sacrifice their principles.

Mr. Loizos Iordanou explains: “We areselective when accepting contracts, andwe only participate in projects where wecan effectively utilize our expertise andtechnology."

He continues: "Since we are a construc-tion company as well as a developer, wealways strive to provide our clients withthe level of quality that they have come toexpect from us.We do not subcontract toanyone since we believe that this is thebest way of looking after our customers'interests while maintaining our high levelof standards.”

For the pasttwenty years,Hassapis Land

Developers has beenbuilding attractive,comfortable and highquality properties inLarnaca while simulta-neously working toestablish the area asone of the island'sleading destinationsfor investors, touristsand locals alike.

Mr. George Hassapis,the founder and CEOof Hassapis LandDevelopers, summa-rizes his company's

vision with these succinct words:"Land development is a privilege anda responsibility. The privilege lies inoffering people the home they havealways wanted. The responsibility isto make sure that their investmentis justified."

A highly praised hometown hero,Mr. Hassapis has nothing but love forLarnaca as well as sparkling opti-mism for its future. "If you take awalk around Larnaca, you will agreewith me that it's one of the mostbeautiful spots on the island.However, because we are still verymuch behind Nicosia, Pafos, andLimassol in terms of infrastructuraldevelopment, our customers canpurchase a property for a reason-

able price compared to other areas.However, the future of Larnaca isindeed looking bright, especiallysince a number of ongoing projectsare expected to raise the profile ofthe area.

Mr. Hassapis explains: "There arethree classes of major projects cur-rently taking place that will improvethe face of Larnaca: a series of golfcourses, a new regional airport anda complex of marinas. Because ofthis widespread development, webelieve that any new project inLarnaca will prosper as the areacontinues to transform itself into aleading destination."

Golden LandContractorsand Developers

is a mid-sized real estatecompany with over thirtyyears of experience in thePolis and Latchi areas.

Specializing in proper-ties suitable for both hol-iday and permanenthomes, Golden Landoffers customized designsranging from traditionalCypriot stone houses toultra-modern Europeanvillas.By employing a widerange of trained profes-

sionals including architects, civil engi-neers and project managers, GoldenLand is able to respond directly to theneeds and demands of their clientele.

Mr. Petros Ioannides, the ManagingDirector of Golden Land, is optimisticabout the future of his company as wellas the investment potential of both Polisand Latchi."More and more people arebecoming interested in Polis and Latchi,especially since both areas have thepotential to support more residentialand commercial developments, resorthotels, golf courses and marinas. As aresult, we are simultaneously expandingthe number of our branch offices whilehiring new staff."

Loannides also believes that a similartrend is emerging amongst Russianinvestors.

He explains: "In previous years,Russian investors were solely interestedin the Limassol area, but now they arestarting to branch out and target otherpotentially lucrative markets. To date,wehave already been approached by twoMoscow-based real estate companies,and we have already made an agreementto work closely with both of them.Wehave also personally contacted otheroffices in Moscow in the hopes ofattracting more clients and building anextended network."

Petros Ioannides, Managing DirectorGolden Land

George Hassapis, CEO, Hassapis LandDevelopers

Loizos Iordanou, Managing DirectorLoizos Iordanou Constructions Ltd

24

25

F or more than threedecades, AthanasiouConstruction and

Development has createdworld-class residences inthe Limassol area cateringto a diverse range oflifestyles.

The major point ofdifference betweenAthanasiou and the com-petition is that the com-pany strictly adheres totheir philosophy of offer-ing consistent and qualityconstruction as well asinnovative design solu-

tions. From start to finish, the companyworks alongside their clients to ensurethat their full range of needs and expec-tations are met when purchasing anAthanasiou branded home.

Christakis Athanasiou, the founder anddirector of the company, explains: "Inthe real estate business, companies arequick to throw around words like 'qual-ity,' yet most residential projects thesedays are characterized by stale architec-ture and a general lack of imagination.Asa result, we at Athanasiou strive to offerunique designs that distinguish ourdevelopments from competing proj-ects."

Although Limassol is second to Nicosiain terms of political and economic sta-tus, the city is rapidly becoming the pre-ferred destination for Russian investors.As a result, business is booming at astaggering rate, and Russian investorsare cashing in on this lucrative market.

Mr.Athanasiou knows how important itis to build trust amongst his Russianclientele. "It is the mentality of Russiansto talk directly to people in positions ofpower in order to solve their problemsquickly and efficiently. As a result, wehave decided to keep our business smallin order to be able to maintain a per-sonal touch with all of our clients."

Kouroushi BrosLtd is a well-established and

highly reputable con-struction and propertydevelopment companybased in Pafos.The com-pany is proud to offerexclusive designs that arebuilt to exacting specifica-tions with the utmostcare and attention todetail.

The Kouroushi brothersthemselves, Kypros and

Chrysostomos, have beenworking in the construc-tion business since 1989.

While both are civil engineers,Kypros isin charge of the overall administrationof the company, while Chrysostomosoversees all the technical aspects of thebusiness.

Since then, they have built hotels, gov-ernment buildings, banks, villas, bunga-lows, townhouses, apartments and stu-dios mainly in the Pafos area.Their oper-ations are on a national scale with proj-ects in both Nicosia and Limassol.Projects overseas, in Bulgaria andMoldovia, are also in the pipeline.

Kypros explains: "We are presentlyworking on three separate luxury villaprojects, two of which are aimed exclu-sively at Russian investors. These two

developments, which we hope will hitthe market in October 2008, will be ofthe highest quality, in order to meet thedemands of our Russian clientele. Weare also introducing the fractional own-ership concept in Cyprus with a projectwe are developing along with our Britishpartners."

About the prospects of the real estatemarket, Chrysostomos comments: "Inmy view, the real estate market inCyprus will continue to steadily growfor at least the next five to ten years.The price of land in Cyprus is muchmore affordable than other Europeancountries, and it's difficult to competewith the island's hospitality, favorable cli-mate and esteemed culture."

Since 1998, MaispaDevelopers Ltd. hasspecialized in build-

ing residential properties inthe Pafos and Polis areas. Inorder to uphold their mis-sion statement, Maispaaims to provide fairlypriced constructions of thehighest quality,and to main-tain steady market growthwithout sacrificing theircommitment to customerservice.

Mr. George Mais, whoserves as the ManagingDirector of Maispa, Vice-

President of the Pafos Chamber ofCommerce and Industry and is the currentPresident of the Pafos Land and BuildingDevelopers Association, believes that thereal estate market in Cyprus is a lucrativeinvestment, especially for the Russian mar-ket.

He explains: "Although the British havebeen investing in Cyprus for years,Russiansare starting to realize that the propertymarket in Cyprus is growing very quickly.In fact, real estate is the traditional invest-ment field for local Cypriots, who preferbuying property to stocks. Since Cyprus isa small island with limited availability of landfor development, property prices arealways on the rise. Needless to say, this is

extremely attractive for investors."

Compared to the British, Mr. Mais believesthat Russian clients require a greaterdegree of personalized service if they areto consider investing.

According to Mr. Mais: "The main differ-ence between our British and Russianclients is that generally speaking, Russiansplace a greater value on building trust.Since Cypriots and Russians share similarcultural values, we realize that our clients'expectations are often extremely high.As aresult, we employ Russian-speaking staff,and make a point of attending annual realestate exhibitions in Russia in order staycurrent on the latest market trends."

George Mais, Managing DirectorMaispa Developers

Kypros and Chrysostomos Kouroushi,Directors, Kouroushi Bros Ltd

Christakis Athanasiou, DirectorAthanasiou Construction & Development

26

Based in the cityof Larnaca,Cyprus Dream

Homes is a highly-respected propertydevelopment and realestate company dedi-cated to the principlesof quality, value formoney and customersatisfaction.From secur-ing the perfect plot toconstructing a custom-designed villa, CyprusDream Homes standsby their firm commit-ment to professional-ism.

Mrs. Christiana Alexandrou, the man-aging director of Cyprus DreamHomes, believes that it is importantto be loyal to customers amidsta competitive environment."Dedication, commitment and hardwork are the keys to our success.When people come here to buyproperty, we want to enable them topurchase the best property for theirneeds, both in terms of quality andinvestment-return potential.”

In the past, Russians have typicallychosen to buy property in eitherLimassol or Pafos, but over the lastcouple of years, Mrs. Alexandrou hasseen an increase in Russian buyers

choosing Larnaca as the preferredlocation in which to invest. "Theinvestment potential is high, especiallysince the price of real estate inLarnaca is lower than in other citieson the island. Larnaca has much tooffer in terms of shops, ranging fromboutiques to designer stores, numer-ous restaurants and bars which caterto all tastes, and far more attractivebeaches than Limassol and Pafos.”

Cyprus Dream Homes has hiredRussian speaking staff and is planningvarious exhibitions in Russia in orderto show all that Larnaca has to offer,and build bridges with Russian clients.

Pe t r a b u i l dDevelopers is asuccessful and

well-established realestate company withnearly a decade ofexperience in Cyprus.Today, they enjoy areputation on theisland as a firm dedi-cated to building quali-ty properties thatadhere to the highestpossible standards.

Concentrating onthe Pafos area, Petrabuildspecializes in exclusive

residential developments that are tra-ditionally styled in keeping with thecharacter of the island. At the sametime however, the firm prides itself onincorporating customer require-ments into each new home that theybuild, which ensures that each prop-erty is distinctive in both appearanceand character.

Fytos Koursaros, the director ofPetrabuild, recognizes that this quali-ty-orientated approach is the key tosecuring moderate growth. "Our cus-tomers are always looking for some-thing that is different than the rest.Therefore, we spend large amountsof money each year designing new

projects. The care we show for ourbusiness starts from the moment webuy a piece of land to the moment wefinish developing a property."

At present, Koursaros is seeing astrong shift in the market from tradi-tional UK investors to newly wealthyRussian clientele. "There is a lot ofpotential in Cyprus for Russianinvestors, particularly in the cities ofPafos and Limassol, which are cur-rently experiencing a property boom.Although actual rates of return varyconsiderably, our clients can expecttheir properties to return on average8 to 17 percent per year."

Signature LuxHomes is proudto pioneer the

groundbreaking con-struction method ofsteel-framed housing inthe Pafos area of Cyprus.The durability of thisbuilding style is unri-valled in the industry,andits design flexibility isaccompanied by signifi-cant savings in both con-struction time and over-all energy costs.

Mr. Kiriakos Photiou, theManaging Director of

Signature Lux Homes, is proud ofhis company's motto "Luxury ThroughQuality," as well as their eco-friendlyapproach. "We practice what wepreach, which is why all of our materi-als are environmentally sustainable.Allof our homes are also extremely ener-gy efficient, which results in a yearlysavings percentage of 80 percent onheating and cooling."

He continues: "For instance, theEuropean Union (EU) value for energyloss ranges from 0.6 to 1, with 1 beingthe maximum allowable value. Everyconcrete home in Cyprus has a valueof 1.69, which exceeds the EU stan-dard, while our homes have a value of

0.27, which is 200 percent lower thanthe minimum standard.”

Galvanized steel is by far better thaneither timber and/or concrete,which iswhy Signature Lux homes are designedto last for generations without theneed for continuous maintenance.

Mr. Photiou explains: "In the 21st cen-tury, people expect houses that havelittle or close to zero maintenance,which is why we apply all the latesttechnology that perhaps might only beexpected of places like the UK andUSA. As a result, we occupy a veryunique market niche here in Cyprus."

Kiriakos Photiou, Managing DirectorSignature Lux Homes

Fytos Koursaros, Director Petrabuild Developers

Christiana Alexandrou, Managing DirectorCyprus Dream Homes

27

G iovani CyprusP r o p e r t yD eve l o p e r s

offers a wide range ofluxury properties on thesouth-east coast ofCyprus. As the area'slargest constructioncompany, GiovaniDevelopers employsover 250 staff, and offersan incredible range ofupmarket apartments,homes and villas to theirclientele. In the years tocome, the company isalso planning on expand-ing their operations in

several other locations in Cyprus andaround the Mediterranean region.

Mr. Chris Giovanis, the founder andManaging Director of GiovaniDevelopers, is extremely optimisticabout the future of the real estate mar-ket in Cyprus. "I must say that this areahas the greatest potential in the wholeof Cyprus. This is because it has beenhidden for too many years, and only noware people beginning to discover whatthis market can offer."

In order to differentiate themselvesfrom the competition, GiovaniDevelopers primarily targets elite clientsin the high-end segment of the market.

Although at times it can be difficult tocater to demanding customers, Mr.Giovanis offers this practical advice:"Simply put, we listen to them. We dowhatever they want.When they show usthe designs that they want, we immedi-ately respond to their needs, and wesuggest the location that befits theirdesign."

He continues: "Our company focusesstrictly on quality and service, which iswhy we are so widely known on theisland as well as overseas. By upholdingthis reputation, we believe that we cancontinue to increase our presence,espe-cially in the lucrative Russian market."

Amedium-sizeddeveloper inthe Pafos and

Limassol areas,KleanthisSavva offers a widerange of propertiesincluding apartments,townhouses, villas andself-styled configura-tions.With a well-estab-lished reputation forexemplary customerservice and productquality, Kleanthis Savvaguides clients from theearly stages of choosing

a property and designingthe building to the final

stages of signing the papers and mov-ing in.

Mr. Panayiotis K. Savva, the ManagingDirector of Kleanthis Savva and theson of the company's founder, is well-versed in the needs of Russian clients."Russians tend to rely on recommen-dations from their peers, which is whywe are proud to say that much of ourbusiness comes from referrals.Russians are also quick to demand firstclass service, which is easy for us tocomply with since we strive to meetthe needs of our customers at everystage."

In response to the growing interest

amongst Russian investors in theLimassol and Pafos property markets,Kleanthis Savva is presently opening abranch office in Moscow.The companyalso regularly attends property exhibi-tions in Russia, and advertises theirservices in the Russian media.

According to Mr. Savva: "As a mid-sized company, our target is to buildstrong foundations, and to expand at asustainable pace.By maintaining steadygrowth, we can ensure that our cus-tomers can secure the deals that theywant.We stand by the properties thatwe sell, and we are confident that ourcustomers always receive the bestvalue for their money."

Since year2000, CHAPSDevelopers

has been involved inreal estate and prop-erty development inthe Nicosia area inthe island of Cyprus.The company's mainobjectives are toidentify premiumplots of land, todesign innovativeexamples of architec-ture, and to con-struct buildings usingthe highest possiblequality of materials.

As of recent, CHAPS Developers hasalso been working hard to create linkswith Russian investors,and to establisha greater presence in the overseasmarket.

Mr. Stavros Petrakides, the Director ofCHAPS Developers, explains: "Webelieve that we are a niche companycapable of attracting Russian investors,especially since we are young and flex-ible. Compared with bigger and moreestablished developers on the island,we are choosing to focus on quality ofdesign and customer service instead ofsolely pursuing profit."

He continues: "Our aim is to personal-

ize our work to meet the taste anddemands of our clients, which is whywe emphasize novel and cotemporarydesigns in all of our projects.We alsoknow that Russians demand the high-est possible level of service, which issomething that we feel we can providebetter than large and impersonaldevelopers."

Although Mr. Petrakides admits that itwill take some time to break into theRussian market, he is confident thatCyprus will continue to appeal to for-eign investors. "Cyprus is a blessedisland in terms of the weather, whichcreates a relaxing atmosphere fortourists and business investors alike."

Stavros Petrakides, DirectorCHAPS Developers

Panayiotis K. Savva, Managing DirectorKleanthis Savva

Chris Giovanis, Managing Director,Giovani Developers

28

Market Formation in theEuropean Union

Since the formation of theEuropean Union (EU), the financialand capital markets of membercountries have become increasinglyinterdependent. As imagined by theoriginal architects of the EU, Europecan now function as one integratedmarket capable of competing withkey global players.

In this new environment, it isessential that entrepreneurs wishing

to invest in the EU take the time toshop around, and to identify themost lucrative prospects. At thesame time however, tax considera-tions must be taken into account

when selecting a financial center tohost a holding company.

Of course, thanks to the intro-duction of a single European pass-port for securities, investors cannow make these two decisions inde-pendently. In the new EU, it is possi-ble for companies to raise capital orlist shares in one country while bas-ing themselves in another.

Although Cyprus has a long his-tory as an international financialcenter, the island has grown increas-ingly popular in recent years as anideal location for establishing invest-ment holding companies. From itsMediterranean location and com-prehensive infrastructure to itsmodern political and legal systemsand advantageous tax structure,Cyprus is in an enviable position asone of Europe's leading businesscenters.

Cyprus as a LeadingBusiness Center

An undeniable advantage ofCyprus is its strategic location in theeastern Mediterranean at the cross-roads of Europe, Africa and Asia. Byplane, Cyprus is only four hoursfrom London, three hours fromMoscow, two hours from mostEuropean destinations and one hourfrom most Middle Eastern capitals.

The island's two shipping ports alsocontribute to the development ofthe transit trade and the shippingindustry throughout theMediterranean.

Another benefit of Cyprus is sim-ply that it offers plentiful sunshineand ideal temperatures virtuallyyear round. Offering a trueMediterranean climate, summers inCyprus are sunny and dry whilewinters are short and mild. In fact,extremes of weather and tempera-ture are rare, allowing Cypriots toenjoy the outdoors considerablymore than their mainland neighbors.

Partially due to its attractive cli-mate, Cyprus enjoys its status asone of Europe's leading tourist des-tinations, particularly amongstBritish and more recently Russianholiday makers. As a result, theisland boasts a comprehensive infra-structure of airports, cruise ports,upmarket hotels, luxury resorts,shopping districts and world-classgolf courses.

In recent years, the island hasalso become one of the world'sleading property hot spots amongstboth real estate investors and sec-ond-home seekers. In order torespond to this growing demand, arapidly expanding network of prop-erty developers, financial consultan-

A Global Business CenterNow a fully integrated member of the European Union, Cyprus has emerged

as a global business center for foreign investors looking for advantageoustax status and/or a springboard into European capital markets

“Cyprus offers the lowest tax rate in the EUwhile fully complying with both EU and OECD

requirements against harmful tax practices"

29

cies and legal experts have sprungup across the island.

As dictated by its constitution,Cyprus is an independent and sov-ereign republic with a presidentialsystem of government. Cyprus alsoemploys a legal system that has beenstructured on English CommonLaw, with UK court decisions oftenused as precedents for Cypriotcourt cases.

This modern political and legalsystem carries over into the busi-ness world, with all companystatutes regulating business mattersand procedures based on CommonLaw. Furthermore, these systemsfacilitate quick and efficient process-es for establishing a company inCyprus, with all decisions beingissued by the Registrar ofCompanies.

Liberalizing the CypriotTax Structure

Although the aforementionedfactors are certainly appealing toforeign investors, the main reasonfor choosing to base oneself in

Cyprus is its extremely advanta-geous tax structure.

For starters, Cyprus offers thelowest tax rate in the EU while fullycomplying with both EU andOrganization for Economic Co-operation and Development(OECD) requirements againstharmful tax practices. Since taxcosts play a significant role in invest-ment decisions, the formation of aholding company in Cyprus can inmany cases eliminate or reducewithholding taxes under double taxtreaties or under EU directives.As aresult, this income can then be repa-triated in any form the investorwishes without incurring Cypruswithholding tax.

The current tax structure inCyprus was implemented on 1January 2003, and refers to invest-ment holding companies based inCyprus. Specifically, the legislationallows for the following parameters:an income tax rate of 10 percent(the lowest in the EU) for all corpo-rations, no withholding taxes onpayments of dividends, interest, androyalties paid to non residents, no

30

tax on the disposal of titles, partici-pation exemption system on divi-dends or profits from abroad, nothin capitalization rules, no exitcosts, no holding period require-ments for exemptions, a uniform taxrate without discrimination, and noexchange controls.

As a full member state of the EU,the aforementioned tax legislationalso grants freedom for all EU citi-zens to conduct business and live inCyprus with no legal restrictions. Inturn, Cyprus can now share in thegrowth and development of thegreater EU economy, adopt the Euro(formal adoption is scheduled totake place in January 2008) and par-ticipate in the Economic andMonetary Union (EMU). It isbelieved that these changes willattract a greater share of foreigninvestment to Cyprus, and acceler-ate the island's transformation intoa leading international business cen-ter.

Integration into Europe'sCapital Markets

EU membership has also enabledCyprus to fully integrate intoEurope's capital markets, thanks tothe July 2005 Prospectus Directiveacross member states. This legisla-tion harmonizes requirements forthe drawing up, approval and distri-bution of the prospectus to be pub-lished when securities are offered tothe public, and when securities areadmitted to trading on a regulatedmarket situated or operating withina member state.

One of the major initiatives tocome from the Prospectus Directivewas the creation of a singleEuropean passport for securities,

which allows the issuer to raise cap-ital on a pan-European basis. As aresult, companies registered inCyprus can conduct a public offer-ing in another EU member state orhave their shares admitted to trad-ing in any EU regulated market.

Strengthening the Tieswith Russia

The integration of Cyprus intothe EU has also allowed Russianinvestors to gain a foothold into for-eign markets to which they didn'thave easy access in the past.

Since the fall of the Soviet Union,Russia has opened its doors to for-eign corporations, and eased restric-tions on the Russian entrepreneursinvesting overseas. As a result,Russian investors that choose tobase themselves in Cyprus canscout for lucrative investmentopportunities within mainlandEurope while simultaneously reapingthe advantages of the island's liberaltax codes. In addition, the boomingproperty market in Cyprus is partic-ularly appealing to Russians, who areeasily swayed by the idea of owninga vacation home in the warm andsunny Mediterranean.

In the years to come, the Cypriotgovernment is taking steps to easevisa restrictions and to create fasttrack services for Russian investors.Considering that Russian individualsand corporations are increasinglytaking advantage of off-shoring inorder to increase their profitably,the Cypriot government is fullycommitted to enhancing its image asboth an advantageous tax base and aspringboard for entering Europeancapital markets.

“Companies registered inCyprus can conduct a publicoffering in another EU mem-ber state or have their shares

admitted to trading in anyEU regulated market"

31

ndreas Neocleous & Co was the first Cyprus law firm to establish an office inMoscow, and is dedicated to serving thegrowing Russian market

Andreas Neocleous, Founder,Andreas Neocleous & Co

Exceeding Expectations

Andreas Neocleous & Co. has astrong affinity with Russia, dat-ing back to the 1980s, when

the coalition government of the timebegan to establish strong relationsthrough a series of treaties. At thattime, many people recognized thestrategic strength of Cyprus as a cen-ter for international investment, andMr. Andreas E. Neocleous focusedmuch of his attention on developinginternational links, recognizing theadvantage that Cyprus has in maintain-ing strong relations with key interna-tional partners, notably the UnitedStates and Russia.The firm establishedits own office in Moscow,and has main-tained a presence in the country eversince, operating through the collapse ofthe Soviet Union when many of thefirm's clients ceased trading.“Though itwas a difficult time to be workingthere, we stayed, and now our office isvery strong and growing steadily”explains Mr. Neocleous.

By the time of the accession ofCyprus to the European Union,Andreas Neocleous & Co. had alreadyestablished a very strong reputation inthe Russian market, and Mr. Neocleousplayed a key role in reassuring Russianinvestors about the effects of Cyprus'sEU entry. “The business community inRussia was very worried, and theyinvited me to speak to the three majorinvestment committees: the budgetcommittee, the foreign affairs commit-tee and the economic committee. Ihad to explain all of the advantages anddisadvantages to them because theythought Europe was taking Cyprusfrom them. Some people use Cyprus

to reduce their tax liabilities–which isvery beneficial for large companies–andRussia was afraid that they would losetheir capacity to do so.”

As Mr. Neocleous predicted, theaccession of Cyprus to the EuropeanUnion has extended the opportunitiesfor Russian businesses and investors,and Andreas Neocleous & Co. hasbeen among the leaders in building onthe unique strengths of the country tomake it a financial hub for investmentsin Europe, as well as in the Middle Eastand not least in Cyprus itself, wherebusiness opportunities have aboundedsince EU membership was confirmedin 2004.

David Stokes, a consultant atAndreas Neocleous & Co, explainshow the firm also plays a role in help-ing Russian businesses to develop rela-tions with other countries, such as theUnited Kingdom with which Cyprushas very strong historical ties: “Londonhas taken over from New York as acenter for global companies to raisefunds, and Cyprus can play a key role inlinking the avalanche of Russian IPOswith the City. That is exactly the sortof work that this firm does, it acts as anintermediary, as a portal betweenRussia and the rest of the world,”explains Mr. Stokes.

The Russian arm of the business isvital to the firm's plans for the future,as Mr. Neocleous is determined toexpand its activities regionally, helpingto facilitate growing trade betweenRussia, Europe and the Gulf States:“Wesee Cyprus as a two-way bridge for

great Middle Eastern enterprises tobranch out and do business in Europe,America and Russia, and vice versa.”

Mr. Andreas E. Neocleous,Advocate and Managing Partner ofAndreas Neocleous & Co, has strivenagainst adversity to make his legalbusiness what it is today. Growing upin a poor household in Pafos, he

fought in the war of liberation, wasimprisoned and tortured. After com-mencing training in theology, he quick-ly realised his real passion was the lawand after completing his studies,moved to Limassol to establish hisown practice. He even served as amember of parliament, before return-ing to devote himself completely tothe law.

AA

32

Neoclis LysandrouVice Chairman, Laiki Group

he Laiki Group is preparing to strengthen its international business by extending its presence inRussia

The Laiki Group is a familiarname in Cyprus, being one ofthe longest established and

most profitable banking groups in thecountry. Founded in 1901 in Limassolas a local savings bank, the Laikiname, like that of its co-founders, theLanitis family, has been prominent inbusiness affairs ever since. Laiki wasthe first business in the country tobecome a registered company, backin 1924, and still holds its original cer-tificate of registration–serial numberone, and now a historical artifact.

Entering the Russian Market

It was not until the 1960's that thebank expanded to become a nation-wide concern. Co-operation with asubsidiary of the HSBC groupenabled this expansion to take place,and also gave the bank an instantinternational recognition. Thisenabled the group to extend further,firstly into Greece and then in otherkey markets. The group now hasbanking activities in Greece,Australia, the United Kingdom,Guernsey, Serbia, Romania andEstonia. It also has representativeoffices in the USA, Canada, SouthAfrica and Russia.

For Mr. Lysandrou, the attractionsof Cyprus as a destination for invest-ment are not difficult to see. “Firstly,at 10 percent, corporate tax is thelowest in the European Union, evenlower than Ireland, which is knownfor being an attractive business cen-ter. Second, the infrastructure here isa huge advantage, as there are noproblems for people to communi-cate and have access to the mainregional centers on the island.

Thirdly, I think the location in gener-al, being at the crossroads of Europe,Asia and the Middle East, placesCyprus as the gateway to the world.”

Last year, Laiki Bank merged withthe Marfin Group and Egnatia Bank,further strengthening the group's

finances and credentials, and alsoenabling it to embark on plans forfurther international expansion, keyto which is to build on its presence inRussia.

Laiki opened its representativeoffice in Moscow almost 10 yearsago. Now with the finance and expe-rience it needs, the group plans toestablish its own banking business inRussia. Mr. Lysandrou believes that

the group's solid reputation, commit-ment to innovation and new technol-ogy will drive the success of theRussian venture. “Technology is atthe core of our strategy to enter themarket, as well as our reputation andphilosophy of building long termbusiness relationships based on trust.

We can bring investors to Russia, aswell as Russian investors to Cyprus.It's a mutual exchange of businessopportunities.”

In addition to its technical andfinancial strengths, the group will belooking to build on its solid founda-tion for ethical trading and corporateresponsibility to help build the brandinternationally. This reputationearned the bank four prestigiousawards in 2006, and has already giventhe business a solid foundation tobuild on.

About Mr. Neoclis Lysandrou

Mr. Lysandrou has been with theLaiki Bank since 1972, straight afterfinishing his studies in England.He hasbeen a part of the group's expansion,starting as a trainee and workingfrom branch to regional level toGeneral Manager before being invit-ed to serve in his present position ofVice Chairman. In his opinion,“To bea successful banker, the secret is notdifferent than in any other business:you should have passion for yourwork, and that's the kind of passion Ihave!”

T

An Established Bankwith Young Ideas

“We can bring investors toRussia, as well as Russianinvestors to Cyprus. It's a

mutual exchange of businessopportunities"

110, Eleftheriou Venizelou & Santorinis Str.P.O. Box 62292, 8062, Pafos, CyprusTel: +357 26 822 221Fax: +357 26 941 848e-mail: laikigroup@cy.netwww.laikigroup.com

Laiki Group

33

Business success in today's rapidlychanging global environment requiresthe ability to rely on your business

partners. At Deloitte, the multidisciplinaryenvironment and the expertise of the staff,combined with an industry-focusedapproach, enables the firm to offer the com-plete business solution.

Deloitte offers professional services inauditing, accounting, tax, financial advisoryand consulting, and provides the link forinvestors looking to establish a company inCyprus. In the city of Limassol, where themajority of Russian related business enter-prises are concentrated, Deloitte is thelargest professional services firm and theleading advisors in the shipping sector.

Mr. Nicos Kyriakides, the Head of FinancialAdvisory at Deloitte, who is a member of theboard of directors and in charge of theLimassol office, believes that Cyprus is an ideallocation to create tax-efficient internationalcorporate structures. Certain provisions ofthe domestic tax legislation of Cyprus com-bined with a wide network of double taxationtreaties with over forty countries and theimplementation of the EU Directives, offer tointernational investors the advantage of lowoverall taxation, maximizing the return ontheir investments. The Company Law frame-work has recently been amended to enablealso the establishment of societas europaea.

Specifically, dividends received by Cypriotcompanies and profits of their foreign perma-nent establishments are completely exemptfrom tax under certain conditions. Gainsfrom the disposal of shares and other securi-ties held by Cypriot companies are alsoexempt. Moreover, dividends and interest canbe paid to nonresident shareholders andinvestors without any withholding tax inCyprus. Cyprus offers also unilateral creditrelief for tax withheld abroad regardless ofthe existence of a double tax treaty with therespective country,

With respect to the shipping sector,Cyprus offers significant benefits and veryattractive conditions for ship-owners andship-managers. Profits from the operationsof a Cypriot registered vessel, dividendsfrom a Cypriot ship owning company, andemoluments of officers or crew on board aCypriot registered vessel are completelyexempt from tax. Moreover, there is no cap-ital gains tax on the sale or transfer of aCypriot registered vessel or the shares ofthe Cypriot ship owning company. Profitsfrom ship-management activities are taxed atthe lower of 4.25 percent on taxable incomeand reduced tonnage tax on vessels undermanagement.

According to Kyriakides, “When all ofthese favourable tax conditions are com-bined, they create an extremely attractive

platform for international businessmen forinvestment holding and financing operations,for holding and exploiting intellectual prop-erty rights, for shipping activities and fortrading in international stock markets. AtDeloitte in Cyprus, we offer our clients acomplete business solution.We undertake toadvise our international clients on how tocreate a tax-efficient corporate structure byexploiting the vast resources of the interna-tional network of Deloitte; we support themto establish a company in Cyprus and weprovide all the required services (accounting,auditing, IT & HR consulting and tax) tooperate their companies in compliance withthe requirements of the law. Furthermore,through our Financial Advisory andCorporate Finance service lines we offerM&A advisory, financial and tax due diligencework, project and company valuations andlisting of groups of companies in internation-al stock markets."

Kyriakides, who is also a member of theCyprus-Russia Business Association, regular-ly participates as a speaker in seminars andother promotional activities abroad, empha-sizing the advantages of the tax system ofCyprus after its accession to the EU in aneffort to attract more foreign investors tothe island.

He added: “In order to strengthen therelationship of Deloitte with our Russian

clientele and to enhance the interest forCyprus, we strive to increase awarenessabout what Cyprus can offer.We participatein seminars abroad, organized by the CyprusChamber of Commerce or by us in collabo-ration with banks and other institutions.Wealso frequently visit the Deloitte offices inRussia and give presentations to our part-ners about the investment and tax incentivesthat Cyprus can offer.”

Although Kyriakides concedes Cyprushas a comparatively small economy on theglobal stage, he is adamant that the island notonly offers one of the best solutions forRussians seeking an intermediary locationfor investments abroad, but also one of thebest platforms for inbound investments byforeign businessmen into the vast Russianeconomy.

“The Double Tax Treaty of Cyprus withRussia is one of the best because it providesfor 5% withholding tax on dividends frominvestments in Russia exceeding 100,000 USDollars, and zero withholding tax on interestand royalties.”

With such an attractive tax regime andthe tax incentives available for foreigners inCyprus, it is easy to understand why thegrowth of foreign investors and internation-al business companies coming to the islandcontinues to gain momentum.

eloitte provides insightregarding the advantagesCyprus has to offer to Russian investors

DMr. Nicos Kyriakides, Head of FinancialAdvisory at Deloitte

Providing the Link

www.deloitte.com/cy

Contact details

Nicos S. KyriakidesMain : + 357 25 868686 Mobile: +357 99 611827E-mail : nkyriakides@deloitte.com

Deloitte & Touche LimitedP.O.Box 58466CY-3734 Limassol, Cyprus

Other Deloitte offices in Cyprus

NicosiaTel.: +357 22 360300, E-mail: infonicosia@deloitte.comP.O.Box 21675, CY-1512 Nicosia, Cyprus

LarnacaTel.: +357 24 819494, E-mail: infolarnaca@deloitte.comP.O.Box 40772, CY-6307 Larnaca

34

BNP Paribas is rightly proud of itsactivities in Cyprus, where it acts as alocally registered bank, offering a rangeof services to local and internationalclients. The Cyprus subsidiary of theFrench and European multinational

BNP Paribas SA is operated by a spe-cialized management team, and an effi-cient operations department, run byexperienced, multilingual staff. Withthe growing importance of Cyprus asan international financial center, BNPParibas (Cyprus) Limited is offering aunique combination of local and inter-national knowledge to meet the needsof investors and traders throughoutthe world.

Cyprus is indeed an ideal location

for investors and businesses.They canbenefit from an exceptional location atthe crossroad between the East andthe West, both in terms of culture andbusiness.A well regulated environmentfully compliant with EU regulations,

and numerous double tax treatyagreements are additional solid andrecurrent incentives.

Investment in Cyprus has grownrapidly since the country joined theEuropean Union in 2004, and with theanticipated adoption of the Euro nextyear, the country's important positionas a major financial center for Europeis likely to be consolidated still further.Thierry Gigant, managing director ofBNP Paribas (Cyprus) Limited, com-

pares the development of the Cypriotfinancial sector with the experience ofIreland, which has thrived since joiningthe European Union in the 1970's.Cyprus is frequently referred to as“The Ireland of the Mediterraneansea” for that reason, and once thecountry has a common currency withthe economies of the Eurozone, theflow of capital to Cyprus can only beexpected to increase further.

With the imminent launch of newbranches in Moscow and other majorcities in Russia along with the recentacquisition of 51 percent ofUkrsibbank in Ukraine, BNP Paribas isin a strong position to meet the needsof Russian and Ukrainian clients, indi-viduals and businesses alike. Synergiesare obvious between BNP Paribasentities. Recent cooperations withBNP Paribas in Moscow have provedto be extremely profitable for com-mon clients.

The synergy is not limited to thebranches in Cyprus and Russia butconcerns clients from the entire bank'snetwork. The client benefits from anintegral offer. For instance, if a cus-tomer wants to invest in Russia he canuse both branches in Cyprus andMoscow to structure the transactionand its operations in Russia. “This isundoubtedly a win-win situation forclients and for our bank,” ThierryGigant confirms.

In Cyprus, the bank proposes anattractive portfolio of services includ-ing cash management, corporate andtrade finance, equities and fixedincome derivatives, expertise in energyand commodities and infrastructure,thanks to the support of the dedicateddepartments of its mother company.

Thierry Gigant also explains howthis can derive valuable benefits forRussian and international companies inthe increasingly global world of thetwenty first century.“As so much man-

ufacturing activity is transferring toChina and other Asian countries,traders will often source products orcomponents from Asia, where pay-ment is usually made by letter of cred-it. BNP Paribas has operations in mostmajor Asian cities.This means that let-ters of credit drawn on BNP Paribasare usually processed quickly, do notrequire any additional confirmationand thus costs are reduced.Additionally, BNP Paribas proposes itsonline trade system “Connexis”, prob-ably the only service of its kind inCyprus, which can track the exact sta-tus of a letter of credit request.Clientscan then securely download copies ofthe SWIFT confirmations and showthem to suppliers.”

Thierry Gigant has worked forBNP Paribas for over 20 years, firstly inLa Reunion Island, then relocating toParis with Asian coverage, later toLebanon, Bahrain, and finally toCyprus. His solid experience ofInternational clients' needs, similar tothe experience of the top managers inRussia, in Ukraine, and in most of thebranches of BNP Paribas in the world,contributes to the quality of servicerequested by demanding customers.The staff is equally involved, and sup-ports the four core values of theBank: Responsiveness, Creativity,Commitment and Ambition. “I believein participation, the management of aninstitution should not be situated in aniconic tower giving orders.We apply apolicy of open doors, and the Bank'sstrategy is shared by all the employ-ees."

For serious Russian investors andtraders, BNP Paribas (Cyprus) Ltd canbe counted on for a genuine qualityservice, not least because of its focuson high value clients rather than themass market. "We concentrate on alimited number of clients and we servethem very well," Mr. Gigant says.

“We are the mostinternational of local

banks.” Thierry Gigant,Managing Director,

BNP Paribas (Cyprus) Limited

Kanika Business Center, 319, 28th October St., P.O. Box 50058, CY-3600, Limassol, CyprusTel: +357 25 840 802, Fax: +357 25 840 699

BNP Paribas is in a strong position tomeet the needs of Russian individuals and

businesses with interests in Cyprus

The Most Internationalof the Cypriot Banks

BNP Paribas has been operating in Cyprus for more than20 years. It is now seeking to consolidate its position byutilizing its extensive global network.

35

With the opening of the firstbranch fully owned by aCypriot bank in Russia, the

Bank of Cyprus Group (BOC) adds yetanother page in its more than 100 years ofhistory as the leading bank on the island.We sat down with Mr.Eleftherios Ioannou,Group Chairman, to obtain his views onthis and other recent developments.

Q: Could you please elaborate on thekey elements of strategic planning behindthe launch of the Russian operation ofBOC in June 2007?

Eleftherios Ioannou: The com-mencement of business operations inRussia is a key pillar of BOC Group's strat-egy to expand into new, dynamic markets.After a detailed assessment of the Russianmarket,we decided to start with the devel-opment of a loan portfolio and the provi-sion of services to existing corporateclients of the Group, thus minimizing cred-it risk. Our Russian expansion plans arelong term, and we aim to optimize themanagement of the potential risks thatsuch a major move entails. Our businessplan provides ultimately for the setting upof a network of branches, and ourapproach will of course be in line withBOC's core philosophy: offering fast andreliable service, which addresses cus-tomers' needs.

Q: Besides the very high rates ofgrowth of the last few years, what makesthe Russian market especially attractive forBOC?

Eleftherios Ioannou:As you know,Cyprus is the place of choice from whichWestern companies and investors con-duct their activities in Russia. For thisreason, BOC has a large number ofclient relationships with companies thatoperate in Russia, and capitalizing onthese relationships gives us a clear com-petitive edge. It's important to note thatwe entered the Russian market almost10 years ago with the establishment ofour Representative office, and now,based on our knowledge of the marketand the good reputation we have creat-ed, we are in a position to expect satis-factory profitability from our operationsin the country.

Q: What segments of the Russianmarket will BOC be catering to and howwidespread will your geographical pres-ence be?

Eleftherios Ioannou: In terms ofmarket segments, we will start by offer-ing a variety of products to our existinginternational corporate customers thatoperate in Russia, but in the mediumterm our focus will be to provide a widerange of services and products to medi-um-sized enterprises. High net worthindividuals will also form part of our cus-tomer base. Regarding our branch net-work, we have opened our first branchin Moscow and we plan to open one inSt. Petersburg soon. Early in 2008 weshall open our first street-level branch inMoscow.During the next three years weexpect to reach 15 branches, concen-

trated mainly in the two major cities.

Q: What choice of products do youhave on offer for Russian businessmen aswell as high net worth individuals fromRussia coming to Cyprus?

Eleftherios Ioannou: We offerproducts catering to the needs of thebusiness community: local or foreigncurrency accounts, credit facilities, leas-

ing, factoring, investment banking, etc.For high net worth individuals, ourPrivate Banking division offers a greatrange of interesting options for placingtheir funds in competitive internationalinvestment products.

Q: I know that company executivesare rather reticent when it comes tocommenting on the value of their com-pany's stock.Nonetheless I would like tohear your views on the course of your

stock price as of late and its outlook forthe reminder of the year.

Eleftherios Ioannou:The price of acompany's stock is determined by supplyand demand in the stock exchange,therefore I cannot comment on BOC'sshare price.We are focused on expand-ing our business and increasing our prof-itability and as long as our business strat-egy decisions are fully vindicated by our

financial results, our shareholders, clientsand personnel are satisfied. During thelast few years we have achieved impres-sive outcomes in terms of financial per-formance.As expected, this has pleasedour stakeholders, and stock market ana-lysts have taken note, with some of themost internationally reputed ones classi-fying our stock among the top picks inEurope, quoting target prices between16 and 18 Euros per share.

Eleftherios Ioannou, ChairmanBank of Cyprus Group

Bank of Cyprus Opens its First

Branch in Russiahe bank plans to open 15 branches during

the next three years, capitalizing on solid relationships with existing clients in Russia

T

“BOC has a large numberof client relationships withcompanies that operate in

Russia, which gives us a clearcompetitive edge"

36

Mr. Peter G. Economides Chairman, Totalserve Management Ltd

otalserve continues to provide tailor-made consul-tancy services on all matters related to internationaltax planning, corporate services and trusts

Totalserve Management Ltd isan international tax and cor-porate services consultancy

company that caters to the tax plan-ning needs of multinational corpora-tions, global financial institutions andhigh net worth individuals. Since1972,Totalserve has greatly expand-ed beyond their original location inLondon's West End and currentlyhas offices in London, Moscow,Warsaw, Bucharest, Athens,Thessaloniki, Tortola in the BVI,Johannesburg and its headquartersin Limassol, Cyprus.

Totalserve is celebrating its 35thanniversary this year and continuesto provide consultancy services onall matters related to internationaltax planning, corporate services,trusts, shipping and ship manage-ment.The management consists of amulti-disciplinary team of account-ants, lawyers, tax and business con-sultants supported by a global net-work of associates specialized inrelated fields.

The Chairman of Totalserve isPeter G. Economides, a FellowChartered Certified Accountantwho is a member of various interna-tional accounting, tax and trust asso-ciations. He also regularly publishesarticles in the specialized press, andgives lectures on international taxplanning and trusts.

According to Economides, “Thework of Totalserve is implementedby three separate, wholly independ-ent entities: our accounting andauditing division, a corporate serviceprovider and our legal firm. To beable to offer these services with thehighest quality standards, we onlyhire proven professionals that meetour strict requirements of educationand prior work experience.”

As a result of these efforts,Totalserve successfully functions as aone-stop shop for a wide range offinancial services. Through its broadnetwork of offices as well as its highstandards of personalized service,

the firm is able to deliver total solu-tions to their international clientele.“Depending on what the market

demands at the moment, we focusour energy on a specific area ofservice. For instance, last year, weconcentrated on people wanting toset up funds that can be listed onstock exchanges. In fact, we are nowin the final stages of launching a fundthat will be listed in the LondonStock Exchange,” Economides says.

Economides acknowledges thegrowing strength of the economicrelations between Russia andCyprus, and is keen to mention thefact that his firm is following suit.“Totalserve has been taking part innumerous bilateral conferences andseminars, and we have been travelingfrequently to Moscow. We work togain deep knowledge of whatCyprus can offer so that we canproperly market the country toRussian investors.”

Cyprus shares a common religion

and culture with Russia, which iswhy Economides is incredibly opti-mistic about the future business

relationship between the two coun-tries. “There is a strong trustbetween Cypriots and Russians.Both sides are very particular aboutestablishing personal relationships,which is indeed the cornerstone ofany successful future businessendeavor.”

By moving away from the provi-sion of traditional services, and byoffering a wide spectrum of person-alized services, Totalserve is posi-tioning itself to take advantage of thelucrative dynamic between the twocountries. This is especially impor-tant given that Russian clients arebecoming increasingly sophisticatedin the services that they require. AsEconomides points out, “Russianclients know what they want, andthey're not afraid to ask for it.Theyexpect to get on-time, personalizedquality service, which is exactly whatwe at Totalserve strive to offer.”

T

Leading the Way inFinancial Services

“Russians and Cypriots are veryparticular about establishing

personal relationships, which isindeed the cornerstone of any suc-cessful future business endeavor”

37

E stablished in 1998, the AspenTrust Group has pulledtogether a team of specialists

from various disciplines for the pro-vision of international tax advisoryservices, legal and corporate man-agement services, banking and treas-ury services, and accounting andfinancial reporting services. Thisenables the Aspen Trust Group toprovide an integrated range of inter-national tax optimization servicesfrom Planning to Implementation toOngoing Management, Statutoryreporting and Tax Compliance.

In today's financial world, individ-uals and corporations seek to maxi-mize their net cash returns thoughviable tax optimization strategies.Cyprus, with its favorable tax sys-tem, is one of the most widely usedand accepted jurisdictions for taxoptimization strategies for invest-ments into and out of Russia.

The Aspen Trust Group recog-nized the increasing role of Cyprusas a bridge in tax optimizationstrategies and developed a serviceproposal that links the requirementsof the investors -- mainly WesternEuropean and North AmericanFunds -- with the need of the target

investments -- mainly businesses inRussia and the CIS.

“In today's complex world, a taxoptimization strategy starts with asolid tax advice.We require that ourclients have one as a starting point

in our relationship. We work withthem to ensure that all the finedetails of the tax advice arematched to their business plan andwe implement the corporate struc-ture required -- in Cyprus or inother reputable financial centers,"says Mr. Andreas Athinodorou,Managing Director of the AspenTrust Group.

Athinodorou continues: “Weimplement for the client the neces-sary processes and procedures to

ensure that the Management andControl is exercised in Cyprus --management and control being thekey factor for the viability of aCyprus-linked tax solution. Wework with our clients to streamlinethese processes with the require-

ments of their investors and theever changing realities of theRussian business environment. Theconvenient time zone of Cyprus,our multicultural team that includesUK, US and Russian qualified profes-sionals and our service approach,offer an excellent ground for Eastand West to meet for joint venturesand exploit investment opportuni-ties.We are not in the business ofselling offshore companies. We arein the business of setting up andmanaging tailored solutions that

meet our clients' tax and businessplan objectives. This changes ourrole from a mere supplier to avalue-added service partner.”

In regards to the future ofCyprus as an international financial

center, Mr.Athinodorou is very opti-mistic. “The role of Cyprus as abridge to investors and businesspartners through the managementof international tax solutions will bethe key driver to Cyprus being aninternational financial center in the21st century, and this is evidencedby the increasing involvement ofCypriot structures into the mainregions of investment activity--Russia, the Balkans, the Middle East,India and China.”

"Our service approach offers an excellentground for East and West to meet for joint

ventures and exploit investment opportunitiesinto and out of Russia"

Aspen Trust GroupElia House - 77 Limassol Avenue - CY-2121 Nicosia - CyprusTel: +357 22679100 - Fax:+357 22668111Email: info@aspentrust.comwww.aspentrust.com

Andreas Athinodorou, Managing DirectorAspen Trust Group

he Aspen Trust Group philosophy is totailor its services to meet the needs ofits clients investing into Russia

T

Solid Advice, Flexible Solutions

38

The Russian Commercial Bank(Cyprus) Ltd (RCB) strives toprovide its clients with financial

investment opportunities in the Russianeconomy using the advantages ofCyprus as a regional business hub. Bycontinuously staying up to date withthe realities of doing business in Russia,RCB succeeds in bringing this expertiseto the local Cypriot market and thedynamic international business commu-nity that thrives on the island.

RCB's history in Cyprus beganmany years ago, with the MoscowNarodny Bank in London, recentlyrenamed to VTB Bank Europe plc,which at the time had a branch inBeirut.The war in Lebanon caused thebranch to close, but the strategic needfor a bank in the region to serviceUSSR foreign trade with the countriesof the Middle East and theMediterranean still remained. This ishow in 1990, the Soviet governmentdecided to open a branch of the bankfor Foreign Economic Affairs of theUSSR in Cyprus. The branch was set-

tled in Limassol. When the SovietUnion was dissolved, the Bank forForeign Economic Affairs of the USSRtransferred its branch in Cyprus to thenewly established Bank for ForeignTrade (Vneshtorgbank) which is nowcalled JSC VTB Bank. Existing as abranch for some time,VTB applied fora banking license to establish RCB. In1995,RCB was incorporated in Cyprusas an offshore banking unit under thelicense and jurisdiction of the CentralBank of Cyprus. Since the admission of

Cyprus to the European Union in 2004,RCB operates as a local bank regulatedby the Central Bank of Cyprus.

RCB is a wholly owned subsidiary ofJSC VTB Bank, a recognized leader ofthe Russian financial industry. VTB, inturn, is 77.5% owned by the Russiangovernment.Clients can take advantageof the security VTB offers as a leadingbanking group and recognized leader ofthe Russian economy as well as of itswide local and international network.

The CEO of the Russian

Commercial Bank is Mr. MikhailKuzovlev, who is quick to stress theunique relationship that the Bank haswith both Cyprus and Russia.“On onehand, our bank enables investors totake advantage of the Cypriot legal sys-tem which is based on the principles ofEnglish Law -- making the legal activitiesfor international companies very trans-parent, and on the other hand thelucrative investment opportunities ofthe rapidly emerging Russian economy."

Mr. Kuzovlev believes that thestrategic relationship between Russiaand Cyprus will only strengthen in theyears to come. "Cyprus is perceived asa very attractive location for Russianbusinesses given that both countriesshare strong cultural traits. This isextremely important as one of the fun-damentals of the business world isbeing able to trust your partners.Furthermore, many Russians viewCyprus as a favorable port of entry intothe European Union, especially giventhe country's unique tax status.Additionally, there is currently a rapidly

expanding financial network on theisland of accountants, auditors, legaladvisors and business consultants.”

Although RCB is a Russian ownedbank, its long-term affiliation withCypriot affairs is evident in its contin-ued efforts to give back to the island'scommunity. Since its incorporation,RCB has garnered a strong local repu-tation as a socially responsible financialinstitution. For instance, RCB currentlyparticipates in several community out-reach programs that run the spectrumfrom funding charity projects to spon-soring cultural events.

Mr. Kuzovlev explains: "Since ourestablishment in Cyprus, RCB hastaken the lead amongst financial insti-tutions by working on the ground withvarious local organizations such as theCyprus Red Cross Society, EuropaDonna - the European Breast CancerCoalition, etc.This act is a reflection ofour commitment to give back to thevery same community that has wel-comed us with open arms."

Over the past twelve years,RCB hasmaintained a steady and constant rateof growth while maintaining a high levelof profitability.As a result of their pastand present successes, Mr. Kuzovlev isall together optimistic about the future:"We are extremely pleased with ouroperations here in Cyprus,and we havealready established a number of strate-gic objectives and long-term goals toincrease the strength of our presencein the country."

"Russian-Cypriot cultural ties are extremelyimportant as one of the fundamentals of the

business world is being able to trust yourpartners"

he Russian Commercial Bank in Cyprus provides amix of global expertise and market intelligence to itsinternational clients

TMr. Mikhail Kuzovlev, CEORussian Commercial Bank (Cyprus) Ltd

A Leading RussianBank in Cyprus

39

A t PricewaterhouseCoopers inCyprus we share knowledge,experiences and the talents of

our more than 800 people, who con-nect with more than 146,000 col-leagues in 150 countries, building trustand creating value for our clients andtheir stakeholders.

We support our clients in theirbusiness operations, in their newinvestments, in innovation and mod-ernisation of their businesses. Thefoundation of our efforts is the team-work and utilisation of all sources ofknowledge. Always focussed on ourvalues which support our develop-ment.

In addition to providing assurance,our audit teams go beyond the num-bers, understand the clients' businessand provide value-adding business rec-ommendations.

Our advisory teams address com-plex issues of managing enterprises,offering innovative solutions, bringingout and strengthening the competitiveadvantage.

Our tax teams, advise internationaland local organizations and individualsfor their tax strategy, planning andcompliance.

With a versatile internal manage-ment, focussed on the quality of ourservices and products, with confer-ences, seminars, surveys and thoughtleadership for a number of issues, weare always next to our clients wherev-er they are based. Maintaining at thesame time a strong relationship withour community, we are committed todeploy a multidimensional CorporateSocial Responsibility strategy.

All this experience ofPricewaterhouseCoopers is created byour own people. Our commitment isto employ the best professionals,whom we assist to develop theirexpertise and ability. For this reason,we continuously improve the methodsof attracting, recruiting, training andevaluating our human capital. Our aimis for PricewaterhouseCoopers to beable to offer a modern business envi-ronment which will develop continu-ously. This unbroken chain of knowl-

edge of people who are dedicated tothe quality of their work, creates thecompetitive advantage ofPricewaterhouseCoopers. And it is thecatalyst of the business success of ourclients who honour us with their trust.

Mr Phidias Pilides, the ChiefExecutive Officer of the firm in Cyprus,who is also serving as Chairman of theBoard of the University of Cyprus, theCyprus Russian Business Associationand the Cyprus Investment PromotionAgency, noted:

''We act as auditors to public com-panies representing 45 percent of themarket capitalisation of the CyprusStock Exchange. We have maintainedour leading position with internationalcompanies structured through Cyprus.Our clients understand that we havethe experience and expertise to offercompanies top class services and valuefor money irrespective of their size orstage of development. One of ourfastest growing foreign investors in theCypriot economy is Russia.The strongbusiness and culture ties of Russiansand Cypriots go many years back.

From real estate and tourism venturesto holding companies and investmentplatforms, the strategic financial alliancebetween Cyprus and Russia is growingat an unprecedented rate. With rapidand convenient flights betweenMoscow and Larnaca, and future plansto facilitate the visa applicationprocess, Cyprus stands out as one ofthe most accessible European Unioncountries for Russian investors. Thewarm Mediterranean climate of theisland is also an undeniable draw, as isthe relaxed business environment andthe welcoming nature of the Cypriotpeople.”

Mr Pilides stressed: ''Cyprus has in-depth knowledge and extensive expe-rience in the international businesssector. It paves the way to become anattractive, efficient and flexible interna-tional financial centre. It is the door forinvestors who want to enter into theEuropean Union. It is also the door forEuropean Union investors who wantto invest in locations with whichCyprus has double tax treaties''. As abottom line, PwC in Cyprus is the busi-ness advisor you can trust.

s the leading accounting firm in Cyprus,PricewaterhouseCoopers aims to strengthen fur-ther its growth in the market through its qualitypeople, quality services and quality clientsMr. Phidias K. Pilides, Chief Executive Officer

PricewaterhouseCoopers

AA

The trusted Business Advisor

Nicosia: Julia House, 3 Themistocles Dervis Street, CY-1066 Nicosia, CyprusTel. +357-22555000Fax +357-22555001

Limassol: City House, 6 Karaiskakis Street, CY-3032 Limassol, CyprusTel. +357-25555000Fax +357-25555001

Larnaca: City House, 4 Artemidos Avenue, CY-6030 Larnaca CyprusTel. +357-24555000Fax +357-24555001

Paphos: City House, 58 Gr Dighenis Avenue, CY-8047 Paphos, CyprusTel.+357-26555000Fax +357-26555001

© 2007 PricewaterhouseCoopers Ltd. All rights reserved. “PricewaterhouseCoopers” refers to the Cyprus firm of PricewaterhouseCoopers Ltd or, as the context requires, the other member firms of PricewaterhouseCoopersInternational Limited, each of which is a separate and independent legal entity.

PricewaterhouseCoopers Offices in Cyprus

40

Christos Mavrellis, Managing PartnerChrysses Demetriades & Co.

s a former Minister of Finance and Transport, the managing partner of Chrysses Demetriades & Co., Christos Mavrellis, offers a wealth of experience for investors to tap into

Established in 1948, ChryssesDemetriades & Co is currentlyone of the largest law firms in

Cyprus, with offices in Limassol andNicosia. Offering comprehensive legalservices in a variety of disciplines includ-ing corporate structures and interna-tional tax planning, ChryssesDemetriades & Co is committed tooffering efficient and beneficial advice toits clientele.

Mr. Christos Mavrellis, the ManagingPartner of Chrysses Demetriades,brings an impressive amount of experi-

ence to the firm. Prior to joiningChrysses Demetriades, Mr. Mavrellisserved as both the Cypriot Minister ofFinance and the Minister of Transportand Public Works.As a result of his back-ground,Mr.Mavrellis is certainly qualifiedto serve his clients in utilizing the mosthis country's tax and legal system has tooffer.

He explains:"Low taxation rates havenot been the only factor responsible forthe success of Cyprus. In my opinion,theappeal of our island is due to the highlevel of professional service that foreign

investors receive here. Furthermore,Cyprus also boasts an efficient bankingsystem as well as a well developed legalsystem based on English law."

In order to meet the needs of theirRussian clients, Chrysses Demetriadeshas developed close links with an exten-sive international network of profes-sional firms. According to Mr. Mavrellis:"A large part of our international clien-tele is comprised of clients and associ-ates based in both Russia and the for-mer Soviet Union. Primarily, we arefocused on handling our client's interna-

tional transactions and acquisitions,including the listing of Cypriot compa-nies involved in Russian investments invarious stock exchanges around theworld."

As a loyal Cypriot, Mr. Mavrellisbelieves that it is extremely importantfor the firm to be involved in the localcommunity. "Recently, we repainted ahistoric bridge that has been here inLimassol since 1908. We also remaincommitted in helping local business withtheir needs at a time of great financialdevelopment."

CSC Christodoulou Ltd. is adynamic and rapidly expandingaccounting, auditing and consultingfirm headquartered in Limassol with abranch office in Pafos. Having garneredan international reputation amongsttheir clients for reliability and profes-sionalism, CSC Christodoulou wasrecently given a global award for qual-ity issued by the Association ofChartered Certified Accountants(ACCA).

The managing director of CSCChristodoulou is Mr. ChristosChristodoulou, an influential business-man in the island who has also sits ona number of Cypriot regulatory com-mittees. Quick to cite his recent awardby the ACCA, Christodoulou believesthat his small firm has big ambitions:“When I set up the office in Cyprus, Itold myself that we would set the stan-dards from the beginning and that wewould operate in a very professional

way. We also decided that we wouldkeep personal contact with our clientsby identifying their specific needs,offering individually catered services,and always respecting their confiden-tiality.”

Clearly, CSC Christodoulou is asmall firm with a personal touch.

Christodoulou goes on: “Personalcontact is particularly important forRussian clients, who are always seekingpersonalized and quality treatment.

For those clients who tend to choosefirms based on their size and number,we have to let them know that it isimportant how they measure 'big'.Our firm might not be 'big' in terms ofturnover, but we are 'big' in terms ofquality. So for those investors who goin for firms that provide the qualitythey need, the ACCA Global Awardthat our firm received will serve as anindication as to the level of serviceclients should come to expect.”

When Experience Makes a Difference

Christos S. Christodoulou, Managing DirectorCSC Christodoulou Ltd.

SC Christodoulou sets internationally recognized standards of excellence in accounting practices

Quality and reliability - certifiedC

A

41

An international tax and trust consultancywith over thirty-five years of experience onthe island of Cyprus, Totalserve ManagementLtd. services multinational corporations, finan-cial institutions and high net worth individuals.

The Chairman of Totalserve is PeterEconomides, who believes that his firm is aone-stop shop for tax planning, internationaltrusts, company registration, shipping manage-ment and information technology services. "Tobe able to offer these kinds of services,we hireonly proven professionals that meet our highstandards of education and prior work experi-ence."

By moving away from the provision of tra-ditional services, and offering a wide spectrumof personalized services,Totalserve is position-ing themselves to attract more Russian clien-tele. This is especially important asEconomides is incredibly optimistic about thefuture economic relationship between bothcountries.

According to Economides, "There is astrong trust between Cypriots and Russians.Both sides are very particular about establish-ing personal relationships,which is a promisingsign for future business endeavors.”

He continues, “Totalserve has been takingpart in regular conferences and seminars, andwe have been traveling frequently to Moscow.Our target is to know what Cyprus can offerso that we in turn can market the country toRussian investors."

Economides is quick to point out thatRussian clients are becoming increasinglysophisticated in the services that they require."They know what they want, and they're notafraid to ask for it.They expect to get on-time,quality service,which is exactly what we striveto offer."

KPMG has an unparalleled reputation inthe business community as a leading providerof audit, tax and advisory services. On theisland of Cyprus, KPMG controls the largestdomestic market share of clientele, whichincludes prestigious companies such asCyprus Trading Corporation,Cyprus Airways,Hellenic Bank and Louis Group.The interna-tional clientele is also impressive, includingwell-known Russian groups such as Lukoiland Basic Element. According to NicosG.Syrimis, Chairman, KPMG Cyprus standsout amongst the big accounting firms for twospecific reasons: “First, our specialized TaxAdvisory, Financial Advisory and RiskAdvisory departments,are headed by the topexperts in Cyprus and provide advice to localand international clients in a wide variety ofindustries. Second, we are part of the KPMGglobal network capable of rapidly exchangingspecialized knowledge.”

Cyprus has evolved into an internationalbusiness, financial services and investmentfund center,and Syrimis is not at all surprised:“Our entry in the EU has stabilized the econ-omy, preserved our favorable tax regime andenhanced the business environment. Themajority of Cypriot qualified accountants areUK qualified chartered or certified account-ants, so the quality of our services isextremely high.”

Syrimis points out that Russian investorsare increasingly interested in Cyprus, and heconstantly receives referrals from the KPMGMoscow office.“We visit Russia regularly andmeet with Russian and International clients inkey sectors like banking, industrial produc-tion, oil and gas, and investment services,which enables us to personalize our servicesand gain an edge over the competition.”

Advice You Don’tWant to go Without

Peter G. Economides ChairmanTOTALSERVE Management LTD

Nicos G SyrimisChairmanKPMG Cyprus

42

Deloitte offers professional services inauditing, accounting, tax, financial advisory,and consulting, and provides the link forinvestors looking to establish a company inCyprus. In the city of Limassol, where themajority of Russian related business enter-prises are concentrated, Deloitte is thelargest professional services firm and theleading advisors in the shipping sector.

Mr. Nicos Kyriakides, who is the Head ofFinancial Advisory at Deloitte, explains:"When all of Cyprus's favourable tax condi-tions are combined, they create an extreme-ly attractive platform for international busi-nessmen for investment holding and financingoperations, for holding and exploiting intel-lectual property rights, for shipping activitiesand for trading in international stock mar-kets."

He continues: "At Deloitte in Cyprus, weoffer to our clients a complete business solu-tion.We undertake to advise our internation-al clients on how to create a tax efficient cor-porate structure by exploiting the vastresources of the international network ofDeloitte."

Although Mr. Kyriakides concedes thatCyprus has a comparatively small economyon the global stage, he is adamant that theisland offers one of the best solutions forRussians seeking an intermediary location forinvestments abroad, and that it is one of thebest platforms for inbound investments byforeign businessmen into the vast Russianeconomy.

According to Mr.Kyriakides: "The DoubleTax Treaty of Cyprus with Russia is one ofthe best because it provides for 5% withhold-ing tax on dividends from investments inRussia exceeding $100,000 and zero with-holding tax on interest and royalties."

Ernst & Young, one of the “Big 4”accounting firms, is the oldest locallyestablished firm in Cyprus. Prior to tak-ing on the Ernst & Young name in 1989,the firm in its current form had been act-ing as a certified public accountancysince 1937.

Today, Ernst & Young specializes inoffering top quality services includingaccounting, auditing and financial consul-tancy.The firm also has strong relationswith the Russian market that date backto the collapse of the communistregime.

Mr. George Kourris, the CountryManaging Partner of Ernst & Young inCyprus, explains: "Once Russia wasopened up to foreign investment, Ernst&Young was one of the first firms tobuild a presence in Moscow. Since then,we have worked in close cooperationwith our Russian colleagues in order tostreamline the services that we offer ourclients."

In recent years, Ernst & Young hashelped Russians establish and managecompanies in Cyprus.

According to Mr. Kourris, "The factthat it can be extremely tax efficient forinvestors to use Cyprus as a base givesthe island an advantage over other coun-tries within the EU. As a result, we areseeing the creation of more and moreholding companies in Cyprus."

In the future, Mr. Kourris hopes thatErnst & Young can expand its presence inCyprus. "Although we are not striving tobecome the largest local firm, we dobelieve that expansion is the key to cre-ating a more comprehensive networkfor our clients to access."

Nicos S. Kyriakides Head of Financial Advisory

Deloitte & Touche

George KourrisCyprus Managing Partner

Business Consultantsin Cyprus

Ernst & Young

43

MGI Gregoriou & Co. was estab-lished in 1973, and over the years thefirm has experienced substantial growthto the point that today it is one of theleading professional services firms inCyprus, offering a wide range of servicessuch as auditing, international tax plan-ning and consultancy services to high-profile domestic and internationalclients.The head office of MGI Gregoriou& Co is in Nicosia. The firm has alsooffices in Pafos, Limassol, and Larnaca.

The firm is a member of the MGI net-work, which is a worldwide associationof independent auditing and tax consult-ing firms with offices in Moscow and St.Petersburg, which enables the firm toservice its Russian clients optimally bytaking advantage of the in-depth knowl-edge of the Russian market that theseoffices provide to the firm.

The firm is currently working withpublic companies in Russia involved inreal estate, hotel industry, insurance andinternational trade, as well as with highnet worth individuals using Cyprus fortax optimization. “We are presentlyorganizing target seminars for our actualand potential clients in Russia.We thinkthis is the best way of expanding andattracting new business in that country,and it has been successful in the pastcouple of years.We however don't wantto expand too much at the expense ofquality,” says Andreas N. Gregoriou,Managing Director.

Mr. Gregoriou, believes that the com-bination of the focus on client needs, thepersonal touch provided by the direc-tors and the emphasis on quality and effi-ciency is the recipe behind the success ofthe firm differentiating it from its com-petitors.

The Aspen Trust Group specializes inproviding international tax optimizationservices to clients looking to establish afoothold in Cyprus.With its favorable taxsystem, Cyprus is rapidly becomingEurope's most popular destination forinvestors seeking to maximize their netcash returns through viable tax optimiza-tion strategies.

Mr. Andreas Athinodorou, theManaging Director of the Aspen TrustGroup, believes that Cyprus serves as aperfect bridge for investors seekingaccess to European markets. "We imple-ment for the client the necessaryprocesses and procedures to ensure thatmanagement and control is exercised inCyprus. We work with our clients tostreamline these processes with therequirements of their investors."

He continues: "Rather than selling off-shore companies, we are in the businessof setting up and managing tailored solu-tions that meet our clients' tax and busi-ness plan objectives. This changes ourrole from a mere supplier to a value-added service partner.”

For all of their clients, the Aspen TrustGroup seeks to offer solid tax advice,andto ensure that all of the fine details arematched to their business plan. In thecase of Russian clients however, particu-lar attention is given to bridge culturaland linguistic gaps.

According to Mr. Athinodorou: "Byemploying a multicultural team thatincludes UK, US and Russian profession-als, we can ensure that our serviceapproach provides an excellent meetingground for both East and West. In thismatter, we can easily create joint ven-tures and exploit lucrative investmentopportunities."

Advice You Don’t Want to go Without

Andreas N. Gregoriou Managing Director

Gregoriou & Co

Andreas A.Athinodorou Managing Director

Aspen Trust Group

Consulco Limited was established in1993 in Nicosia. Today, the group hasoffices in Cyprus, Malta, theNetherlands, Sweden, the UnitedKingdom, Russia, Bulgaria, Romania andUkraine, and a broad network of repre-sentatives throughout Europe andNorth America.The group employs over200 professionals who provide a widerange of financial services includingbanking, tax advice, legal counseling,accounting, internal auditing and man-agement.

Mr. Dmitry Khenkin, Director ofConsulco, knows the Russian marketwell. "Ten years ago, Russia had astraightforward and almost elementarytax regime. It was geared to jumpstartthe economy in the hopes that the freemarket regime would bring wealth andprosperity to the country. As the yearswent by however, the tax regimebecame more sophisticated, and thebusiness community had to reply bymaking sure that they are in line withlegislation. This subsequently increasedthe demand for financial and legal servic-es. Since one of the founding membersof Consulco was born in Russia, thisseemed like a natural place for us tostart."

As a result of his expertise, Khenkinbelieves that his firm distinguishes itselffrom the competition through its closerelationship with the Russian market.“First of all, instead of employing transla-tors, over 40 percent of our profession-al staff speaks fluent Russians. Second,we know that Russian require work exe-cuted with speed and accuracy. Weknow the business rhythm of Russia is ata high pace -- it's a very fascinating andrewarding market for us to work with."

CosmoServe is a multidisciplinaryfinancial consultancy group offering a widerange of services including internationaltax planning and offshore jurisdiction.Founded in 1991,CosmoServe consists ofspecialized professionals who are dedicat-ed to meeting the particular requirementsof both corporate and individual clients.

Mr. Antonis E. Kassapis, the ManagingDirector of CosmoServe, is quick topoint out the strengths of his company incomparison to the "Big Four" accountingfirms.

According to Mr.Kassapis: "Due to thenature of international business struc-tures, large multinational corporations aredrawn to the "Big Four" since these com-panies can offer streamlined accountingservices.However,when it comes to man-aging day-to-day affairs, the "Big Four" areunable to offer prompt and personalizedattention. As a result, we aim to attractclients such as small private companies,subsidiaries of multinationals and individ-ual investors who can benefit from ourcustom-tailored service."

Mr. Kassapis is also well-versed in thespecific needs of his Russian clients."These days, Russians are coming toCosmoServe knowing exactly what theywant from us.They plan ahead with regardto their investments, and are mainly seek-ing confirmation that what they want todo is valid and legal in Cyprus."

He continues: "In order to meet thesedemands, and to consistently ensure thatwe are up to date with legal codes in bothCyprus and Russia,we frequently collabo-rate with our domestic and internationalassociates. As a result, we are incrediblysuccessful at bridging the gap betweenCypriot service providers and theirRussian counterparts."

Dmitry KhenkinDirector

Consulco

Antonis E.KassapisFounder

Cosmoserve

44

Maria Malachtou-Pamballi, Minister of Communications and Works, Republic of Cyprus

ue to its advanced regional and global connectivity, Cyprus isconsidered to be one of the most important telecommunicationshubs in the eastern Mediterranean and the Middle East regions

Due to its advanced regional andglobal connectivity, Cyprus is con-sidered to be one of the most

important telecommunications hubs in theeastern Mediterranean and the Middle Eastregions.

Mrs. Maria Malachtou-Pamballi is cur-rently serving as the Cypriot Minister ofCommunications and Works. "The island ofCyprus is home to one of the world's mostadvanced telecommunications networks,which has garnered us an enviable reputa-tion as a major logistics center in both

Europe and the Middle East.Combined withour democratic political system, our advan-tageous tax status and our excellent legalsystem, this telecommunications infrastruc-ture has contributed to the recent wave ofincreased foreign investment on the island."

Currently, Cypriot telecommunicationscompanies are aiming to link up with theirRussian counterparts in the hopes of creat-ing a more comprehensive global network.

According to Mrs. Malachtou-Pamballi,this mutually beneficial partnership willexpedite the transfer of specialized knowl-

edge while raising the technological sophis-tication of telecommunications networks inboth countries. "There is a high degree oftechnological expertise in Russia that we inCyprus are eager to tap into, especiallysince we are currently in the process ofadvancing our international media technol-ogy. For example, in the near future we willbe deploying state of the art wireless net-works for the purpose of developing digitalinternet TV. We have already invested a sub-stantial amount of capital into this medium,and we are eager to see our efforts come

to fruition."She adds: "Increased collaboration with

the Russian market in the near future willalso increase market competition and intro-duce new technology, which nearly alwaysresults in higher quality of service and lowerprices for the consumer. Furthermore, thepeople of Cyprus have always turned toRussia for support, which is why we arehappy to welcome our Russian counter-parts to the island in an effort to continueour history of good relations."

As of September 26th, MTN is thenew brand name of Areeba, a pri-vate mobile telephony company in

Cyprus, subsequent to the acquisition of itsmother company Investcom LLC by theSouth African company, MTN Group.

Launched in 1994, MTN is a multination-al telecommunications group,operating in 21countries in Africa,Asia and the Middle East.MTN Group is listed on the JSE SecuritiesExchange in South Africa and has a total ofover 54 million subscribers across its 21operations. The MTN Group is a globalsponsor of the 2010 FIFA World Cup South

Africa™ and has exclusive mobile contentrights for Africa and the Middle East.

A recent entrant to the telecommunica-tions market in Cyprus, MTN was incorpo-rated in 2004 at a time when the semi-gov-ernment organization ,CYTA,had been func-tioning for over a decade and was in controlof over 80 percent of the local market.

In order to differentiate from competi-tion and optimize its operations, MTN builtan entirely new network from the groundup.Today the company controls 15 percentof the market and has more than 110,000subscribers across the island.

MTN is currently undergoing an aggres-sive expansion campaign in order to increaseits market share. In addition to the develop-ment of its infrastructure on the island,MTNis seeking to attract more customers byoffering innovative and practical services andproviding a 24-hour customer service.

Since its incorporation, MTN is also pro-viding substantial support to the local com-munity by sponsoring sports leagues, educa-tional programs, health centers and culturalevents.

MTN Cyprus is run by Mr. BasselJamaleddine, who is extremely optimistic

about the future growth potential of thecompany: “This year we jumped from a mar-ket penetration of 9.6 to 15 percent and weintend to finish the year at 17 percent. A yearago,many analysts projected that Cyprus wasnot an emerging market for MTN comparedto Africa. However, the commitment toCyprus from our CEO and our Board ofDirectors remained unchanged and pro-ceeded to launch a huge investment platformon the island.We are determined to keep upthis momentum and we hope to use Cyprusas a staging post for launching Europeanoperations in the medium term."

DCyprus Consolidates its Position

as a Telecommunications Hub

Bassel Jamaleddine, CEO, MTN Cyprus

TN Cyprus remains committed to enhancing its infrastructure to further develop mobile telephony on the island

A Sustained Commitment

MTN Cyprus87 Kennedy Ave., 1077 Nicosia, Cyprus - P.O. Box 20683 – CY 1662Tel: +357 96 969 100 / 96 222 222 - Fax: +357 96 222 000www.mtn.com.cy

M

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Stavros Kremmos, Chairman, CYTA

CYTA has spent nearly a decade re-engineering itself from a slowmoving state monopoly into a dynamic, flexible and customerdriven provider of state of the art communications solutions

Over the past several years, thetelecommunications market inCyprus has introduced a num-

ber of impressive liberalization policiesaimed at increasing overall competition.

According to Mr. Stavros Kremmos,the Chairman of the CyprusTelecommunications Authority (CYTA):"The last few years have witnessed acomplete transformation of the Cyprustelecommunications market from amonopoly to a fully liberalized andvibrant market place. New dynamiccompanies have entered almost all areas

of the market in which CYTA had previ-ously enjoyed a monopoly for over 40years."

Although market liberalization was arelatively recent occurrence, CYTA hasspent nearly a decade re-engineeringitself from a slow-moving state monop-oly into a dynamic, flexible and cus-tomer-driven provider of state of the artcommunications solutions.Today, CYTAremains the dominant player in theCypriot telecommunications market byoffering the most advanced technologiesas well as unparalleled customer service.

CYTA also understands that businessdevelopment in the new era is fuelled byalliances,which reinforce the constituentparties while simultaneously creatingsynergies and added value.

Through CytaGlobal, CYTA is con-tinuously evaluating the connection ofCyprus to various planned private andconsortium-based regional and globalfiber optic networks, either on a part-nership or a co-ownership basis. In addi-tion, through its wholly-owned sub-sidiary DIGIMED, CYTA has alreadystarted to establish itself in Hungary,

Greece and the United Kingdom.

In regards to the rapidly growingRussian telecommunications market,Mr. Kremmos offered this outlook:"The Russian telecommunications sec-tor is growing rapidly, and the size ofthis market is extremely attractive toforeign investors. As a direct result,CYTA recently created a specialinvestment unit, which is investigatingthe possibility of expanding CYTAoperations in promising emergingmarkets. Needless to say, Russia isunder strong consideration."

From monopoly todynamic competitor

46

Cyprus enjoys a strong rela-tionship with Russia, which isreflected in the island's popu-

larity as a tourist destination, andincreasingly as a target for investment.After a dip in the numbers of visitorsa few years ago,The Cyprus TourismOrganization (CTO) reports thatRussians are now returning in droves,citing dissatisfaction with customerservice and safety levels in other des-tinations as a key factor in the island'sreturn to favor.

The warm Mediterranean climateof Cyprus is certainly one of the maindraws for visitors, whether fromRussia or elsewhere. For Russians inparticular, Cyprus also offers the con-venience of rapid and reliable air con-nections, a safe and peaceful environ-ment, good hotel and restaurant facil-ities and warm hospitality. Russia isalready Cyprus's second largestsource of visitors after the UnitedKingdom, and if present growthtrends continue, it could eventuallybecome the number-one source. ForAntonis Michaelides, Minister ofCommerce, Industry and Tourism, thenumbers speak for themselves:Duringthe first few months of 2007, weexperienced an average year-on-yearincrease of 27 percent in the numberof Russian visitors to Cypurs. And2006 had already been a great yearwith close to 115,000 Russiantourists, an increase of close to 18

percent from 2005."

Panos Englezos, Chairman of theCTO, sees Russia as one of the high-est priorities in his development strat-egy: “When it comes to security, freemovement, great food, air connec-tions, communications and religiousattractions, Cyprus has a lot to offerwhich exactly fits the Russian taste.”And this is perhaps the reason whyRussian tourists are not only comingin larger numbers, but also spendingmore money in Cyprus: "The highestper capita expenditure in 2006 camefrom Russian tourists, and we expectthis trend to continue in the foresee-able future," says Michaelides.

Water-ski in the morning,

snow-ski in the afternoon

Cyprus is seeking to maximize thebenefits of its small size as a majorattraction for visitors.Any part of thecountry is accessible within about anhour from the capital city, Nicosia,meaning that visitors have an almostunique opportunity to undertake asurprisingly varied range of activitiesduring their stay: “It doesn't matterwhere you prefer to stay, there's easyaccess to everywhere. You can water-ski in the sea in the morning andsnow-ski in the mountains in theafternoon. Distances are very smalland you can reach anywhere in a

short amount of time,” explainsEnglezos.

Accessibility is another importantadvantage for Russian visitors.With achoice of direct flights from sevenRussian airports, travelling time is typ-ically around two and a half to threehours, making Cyprus among themost accessible of Mediterraneanresorts for most Russians.The CTO isencouraging the government to sim-plify visa application procedures forRussian passport holders too.Plans tointroduce application facilities througha number of consulates in variousRussian cities, together with plans tostreamline the process itself areintended to make Cyprus the mostaccessible of the 27 European Unionstates for Russian visitors.

Quality, not quantity

Demand for tourist facilities inCyprus is growing rapidly, and it is animportant role of the CTO to ensurethat provision of facilities such ashotel rooms keeps pace. But this ismuch more than just a numbers game.The CTO fully recognizes the poten-tial dangers of allowing visitor num-bers to grow too rapidly, a particularproblem for a small island which couldseriously damage its charm and char-acter by allowing development ininfrastructure which does not take

into account the needs of the envi-ronment and local people. So thestrategy focuses on maintaining orimproving quality and in focusing onniche opportunities in specialist mar-kets.

Mr. Englezos recognizes the chang-ing tastes of Russian and other visi-tors, and the development of newfacilities is designed to fully meet theexpectations of twenty first centuryguests. New hotel facilities aim tomeet the demand for quality, beingtypically in the three to five star brack-ets, but at the same time, the move isaway from large hotels to smaller,more specialized facilities in a range oflocations, with an emphasis on per-sonal service.

The development of specialist facil-ities and attractions is expected tomake Cyprus a much more populardestination all year round. The islandenjoys a favourable climate for mostof the year, but at present some 40percent of all visits take place duringJuly to September.The CTO aims toreduce this figure to 33 percent, andintends to achieve this by developingthe appeal of year-round attractionsand specific events.

Breaking with the past

The CTO is also pursuing a care-

A true friendship

Antonis Michaelides, Minister of Commerce, Industry and Tourism

he special relationship betweenCypriots and Russians can be describedas a true friendship, and the CyprusTourism Organization is looking forward to seeing the number of friendsincreasing over the next few years

T

47

fully planned communications strate-gy, designed to both strengthen andre-position the Cyprus "brand" as anattractive and accessible destinationthat meets the needs of specific targetgroups, with a reputation for friendli-ness, quality and good service. In thisrespect, the CTO is working in closeco-operation with private sectororganizations and local tourism initia-tives, to ensure that a coherent mes-sage is adhered to. The CTO isencouraging a wide range of advertis-ing and promotional initiatives, forexample through co-financing.

The other side of the coin of thiscommunications strategy is of courseto listen to the views and opinions ofvisitors. The CTO is embarking on arange of surveys and market researchinitiatives to help build a clear pictureof the needs of the island's actual andpotential visitors, and ensure that thedevelopment strategy adheres closelyto customer demand.

This strategy is a marked depar-ture from the way in which Cyprusdeveloped as a sea and sand destina-tion during the 1980's, and recognizesthe changing tastes of visitors, notleast from Russia.

Michaelides comments: "The CTOlaunched its current strategic plan in2003 with concrete objectives for2010, with the crucial aim of focusingour goals on the quality of touristsrather than on their quantity."

Sports tourism

Cyprus first began to realize itspotential as a destination for sportstourism at the time of the GreekOlympics in 2004, when a number ofparticipants chose Cyprus as a suit-able location for training and prepara-tion. Cyprus has already seized theopportunity to turn this into a longterm attraction, and world-class facili-ties, particularly for target sports suchas football, swimming, cycling and ath-letics are already in development,which have the potential to putCyprus firmly on the world map as animportant venue for internationalevents. Regulations on the develop-ment of private golf courses havealready been reviewed with the inten-tion that a number of attractive newfacilities will be given the go-ahead.

Marinas and nauticaltourism

The government has allowed forthe development of three major mari-na complexes, which are being under-taken by private development compa-nies after a tendering process. Thenew facilities will provide popular newattractions for visitors as well as beingthe focal point of additional privatesector investment.

Agro tourism

The Plan for the Development ofRural Tourism attracted EU funding to

enable the private development oftourism in restored buildings, as wellas supporting the growth of tourism-related enterprises such as local craftindustries. Agro tourism is playing acrucial role in supporting the sustain-ability of many rural communities.

Cultural tourism

The CTO is backing the develop-ment of new museums,visitor centersand improved access to the country'swealth of historical and archaeologicalsites, in order to promote awareness,

as well as ensuring the preservation ofnational treasures.

Environmental tourism

This is represented by a two-prongstrategy addressing both the need toprotect the island's ecology as well asencouraging the development of envi-ronmental tourism initiatives, such ascycling holidays, camping sites, naturetrails and environmental centers.Sincejoining the European Blue Flag schemein 1995, some 52 beaches in Cyprushave been awarded the blue flag for

Panos Englezos, Chairman, Cyprus Tourism Organization

48

outstanding environmental stan-dards.

Synergy between tourism

and foreign investment

Along with the highly developedfinancial services sector, tourism isthe largest industry in the economyof Cyprus. However, Englezos seesthe development of the market forRussian visitors not just as an end initself, but also as a means of devel-oping the longer term potential ofCyprus as an important destinationfor Russian investment. Cyprus isbecoming an increasingly popularchoice for the purchase of holidayhomes, and the CTO is giving partic-ular emphasis to researching theimpact of this trend to ensure that itoccurs in a sustainable way that isnot detrimental to local needs.

About Mr. Panos

Englezos and the CTO

Mr. Englezos has striven toachieve new successes in a range ofCypriot sectors since returning toCyprus after studying economics in

the United Kingdom. He previouslyworked in the health and telecom-munications industries, and seeshonesty and hard work as the keyelements to success.

The Cyprus TourismOrganization overseas the industry,operating information offices andinspectorates in every city andtown, and promoting Cyprus oninternational exhibitions, confer-ences and seminars. It providesinformation to the media andinforms hotel operators and otherservice providers on trends andopportunities in world markets.

Tourism is strategically importantto the economy of Cyprus, provid-ing more than 15 percent of grossdomestic product and 30 percent offoreign currency earnings. The sec-tor has been vital to the recovery ofthe national economy since themajor collapse that occurred follow-ing the Turkish invasion of the northof the island in 1974. The CyprusTourism Organization was initiatedat that time, and delivered the gov-ernment strategy of a tourism-ledeconomic recovery.

50

Costakis LoizouExecutive ChairmanLouis Group

The Louis Group is one of theleading travel, tourism, cruising,hotel and catering groups in

the Mediterranean.An extremely cus-tomer-focused organization, the LouisGroup is passionate about sharingCyprus with the rest of the world.

Founded in 1935 by Louis Loizou,who is acknowledged as the "father ofCypriot tourism," the Louis Groupstarted out as a small travel agency.Despite these humble origins, theLouis Group quickly became the keyplayer in the Cypriot tourism industry,and eventually expanded into all facetsof travel.Today, the Louis Group con-sists of Louis Cruise Lines & LouisHellenic Cruises and Louis Hotels,while Louis Tourist Agency is thefounding company of the Louis trademark. Finally, Louis Catering Services isthe catering arm of the Louis brand.

When Louis Loizou passed away in1971, his son, Costakis Loizou, tookover the business as Chairman andManaging Director along with his

brother,Vakis. Costakis Loizou is nowthe Executive Chairman of the largestprivate group of companies on theisland, with over 8,000 employees andbusiness activities in all forms of travel.

When asked about the key to hispersonal success, Costakis Loizou isclear and concise. "The key to successis hard work. If you don't have passionfor the work you do, you will notachieve much. Every day, we areresponsible for the tens of thousandsof people who sleep in our hotels, eatin our restaurants, travel on our cruiselines and arrange their holidays with us.Since people place an incredibleamount of value on their holidays, wesimply cannot afford to let themdown."

Costakis Loizou continues: "Inorder to meet the expectations of ourcustomers, we must personally investourselves in the business, and showour readiness to be involved in everyproblem that surfaces, no matter howsmall. Our business is not a machine

that manufactures products. Instead, itis about people, and we cannot forgetthis if we want to be successful.Without passion and love for this kindof job, we wouldn't be able to do it."

To date, the Louis Group has beeninvolved in virtually all aspects ofCypriot tourism including hotels, cruis-es, catering, travel and even specializedIT services.However,although they arefirmly based on the island, the LouisGroup has spent the last twenty yearsexpanding their operations and influ-ence overseas. As a result, the LouisGroup presently operates in 11 coun-tries worldwide from Europe to Chinaand is ambitiously building a presencein several other countries includingRussia.

According to Costakis Loizou, "TheRussian market is a crucial one, espe-cially considering that Russian touriststend to spend more money when onholidays than other tourists. According

to our estimates, about 25 percent ofRussian tourists stay in 5-star hotels,40percent stay in 4-star hotels and 35percent in 3-star hotels."

Costakis Loizou adds: "In the yearsto come, I believe that record numbersof Russians will consider buying secondhomes on the island. Of course, thereare many countries out there in theworld with beautiful beaches and niceweather, but none of these are as cul-turally close to Russia as Cyprus. Notonly is Russian spoken in Cyprus, butthere are in fact an increasing numberof Russian establishments on the islandincluding schools,churches, restaurantsand businesses.As a result of this cul-tural connection, Russians andCypriots have always maintainedstrong and friendly relations. I trulybelieve that the bi-lateral relations ofthe two countries will continuouslygrow, and an increasing number ofRussian tourists will visit the island.”

The Father of Cypriot Tourism

"In order to meet the expectia-tions of our customers, we mustpersonally invest ourselves in

the business, and show ourreadiness to be involved in any

problem that surfaces"

"In the years to come, I believethat record numbers of Russians

will consider buying secondhomes on the island"

ounded in 1935 by the late Mr. LouisLoizou, the Louis Group is today one of theleading travel, tourism, cruising, hotel andcatering groups in the Mediterranean

F

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Eight kilometers east of theLimassol city center on the beachlies the Four Seasons Hotel, an

independently owned property operat-ed by Muskita Hotels Ltd.Since its open-ing in 1993, the 5-star deluxe FourSeasons has been regarded as the pinna-cle of luxury on the island of Cyprus.

The owner of the Four Seasons, Mr.Christos Mouskis, is quick to outline hisstrategy for success in the hotel busi-ness: "Luxury in everything we do,including the way our staff is treated bymanagement,as well as innovative designof the spaces."

True to this, Mr. Mouskis has beensuccessful in clearly distinguishing theFour Seasons from the competition.Despite being open for only fourteenyears, the Four Seasons has undergonemany major renovations, which haveresulted in a number of impressive inno-vations.

Mr. Mouskis explains: "We were thefirst hotel on the island to introduce anumber of upmarket amenities, such as aspa and an adult-only wing. Although

these are now fairly common on theisland, we recently raised the bar byinstalling king Jacuzzi baths in all of thestandard guest rooms, which is some-thing that you don't see in any otherhotel in Cyprus."

He continues: "We also invest a lot inthe quality and uniqueness of our foodand beverage operation. The variety tobe enjoyed includes three specialityrestaurants: Chinese, Italian andGourmet Greek, in addition to the casu-al Cafe Tropical. Of course the mostimportant amenity which clearly placesthe Four Seasons ahead, is the excep-tional service throughout and the friend-liness of its staff. "

According to estimates, nearly 40percent of the guests at the FourSeasons are Russian, which is why thehotel takes special care in addressingtheir specific needs. "Our Russian clientshave been very loyal to us," says Mr.Mouskis. "We receive a high number ofrepeat clientele, which we believe is areflection of the outstanding level ofservice that we offer at the FourSeasons."

Christos Mouskis, Managing Director, Muskita Hotels

A Pioneer in theLuxury Hotel BusinessKeeps Raising the Bar

he Four Seasons Hotel keeps pushingahead with upmarket amenities for itsdistinguished clientele in Limassol

T

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Sixt Rent a Car office in Limassol

Founded in Munich in 1912, SixtRent a Car is a worldwide mobili-ty service provider that specializes

in supplying top-class cars to its cus-tomers at low prices. With the world'slargest fleet of BMWs and MercedesBenzes, Sixt easily distinguishes itselffrom market competitors. In Cyprus,Sixt offers a large variety of cars fromthe Volkswagen Group, the largestGerman car manufacturer.

True to its German heritage, Sixtemphasizes service, product quality and

customer satisfaction above all else.As aresult of these rigorous standards, Sixthas become the preferred mobility serv-ice provider for corporations and high-end private clientele.

Mr. George Mavrouvouniotis, theGeneral Manager of Sixt Rent a Car, isstriving to attract a larger number ofRussian clientele through the implemen-tation of an innovative leasing program.

According to Mr. Mavrouvouniotis:"We quickly learned that our Russian

customers here in Cyprus are interestedin leasing large cars and SUVs with pow-erful engines, which are similar to whatthey are used to driving back home. Atfirst, we did not think that it was feasibleto offer these types of cars at low pricesin Cyprus since the government hereimposes high taxation on imports.And ofcourse, it can be extremely difficult toshift a particular car model from theleasing sector to the renting sector."

However, true to the philosophy ofSixt Rent a Car, Mr. Mavrouvouniotis

found a solution to meet the needs ofhis clients. “To solve the situation, weuse our six branches to service bothshort- and long- term lease cars.Thismeets the demand of leisure cus-tomers with value-for-money servic-es,while at the same time offering rea-sonably priced leases on larger andmore luxurious cars and SUVs. Forinstance, true again to our Germanorigins, we are placing an order forthe Tiguan, the new SUV fromVolkswagen that just hit the market.”

Sixt Rent a Car Leads the Pack in the

Cypriot Car RentalBusiness

54

Perched between rolling hills andcrashing waves,Le Méridien Limassol Spa& Resort offers luxury and exclusivityamidst vibrant natural environs.Chic andsophisticated rooms and suites are deco-rated in a palette of soft-hues, whichhighlight the beauty of the surroundingnature.Whether staring out at the end-less sea or off into the distant hills, thebeauty of Cyprus is never far from yourmind at Le Méridien.

Stressing intimacy and privacy, LeMéridien is the preferred choice for bothbusiness and upmarket travelers alike.Since 2003, Le Méridien has operated asa residence-only hotel, which means thatonly registered guests are permitted toenter the property and to use the facili-ties.“Being the only five star internation-al chain hotel in Limassol strengthensour commitment as a hospitality leaderand to provide our valuable guests anexperience that goes beyond accommo-dation, food or beverages,” says VassosKilanis,Manager of the hotel.The undeni-able focal point of the hotel is Le Spa, anaward-winning thalassotherapy spa thatfeatures four outdoor and three indoorseawater pools, each with a differentsalinity content and temperature. Thepremises are also home to a Turkish-stylehammam, two saunas and no less thanthirty-four specialized treatment rooms.

Le Méridien is also proud of the factthat they are 100% family friendly, the lit-tle ones.The Penguin Village,which is freefor children ages 3 to 12 years, is hometo everything from a mini football pitchand a climbing frame to a bouncy castleand a kiddie pool,and crèche facilities areavailable at a charge.

Located on a sandy peninsula adjacent toCoral Bay,Thalassa, the Greek word for sea,is an intimate boutique hotel that boastsstunning views of the cool, blue waters of theMediterranean.An oasis of luxury and relax-ation, the Thalassa Hotel is the clear choice ofdiscerning upmarket tourists in Cyprus.

The motto of the Thalassa Hotel says itall: "The answer is yes.What is the question?"From personal butlers catering to your everywhim to impromptu yoga lessons at theonsite holistic spa, the Thalassa Hotel bringsthe concept of boutique luxury to a wholenew level.

Mr. Michael Pambos, the general managerof the Thalassa, is quick to point out thehuman element that makes his hotel sounique. "Our aim is to give people coming tothe island a completely different option thanthe standard 5-star hotel.Tourists in Cypruswant to indulge in luxury,so we strive to offera relaxing atmosphere that respects the pri-vacy of our guests."

In recent years, the Thalassa Hotel hasgarnered a favorable reputation amongstRussian tourists.According to Michael:"We atthe Thalassa try extremely hard to make ourRussian guests happy, and we always succeedby offering them a level of service that isunparalleled on the island.The proof of oursuccess is that our repeat clientele fromRussia has increased steadily over the years."

Michael goes on to add: "Growth as far asour Russian clientele is concerned is enor-mous. We have more and more Russianguests checking in each week, and we areworking hard to attract more. At themoment, I would say that about 20 percentof our staff speaks perfect Russian, and verysoon we will be able to offer hotel instruc-tions and manuals printed in Russian."

Rolling Out the Red Carpet

The Paphos Amathus Beach Hotel isrenowned for its unsurpassed five-starservice and Mediterranean charm, as wellas its sophisticated offering of luxuryamenities and high-class dining. In the hotelindustry, the truth is in the numbers, whichis why the Paphos Amathus Beach Hotel isquick to boast that 35 percent of theirguests are in fact repeat clientele.

Making the most of the warm andsunny climate, the Paphos Amathus BeachHotel features a free-form swimming poolreminiscent of a tropical lagoon, a seasidepromenade that overlooks the endlessexpanses of the Mediterranean, and a arange of services to give its golfing gueststhe most convenient access to the out-standing golf courses that are rapidlybecoming landmarks of Pafos. Of course,even if the weather isn't cooperating,guestscan take advantage of the onsite wellnesscenter, which offers everything from spaservices and yoga classes to an aerobicsstudio and a fitness center.

Recently, the Paphos Amathus BeachHotel opened two new eating and drinkingestablishments that are quickly becomingthe talk of the island.Asiachi Restaurant is afine-dining experience, offering delicaciesfrom the Far East including Chinese,Polynesian and a full sushi bar, while Nubaris an intimate bar and lounge that is bathedin soft hues and pale light.

With direct flights from St. Petersburgto Pafos starting soon, the number ofRussian clients at the Paphos AmathusBeach Hotel is expected to increase dra-matically. As a result, the management atthe Paphos Amathus Beach Hotel is cur-rently unfurling plans to cater to this lucra-tive market segment.

Only 35 minutes from LarnacaInternational Airport, the Cyprus Hilton islocated in downtown Nicosia next to theheadquarters of the Central Bank andclose to the city's main cultural, shopping,and business districts. The hotel offersmodern and sophisticated rooms andsuites, a broad spectrum of bars andrestaurants, and the highest possible stan-dard of business facilities and resortamenities. In recognition of their commit-ment to quality and service for 40 years,the Hilton Cyprus was awarded our edito-rial pick for "The Best Business Hotel inCyprus."

Mr. Marwan Ragheb, the general man-ager of Hilton Cyprus, fully understandsthe needs and desires of his clientele. "Thisis a business hotel, and people do comehere for business.We offer higher levels ofservices than you will find at resort hotelsaround the island, and our business facili-ties are easily the best in Cyprus." Thehotel offers various meeting rooms andfacilities that can accommodate either asmall meeting or a conference for up to1,000 delegates, and a full-service BusinessCenter equipped to fulfill the requirementsof the most demanding business travelers.

He continues: "And of course, it is partof the Hilton culture to cater to the indi-vidual demands of our guests, no matterhow small. Because of this policy, we havea huge number of repeat clients who sim-ply refuse to stay anywhere else on theisland."

When asked to comment about theHilton moniker, Mr. Ragheb offers thesewords: "By definition, Hilton hotels are aproduct that is perfectly adapted to thebusiness traveler."

Vassos Kilanis Hotel ManagerLe Meridien Limassol Spa and Resort

Pambos Michael General ManagerThalassa Hotel

Nicos Nicolaou Hotel ManagerPaphos Amathus Beach Hotel

Marwan RaghebGeneral ManagerHilton Cyprus

Security is their key Best boutique hotel in Cyprus Best bar in Cyprus Best business hotel in Cyprus

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Overlooking the white sandy beachesthat line the Ayia Napa harbour, the AlionHotel offers unmatched peace and seclusion.A five-star property with a boutique flair andno more than 100 rooms, the Alion is notedfor its appealing blend of modern luxury andindividual attention. Here, class merges withcoziness, and hospitality is enhanced with acommitment to personal service.

The Alion is proud to emphasize its loca-tion, size and service above all else.As a tes-tament to this fact, the Alion was listedamongst the “Best 100 Hotels in the World”for six years running by TUI, the largestEuropean tour operator.This year,only threehotels in Cyprus were a part of this list,though no other hotel on the island canequal the number of awards bestowed uponthe Alion.

Mr.Michael Panicos, the general managerof the Alion,believes that the path to successfor the Alion is to offer an unmatched quali-ty of personal service.“We see things differ-ently. Our aim is to invest in our people andbring out the hospitality that Cypriots arewell known for. During the hiring process,we place a strong emphasis on a person'scharacter in the hope that they will be ableto make our guests feel immediately wel-come.”

Panicos estimates that Russian touristswill make up over 20 percent of his guests inthe near future, and believes that the Alion iswell suited to their needs.“Russians want torelax and enjoy in the beach, which is whythey don't choose a large business hotel.Atthe same time however, they want to followup on their affairs back home, and they wantto be treated with special care.This is exact-ly what we strive to offer at the Alion -- con-sistent personalized attention.”

If you are struck with a sensation ofimmortality while staying at the AphroditeHills InterContinental Hotel, don't worry, it isnot just the champagne! From start to finish,guests may expect a holiday experience thatis nothing short of divine, so pleasurable theywill want to live forever if only to return onemore time. Welcome to a resort where therooms are always comfortable and clean, thestaff always knows your name, and your glassis always filled with champagne (sparklingapple cider for the kids), the nectar of thegods. The grounds of this earthly paradise areas beautiful as the goddess for whom thehotel and compound are named, withunmatched views of the Mediterranean Seaand 15 hours-per-day of sunshine, perfect foran early morning dip in one of the pools, 18holes of golf,or a romantic dinner during oneof the stunning sunsets. The resort staff couldnot be more attentive,polite,and personable.Mr. Philippe Requin, the hotel's extensivelyexperienced general manager, believes inkeeping things simple and elegant, and main-tains a creative ambiance where his guestsare the focus and every measure is taken tomake them feel at home.“I look at the hotelas a computer: you have the hardware or thebuildings and grounds, and the software orthe staff that helps everything to run smooth-ly,” said Mr. Requin, recipient of numerousprestigious awards in the hotel industrythroughout his managerial history. “We arevery lucky in that both our 'software' and our'hardware' are excellent.” Mr. Requin intro-duced the “plaisir santé” concept for guestsseeking delectable cuisine from every cornerof the world prepared in a health-consciousmanner,and has aims set high for the hotel tosoon emerge as the premier European vaca-tion destination for luxury-seeking travelers.

Top Hoteliers in Cyprus Share theirViews on Luxury Hospitality

Anassa, meaning "queen" in classicalthe Greek language, is universallyregarded as the most luxurious, exclu-sive and upmarket hotel on the island ofCyprus. The ultimate Mediterraneanretreat for the rich and the famous,Anassa caters to your every conceivablewhim with dignified grace and class atevery turn.

According to Mr.Thanos Michaelides,the managing director of the hotel,"Anassa is not just a hotel, it's a destina-tion. Although we cater primarily toEuropean clientele, all of our guests arethe same in that they know what theywant, and they come to Anassa becausethey know they will get it here."

He continues: "Regardless of whereour clients come from, they come toAnassa to escape from reality and entera world of unimaginable leisure. Weknow exactly what our guests need, andwe never stop catering to their individ-ual requests. This is why we employ amulti-lingual staff capable of speakingEnglish, German, French, Spanish, Italianand, of course, Russian."

Rooms at Anassa are individually dec-orated in classical style, though it's theflawless attention to detail that setsthem apart from the competition.Guests are also wined and dined atgourmet restaurants spanning the culi-nary spectrum, and pampered in excessat the award-winning Thalassa spa.

In recognition of their unequalledluxury and customer service,Anassa is amember of the "Leading Hotels of theWorld," a highly prestigious group of theworld's most sophisticated upmarketboutique hotels.

Almyra, meaning "the taste of thesea" in the Greek language, is an innova-tive boutique hotel on the island ofCyprus that caters to a young, hip andfashionable jet-setting crowd.

According to Mr.Thanos Michaelides,the managing director of the hotel,"Almyra is a completely original concepton the island. Our major clientele areyoung professionals from Europe whoare searching for a product-driven holi-day. Our guests are the type of peoplewho come to Cyprus simply because ofAlmyra, and wouldn't dream of stayinganywhere else."

He continues: "We cater for individ-ual travelers who want to go to placesthat are off the beaten path and relative-ly unknown. So we have adopted a busi-ness philosophy that caters to ourguests' desires to have a distinctive andstimulating hotel experience."

From the chic minimalist interiors ofthe individually designed rooms, to thesubtly refined haute cuisine of the hotel'srenowned restaurants, Almyra is anabsolute feast for the senses. Not sur-prisingly, it was the first, and remains theonly,“Design Hotel” member in Cyprus.

Mr. Michaelides explains: "This organ-ization is a marketing affiliation that gen-erally consists of contemporary stylistichotels that have a wholly unique charac-ter and ambiance.You need to apply inorder to be considered, and only inde-pendently-owned hotels are eligible formembership. Needless to say, we areextremely pleased to be a part of thisexclusive group, and we feel that it is atestament to the quality of the productwe offer."

Panicos Michael Hotel ManagerAlion Beach Hotel

Philippe M.E. Requin General ManagerInterContinental Aphrodite Hills

Thanos MichaelidesDirector

AlmyraAnassa

Best breakfast and beach in Cyrpus Best Golf in Cyprus Best luxury resort in Cyprus The one and only design hotel in Cyprus

Located approximately 45 minutes by carfrom the Larnaca International Airport, theAdams Beach Hotel is perched on the beau-tiful sandy beach of Nissi Bay, and locatedwithin a short distance of the resort centerof Agia Napa. Built in 1991 and extended in2000, the Adams Beach Hotel currentlyboasts 296 5-star rooms, and an impressiveoffering of sports and leisure facilities includ-ing the island's largest indoor gym, a free-form swimming pool and an inviting spa andbeauty center.

Mr. Christos Theodoulou, the generalmanager of the Adams Beach, believes thathis hotel's unique blend of resort-worthyamenities and boutique-style service is thedifferentiating factor.

Although the competition for tourist rev-enue amongst upmarket hotels in Cyprus isfierce,Theodoulou professes without hesita-tion that the Adams Beach is the best optionon the island for Russian tourists.“The initialtrend was for Russian tourists to stay in bigcities so that they could combine shoppingwith leisure. But the Russian market haschanged over the past ten years, andMoscow is now jam-packed with shops.Today, Russians are more concerned withthe opportunity to unwind in luxury.”

Clearly,Theodoulou has taken this trendinto consideration, especially since theAdams Beach Hotel is improving its alreadygenerous offerings by adding a number ofnew bars and restaurants to the property.

Ultimately however, the key to choosinga fine hotel is its location, a fact thatTheodoulou is happy to acknowledge.“Oneof our advantages in Agia Napa is that wehave a beach of soft,white sand,compared todark and rough sand found elsewhere on theisland.”

In 1992, the Coral Beach Hotel &Resort opened with great fanfare at acelebration led by Baroness BettyBoothroyd, the first female Speaker ofthe House of Commons. Since then, thehotel has brought a new level of sophis-tication to the hospitality market ofPafos by reflecting the local character ofthe island whilst offering five-star servic-es and facilities.

As a testament to their tireless com-mitment to customer service and quali-ty, the Coral Beach Hotel & Resort haswon a number of awards including the“First Choice Gold,” and a quality markas one of the "Top One Hundred Hotelsof the World” for three consecutiveyears.

Mr. George Kassianos, the AssistantGeneral Manager of the Coral Beach, isconfident that the hotel is easily differen-tiated from other hotels in thehighly competitive Pafos hospitality mar-ket."The Coral Beach Hotel & Resort islocated on 500 meters of natural sandybeach, boasts a private pleasure harborand is perched on the edge of theAkamas Peninsula, a UNESCO protectedarea of natural beauty. "

He continues: "The hotel's threeblocks comprise some 422 rooms with16 varieties to choose from, from familyduplex studios to our Presidential andRoyal Suites, making the Coral Beach thelargest five-star hotel and resort on theisland.This gives us the capacity not onlyto provide an idyllic family holidayresort, but we are also able to offer thelargest five-star conference facility of anyhotel in Cyprus."

A selection of hotels offeringvalue for money in Cyprus

The Kermia Beach Bungalow Hotel isscenically perched on a secluded strip ofgolden sand near the crystal-clearturquoise waters of Cape Greco in thesoutheast of Cyprus. The property con-sists of approximately 150 Mediterranean-style bungalows scattered amongst 60,000square meters of manicured landscapes.

Forgoing over-the-top luxury in favorof offering excellent quality at affordableprices, the Kermia Beach Bungalow Hoteloffers discriminating guests a relaxedbeachside ambiance and a carefree holidayatmosphere.

Depending on their specific needs,guests at the hotel have the option tochoose from one of several bungalowstyles ranging from modest studios to lux-urious 2-bedroom affairs. However, all ofthe bungalows are highlighted by woodenrafters and woven cane ceilings, and arefully equipped with modern amenities.

Although the main attraction of theKermia Beach Bungalow Hotel is its seam-less integration with the surroundingnature, guests looking for resort amenitieswill not be disappointed. The hotel ishome to a variety of restaurants and barsthat serve both local and international cui-sine, as well as a generous offering ofsports and leisure facilities.

Michael Loizides, the manager of theKermia Beach Bungalow Hotel, recognizesthe unique character of the property. "Thegreenery we have at the hotel is an incred-ible asset, especially considering that ourtrees were planted when we first openedin 1981.This same concept applies to themajority of our staff members, who havealso been here with us for more than 25years"

Located directly on the OlympionBeach just two Km from the old town, theHoliday Inn Limassol boasts one of themost convenient locations of any hotel inthe city. A short stroll from the hotelreveals a lively tourist area full of brandname stores, dining options and entertain-ment spots, though most guests are con-tent to simply lie on the beach and soak upthe sun.

Mr. Pietros Pierides, the GeneralManager of the Holiday Inn Limassol, isquick to stress the convenience of thehotel. "The uniqueness of the Holiday InnLimassol is our location,which simply can'tbe beat."

The Holiday Inn Limassol has a total of144 standard and executive rooms as wellas a handful of individually furnished suitesoffering the highest level of comfort.Guests can also take advantage of theonsite amenities, which include indoor andoutdoor pools, a gym and health club, ten-nis courts, beach facilities and fully-equipped conference rooms.

Although the hospitality market inLimassol is extremely competitive, Mr.Pierides believes that the Holiday InnLimassol is easily distinguished."We are theonly 100 percent branded hotel vis-à-visthe strong bond with the InterContinentalHotel Group (IHG), which gives us accessto a wide range of resources."

He continues: "We are also very wellrepresented in Russia, and our name fea-tures prominently in the brochures ofmost travel agents and tour operators.Asa result, a large portion of our customersare Russian tourists,who traditionally havechosen to holiday in Limassol."

Christos TheodoulouGeneral ManagerAdams Beach Hotel

George Kassianos Assistant General ManagerCoral Beach Hotel

Michael LoizidesManager Kermia Beach BungalowHotel

Pietros PieridesGeneral ManagerHoliday Inn Limassol

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