Cyprus – Stavros Pantzaris, Country Assurance Leader, Oil & Gas Leader
Stavros Pantzaris from EY Cyprus offers his perspectives on the early days of E&P in the country, and how EY tackles HR challenges unique to the island nation.
Cyprus is globally renowned for its professional services sector. Despite the exceptional challenges the country has had to face in recent years to restore the viability of its financial sector and public finances, Cyprus still offers a favorable environment for international business companies. Why is the environment still attractive to serve the local market and region?
Cyprus economy is based on a free enterprise system and the private sector is the backbone of economic activity. Currently the country’s main sources of foreign earnings are tourism and services. Following the disruption of its banking sector in 2012 and 2013 (mainly due to the exposure to the Greek economy), Cyprus applied to Eurogroup for financial assistance (to cover its budgetary needs, restructure its banking system and refinance its public debt). The latest reports from Troika (EC, ECB and IMF) are positive, with forecasts for the macroeconomic outlook for Cyprus revised upwards. Standard & Poor’s and Fitch upgraded the Cyprus economy in April 2014 after years of continuing downgrades and recently we have seen deposits in Cypriot banks increase for the first time since December 2012. The local economy is expected to grow in 2015.
Notwithstanding the aforementioned, the environment is still attractive to serve the local market and the region. Various business and tax factors such as the ease of doing business in Cyprus (according to World Bank, Cyprus is ranked 39 out of 189 countries), its strategic geographical position on the crossroads of Europe, Africa and Asia, English speaking environment, EU membership, no FX controls, low set up and maintenance costs for local entities and a wide range of supporting services provided by local professionals, together make Cyprus an attractive business centre.
Additionally, Cyprus provides a friendly tax environment with a low corporate income tax rate (12,5%), access to the EU directives and the extensive double tax treaties network (with approx. 50 countries), no withholding tax on payments to non-residents (apart from royalties paid for intellectual property economically utilised in Cyprus), low transaction taxes, IP Box regime, tonnage tax regime and tax incentives for expatriate employees.
EY has been active in the country since the 1930s. How is EY today positioned in the market?
EY Cyprus, a firm with a history of over 70 years in the local market, is a leading professional services firm, providing services to clients in a wide spectrum of industries. Our clients are among the most important local and international companies, their operations inevitably impact peoples’ everyday lives.
As of 1 July 2008, the offices of EY in Cyprus are part of the EMEIA Area, which integrated the European, Middle East, India and Africa practices of EY. The creation of the EMEIA Area, which brings together 73,000 people, enables EY to better leverage its strengths and more swiftly bring together the best teams to serve its accounts, drawing on all its expertise – across industry sectors, services and geographies. We are the first professional services organization to bring a truly borderless approach to our clients in Cyprus enabling us to better meet client needs and deliver seamless, consistent high-quality service.
What differentiates EY from its competitors is its purpose, its ambition and its strategy to provide exceptional client service, worldwide. This is made possible by an unwavering commitment to quality and service that is professionally and globally consistent and means service that is based on objectivity, professional skepticism, and adherence to EY and professional standards.
EY’s comparative advantage begins with our global network; our vast knowledge pool provides a constant surplus of leading practices and fresh thinking that we tailor to meet the ambitions of each individual client. We handpick multidisciplinary teams to support knowledge exchange, differentiated perspectives, skills, methodologies and knowledge of the latest tools to ensure proper implementation and most of all consistent service to our clients.
How is Vision 2020 – which sets out EY’s ambitions for the future and global strategy – impact the Cypriot office and operations? How do you translate this global strategy to the local level?
Since the launch of Vision 2020 − our plan is to be the leading professional services organization by 2020. And as part of Vision 2020, we set out our purpose: Building a better working world. This purpose acknowledges the important role we play in building trust and confidence in the global economy by delivering quality and excellence in every engagement.
At a local level, Vision 2020 impacts all areas of our organization. We have adopted ‘EY’ and ‘Building a better working world’ as our name and tagline. Our ambition is to have leading growth in the local market with competitive earnings sufficient to attract and inspire top talent, have the best brand, build strong relationships with our stakeholders and be the most favored employer.
Achieving these goals means implementation both internally and externally. Internally, we foster the right attitude, culture and approach so our people have the ambition and strategy to succeed. Externally, we demonstrate EY values to stakeholders in all areas of work which include building trust, enriching relationships, tailoring advice based on global synergies and organizing focused material (conferences, webinars, seminars and newsletters) to advance thinking in local businesses so they can position themselves to succeed. We also continue to expand the services we offer so as to increase our specialized knowledge pool, contribute to the community, and receive well-rounded feedback to extrapolate into our developing service areas. Cumulatively, these actions translate into becoming recognized as the leading technical/industry experts.
The Cypriot Government and particularly the Minister of Energy, Commerce, Industry and Tourism, Yiorgos Lakkotrypis, have made it a priority to develop a sustainable oil & gas sector in the country. How is EY ensuring international standards are adhered to and transparency is promoted at all levels?
As professionals, we have an important duty to the public trust and the capital markets. EY has established a detailed system of policies and controls, along with independence standards that are among the strictest in the profession. These enable our professionals to deliver quality services in which you can have confidence.
Our focus on the oil and gas industry is a major part of our commitment to the energy industry as a whole. We are proud of the many oil and gas clients we serve globally in the exploration and production, midstream, downstream, chemicals and oilfield services. We bring to these clients deep bench strength of oil and gas professionals serving a large body of clients globally, an in-depth understanding of industry issues and committed professionals who truly understand our client’s operating environment and network with each other to share best practices.
With regards to IFRS reporting, our clients benefit from our network of professionals that have subject matter experience on the wide variety of accounting and regulatory issues that companies in the oil and gas industry face. When technical issues arise, EY promotes a culture of consultation between its clients and local office. We believe that understanding the culture and industry in a geographic region is beneficial to the client and that close proximity accelerates open communication and leads to rapid issue resolution. We invest in knowledge and communication networks that give our professionals access to up-to-the-minute information and the necessary tools to execute their work efficiently.
There is a broad view that greater transparency in the natural resource extractive industries will support proper development. Three major efforts have emerged to require disclosure of government payments, including the Extractive Industries Transparency Initiative (EITI), US legislation under the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the European Union’s recently approved rule. EY supports its clients to understand and comply with these reporting requirements.
In these early days of E&P, how has EY already provided its services to the first entrants?
We have supported our clients during the first and second licensing rounds by providing assistance in the preparation of applications to the Cyprus Government. We have also assisted our multinational clients in understanding the tax considerations involved with expanding operations into Cyprus, in establishing local entities/branches and in setting up their local accounting and payroll functions.
Our audit support for new entrants includes financial statement audit/review, compliance & reporting, internal audit and internal controls advisory, accounting consultation, IFRS/GAAP advisory and conversion and charts of accounts alignment.
Our oil and gas tax professionals work with most of the leading players to help our clients make tax a more controllable and predictable cost. We are renowned for our insightful advice and the depth of our industry experience across the globe, where our dedicated oil and gas tax team covers more than 100 territories. We have extensive experience serving major oil and gas companies, large national oil companies and companies of all sizes, including new start-up players that have thrived by utilizing our deep experience. Our tax compliance and advisory professionals assist the companies in the oil and gas industry with corporate income tax, property taxes, compliance and statutory reporting, tax accounting calculations, expatriate tax services and tax return processing, indirect tax reporting as well as local and international social insurance considerations.
How is the company preparing itself for the day the sector will move on to the next level (production of gas, construction of an LNG terminal, pipeline network or other major infrastructure projects)?
We have set-up a local oil & gas/energy team comprising professionals from all service lines, including Assurance, Tax, TAS and Advisory. The purpose of this team is to focus on developing the necessary expertise in the oil & gas sector, in order to be able to serve and support our clients involved in the E&P activity, but also to be prepared to further support our clients once the industry moves to the next level.
Our aim is to create and work in high-performing teams and we do encourage collaboration with colleagues across borders and across service lines. In this respect, we encourage our local oil & gas professionals to capitalize on the mobility opportunities offered within our global organization. These opportunities enhance the hands on experience and knowledge gained by our professionals, by working on projects of our global clients in various geographical locations.
We develop and deliver oil and gas specific training to all our professionals in order to provide the continuous knowledge necessary to deliver high-quality services to our clients. We also participate in many industry events to support the mission of dialogue and articulate points of view on relevant key industry issues so that our professionals as well as our clients stay informed about key industry developments and trends.
Could you please tell us more about the “EY difference” and why EY should be a preferred partner to the Oil & Gas players in Cyprus?
EY’s Global Oil & Gas practice consists of a network of more than 9,600 professionals and our Global Oil & Gas Centers, like the professionals in our Global Oil & Gas Practice, are strategically located in areas that allow us to serve best the needs of the oil and gas industry, including Cyprus.
With information, regulations and trends moving at a staggering pace, ensuring that our clients are armed with the most current information and perspectives is a difficult challenge. In support of the flow of information, the EY Global Oil & Gas Centers are committed to providing technical training and webcasts to help our clients navigate the issues of the day.
Our commitment to the industry is valued through our forums and events. We feel that solving tough problems requires dialogue about the issues. The vision of our Global Oil & Gas Centers is to convene industry executives with the seasoned professionals of EY to discuss issues vital to the future success of our clients. We do this by hosting a number of highly regarded proprietary seminars and roundtables around the world on hot topics like IFRS, climate change and regional regulations.
Our deep industry focus helps EY make a difference and allows us to help companies in the oil and gas industry meet their goals and compete more effectively.
Recruiting and retaining the right skills is a considerable challenge in Cyprus. How are you attracting the best talents and nurturing your HR to the best?
At EY we are investing in our people and make sure that we recruit the best professionals in the market place. We have been voted as the number one most attractive employer in professional services by Universum’s annual World’s Most Attractive Employer ranking. We have respect for our people and we offer a creative and dynamic working environment with a transparent and clear path for advancement.
We provide comprehensive training programs with honest, timely feedback and a transparent recognition/reward policy. Aside from developing current staff, our recruiting efforts focus on internship programs, universities, and strengthening communications with alumni so as to identify and acquire only the highest performing individuals. EY and you (EYU) is our career development framework, which is designed to provide our people with the skills, knowledge and confidence they need to take ownership of their careers.
The development of our people is at the heart of our culture. We believe our professionals will do the best work they can when they have the freedom to map their own career path. And ultimately that means our clients will benefit too.
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