Since Cyprus has emerged as the main base for most regulated binary options brokers, we decided to shift our attention on the island and try to see beyond the bad press it has been receiving lately. In order to determine whether the regulatory framework and business environment in the country is such as to inspire confidence and security, especially to each individual trader.
Instead of turning to Cypriots themselves to pose our questions however, we opted to search for more reliable sources of information, trying to track down independent views, void of vested interests. We will be following the situation in Cyprus and relevant matters, but below are some initial findings, which we consider to be telling.
In the 2013 The Best Countries for Business survey carried out by the internationally renowned financial publication Forbes, Cyprus has topped the rankings coming first in the “personal freedoms” category.
Moreover, out of a total 145 countries which were surveyed in the framework of this particular survey, Cyprus was ranked 27th overall, ahead of countries such as Malta, Poland, Malaysia and the United Arab Emirates. This annual survey by Forbes, which covers the period 2012-2013, is derived from fata obtained by independent, worldwide sources, such as – among others - by the World Bank, the World Economic Forum and Transparency International and it grades the various investment locations against 11 different criteria, ranging from monetary freedom and low corruption, to investor protection. It is interesting to note that, on all these criteria, Cyprus scored highly, ranking 5th, 29th and 32nd respectively.
Due to the fact that an estimated $21 to $32 trillion of private financial wealth is located, untaxed or lightly taxed, in secrecy jurisdictions around the world and since Illegal cross-border financial flows are believed to add up to $1-1.6 trillion each year, many so-called tax havens around the world compete and use secrecy in order to manage to attract such illicit and illegitimate or abusive financial flows. Indeed, this competition between jurisdictions to provide secrecy facilities has become a central feature of global financial market and a whole industry has developed in order to satisfy their tax- and law- evading customers.
In true stereotypical attitude, many believe that these tax havens are primarily some small obscure islands, including Cyprus. However, recently published findings come to prove that this is yet another grave misconception, as some of the world’s wealthiest and biggest countries occupy the top positions on the list of the most important providers of financial secrecy. This list is derived from the Financial Secrecy Index, launched in November 2013, which ranks jurisdictions according to their secrecy and the scale of their activities. Being politically neutral, this index is extremely useful as a tool for ranking and understanding global tax havens or secrecy jurisdictions, and illegal financial flows. While Cyprus ranked 41st on this list, the top 10 secrecy jurisdictions are as follows:
- Switzerland
- Luxembourg
- Hong Kong
- Cayman Islands
- Singapore
- USA
- Lebanon
- Germany
- Jersey
- Japan
We believe the list is indicative of the misconception we discussed earlier and bound to raise an eyebrow or two. We will refrain from any further commentary as we are confident that conclusions can be reached quite easily. We will however continue to have our eyes and ears open to highlight such interesting findings in the future as well.
