Joseph Frangos: “The setting of clear targets is necessary for their achievement”
A young man with a vision, a successful lawyer whose law firm in Larnaca employs around 60 persons! There are many things to talk about with Joseph Frangos. From his love for AEK and Larnaca, to foreign investments in Larnaca and more generally in Cyprus, as well as the financial situation at an international level. In the following interview we tried to talk about ... everything!
Mr Frangos, points out, amongst other things, that “Larnaca has a bright future ahead. I truly believe in Larnaca, I love Larnaca and I cannot imagine myself not living in Larnaca".
By Yiota Demetriou
Μr Frangos, when did your office start its business in Larnaca?
I established our office in 1999.
How was Larnaca at the time and what was the financial and social framework?
It was a period where society was more reserved and development opportunities were more limited.
Law firms were fewer then by comparison to the number of law firms at the moment, as far as I know...
Indeed, the number of lawyers today has increased considerably and we must admit that 20 years ago there were better prospects for the development of lawyers.
Due to the increase of lawyers today?
Apart from the increase of lawyers, it should be noted that the regulatory framework for the operation of a law firm has intensified to the extent that the creation of a law firm today requires compliance with a number of obligations imposed by both the Cyprus Bar Association and various legislative instruments which regulate the legal practice. Inevitably, the infrastructure required to enable a law firm to meet its obligations requires particular efforts and costs.
A wrong client can negatively stigmatise the name of a law firm?
Unfortunately, the answer is YES. It is therefore necessary for each law firm to be particularly careful when evaluating a client before accepting to represent him.
In other words?
Compared to 20 years ago, where the regulatory framework was significantly relaxed, the risk described above was particularly low. Today a simple oversight or the non-observance of any of the existing obligations can lead a law firm to unpleasant consequences.
Where did you study?
At University College London, UCL, in London.
UCL is a very good university, one of the 10 best universities in the world...
Yes it is.
When you completed your studies you came back to Cyprus and opened your own firm. Did you ever imagine or envision that today, 20 years later, you would be employing so many people?
Today we employ around 60 persons, most of whom have been working with us for a number of years now.
Did you have big dreams and goals when you started out?
I am a very optimistic and positive person by nature. It is true that I had the vision and the confidence to create something good. My basic principle is that success in life is directly linked to the early definition of clear goals. If you start something without knowing where this effort will lead you, or if you do not know where you want it to lead you, I believe that it will be more difficult to formulate the actions that will lead you to achieve something. My personal goal was to set up a law firm that would have a serious impact and a substantial ability to offer a wide range of services outside of the strict framework of providing court work, which is historically associated with most law firms mainly in Larnaca.
But you did more than just having a law firm; your turnover has increased. There is now a subsidiary company, Bybloserve Management Ltd and there are other companies with which you cooperate closely and which have their offices in the same offices as the ones in which you are acre carrying on business. What was it that helped in this successful path so that other companies come to you?
The general public has the wrong impression that a law firm is connected to a great extent to court work. This is not the case.
The complexity of today's life imposes a multifaceted involvement of lawyers in view of the fact that most issues that we deal with on a day to day basis require legal advice in order to take the best possible decisions. With this in mind, we expanded our services by dealing with a wide variety of issues. We recently expanded our activities in the area of personal data protection and the relevant European regulation that has recently entered our life.
Do tax laws differ from country to country?
Each country, and more specifically each Member State of the European Union, retains the sovereign right to regulate its internal tax regime, nevertheless within a wider international European regulatory framework. Cyprus has managed to create and develop a particularly attractive tax system especially for foreigners which is a factor that is of paramount importance at the stage where a businessman or a company takes a decision as to where it will be established.
Does the taxation of a Cypriot differ from the taxation applicable to a foreigner?
There is a substantial difference in the taxation of a Cypriot by comparison to a foreigner who chooses to invest in Cyprus or even to become a Cyprus tax resident. There is not enough time to expand right now but I would like to refer to a small example by saying that a Cypriot shareholder of a company from which he receives dividends is required to pay defence tax on dividends paid as opposed to a non-Cypriot shareholder of the same company who does not have an obligation to pay anything.
Of course a Cypriot company can also operate abroad.
A Cyprus company, whether of Cypriot or non-Cypriot interests, can invest abroad. Legal support on tax, banking, property, company law matters is a prerequisite for safe investments, by taking into account all parameters that concern it. The ability of an office to gain knowledge either directly or through associates on the law applicable in other countries is now imperative.
You increased your turnover by also opening an office in Dubai.
Yes, our office in Dubai office provides advisory services to corporate clients. We consult and assist clients who wish to establish and incorporate companies or other types of structures in Dubai. At the same time, we provide banking services and services related to the issuance of employment, residence and tax residence permits.
Dubai is a destination that is evolving as an international business center.
Through Dubai a client may wish to be active in other destinations, such as the Middle East.
I would also like to mention that in recent years we have developed another part of our business which is entitled the Bybloserve Business Center which is addressed to businessmen who come to Cyprus and need support in order to organize themselves either in terms of office equipment or staff employment matters as well as anything else that a company may need in order to have actual presence in Cyprus.
Yes, it is very important because previously, a company could have its seat under the umbrella of a law firm, which is why all law firms in Cyprus had a great number of companies registered at their address. But the way things have evolved does not permit his anymore. It is now necessary for a company to be able to show that there is a real and material seat in Cyprus at its own premises and without dependence on a law firm that may be managing other 100-200-500 companies.
It is necessary for companies to acquire actual "substance" in Cyprus. The company Bybloserve Business Center provides this opportunity.
Did you handle any cases of naturalization of foreign investors?
We have created a specialized department which consists of lawyers who are almost exclusively engaged in this matter. The aim is to provide a holistic service to the investor from the time that he decides to come to Cyprus until the final delivery of his passport.
Can you tell us more about the Bybloserve Business Center?
We maintain two separate building facilities, managed by Bybloserve Business Center, providing all the necessary office and secretarial staff to companies that choose to create a real office presence in Cyprus. The building facilities are appropriately configured and divided into individual offices and public spaces.
What is the advantage you offer to your customers?
Bybloserve Business Center offers a complete solution, essentially delivering the key to the user of the office, who in turn does not have to worry about anything else. Payments for operating expenses, insurance, office staff, cleaning, office equipment and other issues related to the operation of an office are handled by Bybloserve Business Center.
Privacy Minders is part of your group...
Privacy Minders is specialized in the field of personal data protection, with particular reference to the relevant European Regulation known as GDPR (General Data Protection Regulation). We had and maintain the view that the issue of data protection is to a large extent a legal matter that requires specialization. Perhaps the market has not yet grasped the seriousness of the matter but I feel that is will happen very soon. The penalties are very serious and I expect that the competent Commissioner will start carrying out inspections very soon and will inevitably impose penalties. It is my humble suggestion to the public and businesses to consult their lawyers and other experts on the matter in order to take the necessary measures in order to avoid unpleasant developments in the near future.
When did Privacy Minders start carrying on business?
About a year ago.
Let's now turn to the Court work carried out by your firm. I. Frangos & Associates LLC undertakes all kinds of cases?
We deal with the whole spectrum of judicial work, apart from criminal law, with specialization in banking, corporate and commercial law.
In general, are your clients mostly foreign or Cypriot?
They are half half. However, there is a substantial difference in profitability between the legal services we provide to foreign clients by comparison to the legal services provided to Cypriots.
I had interviewed a Russian businessman two years ago who told me that "Dubai offers more attractive packages to businessmen in order to attract them for the purpose of opening offices there." My question to you is whether Dubai or other countries are more attractive in terms of attracting companies and investors?
I think that this comparison cannot be done. There are various factors that can lead an international business to choose one destination from the other. Each business scenario is based on its own factors, which must be evaluated in the light of the particular business venture. The generalization that Cyprus is better than Dubai and vice versa is invalid.
In other words?
The activity itself, the tax regime, the location of the country, the legal regime, the services provided there, the destinations involved with the business venture, are just some of the factors to be assessed.
The only comparison that can be made between two destinations is personalized for a specific index. For example, if you ask me whether the Cyprus legal system is better than the legal system of Dubai, I will answer YES immediately. Personally, all I can say is that I consider that Cyprus is very high in the list of destinations that a businessman or an international business company will choose.
The main factors which in my opinion place our country high on the list of possible destinations for an international businessman is the high level of our services (lawyers, accountants, tax auditors), the applicable Anglo-Saxon legal system, our tax system, our location and the quality of life in Cyprus.
From which countries do most of your foreign customers come from?
Admittedly, as is the case with most major law firms in Cyprus, there has been a long-standing relationship and there is still a particular dependence on former Soviet Union countries. Since the 1980s, a large wave of foreign investments in Cyprus started from the former Soviet Union. As a result, until recently, foreign investment in Cyprus was heavily dependent on Russian capital. Strategically this was a mistake because dependence is not a healthy phenomenon. Over the last decade, this dependence has been corrected to some extent, but still a lot of work is needed. Today I would say that 40-50% of clients come from Russia and Ukraine and the rest mainly from Western Europe, Greece, Israel and the Middle East.
Yes, some come from China, although we should admit that as an office we have not been able to participate in the recent wave of Chinese investment. However, our effort to extend the provision of our services to Chinese investors is continuing intensively.
What is the reason do you think why there is a big stream of Israeli investors in Cyprus in recent years?
There are investors with various citizenships who have invested in Cyprus over the past few years. Admittedly, the program of naturalization of foreign nationals by means of investment has helped the most because, in the manner in which it is formulated, it is probably the most competitive in Europe. Real estate prices are another factor because after the banking crisis of 2013, the real estate market was inevitably low. As a result, this created opportunities for foreign investors. It should be noted that in recent years there is an intense interest in the district of Larnaca. It appears that the rise in property prices in Limassol has shifted interest towards Larnaca, which, combined with the prospect of developing the town's harbor and the move of refineries outside the town, creates an investment interest for our city.
What is your opinion on Larnaca’a development in recent years? Do you have any relationship with the new Mayor?
There is an intense effort in the right direction and I hope that soon there will be results. I know Mr Viras personally and I can confirm that he is working very hard and he only has the best interests of Larnaca in mind.
Our Mayor is a young man. In general, do you believe that it is important to have young minds in important positions?
Of course! We must give way to the new generation and to allow it to create. This is the only way forward. I am convinced that Larnaca has a very good outlook and I am particularly optimistic about the coming years. I have a particular weakness for my city. I cannot imagine myself not living here and I wish in the coming years to see a renewed, fresh and European Larnaca.
Is your love for Larnaca that led you to get involved with AEK?
Yes, in combination with my love for the sport. I love Larnaca, but I also love football! Apart from my involvement in the administration of the Club over the past 15 years, I almost never lose a match. It is an addiction (laughter) and a great love. It's hard to explain it.... And you know, this love is not easy, it needs sacrifices, time, effort, energy, money....
Do you think AEK unites the town?
I believe that AEK is a key component of our everyday life. I cannot imagine Larnaca without AEK. A strong AEK has a beneficial wider impact on the community. I note that AEK engages over 300-400 young footballers in its academies and a great number of coaches and support staff. In the field, you can see families and children. We must love AEK more and feel it as a part of our life.
Do you think that your way of thinking has to do with how you grew up, with your studies and, by extension, with the years you lived in London, or is it something that you worked on yourself?
I think everything had an impact. I believe that if you find 3 persons who had the same educational path, e.g. studied at the same place and grew up in a particular way, it is very likely that you will see that their life course was not the same. There are many things that have an impact. Education, environment, friends, relatives. But the most important thing is your DNA.
*Source: Skalatimes, 07/05/2019