26 August 2014

The Battle for Cyprus

The island of Cyprus is reliant on tourism which represents approximately 12% of GDP.  The latest figures from the Cyprus state statistical service shows a 22.6% increase in the number of visitors from Russia in July 2014. Over 116582 Russians visited the island compared to 96641 in July 2013.

There was a small dip in the number of visitors from Britain but still the largest number at 127152 for July 2014 compared to 132566 in July 2013.

The total figures for the first seven months of this year are: British 478882, Russians 372457, Sweden 57676 plus many tourists from other countries around the world. During 2013 Cyprus welcomed 2.4 million visitors and it looks like 2014 will see an increase on the previous year. Tourism income brings in around €2.0 Billion per year.


Cyprus is still seen an an ideal location for those who are seeking to purchase a holiday home or retirement or investment property. 

12 August 2014

Ukraine - Could it get any worse?

It would be fair to say the business environment in Ukraine is well and truly ****ed.

Even before the Russians started trying to dismember parts of Ukraine the country was in a mess.
Unemployment is high. Inflation is out of control.
Public finances are in a mess. Although we now know that Yanukovych stole billions, it is doubtful if any of the stolen money, even when found will find its way back to Ukraine.
The government is in a mess. The public sector remains part of the old soviet system of doing things, or usually the system of not doing anything. Always easier to say NO just in case.
The parliament is still made up of members from the old regime and old way of doing things for their own personal gain. God forbid they would think about doing anything for the people of the country.

Businesses are not doing much and their employees are going unpaid for many months.

Oh...and the currency has gone into steep decline.  So, not a good environment for doing business in Ukraine.

The level of corruption is probably a little less than what it was under the old regime. We hope.
Many commentators claim that the black economy in Ukraine is over 60 percent.
There is still a massive hole in the country's tax collection. The road to recovery is going to be a long way.

23 July 2014

Ukraine is at war with Russia

On 17 July 2014 in Ukraine an horrendous event showed how 'terrorists' could murder 298 innocent people.
Malaysian Airlines flight MH17 flying from Amsterdam in The Netherlands to Kuala Lumpur in Malaysia was shot down from 33000 feet by a surface to air missile. The missile was launched by terrorists operating inside eastern Ukraine. The terrorists are Russian citizens.

These terrorists receive all their equipment and support from the Russian Federation. Nearly all the terrorists are serving or former members of the Russian FSB, GRU or any number of so called 'elite' units from Russia. The thing they all have in common is that they enjoy killing people.

It is impossible to compare these terrorists to what we normally assume to be terrorists in other parts of the world. They are not like the PIRA in Northern Ireland. These terrorists are equipped with TANKS, HEAVY ARTILLERY, SAM SYSTEMS and other sophisticated military equipment. They are supplied by Russia with everything they need. They are allowed to pass freely across the border between Russia and Ukraine as Russia controls many of the crossing points.

So, it is obvious that we should not be referring to these people as terrorists any longer. They are RUSSIAN citizens. Therefore they are acting on behalf of the Russian Federation.

Russia has declared war on Ukraine but has never made any pubic statement to this effect.

14 July 2014

Ukraine needs to stop ACTING like a Rich Country

Many, if not all people who visit Ukraine for the first time arrive in Kyiv. One of the big surprises for them is when they discover the high prices on the Ukraine residential property market. The overall market has not picked up since the crisis of 2009 but prices are still in what I call the ‘crazy category’

Why should property in Ukraine be more expensive than the following countries in the EU? :
Malta, Slovenia, Romania, Cyprus, Latvia, Estonia, Croatia, Lithuania, Hungary, Portugal and Bulgaria
So we can say that Ukraine is more expensive than 12 EU countries.

What is so special about Ukraine? Some locals will claim that it is due to the demand of not enough housing stock in the first place and people just want to have their own place to live and are prepared to do anything to have their own place of residence. Some property developers would claim it is just a simple of case of supply and demand.

Since the financial crisis and the on-going problems with the economy and political unrest in the country, prices have still not reduced.
Moreover, there is a major difference in how new properties are sold in Ukraine. They are not really finished when they are sold although the developer will be doing no further work after you have paid. Why? – Well in Ukraine the normal practice is to sell property in the ‘core and shell’ state. Which means the property is a bare shell, no windows, (but maybe sometimes), no doors, no plaster on the walls, no floors, no ceilings just a brick shell with water and electricity and sometimes gas supplied. The rest is up to you. The ‘rest’ will probably cost the same if not more than the sales prices to fully complete the property ready for living.

Can you imagine an EU citizen buying a property in Malta or Cyprus or Portugal which had been completed to a state where it cannot be used for living?

The secondary market (used market) is a little easier as the buyer would be able to move in without too much extra expense?  But, most of the property stock in Ukraine is still made up of apartment buildings constructed during Soviet Union times. Buy WHY should an old place be so expensive? Here is one example chosen at random. A 2 bedroom apartment in Kyiv, 75 SQM in an old building. The asking price is a crazy $210,000 - http://www.apartments.kiev.ua/sale/kh3v37s.htm

It is any wonder that so many Ukrainian people get the surprise of their lives when they visit EU countries for the first time and see things are much better and lower priced that back home.
Is it any wonder they want to leave Ukraine?

Ukraine is a poor country yet it continues to act like it is for rich people only. Things need to change.

The British have invaded The Netherlands - So what?

A few months ago President Putin ordered the invasion of Crimea.
Crimea is part of Ukraine. Putin now claims that Crimea is a part of the Russian Federation.
Russians continue to invade eastern Ukraine and kill Ukrainians on an almost daily basis.

Despite the on going weak threats from western leaders about sanctions against Russia, nothing
appears to deter Putin from doing exactly what he wants. Ukrainian people still fear that Russia
will invade the whole of Ukraine.

Yesterday Putin attended the world cup final in Brazil. He was greeted by fellow criminal
Mr Sepp Blatter, President of FIFA and German Chancellor Angela Merkel.
The world cup will take place in Russia in 2018......maybe.

A few days ago Angela Merkel announced that Germany had deported a US Intelligence operative
from Berlin after it was alleged the 'spy' had been monitoring German activities.
Moreover, Putin continues to demand peace in Ukraine and will do ''all he can to help in the
peace process.''

Also yesterday Russian tanks and other military vehicles and soldiers entered eastern Ukraine.
No doubt Putin will quickly deny that they are Russians.

So......I wonder. Let's say that the British had invaded The Netherlands a few months back.
The British government had then declared that The Netherlands were now part of the United Kingdom.
The British army special services were continuing to kill Dutch people on a daily basis.
David Cameron declared that ''They are not British soldiers but Dutch activists responsible for this.''

Would David Cameron have got the same welcome in Brazil?

12 July 2014

Ukraine Economy - Very Bad

During the past few weeks I have come to the conclusion that the economic situation in Ukraine is BAD....VERY BAD.  It is always difficult to find out what is really going on in Ukraine because people are reluctant to tell the truth.  Perhaps now is the time for Ukrainians to admit that the situation is worse than most people realise.

The time has come for Ukraine to stop 'acting' like a rich country. Why do I say this? Well take a look at the price of property for sale in Kyiv for example or the price of Motor Vehicles.  The price of property is way beyond prices in EU countries plus I'm sure most people already know that buying a car in Ukraine is one of the most expensive markets in Europe.

There is far too much ‘acting’ still going on in Ukraine. If you have ever visited a typical Ukraine company HQ office you find the very best quality usually Italian designed furniture, drinks cabinet, floors, reception etc.  The whole place shows luxury at the so called VIP standard.       (I admit it is not always the same outside Kyiv). I have visted many during the past years.  They want to create the illusion that they are a very successful organisation and they assume that this is the only reason you will want to do business with them. As we say back in the UK, ‘’It’s all smoke and mirrors.’’ Just a trick. But more accurately I call it acting. Why? Well because you will also find the same company with the luxury show off office has not paid its employees for many months as it will have informed them that ‘due to the crisis’, we have no money for salaries.

I remember when we opened our first office in Kyiv and wanted to buy some office furniture. Each furniture retailer we talked to assumed that because we are a ‘foreign business’ we would be spending a lot on buying the very best/most expensive furniture. I remember our secretary at the time being very disappointed that we had not purchased the best Italian furniture instead of the boxed standard IKEA style furniture we did buy and still have today. I admit that in British culture a business never wants to show that it has wasted money in buying ‘fancy furniture’ for its first office or any office. It is the opposite in Ukraine culture.

The same applies to motor vehicles. In Kyiv you will still see some of the most expensive cars on the streets everyday. Black coloured top of the range Toyota Land Cruisers, Range Rovers, Porsche Cayenne, Mercedes Benz ‘S’ class are everywhere driven by so called ‘Successful Businessmen’. But yet again it is all part of the acting.

In 'normal' countries when in a crisis the prices of most things stay the same or usually come down significantly.  We know that many people in Ukraine own their own properties without any mortgage and they are lucky when compared to the people in Western Europe.  But I can assure you these people in the west would never pay the prices in Ukraine. Moreover banks in Ukraine are not so ready to provide mortgages these days.

The following countries offer LOWER property prices than in Ukraine.
Hungary, Portugal, Bulgaria, Cyprus, Lithuania, Croatia, Estonia, Latvia, Romania, Slovenia, Malta, Slovak Republic. This applies to both sales prices and rental prices.

In my opinion it would be better for Ukraine to face the truth and downscale.
Prices need to come down significantly before we see any signs of a recovery in the economy.
And stop all the acting. Get real.

10 July 2014

EU Residency Programme via Business Investment -2014

The BBCU has launched a special project to help Ukraine citizens to acquire residency status in a mainland EU country during 2014. Ukraine citizens are required to invest in an EU based business that has been approved by government.

The investment leads to:
1. Automatic provision of a 5-Year EU Temporary Residents Permit
2. Spouse and young family members included
3. Followed by a 5-Year EU Permanent Residents Permit

Minimum investment including all government fees and lawyer’s fees is just
EUR 49,875.
Property purchase is NOT required.

Only citizens of Ukraine may apply.

Further details: Tel: +380 67 444 1381
Email: gerald.bowers@bbcu.com.ua