Cyprus is becoming one of the top emerging investment fund centers in Europe, offering unique access to high-growth markets. Determined to stay at the forefront of industry developments and continuously upgrading its legislative and regulatory regime, Cyprus has developed into a key regional domicile for setting up investment funds and establishing asset management companies for pan-European reach, offering investors a unique set of competitive advantages.
The last years, Cyprus had a steady fund registration flow, a testament to the important incentives and stability that the island’s economy provides to international funds. In addition, many professionals have created a support network around the registration and facilitation of investment funds and are greatly benefited from the newly submitted bills for legislation reforms in order to attract even more funds.
The Cyprus Investment Funds Association (CIFA) and CySEC (Cyprus Security Exchange Committee) as well as the Ministry of Finance have worked closely the past few months in order to lay the foundation that will enhance Cyprus’ presence as an attractive destination for international Investment Funds.
The House of Representatives has given in the last years positive votes for some important legislation updates:
- Change on current legislation regarding Alternative Investment Funds to expedite the process. The new format will be called Registered Alternative Investment Fund and will resemble practices used by Malta and Luxembourg.
- Changes on taxation.
- Changes on fund administration by adding extra security measures and safeguarding investors.
- Introducing Mini Managers, for minima range funds.
- Introducing the Partnerships aspect, resembling very common and successful practices from other investment funds destinations.
The final layout of the changes goes as follows:
- The newly founded RAIFs will not be monitored by CySEC but will be under the surveillance of their registered and vetted Fund Manager
- AIF’s initial capital will differentiate from the current status. Read more.
- The appointment of a custodian depending on the fund structure
- The management assignment depended on fund structure
- The AIF establishment as a limited partnership with or without a legal entity
- The establishment of a variable capital investment company according to the Department of the Registrar of companies