Cyprus a well regulated EU member state, combines tax efficient features of a modern financial centre with the necessary infrastructure for the fund’s industry. It offers the full spectrum of legislative framework to all fund products (UCITS and non UCITS) and provides fund managers to structure as Alternative Investment Fund Managers as presented in the relevant EU Directive or a MiFID compliant Investment Firm, both offering EU passporting ability.
It has an abundance of experienced lawyers, accountants, custodians, fund administrators and fund managers. Cyprus has a UK based legal system, independent judiciary, a friendly business environment and a high quality lifestyle.
Cyprus has a low cost base, efficient and investor friendly government authorities with minimal red tape.
All the above make Cyprus an attractive jurisdiction for the setting up of an Alternative Investment Fund.
Why an Alternative Investment Fund (AIF) in Cyprus?
The Law provides for two types of Alternative Investment Funds (AIFs), namely AIFs without limitations as to the number of investors and AIFs with limited number of persons. The choice of an AIF has a number of significant advantages:
- no restrictions are imposed by the Regulator regarding the type of investments;
- the application process is fairly simple and not particularly time consuming;
- subject to the approval of the Regulator, the AIFs can be self-managed;
- AIFs can be set-up as umbrella funds with multiple compartments, allowing the management of different asset pools with separate investment policies;
- AIFs without limitations as to the number of investors can be listed on Cyprus Stock Exchange and other recognized EU stock exchanges;
- no withholding tax on dividend distributions and no taxation of capital gains;
- the services provided by the Investment Manager of the fund are not subject to VAT;
- the ‘‘Company’’ legal form of an AIF can take advantage of the double tax treaty network of Cyprus;
- no onerous on-going reporting requirements to the Regulator;
- low set up and maintenance costs.
AIFs Main Features
AIFs with limited number of investors
|Investment Manager||Can be self-managed (in the case of a company) or appoint a fund manager (CIF, AIFM)||Can be self-managed (in the case of a company) or appoint a fund manager (CIF, AIFM)|
|Custodian||Can be in the EU or in a third country||If total assets of the fund are less than €5 mil or the fund has up to 5 investors, then the requirement to appoint a custodian may be waived|
|Restrictions||Certain investment restrictions may be imposed depending on the investor type and the overall investment policy||
Licensing application to the Regulator
Choosing the right form of your AIF:
We examine the alternative forms that the fund can take so that it meets your requirements.
Preparation of the application package:
We can prepare the full application package that needs to be submitted to the Regulator. During this process, our experienced team will advise you on how better to structure your operations and will assist with the preparation of all the necessary documents to be included in the application package.
Follow-up of the processing of the application:
We can assist you in replying to any queries or providing additional clarifications as requested by the Cyprus Securities and Exchange Commission during their examination of the application.
Direct and Indirect Tax services
We provide a comprehensive set of Direct and Indirect Tax compliance and advisory services. This ensures that the fund is set up in a tax efficient manner and is compliant with all tax requirements in Cyprus and abroad. Our services cover both corporate and individual taxes.
Incorporation of the entity:
We provide assistance and support with the incorporation of the entity to be licensed as an AIF, including the drafting of the constitutional documents.
On-going legal support:
We provide legal support both during the fund’s application process and operation (e.g. preparation of agreements).
Provision of on-going administration services:
We have developed systems and procedures to ensure that our fund administration is executed in an efficient and cost effective manner.
Our related services include:
- Fund Accounting, Management Reporting and Net Asset Valuations including preparation of financial statements in accordance with International Financial Reporting Standards, cash management, etc.
- Unit holder Dealing and Registration including processing share transfers, subscriptions and redemptions, ensuring the fund is administered within the terms of the offering memorandum and Cyprus Securities and Exchange Commission requirements.
- Compliance and Regulatory reporting.
- Statutory and Secretarial Services, including provision of statutory secretary, completion of statutory returns, etc.
Annual audit and interim reviews:
We provide on-going services with respect to annual statutory audit of the IFRS financial statements as well as interim review, should you wish to prepare interim financial statements on a quarterly and half yearly basis.
Our firm has engaged a multi-disciplinary team of specialists who can assist you in all aspects of setting up an AIF, the licensing process and the on-going maintenance of the Fund.
Our dedicated Financial Services team, duly licensed by the Cyprus Securities and Exchange Commission (CySEC) has a wide and in-depth knowledge of the local Laws and requirements and, coupled with their international Financial Services experience, can assist you with any challenges you face in setting up and maintaining an AIF and obtaining the relevant licenses.
Our tax experts have extensive experience in advising on tax planning and international tax structuring and can support you in such matters when setting up the AIF.