Introduction
An Investment Fund can be defined as a collective investment undertaking raising external capital from a number of investors with a view and purpose of investing it in accordance with a defined investment policy for the benefit of those investors.
Procedure
- Initially the establishment and incorporation of a Cyprus company is required in order to obtain authorization by the Cyprus Securities and Exchange Commission (“CySEC”), being the sole competent supervisory authority and Regulator in respect of Financial Entities including, but not limited to Alternative Investment Fund Manager (“AIFM”), Alternative Investment Funds (“AIFs”), Registered Alternative Investment Funds (“RAIFs”) and Alternative Investment Fund for Limited Number of Persons (“AIFLNP”) etc.
- Thereafter, the application form accompanied with the required supporting documents, for the obtainment of the mandatory license, is submitted for the consideration and approval of CySEC – the Regulator.
Timeframe
- It is important to note that, a complete and adequate submission of an application, can take from 6 (Six) to 8 (Eight) months to be approved.
- In the case of a RAIF, due to the obligatory requirement to appoint and External Manager which is an AIFM, the authorisation and obtainment of license by the Regulator is not required, apart from the fact that the External Fund Manager is required to notify the CySEC to register the new RAIF on their special RAIF Register.
- CySEC is expected to register the new RAIF on its special RAIF Register within 1 month upon the initial notification.
Conclusion
- CySEC being the sole Regulator and Supervising Authority for all the aforementioned Financial Entities, reflects the solid international presence of Cyprus as a reliable and safe European Investment Hub, promoting the consistent and fair supervision of all Cyprus investment entities with the ultimate purpose being the protection of the investors.
- Τhe most sought after Cypriot Investment Fund structures are initially the Alternative Investment Funds (AIFs) either externally or internally managed and the Registered Alternative Investment Funds (RAIFs).
Our Firm can advise you further, not only on how to setup your Investment Fund, but how-to setup the structure of your Investment Fund as well, to reflect sufficiently your type of investments and optimize the appropriate results.
Why Operate in Cyprus
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Access to the EU and High Growth Markets;
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- Geostrategic position between three continents
- Easy access to major markets
- Comprehensive access to the European Single Market
- Over 40 European Union Trade Agreements
- 65 double tax treaties (“DTT”)
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Excellent regulatory framework;
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- Strictly aligned to the English common law legal system
- In Compliance with EU and international laws and regulations
- Frequently updated to adopt investors’ changing needs
- Firm protection for investment & intellectual property
- Advanced legislative framework for Investment Funds
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Excellent business support and network of financial and professional services
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High Quality workforce;
- Highly skilled professionals
- Multilingual workforce
- Highest EU tertiary education attainment
- International business experience
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Low cost of conducting business;
- Labour costs
- Property costs
- Business services
- Living expenses
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Ideal Economic Sectors;
- Hospitality & Tourism
- International Shipping Centre
- Real Estate
- Energy
- Higher Education and Research
- Film Production
- Innovation and Startups
- Investment Funds
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High quality of life;
- Natural Beauty
- Safety
- Lifestyle
- Culture and History
- Education
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An attractive investment climate;
- Corporate Tax Rate at 12.5%
- Dividend Income Exemption
- No withholding taxes on interest & royalties
- No tax on profits from disposal of securities
- No tax on capital gains under conditions
- Notional Interest Deduction (NID) on equity investment into Cypriot companies
- Tailor made provisions for the investment funds industry
- Favorable IP Regime