The International Collective Investment Schemes Law (No. 47(I) of 1999) (“the Law”) came into force in May 1999. The Central Bank of Cyprus (“the Bank”) has been designated under the Law as the competent authority with the responsibility for the recognition, regulation and supervision of ICISs. The Bank is also the supervisory authority for the managers and trustees of ICISs.

Under this Law, the Bank may issue regulations covering investment restrictions, directions and codes of conduct for ICISs, managers and trustees. 

The Cyprus Companies Law and the Partnership and Business Names Law, are applicable to ICIS, except for those sections, which are specifically disapplied by the Law. The International Trusts Law is applicable to ICIS to its totality. 
Legal form of ICISs An ICIS can take one of the following legal forms: 

• International Fixed Capital Company; 
• International Variable Capital Company; 

(The above two are known as “international investment company”) 

• International Unit Trust Scheme; 
• International Investment Limited Partnership. 

The sole object of an ICIS must be the collective investment of funds of unitholders. The units issued by an ICIS must be, at the option of unitholders redeemed or repurchased directly out of the assets of the ICIS (unless provided otherwise by the Law or any other law applicable thereto). 
Type of ICIS Upon application to the Bank and having regard to the investment policy and the particular investment objectives of the applicant, an ICIS may be designated as: 

• an ICIS marketed to the general public; or 
• an ICIS marketed solely to experienced investors; or 
• a private international collective investment scheme. 

Managers of International Collective Investment Schemes 
All ICISs, unless specifically exempted by the Bank or unless they are designated as private international collective investment schemes, must appoint a manager who must be approved by the Bank. 

No appointment shall be made to the office of the director of a manager without the prior approval of the Bank. 

A manager must have a place of business in the Republic, from where to conduct its business. This requirement will only be waived by the Bank in exceptional cases. 

If the manager delegates any of its functions to third parties (delegates), the principles which govern eligibility and conduct of the manager, apply also to such delegates. Further, any person to whom functions or duties have been delegated shall be subject to the provisions of the Law and the administrative acts issued under the Law in performing such functions or duties as if it was a manager. 

Trustees of ICIS 

All ICISs, unless specifically exempted by the Bank or unless designated as private international collective investment schemes, must appoint a trustee to hold the assets of the scheme. 

A trustee must have a place of business in the Republic, from where to conduct its business, unless such requirement is specifically waived by the Bank. 

A trustee must act independently of the manager and must always act in the best interest of unitholders. 

Regulations for ICIS, their managers and trustees

Every scheme which is recognised by the Bank as an ICIS will be issued with a certificate of recognition. Conditions may be attached to an ICIS’s recognition, which will vary, depending on the particular investment objectives and policy of each scheme. In addition, conditions may be imposed by the Bank regarding the activities of a manager or trustee of an ICIS. 

Publication of annual and half-yearly reports 

Every ICIS must prepare an annual and a half yearly report, which must be sent to the Bank and the unitholders. 

The financial accounts of the ICIS must form an integral part of the annual and the half-yearly report. 

Auditors of ICISs 

Every scheme is required to appoint an auditor who shall audit the information given in the scheme’s annual report in accordance with International Auditing Standards and who shall prepare a relevant report which shall be reproduced in its entirety in the annual report of the scheme. 

Additionally, the auditor of a scheme must undertake to report to the Bank annually and in writing whether in his opinion and to the best of his knowledge the scheme has complied with its obligations under the Law or any administrative act issued under the Law. 

Keeping of books and records 

The ICIS, the manager and trustee must keep proper books of account, so as to clearly indicate all sums of money received and expended. Such proper books of account shall be kept as is necessary to give a true and fair view of the state of the affairs of the ICIS, its manager and trustee and to explain their transactions for the period. 

Asset valuation and pricing It is a fundamental principle that the price of units of an ICIS be based on the net asset value of the ICIS which must be determined on a regular basis in accordance with international accounting practices. 

An ICIS must sell, redeem or repurchase its units at the request of unitholders, in accordance with its constitutional documentation. Units may not be issued as partly paid and may not be sold unless the equivalent of the net issue price is paid. Applications for a recognition as an ICIS. 
Application for the Recognition of ICIS The application for the recognition as an ICIS is mainly two stage procedure: 

Stage 1: Preliminary Views 

The first stage is to submit a business plan and the required information to the Bank for a preliminary view. This stage includes extensive consultation with the Bank on client’s behalf. 

Stage 2: Final Application Submission 

Once the Bank’s preliminary views and comments have been received, then a final application shall be prepared and submitted. 

Here, at LLPO Law Firm, we are usually humble! Sometimes we get proud. We get proud when we win a “lost case” or when we help the “underdog corporate” ride a market wave. We also get proud when we nurture an against-the-odds start-up to get to commercialisation.Today we are proud because one of our nurtured start ups is commercialising and getting ready to revolutionise the way we interact with the world around us.

Yes… I know, big words and better they mean something… but this is it Maglid aka “Magic Lid“. One handed… self actuating… self closing…Officially Maglid is patented in 72 jurisdictions, after 5 years of research and development, complex legal work and over Euro 2.000.000 of investment. The result… a hard core engineering invention… maybe one of a scale never seen before developed in our small island. Catch a glimpse in the future of closures!!!

As we all know inventions need practical applications and commercialisation to become useful tools in our everyday lives. The first of such applications is launching now… in the form of a house-ware consumer product. 

Teio Solo is a tea storage container with ambitions to solve all the problems involved in storing tea leafs. Explore Teio Solo website and the video below.

The usual question I am asked when I show-case this Company, is whether the people involved are Cypriots. Well… yes! This is a 100% Cypriot Company with 100% Cypriots being involved. The real aspirations of the company are lying with market penetration internationally but I guess we get to try the innovation first with world wide launch from Cyprus.   

Who said that there is no innovation in Cyprus? We are indeed proud!

Teio Solo has recently enrolled in INDEX AWARDS competition and needs the support of everyone!

Cyprus property market is picking up with a 67% growth year to year. In accordance to Land Registry statistics the numbers are not really huge but the rates are and it seems that the real estate market is kick starting. The growth rates per district are the following:

• Nicosia (Capital): 131%;
• Limassol: 4%;
• Larnaca: 50%;
• Paphos: 67%;
• Famagusta: 48%

It seems that the growth is caused by international demand, sales and property registrations. This clearly indicates that the new Permanent Residence Permit regime via property investment is paying off. In 2012 there were 15 PRPs granted to third party nationals investing in property. Another 600 PRP applications from third party investors are under consideration and expected to be granted soon. This is a clear indication that 600 properties are sold (but not yet registered to the investors) which clearly sets the stage for more growth for Cyprus’ real estate industry in 2013.

Cyprus has recently enacted a regulation allowing for a permanent residence permit via property investment. The regulation provides for the grant of a Cyprus permanent residence permit if the candidate purchases a privately-owned residence for self-occupancy in Cyprus, with a value of not less than €300.000.

Main Conditions
The applicant must prove that he has at his disposal a secured minimum annual income of €30.000, from sources other than employment in Cyprus. The required income of €30.000 could derive from salaries of employment abroad and not in Cyprus, pensions, stock shares, rents, etc. The necessary minimum annual income is increased by €5.000 for each dependent person applying for permit.

The applicant must purchase a private house for his/her own residence in Cyprus with a value of not less than €300,000 and must have proof of payment/pre-payment of at least €200,000.

Visits Requirement
The applicants should visit Cyprus at least once every two years, otherwise he/she will automatically lose his/her status as a permanent resident in Cyprus.

Required Documentation
If the applicant satisfies the pre-conditions above, then an application for permanent residence can be submitted. The required documentation for such application is the following:

1. Title of ownership or contract of sale, of a property in Cyprus, a house, apartment or other building. The contract of sale should already have been submitted to the Department of Lands and Surveys;
2. Proof of payment of at least €200,000;
3. Confirmation letter from a Cyprus Bank stating that the applicant has deposited a minimum capital of €30.000 in an account, which will be blocked for at least three years;
4. A document proving the income of the applicant including pension, retirement income, salaries or dividends;
5. Criminal Record Certificate which must be issued by the Authorities in the applicant’s country of origin; 
6. Statement from the applicant stating that he/she does not intent to work or be engaged in any form of business in Cyprus;
7. Certificate of health insurance in Cyprus;
8. Marriage certificate (if spouse is included in the application);
9. In the event permanent residence is applied for children, birth certificates are required;
10. Copy of valid passport (certified from country of origin);
11. Letter of guarantee obtained from a bank in Cyprus (€850);
12. CV of the applicant;
13. Application Procedure

The application should be submitted to the Civil Registry and Migration Department personally or through a representative.

The application is examined by the Civil Registry and Migration Department and is submitted to the Minister of the Interior, for a decision. For the purposes of the specific type of immigration permit, no personal interviews are necessary.

Then the Ministry of the Interior will inform the applicant or the representative of the applicant and the Civil Registry and Migration Department, about the decision of the Minister of the Interior. 

The normal time for a Permanent Permit of this kind requires 1-2 months, however the applicants are granted temporary residence permits from the outset of the procedure.

When it comes to law and regulation the common belief is that strict regulation (sometimes a full ban) yields better results. Such a popular belief is transposed in many restrictive laws in Cyprus like gaming bans, drugs bans and firearms strict regulation. One of such beliefs which is also relevant to the recent mind-numbing killings in the US, is that a complete ban on private possession of firearms may end this vicious circle of crimes. Well the belief, although popular, is wrong. The facts and numbers are different. 

There is absolutely no correlation between firearms and homicides as the following chart suggests:

For instance, in El Salvador, gun possession is just under 8% and homicides per annum are close to 0,07% of the population, whereas in Switzerland, gun possession is just under 50% but homicides per annum are much lower close to 0.001%.

In a similar chart, based on statistics from developed countries, the results are confirmed.

It is clear that the popular belief that restricting firearms possession will make crime go away, is not valid. This outright dismissal of the that belief however, raises a clear question. What is the driver  for gun related homicides?I believe, deep down, we all know the cause of violent crime in our society but we choose to hide it behind easily digested restrictions, because it is quite challenging to handle and tackle the real issue.  Society can only become better with education, prosperity and health. Simply put, higher human development lowers crime. The chart below shows high negative correlation between homicides and the Human Development Index (HDI), which is a composite index for education, prosperity and health.

Although other, more specific causes may exist in particular societies, like inequality, poverty or tradition, low human development is clearly the main cause.

When it comes to law and regulation, we should be very cautious and aware of democracy’s inherent defect. Dismissing reality and numbers in favour of “popular beliefs” or as democracy defines it “popular vote”, is a mistake. I am not dismissing popular vote, however popular beliefs should be based on numbers and reality, not instinct and misinformation. Hiding a problem behind a misguided and uneducated popular belief, just to enact an easily digested restriction, is only worsening people’s quality of life and lowering their chances of further development. In simple terms, over regulation with no real effect becomes a self fulfilling prophesy of even more evils.

In Cyprus we have many examples of this approach.

The inability of regulators in Cyprus, to understand, control and regulate drug-use together with the uneducated resistance to face the reality on legalising drags, serves only the outlaws and punishes the victims. Decent people, victims of drug addiction, are dragged to court everyday and forced to turn to the outlaws for their fix.

The inability of regulators in Cyprus to keep up with information technology, control and regulate gaming properly, led to the recent complete ban on gaming. Besides the tax benefits the society looses, the ban now forces decent people to resort to an outlaw gaming community and the turkish and turkish – cypriot casinos.

On gun crimes the real numbers are daunting and alerting for yet another field regulators in Cyprus are unable to do something right. The chart below shows the reality, with Cyprus ranking the worst in annual gun related crimes in Europe.

The recent 5-victims mob-like killing in Ayia Napa, earlier this year, was a loud warning of a problem getting out of control.

The complete ban and strict restrictions in bearing firearms is not working. The abolition of the “special policeman” regime in 2002 and the collection of all firearms from the ones in need of protection, is certainly giving the upper hand to outlaws, having unregistered – illegal guns in their possession. Maybe giving such an advantage to the perpetrator, is not the best way to go about. 

Maybe it’s time for Cyprus regulators to face the reality, instead of being misguided by popular belief. Gun possession is not correlated to gun homicides. Registered firearms don’t kill. Registered firearms in the hands of a victim, deter the prospective offender. Registered firearms give fair chance to the victim to protect his/her life.