A new flexible regime to rival other onshore or offshore funds jurisdictions
Cyprus is now combining its proven tax efficient regime with the required infrastructure for the fund management industry to create a new dynamic and competitive European hub for fund management and administration. With the enactment of the Alternative Investment Funds Law 124(I)/2018 (the “AIF Law”) in July 2018, it now offers a modern and flexible legislative framework to all Alternative Investment Funds (AIF) types within the European AIFM Directive (AIFMD) enabling EU Passporting for AIF’s.
The AIF Law of 2018, has introduced the Registered Alternative Investment Funds (RAIFs) regime and in addition fine-tuned the existing types of AIFs, including the AIFs with Unlimited Number of Persons (AIF) and the AIFs with Limited Number of Persons (AIFLNP).
The regime is combined with the half century international business experience of professionals in Cyprus, the UK based legal system, the low cost and a business-friendly government to create one of the most prominent offerings in the Funds Industry.
Cyprus aims to develop a world class fund sector and mark its position as a growing domicile for investment funds and asset management. The continuous upgrading of the legal framework is expected to raise investors’ confidence in the jurisdiction. For this year two new legislative initiatives are expected to pass into law, for the regulation of Fund Administration and the introduction of the Mini Manager.
Furthermore, the country’s attractive fiscal framework, English-speaking workforce and its competitive operating environment, will likely increase the island’s ranking as a domicile and servicing centre for both Alternative Funds and UCITS. The fact that fund managers are increasingly moving to Cyprus demonstrates the rapid development of the funds sector, attracting additional investments for the Cyprus economy.
| Cyprus Fund Domicile Benefits | |
|---|---|
| EU member state compliant with EU laws and regulations | Eurozone member |
| Strategic geographical location between Europe, Middle East, Asia and Africa | Mature business centre with highly qualified professionals and sophisticated infrastructure |
| Extensive range of excellent legal and accounting services | Cost-effective setting-up and on-going operational services |
| Favourable EU and OECD-approved tax regime | Access to an extensive network of double tax treaties allowing for tax efficient structuring of investments |
| Efficient and up-to-date regulation, fully harmonised with related EU Directives | Investment Funds may be listed on the Cyprus Stock Exchange and other recognised EU stock exchanges |
| Cyprus-based funds and asset managers benefit from low tax burdens levied on Cyprus-based corporations | Incentives and tax benefits for high-earning managers and high-net-worth individual |
For more information check Alternative Funds (AIF) or contact Michael O. Ioannides.
