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Investment Funds in Cyprus
Cyprus is ideal to diversify your investment funds. Different kinds of investors can have a great place to operate their business with fewer worries. Cyprus has unlocked doors of opportunities for business persons by transforming the country from a debt-driven economy into an investment-driven nation. Different types of investments that are carried out in this country include renewable energy, real estate, gas, oil, shipping, infrastructure and many more.
If you are interested in starting an investment fund in this country, Cyprus provides a combination of effective flexibility and favourable regulations.
Top Eight Benefits of Investing your Funds in Cyprus
-Cyprus is a member of the European Union which complies with the European Union legislation.
-The country has a great and OECD permitted tax regime.
-Cyprus is in a good geographical location which allows fast transport between Africa, Europe, Asia, and the Middle East.
-The nation has expert legal and financial service providers.
-Cyprus has the ease and efficiency to transact any business internationally.
-Any investment can be recorded on any approved European Union stock exchange.
-Cyprus has tax incentives given to high earning managing directors and employees.
-Efficient banking services offered.
Types of Investment Funds in Cyprus
1. Alternative Investment Funds (AIF)
Alternative Investment Funds are funds that are registered under the
Alternative Investment Funds Law of 2018 L.124(I) of 2018 (the ‘ AIF’ Law) of Cyprus. These kinds of funds include real estate funds, hedge funds, private equity funds, and venture capital.
Alternative Investment Funds of Cyprus are more accessible and flexible for private investors or small groups of people. The least amount paid of Cyprus Alternative Investment Funds is EUR125k.
Key Features of AIF
-Simple to create, cost-efficient, and easy to manage.
-Alternative Investment Funds have a great regulatory framework connected with European Union directives.
-It has increased flexibility.
-Alternative Investment Funds has significant tax incentives.
-Transparency through audited reports.
-AIF is regulated by the Cyprus Securities and Exchange Commission (CySEC)
2. Registered Alternative Investment Funds (RAIF)
Registered Alternative Investment Funds are new funds and are aimed at the professional and well-informed investors only providing a swift and efficient fund launch. A RAIF is a special type of an AIF that is not be subject to authorisation from CySEC, but it is regulated through its manager who should always be a licensed AIFM.
Key features of RAIF
-No license is required
-No minimum capital requirement
-No restrictions of investment
-A couple of compartments available
-The funds can operate as close or open-ended
-Approved to choose a local depository
-Targeted to the professional investors or well-informed investors
Collective Investments in Transferable Securities (UCITS)
UCITS Funds are collective investment portfolios that invest in transferable securities and / or other liquid financial instruments, which operate on the principle of risk – spreading.
UCITS are established and authorized under a harmonized EU legal framework.
UCITS Mutual Funds are internationally considered as one of the most effective asset management tools available, due to their low investment risk and high level of investor protection.
A UCITS fund may be set up in one of the following legal forms:
-Common fund (CF)
-Variable capital investment company (VCIC).
The main benefits of UCITS Funds are:
-Professional wealth management
-Institutional security / High protection
-Access to international markets (money and capital markets)
-Wide range of options to cover all investor profiles
-Risk reduction through investment diversification
-Comparatively low costs
-Full transparency of information / Daily publication of M/F prices
-Possibility to set-up umbrella funds, allowing different sub-funds and share classes
Cyprus Investment Funds Association (CIFA)
The Cyprus Investment Funds Association (CIFA) is made up of organizations, businesses, and professionals providing services. This association is involved in the matters of investment of funds in Cyprus. The Cyprus Investment Funds Association (CIFA) was formed in February 2013 to create awareness of what this nation has to provide among international investors, administrators, and managers.
The association aims to enhance the high level of professionalism of the investment funds in Cyprus. The main objective of the Association is to capitalize on investment trends, enhance quality, integrity, and professionalism among investors in the framework that attracts local and international business people to invest in the country.
The Securities Market Regulator in Cyprus
The Cyprus Securities and Exchange Commission (CySEC) is an independent authority responsible for the supervision in the investment market. All transactions are carried out under the control of this supervisory authority. The Cyprus Securities manages the firms providing administrative services that are not categorized under the supervision of the Cyprus Bar Association. The main goal of the securities market regulator in Cyprus is to exercise the right supervision that ensures investor protection and the smooth development of the financial industry. The securities market regulator in Cyprus fights cybercrimes and makes the country be most attractive, safest, and reliable destinations for local and global investors.
Factors that have Lead Cyprus to be a Hotspot Investment Center in Europe
-There has been a collaborative effort to both the promoters of industry and the judiciary which implement the law in the country. Ministry of Finance, CySEC, Cyprus Investment Promotion Agency (CIPA), and Cyprus Investment Funds Association (CIFA) always work in great coordination.
-CIPA, and CIFA undertake a batch of road shows that have assisted the growth of Cyprus Investment Funds. Even during the coronavirus pandemic, managers and chief executives of different companies have carried out digital conferences which skyrocket the growth of companies and factories.
-Cyprus has laid a solid foundation for the growth of investment funds with an excellent and strong legal framework that attracts local and international business people to invest in the country.
Cyprus Post-Brexit Opportunities
Cyprus is a close partner for the United Kingdom. This nation shares a long history and outstanding business and bilateral relations, with the added advantage of Cyprus legal framework being written in English Common law.
The reformed Cyprus sector can provide essential support for UK based investment managers and funds when the United Kingdom left the European Union. Cyprus can provide United Kingdom firms with the accessibility to uphold business operations.
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