Why create an alternative investment fund in Cyprus?

Cyprus' economic stability combined with the harmonization of Cypriot legislation with EU directives has led to the emergence of Cyprus as an attractive jurisdiction for the setting up Alternative Investment Funds (AIFs).  

Cypriot AIFs are particularly attractive due to: 

  • The strategic location of the island and its legal infrastructure 
  • The availability of experienced fund administrators and managers, custodians, accountants and lawyers. 
  • Low set-up and maintenance costs 
The AIFs law enacted in June 2014 opened up the market for the registration and operation of new flexible and innovative types of alternative funds, fully compliant with EU legislation.

The law also expanded the possible legal forms of funds that may now take the form of common funds (where investors participate as co-owners of assets), variable capital companies, fixed capital companies, or limited partnerships. 

The law also introduced umbrella funds with segregated investment compartments, funds marketed to professional or retail investors, as well as funds with a limited or unlimited number of participants.

AIFs are investment funds that are not covered by the 'European directive on undertakings for collective investment in transferable securities' (UCITS). This can include hedge funds, venture capital and private equity funds, real estate investment trusts and commodities as well as real assets such as precious metals, rare coins, wine, and art. 

ADVANTAGES OF CYPRUS AIFS


  • Low admin and audit costs and a single regulatory authority
  • Trading income taxed at a low uniform corporation tax rate of 12,5%.
  • Investment managers services are exempt from VAT
  • Tax exemption on gains from trading in securities, including gains on the disposal of subsidiaries
  • Tax exemption on foreign dividend income (subject to certain conditions)
  • No with-holding tax on interest and dividend payments to non-Cyprus tax residents, or redemption of units.
  • No capital gains tax on the disposal of units and on disposal of properties located outside Cyprus
  • No stamp duties on subscription, redemption, repurchase or transfer of units
  • AIFs with an unlimited number of members can seek listing on the Cyprus Stock Exchange or EU stock exchanges
  • AIFs can be self managed (under certain conditions)
  • Extensive network of Double Tax Treaties
Contact the AGN Firms best prepared to provide further information:
JOANNIDES + CO

Contact Person: Lefkios Joannides
Phone: (+357) 22 556 556
EMail:  lefkios@joannides.com.cy
Firm website: www.joannides.com.cy

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AGN International Ltd is a company limited by guarantee registered in England & Wales, number 3132548, registered office 6 Hays Lane, London Bridge, London SE1 2HB, United Kingdom.
AGN International Ltd (and its regional affiliates; together "AGN") is a not-for-profit worldwide membership association of separate and independent accounting and advisory businesses. AGN does not provide services to the clients of its members, which are provided by Members alone. AGN and its Members are not in partnership together, they are neither agents of nor obligate one another, and they are not responsible or liable for each other's services, actions or inactions.

Copyright © 2020 AGN International Ltd, All rights reserved. You are receiving this because you are a member of AGN International Ltd




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