In the recent years, Cyprus has become a jurisdiction of choice for collective investment schemes and investment funds in Europe.
The regulating Authority is the Cyprus Securities and Exchange Commission (“CySEC”) and the fund industry in Cyprus has seen big growth with 105 licensed funds and assets of €3.2 billion under management of Cyprus licensed funds.
Collective Investment Schemes may take one of two forms, Undertakings for the Collective Investment in Transferable Securities (UCITS), or Alternative Investment Funds (AIF).
Master-Feeder and Umbrella structures may be utilised.
The advantages offered by Cyprus as a jurisdiction for funds include the following:
- comparatively low costs and high quality of services and a full range of service providers, including well established locally based international investment firms
- setup and licensing procedures are straightforward, low cost and time effective
- No subscription tax on net assets
- Exemption from tax on profits from sale of shares and other instruments
- No withholding tax on income repatriation or dividends paid to unit holders
- No capital gains tax on disposal of shares/units by unit holders
- Tax exemption on capital gains from the sale of immovable property located outside Cyprus
- Extensive network of Treaties for the avoidance of double taxation signed and ratified by Cyprus
- No restrictions on deemed distribution