Thanks to a completely updated legal & regulatory framework, registering an AIF in Cyprus is now a pretty straightforward process, requiring entrepreneurs to apply minimum efforts. Further development of funds is being supported by the Government whose efforts are causing their number to continuously increase.
What makes investing in funds attractive is that unlike ordinary LLCs, they are more tightly regulated & transparent. Thus, investors, both institutional & private, are guaranteed to get dividends on their investments in a fully transparent & regulated environment. AIF registration in the Republic of Cyprus is also an instrument venture capital investors frequently make use of.
Individuals considering establishing a foundation in the Republic of Cyprus can do it in three different ways:
- by registering AIFLNPs in Cyprus;
- by registering AIFs in Cyprus;
- by registering RAIF in the Republic of Cyprus.
Registration of AIFs in the Republic of Cyprus
Registering AIFs in the Republic of Cyprus requires notifying CySEC, the country’s number one financial regulator. Only after meeting the below conditions can investors proceed with registration of a Cyprus-based foundation:
- making a statement;
- providing an AoA;
- selecting external managers/individuals charged with conducting business (for internally managed funds);
- selecting a depository.
Submitting an application for an AIF registration in Cyprus requires supplying the following data:
- fund’s name, address & its HQ’s address;
- data on individuals who’ll be managing a fund internally (including their resumes);
- data on individuals who’ll be managing a fund externally & who’ll be managing a portfolio & risks;
- a statement of an external manager in which they express their consent to manage investments;
- a depositary’s certificate acknowledging their consent to provide depositary services for a fund’s assets;
- an identity of an individual(s) to whom a depositary entrusts the monitoring of a fund’s activities;
- constituent documents or agreements with partners;
Funds can be either open or closed ones & have the legal form of umbrella funds comprising multiple investment units.
AIFs are required to have a minimum capital of one hundred twenty five thousand euros. Externally managed AIFLNPs & RAIFs mustn’t comply with any such requirements; however if they're self-governed, they’re required to have a minimum capital of fifty thousand euros.
AIFs must have assets worth five hundred thousand euros. They must be raised within a year from the date of incorporating a fund by attracting investors’ capital.
Regardless of their legal form, funds must pay a corporate tax which accounts for twelve percent of a fund’s net income, excluding its net assets.
To sum up, a strategically important geographic location & investor-friendly taxation make Cyprus an ideal jurisdiction for establishing a fund. Should you require more information on how to register a fund in the Republic of Cyprus, please do not hesitate to contact IQ Decision UK.