Cyprus is one of the fastest growing economies in the European Union, determined to stay on top of the industrial growth and the emerging markets. Being a compliant member of EU offering favorable business landscape, Cyprus markets has come to become the first choice among promoter’s and investor’s seeking secure and advantageous fund solutions.
The Cyprus Securities and Exchange Commission supervises the investment services market and transactions in transferable securities. The authority is dedicated to establishing the Cyprus securities market as a reliable, safe and lucrative destination for investment.
In this post, we will evaluate the growth of Cyprus as an emerging European fund and asset management destination. Here is what you need to know about investments in Cyprus.
Modernized regulatory framework
The most prominent factor that is playing a key role in strengthening of Cyrus’s profile as an emerging fund and asset management domicile is its updated regulatory and legislative regime. In the last few years, net sales of European investment funds rose to €725 billion, whereas assets under the management rose to €12 trillion. Amidst the formidable growth of Europe, Cyprus is showing strong potential in its investment fund sector. To achieve the same, the island nation is constantly upgrading and modernizing its regulatory framework. Presently Cyprus offers Alternative Investment Funds (AIFs) and EU-regulated Undertakings of Collective Investment in Transferable Securities (UCITS) as well.
Alternate Investment Funds
AIFs is a collective investment fund in which capital is raised through a number of investors in order to invest the same in a defined investment policy so that all the investors could benefit. The AIF law was enacted in Cyprus in July 2014 intending to enhance investor protection and transparency. There are basically two types of AIFs namely, Alternative Investment Funds with Unlimited Persons and Alternative Investment Funds with Limited Number of Persons.
With the help of AIFMD or Alternative Investment Fund Managers Directive, the AIFs under Cyprus fund legislation can be sold on a private placement basis or marketed to professional investors across the European Union.
Here are some of the key benefits of Cyrus AIFs:
- Several asset classes can be included in an AIF investment strategy, which makes it highly flexible.
- AIFs are easy to set-up, manage and operate on top of being cost-effective.
- The modern regulatory framework of Cyrus, which is fully compliant with the EU directives, makes AIFs a reliable investment.
- Cyrus’s tax incentives add to the advantages.
UCITS is a collective investment undertaking. Its main aim is the collective investment in transferable securities and/or other liquid financial instruments. UCITS operates on the principle of risk-spreading, and the units can be repurchased or redeemed, directly or indirectly out of the UCITS’ assets at the request of holders. The Undertakings for the Collective Investment of Transferable Securities are established and authorized under a harmonized European Union’s legal framework. The asset categories for UCITS include transferable securities, money market instruments, open-ended collective investment scheme, financial derivative instruments and deposits with eligible credit institutions.
Here are some of the key benefits of Cyprus UCITS:
- The Cyprus UCITS come with full EU passporting rights, which means they can be marketed and sold in any of the EU member countries.
- UCITS prove to be cost-effective while setting up and operating in Cyprus.
- Modernized and strong legislative framework of Cyprus protects the investors.
- Low risk of investment.
- Allows different sub-funds and share classes.
- Investments are easy to monitor and fully transparent.
One of the most extraordinary benefits of investment in Cyprus is the tax advantage. Today, Cyrus is a leading provider of professional financial services including corporate structuring and international tax planning. The Island nation offers the most competitive tax regime Europe. It boasts of an extensive network of double taxation treaties with approximately 60 countries. In a bid to support its international financial and business center, plus to attract more investments in Cyrus, the country is continuously upgrading its tax laws as well.
Cyrus is fast emerging as the most beneficial destination for investment, and the country is leaving no stone unturned to ascertain the development as well.
For professional assistance, seek no further, CX Financia offers its expertise in setting-up and licensing Cypriot financial institutions, we act as your fund’s “personal assistant” advising with fund structure, set-up, distribution and management. We take on the mundane tasks of monitoring regulatory developments, units movement and all the bureaucracy revolving around the fund allowing you to focus on maximizing you investments and income.