Cyprus as an International Fund Jurisdiction
Cyprus has established itself as an attractive European jurisdiction for the establishment and administration of investment funds.
Its modern legal framework, European Union membership, competitive tax environment and experienced professional services sector continue to attract fund managers and international investors from around the world.
Alternative Investment Funds in Cyprus
Cyprus offers a comprehensive legislative framework governing Alternative Investment Funds (AIFs), providing flexibility for a wide range of investment strategies and investor profiles.
Today, the Cyprus investment funds framework includes:
- Alternative Investment Funds (AIFs).
- Alternative Investment Funds with a Limited Number of Persons (AIFLNPs).
- Registered Alternative Investment Funds (RAIFs).
These structures provide flexibility for both professional and well-informed investors while operating within a regulated European framework.
Advantages of Cyprus Investment Funds
The Cyprus funds regime offers a number of significant advantages, including:
- Flexible legal structures to suit different investment objectives.
- Umbrella fund structures with multiple investment compartments.
- Wide range of eligible investment strategies.
- Efficient regulatory framework supervised by the Cyprus Securities and Exchange Commission (CySEC).
- Access to the European market through the Alternative Investment Fund Managers Directive (AIFMD), where applicable.
- Well-established legal system based on English common law principles.
- Highly experienced professional services sector supporting international fund structures.
Tax Advantages
Cyprus continues to offer a competitive tax framework for investment funds and fund managers, including:
- Exemption from tax on qualifying gains from the disposal of securities.
- Participation exemption on qualifying dividend income, subject to the applicable conditions.
- No Cyprus withholding tax on dividends paid to non-residents (subject to applicable legislation).
- Notional Interest Deduction (NID), where applicable.
- Extensive network of double taxation agreements.
- No stamp duty on the issue of fund units.
The tax treatment of each fund structure will depend on its legal form and the specific circumstances of both the fund and its investors.
Why Choose Cyprus?
Cyprus combines the benefits of an internationally recognised financial centre with a stable legal and regulatory framework.
Fund managers continue to choose Cyprus because of:
- European Union and Eurozone membership.
- Modern investment fund legislation.
- Competitive operating costs.
- Strategic location connecting Europe, the Middle East and Africa.
- Strong ecosystem of legal, accounting, tax and fund administration professionals.
How UHY Can Help
Establishing and operating an investment fund requires specialist legal, regulatory, accounting and tax expertise.
Our experienced team can assist with:
- Fund structuring.
- Formation of AIFs, AIFLNPs and RAIFs.
- Regulatory compliance support.
- Accounting and financial reporting.
- Tax planning and compliance.
- Investor reporting.
- Ongoing corporate and fund administration services.
For more information on how we may assist you, please contact us at uhy@uhy.com.cy or call +357 22379210.
The contents of this publication are provided for general information purposes only and should not be regarded as legal, tax or professional advice. Specific advice should always be obtained based on your particular circumstances before taking any action.