Brief Overview of the Investment Funds Sector in Cyprus

Updated on Friday 25th August 2017

Brief Overview of the Investment Funds Sector in Cyprus Image
Cyprus is becoming one of the fastest developing investment fund centers in Europe, as the local institutions have created attractive rules of laws and incentives available for all types of investors. Investors who are interested in how to start a hedge fund in Cyprus or another type of vehicle will benefit from one of the lowest corporate taxes applicable in Europe (12,5%) and more than 60 double taxation treaties. Moreover, Cyprus has made relevant progress for the ease of doing business and, in this sense, the country is ranking as the 47th economy in the World’s Bank study for 2016, ranking 13 positions higher compared to last year. 
 

Investments in Cyprus  
 

At the level of June 2016, Cyprus held assets under management with a total value of EUR 2,9 billion, which were comprised of the following: 
 
equity (72%);
real estate (7%);
bonds (2%); 
mixed assets
 
The procedure on how to start an investment fund in Cyprus is provided by the Cyprus Securities and Exchange Commission (CySEC), the main institution which handles the registration of the investment funds and investment companies operating here. The body also issues licenses for investment activities and it also verifies the operations carried out on the Cyprus Stock Exchange
 
With a population of approximately 848,000 inhabitants and with a gross domestic product per capita of EUR 20,791, Cyprus stands out as a developed financial market, having 218 investment firms and more than 50 new applications that are to be reviewed by the competent authorities. 
 

Regulatory framework in Cyprus 
 

The legislation for investment funds available in Cyprus has been harmonized with the regulations applicable in the European Union (EU). Those interested in how to start a fund in Cyprus may set up UCITS funds, which were introduced in the national legislation in 2012, when the EU’s UCITS IV Directive was included. Also, the local legislation has adopted the Alternative Investment Funds Managers Directive in 2016.  
 
Cyprus recognizes the following categories of investors
 
professional investors;
well-informed investors;
retail investors
 
Foreign businessmen can find out other relevant information on the requirements that have to be met by the above mentioned types of investors from our team of affiliates in Cyprus. Our partners can offer in-depth information on the main steps involved in the registration of an investment fund

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