How to Start a Hedge Fund in Cyprus
Updated on Friday 25th August 2017
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Although the Cypriot market was not strongly represented by the domiciliation of hedge funds, this field started to increase its financial activities. The hedge fund market in Cyprus is also characterized by a large proportion of hegde funds which are administered from foreign jurisdictions, most notably from the United Kingdom. Below, investors who are interested in starting a hedge fund in Cyprus can find out relevant information on the current legislation applicable to this type of investment vehicle, as well as the conditions that must be met in this sense.
What is a hedge fund in Cyprus?
Prior to starting a hedge fund in Cyprus, the investors should know the main usages of this type of fund. The hedge fund can be set up by several investors who are willing to pool their financial assets with the purpose of carrying more investment strategies. The main purpose is to obtain the highest return on investment. It is important to know that the regulations available for hedge funds is generally known as being less strict than in the case of other types of investment funds. They can be set up to operate on both the domestic markets, as well as the international ones.
The video below provides more details on how to start a hedge fund in Cyprus:
Legislatiation related to hedge funds in Cyprus
Investors interested in how to start a fund must know that the applicable legislation available to hedge funds in Cyprus is given by several rules of law, as presented below:
• Investment Services Law;
• Consolidated Market Abuse Law;
• Prevention and Suppression of Money Laundering Activities Law;
• Transparency Laws;
• International Collective Investment Schemes Law.
Regulatory body in Cyprus
Foreign businessmen interested in how to start a hedge fund in Cyprus must know that the main regulatory institution for these vehicles is the Central Bank of Cyprus (CBC). Also, hedge funds in Cyprus can be set up as international collective investment schemes (ICIS), which represents the most suitable form for such funds.
Cypriot ICIS can be set up with 100 or fewer investors, as stated by the regulations of the CBC, and our affiliates in Cyprus can provide more details on the main advantages established under this structure, as well as on the legislation regulating it. It is very important to address to financial specialists when opening an investment fund in Cyprus or in any other jurisdiction.