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Fund registration

Since joining the European Union in 2004, Cyprus has been able to combine its own tax advantages with the other numerous benefits of EU membership, meaning that a fund can be marketed freely to other EU countries, often without the huge setting up and operating costs that exist in other EU jurisdictions such as Luxembourg, or in London. Cyprus' close relationship with non-EU countries allows it to act as a bridge of access for investments from the EU to emerging markets in Asia and the Middle East.

 

It must also be appreciated that Cyprus offers the prestigious image of a strong, well-organised legal framework that complies with all European Directives. The Prospectus Directive and the Markets in Financial Instruments Directive (MiFID) are incorporated into Cyprus national legislation. In this way issuers are provided with a single EU passport for marketing prospectuses in all European Countries, without barriers,  to promote their services in all EU member states. Fund managers, custodians, administrators and promoters seeking to raise funds and maximize returns for their clients must choose a jurisdiction to domicile (or transfer) their fund and/or their own operations taking into account the requirements of the new European Directives as well as their regulatory, tax and cost implications.

This is where Cyprus comes in as the new, cost efficient, lowest EU tax member state with great infrastructure, a cosmopolitan lifestyle and well-educated work force, offering to fund managers an attractive place either to relocate or register their fund and manage it from another member state as per the MiFID.

 

International Collective Investment Schemes “ICIS” – Private ICIS

Within Cyprus Law there are two schemes:

Private ICIS – Funds that are not available to the public. For these funds the supervisory authority is the Central Bank of Cyprus.

Public ICIS – Funds that are available to the public (the UCITS). For these funds the supervisory authority is the Cyprus Securities and Exchange Commission.

Undertaking for Collective Investment in Transferable Securities - (UCITS)

An open-ended undertaking for collective investment in transferable securities (UCITS) is undertaking the objective of which the collective investment is in transferable securities and/or in other liquid financial assets of capital raised from the public.

Taking that into consideration, the actions taken by a UCITS, to ensure that the stock exchange value of its units does not vary significantly from their net asset value, shall be regarded as equivalent to such re-purchase or redemption.

Alternative Investment Fund Managers

The AIFM Directive objective is to create a comprehensive and effective regulatory and supervisory framework for AIFMs at the European level. The proposed Directive will provide robust and harmonised regulatory standards for all AIFM within scope and will enhance the transparency of the activities of AIFM and the funds they manage towards investors and public authorities. The funds in question are defined as all funds that are not regulated under the UCITS Directive.

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