Cyprus

Mauritius is a jurisdiction where there is minimal income tax and no capital gain tax.

overview

Cyprus

As Cyprus is a member of European Union (EU), financial services are governed by both the national laws enforced by the Cyprus Securities and Exchange Commission (CYSEC), as well as the regional policies of the EU, the Markets in Financial Instruments Directive (MiFID).

Under the Alternative Investment Fund Managers Directive (AIFMD) of the EU, AIF (Alternative Investment Fund) is an onshore Cyprus and European regulated investment fund (Full EU Cross-Border Fund).

AIF (Alternative Investment Fund) manages the portfolio by investing in any predefined asset class and / or other liquid / illiquid instruments, in order to achieve capital appreciation for its shareholders.

Cyprus is one of the most efficient jurisdictions for Funds in Europe, in terms of administration, regulation and auditing.

CySEC is widely acknowledged as an efficient, experienced, responsive and accessible regulator.

Financial reporting system based on International Financial Reporting Standards (IFRS) and compliant with Organisation for Economic Co-operation and Development (OECD) guidelines.

License granted by CySEC is valid in all European Economic Area (EEA) jurisdictions.

Extremely low entry barrier, as the initial capital required starts from €125,000.

With one of the lowest corporate tax rates in the EU region, Cyprus stands out as a favourite offshore activities destination for all kinds of businesses.

  • Time Frame: Approximately 4 – 6 Months
  • Taxation: 12.5% (Corporate Income Tax).
  • License:
    • Alternative Investment Funds (AIFs)
    • Registered Alternative Investment Funds (RAIFs)
For each Director, Shareholder and Ultimate Beneficial Owner:
  • Notarized / Certified True Copy of Passport
  • Notarized / Certified True Copy of Proof of Address
  • Notarized / Certified True Copy of Bank Statement
  • Bank Reference Letter
  • Detailed CV dated and signed by the applicant

For each Corporate Shareholders of the company:
  • Certificate of Incorporation
  • Memorandum of Association
  • Articles of Associations
  • Register of Shareholdings
  • Register of Directors
  • Certificate of Good Standing (if the company is over 12 months old)

Other Documents Required:
  • Proof of Source of Wealth

Company structure:

  • Minimum 1 Shareholder
  • Minimum 2 Executive Directors and 2 Non-Executive Directors


Taxation:

  • Standard Corporate Tax at 12.5%
  • Corporate Gain Tax at 0%
  • Lowest Value-Added Tax at 19%
  • No Withholding Tax on Dividends
  • An extensive network of Double Taxation Treaties


Accounting requirements:

  • Audit should be done in Cyprus
  • Audited Financial Statements and Tax Return must be submitted within 3 months from its balance sheet date
  • Accounting records should be kept at the local office


Others:

  • Registered Agent – Required
  • Registered Office – Required
  • Company Secretary – Required
  • Professional Indemnity (PI) Insurance Cover – Required
  • Local Employees in Cyprus – Required
Legal Framework: Alternative Investment Fund Managers Law 2013

Regulatory Authority: Cyprus Securities and Exchange Commission (CySEC)

Time Frame: Approximately 4 – 6 Months

Minimum Capital Requirement:

AIF with unlimited number of persons (AIF) €125,000 if self-managed. None if externally managed
AIF with limited number of persons (AIF–LNPs) €50,000 if self-managed. None if externally managed
Registered Alternative Investment Fund (RAIF) Not subject to minimum capital requirements
 
Alternative Investment Funds (AIF):

AIF (Alternative Investment Fund) under the AIFMD Directive of the EU is an onshore Cyprus and European regulated investment fund (Full EU Cross Border Fund), that manages its portfolio by investing in any predefined asset class and / or other liquid / illiquid instruments to the interest of its shareholders.

Registered Alternative Investment Funds (AIF)

A RAIF is similar to AIF, however, it is registered and regulated under the responsibility of the Alternative Investment Fund Manager (AIFM) hosting it, whereby all operational and marketing efforts are conducted under the liability of the AIFM as a European fully passported Fund Management Structure (it is allowed to operate in all EU member states).

AIFs & RAIFs Characteristics:

  1. AIFs or RAIF follow similar legal and regulatory principles, whereby their shares can be redeemed or repurchased directly or indirectly by its assets following an application of its shareholders, as defined in the Fund’s Prospectus.

  2. Its capital is increased by the issue of new shares, whereas its capital is decreased by the redemption or the repurchase of the old ones. Hence it adopts the Variable Capital Investment Company statutes.

  3. The value of its shares is reflected by the net asset value (NAV) of its assets.

  4. AIF’s are marketable to qualified, professional or institutional investors both internationally and within the EU member States (full passporting rights within EU).
  1. The fund management entity must be registered with the Registrar of Companies as Fixed Capital Investment Company (FCIC), Variable Capital Investment Company (VCIC) or Limited Liability Partnership (LLP).

  2. All the personnel and / or external associates involved in the fund must be identified and committed through letters of intent.

  3. The prospectus must be prepared.

  4. Preparation and submission to Cyprus Securities and Exchange Commission (CySEC) of application with all necessary supporting documents.

  5. Approval and commencement of operations.
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