Cyprus Investment Funds: UCITS and AIF’s The Cypriot investment fund sector is emerging as a European domicile for the global investment fund and management industry, investors and fund service providers, benefiting from the modernization of its regulatory framework for investment funds. The reasons to prefer Cyprus include inter alia the fact that Cyprus is an EU member state compliant with EU laws and regulations, the established funds are regulated by a competent and accessible EU regulatory authority, the Cyprus legal framework is based on UK common law, the costs for setting up and providing services is lower than other fund jurisdictions within EU, it has favorable tax regime, it has access to an extensive network of double tax treaties with more than 50 countries which allows tax efficient structuring of investments, the 12,5% corporate taxation is the lowest within EU, dividend income, gains from shares and units of investment funds and capital gains from sale of property abroad are tax exempt, there are no withholding taxes on distributions to foreign investors, there is no subscription tax on the net assets of the fund, collective investments can be listed on The Cyprus Stock Exchange and other recognized EU stock exchanges. In Cyprus there are two types of Investment Funds regulated by CySEC, (1) Undertakings for Collective Investment in Transferable Securities (UCITS) and (2) the Alternative Investment Funds (AIF’s) or Non UCITS. Under the Open-Ended Undertakings for Collective Investment Law of 2012 (Law N78 (I) 2012), UCITS is any organization whose sole aim is the collective investment in transferable securities, or in other liquid financial assets of capital raised from the public, and whose operation is based on the principle risk-spreading and whose units are, at the request of holders, repurchased or redeemed, directly or indirectly out of the UCITS assets. Hereunder a table providing the main features of Undertakings for Collective Investment (UCITS): MAIN FEATURES Legal form Can take the following legal forms: -Common Fund
Cyprus Investment Funds: UCITS and AIF’s The Cypriot investment fund sector is emerging as a European domicile for the global investment fund and management industry, investors and fund service providers, benefiting from the modernization of its regulatory framework for investment funds. The reasons to prefer Cyprus include inter alia the fact that Cyprus is an EU member state compliant with EU laws and regulations, the established funds are regulated by a competent and accessible EU regulatory authority, the Cyprus legal framework is based on UK common law, the costs for setting up and providing services is lower than other fund jurisdictions within EU, it has favorable tax regime, it has access to an extensive network of double tax treaties with more than 50 countries which allows tax efficient structuring of investments, the 12,5% corporate taxation is the lowest within EU, dividend income, gains from shares and units of investment funds and capital gains from sale of property abroad are tax exempt, there are no withholding taxes on distributions to foreign investors, there is no subscription tax on the net assets of the fund, collective investments can be listed on The Cyprus Stock Exchange and other recognized EU stock exchanges. In Cyprus there are two types of Investment Funds regulated by CySEC, (1) Undertakings for Collective Investment in Transferable Securities (UCITS) and (2) the Alternative Investment Funds (AIF’s) or Non UCITS. Under the Open-Ended Undertakings for Collective Investment Law of 2012 (Law N78 (I) 2012), UCITS is any organization whose sole aim is the collective investment in transferable securities, or in other liquid financial assets of capital raised from the public, and whose operation is based on the principle risk-spreading and whose units are, at the request of holders, repurchased or redeemed, directly or indirectly out of the UCITS assets. Hereunder a table providing the main features of Undertakings for Collective Investment (UCITS): MAIN FEATURES Legal form Can take the following legal forms: -Common Fund
Cyprus_Investment_Funds_-_UCITS_and_AIF.docx