Cyprus is today one of the fastest growing investment fund centers in Europe through its' updated, focused and continued development on legislative and regulatory needs and its strong financial services sector which placed Cyprus as an investment and financial services 'hub' jurisdiction.
Through AGP highly qualified professionals and long-term experienced advisors to the local and international investment funds’ industry, we aim to provide tailored-made services at the highest standards.
We offer our clients with a ‘one-stop service’ package for both UCITS funds and Alternative Investment Funds (AIFs), as well as asset and wealth management entities – UCITS Management Companies and AIFMs.
Our comprehensive package includes the following:
- Providing our clients with the analysis of the provisions and the implications of the UCITS and the new AIFs Law.
- Advising on the most suitable forms of AIFs for the reorganization of existing ICIS and the establishment of new AIFs.
- Submission of the application to CySEC and the ongoing monitoring of the status of the application.
- Drafting the necessary legal documents for the incorporation and the establishment of both UCITS funds and AIFs.
- Ongoing provision of administrative services including the appointment of nominee officers, office facilities, administration of affairs, accounting, audit, tax services etc.
Main provisions of the AIF Law
Regulation & Supervision
The supervision and the regulation of investment funds in Cyprus are transferred from the Central Bank of Cyprus (CBC) to the Cyprus Securities and Exchange Commission.
Legal Forms of AIFs
AIFs can be structured in one of the following forms:
- Common Fund
- Fixed Capital Investment Company
- Variable Capital Investment Company
- Investment Limited Partnership
Classes of AIFs
The AIF Law provides for two classes of AIF:
- AIF for an unlimited number of investors, which can be marketed to retail or to well-informed and/or professional investors, as defined by the the EU Directive 2004/39/EC (on Markets in Financial Instruments).
- AIF for a restricted number of investors (up to 75), which can be marketed only to well-informed and/or professional investors, as defined by the the EU Directive 2004/39/EC (on Markets in Financial Instruments).
Minimum Capital Requirements
Minimum share capital: € 125.000
In the case of self-managed funds: €300.000
Management of AIFs
An AIF can be self-managed or appoint a management company.
Does the value of the AIF exceeds EUR 100 million (including leverage) or EUR 500 million (without leverage with a lock-up period of 5 years)?
- If yes: The AIF (if self-managed) or the External Manager is subject to authorization and compliance with the AIFMD.
- If no: The AIF (if self-managed) or the External Manager is not subject to compliance with the AIFMD.
The AIF Law allows umbrella funds, which are collective investment schemes that exist as single legal entities with multiple sub-funds (investment compartments), each one of which can have its own investment policy.
Listing of AIFs
Under the AIF Law, an AIF can be listed on any recognized stock exchange in the EU or a third country.
Transitional provisions framework for existing ICIS
Three options are available to the existing ICIS:
- Maintain their current operational structure by submitting the necessary documents, in order to comply where required, with the AIF Law and continue their operation as AIFs with limited number of investors. In this case, the investment funds continue to operate on the basis of the authorization received by the CBC without any further authorization by CySEC.
- Submit their application to CySEC for the authorization to operate as an AIF.
- Submit their application to CySEC for the authorization to operate as AIFM (Alternative Investment Fund Manager).
The application must be submitted within four months after the AIF Law came into force, this means by the 27th of November 2014. The ICIS submitting an application are allowed to continue their operations until the communication of the decision of CySEC to them.
In case of non-compliance with any of the above options, private ICIS must be dissolved and liquidated with six months following the expiration of the four months compliance deadline. Dissolution and liquidation will be carried out under the provisions of the repealed ICIS Law.