For those interested in Cyprus international funds, a closer eye should be given to Alternative Investment Funds as a potentially lucrative investment vehicle. Since 2018, laws have been put in place to allow the creation of Alternative Investment Funds or AIFs. The legislative framework is now in situ bringing structure to AIFs with limited persons, unlimited persons and also registered AIFS.
Legally, an AIF may be a fixed or variable capital investment company, a mutual fund or a limited partnership. It may be set up with a specific, limited duration or it may unlimited. There are two main categories; A Limited Number of Persons AIF may have up to 75 investors and can only be marketed to well-informed or professional investors. All other investor types come under the category of Retail Investor and may invest in an AIF with Unlimited Number of Persons, but not in a Limited Number of Persons AIF. Of course well-informed and professional investors may also invest in an Unlimited Number of Persons AIF.
Why choose Cyprus to set up an AIF?
Cyprus has the legal structure to ensure that an AIF is easy to set up, low cost and simple to manage. Being within the EU, an AIF is also covered by all relevant EU directives and offers the benefit of being overseen by EU regulatory bodies. Annual audits and six-monthly reports give a transparency that may be lacking elsewhere. Investment types may be varied due to minimal restrictions on category and with the relevant approval, an AIF can be self-managed. In Cyprus, an AIF can be used as an umbrella fund, and as with many aspects of business in Cyprus, there are some tax benefits too.
There are other advantages also. The strong geographical location makes Cyprus a good prospect for many businesses and with a good track record of political stability, Cyprus is attractive both from a financial aspect, and by offering a secure investment with peace of mind in the economy of a country with a good history of modern law and a framework created specifically for the establishment of AIFs.
The tax benefits of an AIF in Cyprus
Income from dividends is tax free in Cyprus, as are capital gains. There are also the added benefits of the many double tax treaties between Cyprus and many countries worldwide.
Cyprus increases in popularity year on year
It’s reassuring, when you’re looking for a new investment opportunity, to see others that have made these choices before, be successful, and so it’s interesting to note that Cyprus has become the country of choice for investment both from Cyprus residents and by those from overseas who have chosen Cyprus as the ideal location for investment, perhaps taking advantage of the highly beneficial Cyprus Investment Programme that has been streamlined in recent years to allow investors, and their extended families to enjoy the benefits of Cyprus Citizenship within just 6 months of applying. A time frame that most other countries simply cannot boast. The number of Cyprus AIFs continues to grow and so within Cyprus itself you’ll find an increasingly number of competent accountants and legal representatives to help you with your endeavours.