Establishment of a Fund in Cyprus

Establishment of a Fund in Cyprus

Cyprus investment climate

With the development and improvement of the legal and regulatory framework for the development of foreign business in the late 1990s, Cyprus became a popular European centre for international entrepreneurs to develop interest in establishing investment funds in the country.

Positive competitive environment, favourable conditions of taxation became the main prerequisites for investment development.


Advantages and types of private investment companies

The purpose of creating a private investment company is the general investment and pooling of contributions, which will be managed in the future by experienced fund managers. The turnover of the fund’s assets in the future may bring a profit, tax-exempt. The main advantage of establishing a fund in Cyprus is:

  • is a quick and easy way to obtain a license for an organization;
  • no restrictions by the country’s controlling regulator on the size of the investment and the environment it will be allocated to;
  • no requirements on the authorized capital;
  • no tax on dividends paid and capital increase;
  • investment managers may be the fund directors themselves;
  • investment funds have all tax benefits of the country, as well as other legal entities of Cyprus.

The Central Bank of Cyprus is the Regulator of Investment Organizations and has the right to appoint a company, trust or partnership investment fund. There are types of funds according to their possibilities and rights.

  1. Small investment fund whose participants and founders are non-residents of the country. The share capital and its size cannot be changed. For registration the amount should be no less than 125 thousand. Euro. This requirement does not apply to private foundations with up to 100 depositors.
  2. Funds with non-resident shareholders but with capital that can change directly in proportion to the number of new investors.
  3. International trusts whose return on investment is directed directly to beneficiaries.
  4. Limited liability partnership consisting of natural or legal persons, represented as an investment partnership. It is managed by one main partner, which is responsible for assets, money turnover and liabilities.

The composition of the investment fund must be approved by the Central Bank of Cyprus.

  1. The investment manager performs the management of the fund in the person of a director, general manager or investment company. 2. The depository may be a credit institution, an investment company, a legal entity, a bank that has the right to act as depositaries.
  2. Fund administrators, who are responsible for financial reporting and document management.
  3. Auditors who audit the fund.
  4. Legal advisers draw up and amend the fund’s charter, draw up contracts, are responsible for licensing and communicate with the regulator.

Lawyers of FINWYN CONSULTANCY LTD will help you in opening a fund in Cyprus, thus ensuring a smooth start of your financial activities.