Cyprus strengthens its position as a hub for alternative investment funds

Maria Panayiotou, President of the Cyprus Investment Funds Association (CIFA), speaking at the 5th Fund and Asset Management Conference in Athens, stated: “In just ten years, Cyprus has grown from zero to over 330 licensed investment organizations managing assets exceeding €9 billion.”

Maria Panayiotou emphasized that this success was made possible through “focused efforts and a clear strategic vision.”

The CIFA President further clarified that Cyprus is now home to more than 330 licensed entities, including companies and collective investment schemes. A significant portion of these assets is managed under Alternative Investment Fund Managers (AIFMs), a result of “systematic and persistent work in collaboration with regulatory authorities and key market players.”

Advantages of Choosing Cyprus for Investment Funds

Cyprus currently ranks fourth among European countries for the volume of cross-border investment funds. This highlights not only its growing appeal to fund managers and investors but also its strengthening position as a key financial hub in Europe.

The Cyprus Investment Funds Association (CIFA) actively contributes to the sector’s development, providing support to market participants and promoting the country as a hub for international investors.

“Among the advantages are its strategic location, robust legal and tax framework, and expertise, which make Cyprus highly attractive for international investors,” noted Maria Panayiotou in her address.

In addition to general benefits, the country offers unique opportunities for alternative funds, including structural flexibility and adaptability to diverse needs. Fund managers can establish open- or closed-ended funds, work with various asset types, and create schemes that consolidate multiple funds under unified management.

One of the key competitive advantages of Cyprus-registered Alternative Investment Funds (AIFs) is the simplified regulatory process: these funds do not require licensing, significantly streamlining and accelerating their launch.

Difference Between AIF and UCITS

Alternative Investment Funds (AIF) are designed for experienced investors seeking to expand and diversify their portfolios through specialized assets. One of the key advantages of AIFs is the absence of minimum capital requirements, making them a flexible tool for asset management. This allows investors to select fund structures and investment strategies that align best with their goals and risk tolerance levels.

AIFs provide access to a wide range of investment opportunities, including:

• Real estate
• Renewable energy
• Private equity
• Hedge funds

UCITS (Undertakings for Collective Investment in Transferable Securities) are investment schemes primarily tailored for retail investors, operating under the unified legal framework of the European Union (EU). The minimum capital requirement for self-managed UCITS is €300,000.

UCITS are permitted to invest in the following types of assets:

• Stocks, bonds, and other instruments traded on financial markets
• Short-term financial assets, such as promissory notes
• Contracts like futures and options, used for risk hedging or enhancing returns.

Prospects for the Development of Investment Funds in Cyprus

Cyprus is emerging as a new hub for fund managers and investors, thanks to its combination of favorable tax conditions, strategic location, and flexibility in fund management. As the country strengthens its reputation in this field, it continues to capture the attention of the international financial community.

If you are seeking a reliable destination for managing investments, Cyprus offers everything needed for success.

The lawyers at Feod Group in Cyprus provide a comprehensive range of services, including:

• Consultations on selecting the optimal fund structure.
• Assistance with the preparation and submission of documents.
• Support throughout all stages of registration.
• Advice on tax planning and regulatory compliance.

Contact us to learn more about registration procedures, tax incentives, and opportunities for investors in Cyprus.