Why Cyprus?

Cyprus is a well regulated EU member state, combining tax efficient features of a modern financial centre with the necessary infrastructure for the promotion of a successful fund’s industry. It has an abundance of experienced lawyers, accountants, fund administrators and fund managers. Cyprus has a legal system based on common law, independent judiciary, a friendly business environment and a high quality lifestyle.

The following features make Cyprus a competitive jurisdiction for setting up, managing and administrating both non-UCITS and UCITS funds.

Advantageous Tax Regime

Cyprus offers one of the most attractive tax systems in Europe, including the following benefits:

- The country provides a simplified, effective and transparent tax regime that is fully compliant with the EU laws and regulations. - Dividend income, profits from overseas permanent establishments and profits from the sale of securities are exempt from tax. Also, there is no withholding tax on dividend, interest and royalties paid from Cyprus.
- Most international transactions are exempt from VAT.
- Cyprus has a network of double taxation agreements with more than 50 countries. For a complete listing please visit the Ministry of Finance Double Taxation Agreements
Section (http://www.mof.gov.cy/mof/
ird/ird.nsf/dmldtc_en/dmldtc_en). Additionally, Cyprus has access to EU Directives that focus on reducing or eliminating foreign withholding taxes.

Legal Framework

The legal system is based on the common law principles and fully compliant with EU laws and regulations. Cyprus provides quality legal services in areas such as international law, corporate administration and management services. Most large legal firms are affiliated or collaborate with reputable international law firms.

Funds’ Legal Framework

In recent years, Cyprus has made an enormous effort towards the enhancement and completion of the national legal framework concerning investment funds.

In June 2012, the Law regulating the Open-ended Undertakings for Collective Investment came into force. This has brought the national legal framework in line with the European UCITS IV Directive and made substantial additional innovations to the existing national legal framework in order to facilitate the establishment and operation of UCITS funds and UCITS Management Companies in Cyprus.

In July 2013, the Law on Alternative Investment Fund Managers came into force as a result of the harmonization of the national legal framework with the Alternative Investment Fund Managers Directive (AIFMD), introducing a number of important regulating changes. This law allows for the set-up of AIFMs operating in Cyprus under a common EU legal framework and benefitting with the passport opportunity provided by the AIFMD to market the AIFs they manage within the EU and to third countries (expected starting 2015).

Furthermore, in July 2014 a new legislation governing Alternative Investment Funds (AIFs) came into effect, replacing in its entirety the existing International Collective Investment Schemes (ICIS) regime, introducing the ability to set up both private and public AIFs in Cyprus, as well as AIFs with segregated investment compartments (i.e. umbrella funds).

In July 2018 the revision of the existing legal framework on AIFs was voted by the Cyprus House of Representatives replacing the existing AIF Law 131(I) of 2014 and came into effect. The main changes are the introduction of a new type of AIF, the “registered” but not “authorized” AIF and the enhancement of the Limited Partnership vehicle. The revised legislation reflects the current market needs as it provides more options and flexibility and enhances Cyprus legal framework and competitive position among other jurisdictions for funds and asset management.

Value for Money

Cyprus is a dynamic business centre that offers relatively lower operating costs while, at the same time, providing top quality services, including accounting, auditing, tax, business administration, legal, investment and funds management. Fees for fund administration, custody, audit and legal are, on average, around 30% to 50% lower compared to other major funds jurisdictions. Furthermore, set up costs are comparatively lower than other jurisdictions.

Strategic Location
Well-developed Infrastructure

Cyprus has a robust telecommunications system, two international airports (Larnaca, Paphos) and two sea ports (Limassol, Larnaca). Furthermore, the efficient road systems and relatively small distances make it very easy to get around the island.

Why administer a Fund in Cyprus

Cyprus offers considerable incentives to investment funds. First-class and cost-effective legal, accounting, and banking services, as well as accessibility make Cyprus a competitive jurisdiction for the establishment and administration of non-UCITS and UCITS.

Furthermore, a fund registered in Cyprus is subject to a multitude of tax benefits, including:

1- One of the lowest corporate income tax rates in the EU at 12.5%;
2- Exemption from tax on profits from the trading in securities;
3- Exemption from tax on foreign dividends received subject to conditions; 4- No withholding taxes on interest payments made abroad;
5- No withholding taxes on dividend payments from Cyprus;
6- No thin capitalization rules;
7- Relative simplicity and certainty of Cypriot tax regime;
8- Favourable network of tax treaties with more than 45 DTTs in force and 38 others being negotiated;
9- Straight forward legislation and Central Bank of Cyprus regulations.

Other advantages include:

1- Cyprus is an EU country, being fully FATF and EU law compliant;
2- Legislation has been put in place and is constantly monitored, to regulate and harmonize operations in the financial services sector;
3-Facilitation of operations of brokerage firms and enhanced prestige on international markets;
4-Licensing and existence of regulatory framework improves transparency and legitimacy with respect to shareholders, employees, authorities, etc.

Success stories
Get to know CPF through the stories

Emma Delta Variable Capital Investment Ltd is a Greek-Czech joint venture that was the sole bidder in the acquisition of OPAP, one of Europe’s largest listed betting firms. In October 2013, OPAP SA announced the transfer from the Hellenic Republic Asset Development Fund (HRADF) to Emma Delta Hellenic Holding Ltd of 105,270,000 OPAP shares, or 33.0% of the share capital of OPAP SA. Emma Delta Hellenic Holdings Ltd is 100% owned by Emma Delta Variable Capital Investment Ltd. Emma Delta Variable Capital Investment Ltd (the ‘’Fund’’) is a private company limited by shares, initially recognized to operate as an international variable capital company and designated as a Private International Collective Investment Scheme by the Central Bank of Cyprus under the provision of the International Collective Investment Schemes Law 47(I)/1999 (ICIS Law).

On 24th July 2015, the Fund obtained authorization from the Cyprus Securities and Exchange Commission (‘’CySEC’’) to operate as an Internally-Managed Alternative Investment Fund with license number: AIFM09/56/2013 in accordance with Alternative Investment Fund Managers Law 56(I)/2013.

CyproFund is proud to be the Fund Administrator of Emma Delta Variable Capital Investment Ltd. The fact that Emma Delta Variable Capital Investment Ltd has chosen CyproFund Administration Services Ltd to act as its Fund Administrator is proof of our high quality service and professionalism. It is also a positive sign for the future prospects of the Cyprus fund market.