The Cyprus Economy
Cyprus has long established itself as a thriving business hub. While the economy of the country is small, it has proven resilient over the years. Through continuous structural reforms and targeted incentives, Cyprus boosts competitiveness and attracts foreign investments.
The island is an ideal investment gateway to the European Union and a portal for investment outside the EU, particularly into the Middle East, India, and China. As a member of the wider EU and Eurozone community, Cyprus ensures investors’ safety and stability while also offering them market access to more than 500 million EU citizens.
Human talent constitutes Cyprus’ most compelling advantage, complemented by a broad range of high-quality professional services. As a dynamic business centre, Cyprus offers an abundance of highly educated and skilled individuals, multilingual in their majority, ready to serve any business’s needs.
The country’s competitive advantages are significantly enriched by a robust and transparent legal and regulatory framework and an attractive tax regime, which offers a wide range of incentives and benefits both for legal and natural persons.
Main economic sectors
Cyprus Investment Fund Guide
The Funds Industry
Cyprus is becoming one of the fastest growing investment fund centres in Europe through the prompt response to legislative and regulatory needs and its strong financial services sector which is at the forefront of industry developments.
Since 1999 with the introduction of the law for Collective Investment Schemes, the country has continuously developed as a regional domicile for investment funds and managers. The growth of the investment fund sector is founded on the social and political stability of Cyprus and on a pragmatic legal and regulatory environment that is continuously evolving through constructive consultation between the regulator and the private sector.
AUM Management
- 56% by the AIFMs
- 12% by Sub-threshold AIFMs
- 8% by UCITS Management Companies
- 23% by AIFMs and UCITS Management Companies
- 1% by Regulated UCIs managed by Foreign Fund Managers.
UCITS Investments
- 84.6% Transferable Securities
- 8.1% Bank Deposits
- 5.8% UCITS and UCIs
AIFs, AIFLNPs and RAIFs Investments
Investments of UCIs in Cyprus
Unit Holders
Tailored-Made Tax System
- Access to all EU Tax Directives
- Favourable tax regime for alternatives (equities, venture capital, infrastructure)
- More than 60 Double Tax Treaties
- Fund management tailored-made tax regime and incentive schemes
- No VAT on management and administration fees
- Attractive tax regime for foreign investors
- Addressed solely to Well-Informed and/or Professional Investors
Continuously Updated Legislative Framework
- Transposition of all EU Directives (AIFMD, UCITS V, MiFID II)
- No restrictions regarding the type of investments
- Variety of legal forms, eligible managers and fund structures
- Listing on a recognised EU stock exchange is permitted
Firm Regulation
- High standards of transparency, through frequent reporting to investors and the regulator
- Best practices of investor protection and anti-money laundering policies
- Competent and accessible regulator
- Legal system is closely aligned to the English common law legal system
- Fairly simple and time efficient application process
Access to Markets & Investor Capital
- Eligibility to offer services and market funds within EU (European Passport)
- Easy access to major markets e.g. Israel, Central Europe, Middle East, India, China
- Geostrategic position between 3 continents (Europe, Asia, Africa)
- Investment opportunities in various sectors of the Cyprus economy
- Cyprus funds can be listed to Clearstream’s Vestima Platform
Ideal Business Environment
- High “ease of doing business” rankings from World Bank reports
- Access to international fund administrators, custodians and brokers
- Well-educated human talent
- English is the business language
- Low set-up and maintenance costs
- Among the lowest office rental rates in Europe
