Investment Fund Registration - Cyprus

About Cyprus

Cyprus has a well-established financial industry and is a popular location for the formation of investment funds. Cyprus provides an advantageous regulatory framework, tax advantages, and a robust infrastructure for investment funds.

Cyprus has an extensive legislative and regulatory framework for investment funds, which is principally administered by the Cyprus Securities and Exchange Commission (CySEC). CySEC monitors and supervises investment funds to ensure that they comply with applicable rules and regulations, protect investors, and maintain market integrity.

Cyprus is in the eastern Mediterranean Sea and theoretically belongs to Asia, yet it is culturally and politically linked to Europe.

According to Worldometer’s elaboration of the most recent United Nations data, the current population of the Republic of Cyprus is 1,232,648 as of Monday, May 22, 2023.

The official languages of Cyprus are Greek and Turkish. The island is divided into two parts, with the Turkish Cypriots to the north and the Greek Cypriots to the south. Around 2.7% of each also speak Armenian and Arabic, and the majority of these also speak Greek.

Cyprus is a common law jurisdiction, and its court system is adversarial in nature. The vast majority of Cypriot law is based on English common law, the fundamental concepts of which are directly applied by Cyprus courts (section 29, Courts of Justice Law).

1. European Union Membership

Cyprus is a member of the European Union (EU), and investment funds established there can take advantage of the EU’s regulatory framework. This permits investment funds to be passported between EU member states, facilitating fund marketing and distribution to a broader investor base inside the EU.

2. Regulatory Framework

Cyprus has a well-established and robust investment fund regulatory structure. The Cyprus Securities and Exchange Commission (CySEC) monitors and supervises investment funds, ensuring that all applicable rules and regulations are followed. This gives investors with some security and boosts market confidence.

3. Flexibility in Fund Structures

Mutual funds, investment companies with variable capital (ICVCs), and limited partnerships are among the fund formats available in Cyprus. This adaptability enables fund managers to select the structure that best suits their investment strategy and investor preferences, while accommodating multiple asset classes and investor types.

4. Tax Benefits

Cyprus offers excellent tax advantages to investment funds. These include a favourable corporation tax rate, income tax exemptions, and access to Cyprus’ wide network of double tax treaties. These tax breaks can boost fund profitability while also maximising tax efficiency for both fund managers and investors.

5. Strategic Location

Cyprus is strategically located, serving as a link between Europe, Asia, and Africa. This ideal position facilitates commercial and trade relations, and it can be especially useful for investment funds looking for opportunities in these regions.

6. Professional Service Providers

Cyprus has a thriving ecosystem of professional service providers, including law firms, accounting firms, fund administration firms, and audit firms. These service companies specialise in investment funds and provide a variety of support services such as fund formation, administration, compliance, and reporting. Their understanding of local legislation and skills can help to expedite the fund registration procedure and continuing operational requirements.

7. Investor Protection

Cyprus has established investor protection measures in accordance with EU directives, ensuring investor openness, disclosure, and fair treatment. This contributes to investor confidence and trust in Cyprus-registered investment funds.


License: Undertakings For Collective Investment In Transferable Securities UCITS
Timeframe for Approval: 3 to 4 months
Regulator: The Cyprus Securities and Exchange Commission

Company Structure

Local Director: At least one
Local Shareholder: At least one
Local Registered Office: Required
Local Staff: Required
Compliance Officer: Required
AML/KYC: Required
Audit: Required
Economic Substance: Required
Corporate Tax Rate: 12.5%
Currency: Euro
Minimum Paid-up Capital: 1,000 euros
Capital Requirement: $125,000
Tax Structure: 12.5% on offshore profits
  • Initially, the establishment and incorporation of a Cyprus company is required in order to obtain authorization from the Cyprus Securities and Exchange Commission (“CySEC”), which is the sole competent supervisory authority and regulator in respect of Financial Entities such as, but not limited to, Alternative Investment Fund Managers (“AIFMs”), Alternative Investment Funds (“AIFs”), Registered Alternative Investment Funds (“RAIFs”), and Alternative Investment Fund for Limited Partnerships (“AIFLPs”).
  • Following that, the application form, along with the necessary supporting documentation, is submitted to CySEC – the Regulator – for consideration and approval.
  • Legal and Regulatory Compliance
  • Fund Structuring and Setup
  • Fund Administration and Accounting
  • Compliance Support
  • Audit and Tax Services
  • Corporate Secretarial Services
  • Investor Services
  • Custody and Prime Brokerage

Details of all proposed Directors, with each providing the following:

a. Copy of passport and recent utility bill evidencing residential address
b. CV with details covering a minimum period of 10 years
c. At least two reference letters (presented upon request)
d. Non-bankruptcy certificate
e. Criminal record certificate
Duly completed CySec questionaire form
Other documents requested by the Authority
It should be noted that all Directors must have adequate financial and fund management experience and academic credentials

Details of the following key service providers:

a. Author
b. Custodian
c. Administrator
  1. Incorporation of Cyprus offshore corporation
  2. Arrange for local registered officer and local directors
  3. Investor offering prospectus and subscription agreements
  4. Draft corporate bylaws, minutes and owner share issuances
  5. Establishment of corporate bank account suitable for forex operations
  6. Establishment of merchant service account for accepting credit and debit cards
  7. Draft requisite business plan, financial statements and financial projections
  8. Draft requisite Anti-Money Laundering & Know-Your-Customer policies
  9. Prepare and process application for registration Cyprus Investment Fund
  10. Representation before licensing regulatory authority, banks and liquidity providers