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. 

Political system
Political system
Presidential Democracy
Legislature
Legislature
House of Representatives
Population
Population
956.800 (est. 2017)
Geographical size
Geographical size
9.251 km2
GDP
GDP
€22.286,9 mn
Currency
Currency
Euro
Legal System
Legal System
English Common Law
International memberships
International memberships
EU, Eurozone, Council of Europe, United Nations, IMF, World Bank, Commonwealth, World Trade Organisation

Main economic sectors

of GVA
Services
Business and financial services, tourism, shipping, real estate, retail trade
of GVA
Industry
Manufacturing of pharmaceutical and food products, construction

Cyprus Investment Fund Guide

The Funds Industry

Total Assets Under Management (AUM)
Total Assets Under Management (AUM)
0

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.

Over time, efficient regulations have been enacted to facilitate the establishment and management of alternative investment funds and venture capital investment funds. By being in line with all the latest EU regulations relating to UCITS, Alternative Investment Funds and their Managers, Cyprus is today a uniquely competitive entry point to EU regulated fund management solutions.

This regulatory environment, combined with Cyprus’s geographical location at the crossroad of three continents, is attracting investment fund promoters and specialist service providers from various parts of the world offering unique investment opportunities and specialized expertise.

The Cyprus investment funds sector is also adhering to best practice of fund investor protection and anti-money laundering policies. Its workforce is amongst the most educated and trained in the EU with a long tradition of multicultural and multilingual expertise in providing fund solutions to an international business community.

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236
Management Companies and Undertakings of Collective Investments (UCIs)
Externally Managed UCIs
0
Internally Managed UCIs
0
External Fund Managers
0
111
Management Companies
AIFMs
0
Sub-threshold AIFMs
0
UCITS Management Companies
0

AUM Management

  • 52% by the AIFMs
  • 23% by Sub-threshold AIFMs
  • 7% by UCITS Management Companies
  • 17% by AIFMs and UCITS Management Companies
  • 0% by Regulated UCIs managed by Foreign Fund Managers.

UCITS Investments

  • 84.5% Transferable Securities
  • 9.2% Bank Deposits
  • 6.4% Others

AIFs, AIFLNPs and RAIFs Investments

Private Equity
Real Estate

Investments of UCIs in Cyprus

Invest in Cyprus
0
Invest in Cyprus
Total Investments - Mainly in Private Equity and Real Estate
0
Total Investments - Mainly in Private Equity and Real Estate

Unit Holders

UCITS
Retail Investors
AIF, AIFNLP & RAIF
Professional Investors
AIF, AIFNLP & RAIF
Well-Informed Investors
AIF, AIFNLP & RAIF
Retail Investors
As of March 2021 (Source: CySEC)
Key Advantages
Tailored-Made Tax System 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 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 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 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 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
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