Private Investments Funds (ICIS) In Cyprus: The New Trend

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Do you intend to live in Europe or establish investments there? Cyprus is one of the best choices you can make. It is a Mediterranean island nation with warm sunny weather and pristine beaches that attract many tourists and holidaymakers. In fact, Cyprus ranks among the top tourist destinations in Europe. The country’s immigration rules are not too stringent, either. Cyprus is known for being a secure and safe country that is business-friendly, hence it promotes growth, success, and boosts investors’ confidence.

One of the ways you can invest in Cyprus is through the private investment funds (ICIS), also known as private International Collective Investment Schemes (private ICIS). You could become a Cypriot as you invest by taking the necessary steps to gain cyprus citizenship by investment. A private ICIS is an investment vehicle that brings together individual investors, also called unit holders. The investors pool their assets and have them professionally managed and invested by autonomous managers or bodies.The goal of the investors is to reap their profits in a tax-efficient manner, if the investment is successful.

So what are the advantages of investing in private ICIS? Read on for an insightful look into the benefits of this investment option:

Regulation

The Central Bank of Cyprus thoroughly regulates the private ICIS in Cyprus. Before issuing an approval for setting up a private ICIS, the authority mandated with overseeing them must ensure that the directors, promoters, managers, and trustees of the entity are proficient, persons of integrity, and meet specific legal requirements. The authority also verifies that the managers or partners or trustees, as may be the case, perform their duties independently. The guiding document of the scheme (the constitution) and the memorandum of forming it have to contain all the information required by the law. It must also be designed in a way acceptable to the supervising body. Further, once the scheme is established and operational, the Central Bank of Cyprus keeps close supervision over it.

Flexibility

Private ICIS can be set up for a fixed period or an unlimited period. It can also have a fixed amount of capital or a varying amount. Additionally, it can assume the form of a private limited company, a trust, or a partnership as the underlying circumstances may dictate.

Straightforward formation

The formation process can be executed in six weeks.

Transparency

The managers of the scheme must prepare annual and semi-annual reports for the ICIS under their management. The annual report must at least include financial statements that comprise the balance sheet and a statement on income and expenditure, income distribution and allocation statement, and statement of duties. Also, the financial statements must show the charges incurred.

Tax incentives

Private ICISs formed in Cyprus enjoy great tax incentives. They are taken as any other Cypriot entity, which subjects them to a 10% flat corporate tax on the yearly net profits from their operations across the globe. There are other significant tax incentives applicable to ICIS that include:

  • The proceeds from their sales of shares and other financial instruments are tax-exempt
  • Foreign dividends paid to them are not taxed
  • Payments made abroad for dividend and interest form Cyprus attract zero withholding
  • Nil withholding on income repatriation
  • Profits from the disposal of securities are tax-exempt
  • Enjoy Double Tax Treaties in the network with over 40 member countries worldwide

Conclusion

The formulation of ICIS laws and practices in Cyprus has done much to bolster Cyprus as a significant player and reputable and trusted financial center, attracting humongous investment from all parts of the globe.

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