Tax-News.com Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Cyprus Industry Insight

Seven methods of ensuring a smooth running of a Cyprus company
by Contributed by Fiducenter (Cyprus) Ltd

Cyprus commercial companies and the need for ‘substance’
by Fiducenter

Why Cyprus?
by Anthony Ashiotis & Co

Trusts
by Fiducenter

The New Cyprus Tonnage Tax System
by Andreas Chrysostomou, Head of Maritime Policy and Standards Division, Department of Merchant Shipping

Cyprus: An International Maritime Centre
by Department of Merchant Shipping Cyprus

New Developments in Russia Regarding Cyprus Structures
by Savva & Associates

EU approval of Cypriot scheme for international maritime transport
by Fiducenter

Private Investments Funds (ICIS) in Cyprus: the new trend
by Michalis Kyriakides and Olga Shelyagova

Shipping in Cyprus
by Aspen Trust Group


 
 

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Private Investments Funds (ICIS) in Cyprus: the new trend

Cyprus is definitely on the map as a prominent forum for the establishment of private investment funds, also known as private International Collective Investment Schemes (private ICIS). An ICIS can also be formed as a public fund, however the purpose of this brief is to provide a general overview of the primary advantages of a private ICIS.

The purpose of a private ICIS is the collective investment of funds injected in such schemes by the unit-holders. A private ICIS can have up to 100 investors, also known as unit-holders. It provides an arrangement that enables a number of investors to add collectively their assets, have these professionally managed and invested by independent managers/entities and, in case of successful investment, extract their profits in a tax efficient manner.

The primary advantages of a private ICIS are flexibility, regulation, transparency, straightforward formation, clear legal framework and tax efficiency. These are examined in brief below:

(1) Flexibility. Private ICIS can be established with limited and unlimited duration or with variable or fixed capital. They can also take the form of a limited company, trust or partnership, depending on the underlying circumstances applicable in each specific occasion.

(2) Regulation. Private ICIS are fully regulated by the Central Bank of Cyprus. In order to issue an approval of the scheme, the supervising authority must be satisfied that the directors, promoters, managers and trustees of the scheme are competent, honest and meet certain legislative requirements and, also, that the manager(s) or the general partner(s) or the trustee(s), as applicable, act independently. The constitutional documentation and the offering memorandum of the scheme must contain the information prescribed by the law and be drafted in a form acceptable to the supervising authority. After formation, the Central Bank of Cyprus pursues a substantial monitoring role.

(3) Transparency. Annual and half-yearly reports must be prepared by the managers in relation to each ICIS. The former reports must contain financial statements, information on borrowing, portfolio information, report by trustees and report by auditors. The latter must as a minimum contain financial statements, including balance sheet, income and expenditure account, statement of the sources from which the total income of the ICIS has been generated, statement of income distribution and allocation and statement of duties, charges and fees paid out.

(4) Straightforward Formation. Formation can be effected within 6 weeks.

(5) Tax Incentives. Cyprus private ICIS benefit from significant tax incentives. A private ICIS is treated identically to any other Cypriot entity and, accordingly, enjoys a 10% flat corporate income tax on the annual net profits earned worldwide. In addition, the following tax advantages are especially significant for an ICIS: (a) exemption from tax on profits from sale of shares and other financial instruments; (b) exemption from tax on foreign dividends received; (c) no withholding on interest and dividend payment made from Cyprus abroad; (d) no withholding tax on income repatriation; (e) exemption on profits on disposal of securities; and (f) a wide network of Double Tax Treaties is in place with more than 40 countries worldwide, securing tax incentives and encouraging the channelling of funds in other countries without or with reduced further taxation.

Cyprus private ICIS are commonly used for the accumulation of funds and collective investments in countries such as Russia, Poland, Ukraine and India. Investments in the Balkans are equally favourably structured via Cyprus. These can be combined by alternatives or more elaborate tax structures, such as a private ICIS operating as a subsidiary of funds established in other international jurisdictions (“Feeder Funds”). The development of ICIS law and practices in Cyprus has strengthened the position of Cyprus as a reputable and strong international financial centre and has attracted considerable international investment.

Up to 30 July 2010, 52 private ICIS have been successfully registered and operate in Cyprus.

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Cyprus Country and Foreign Investment

- CYPRUS GEOGRAPHY
- CYPRUS POPULATION LANGUAGE AND CULTURE
- CYPRUS GOVERNMENT
- CYPRUS ECONOMY AND CURRENCY
- CYPRUS ENTRY AND RESIDENCE
- CYPRUS BUSINESS ENVIRONMENT
- CYPRUS LARNACA INDUSTRIAL FREE ZONE
- CYPRUS IMPORT OF FOREIGN CAPITAL
- CYPRUS INVESTMENTS BY FOREIGNERS

Cyprus Types of Company

- CYPRUS PRIVATE COMPANY LIMITED BY SHARES
- CYPRUS EXEMPT PRIVATE COMPANY
- CYPRUS PUBLIC COMPANY LIMITED BY SHARES
- CYPRUS COMPANY LIMITED BY GUARANTEE
- CYPRUS BRANCH OF OVERSEAS COMPANY
- CYPRUS GENERAL PARTNERSHIP
- CYPRUS LIMITED PARTNERSHIP
- CYPRUS SOLE PROPRIETORSHIP
- CYPRUS TRUSTS

Cyprus Offshore Business Sectors

- CYPRUS TRADE, MARKETING AND DISTRIBUTION
- CYPRUS FINANCIAL HOLDING AND INVESTMENT ACTIVITIES
- CYPRUS OFFSHORE BANKING UNITS
- CYPRUS OFFSHORE FINANCIAL SERVICES COMPANIES (INVESTMENT FUNDS)
- CYPRUS SHIP MANAGEMENT AND MARITIME OPERATIONS
- CYPRUS LICENSING AND FRANCHISING : ROYALTY COLLECTION
- CYPRUS PROFESSIONAL SERVICES
- CYPRUS INSURANCE

Cyprus E-Commerce

- CYPRUS INTRODUCTION
- CYPRUS FACILITIES
- CYPRUS OFFSHORE ACTIVITIES
- CYPRUS CASE STUDIES

Cyprus Law of Offshore

- TABLE OF STATUTES
- TRUST LAW
- BANKING LAW
- INVESTMENT COMPANYLAW

Cyprus Offshore Legal and Tax Regimes

- CYPRUS FORMS OF OFFSHORE OPERATION
- CYPRUS TAX TREATMENT OF OFFSHORE OPERATIONS
- CYPRUS TAX TREATEMENT OF OF FOREIGN EMPLOYEES OF OFFSHORE OPERATIONS
- CYPRUS EXCHANGE CONTROL
- CYPRUS OFFSHORE ACTIVITIES IN CYPRUS
- CYPRUS EMPLOYMENT AND RESIDENCE

Cyprus Domestic Corporate Taxes

- CYPRUS SCOPE OF CORPORATION TAX
- CYPRUS CORPORATION TAX RATES
- CYPRUS BRANCH OR SUBSIDIARY?
- CYPRUS CALCULATION OF TAXABLE BASE
- CYPRUS FILING REQUIREMENTS AND PAYMENT OF TAX
- CYPRUS WITHHOLDING TAX

Cyprus Personal Taxes

- CYPRUS RESIDENCE AND LIABILITY FOR TAXATION
- CYPRUS INCOME TAX
- CYPRUS CAPITAL GAINS TAX
- CYPRUS ESTATE DUTY
- CYPRUS REAL ESTATE TAXES
- CYPRUS CUSTOMS DUTIES

Cyprus Labour Regulation

- CYPRUS REGULATORY ENVIRONMENT
- CYPRUS WORK PERMITS
- CYPRUS SOCIAL SECURITY

Cyprus Double Tax Treaties

- CYPRUS DOUBLE TAX TREATIES
- CYPRUS TAX-SPARING PROVISIONS
- CYPRUS TREATY RATES
- CYPRUS OTHER INTERNATIONAL AGREEMENTS

Cyprus Services Directory

Full List | Accounting/Auditing | Asset Protection | Aviation Services | Banking Services | Brokerage/Trading | Captive Insurance | Company Formation | Corporate Services | Expatriate Services | Internet/E-Commerce | Legal Services | Marine Services | Tax Planning | Trust Management | Wealth Management