An Evolving and Dynamic Powerhouse

The Cyprus investment fund industry is an ideal location for Middle East funds seeking access to the European market and vice-versa

Cyprus' investment fund industry successfully overcame the pandemic's consequences, and continues to grow as an international hub for investment funds and fund managers. Even during the unprecedented period of the Covid-19 pandemic, Cyprus has continued to grow rapidly as a centre of excellence for the international fund and asset management industry.

According to the Cyprus Securities and Exchange Commission (CySEC), by the end of the first half of 2021, the total assets under management reached almost EUR 11 billion, which translates into a 296 per cent overall increase from 2016. What is more, the European Fund and Asset Management Association reported that Cyprus is the fastest-growing European centre, in terms of net assets under management. We are confident that this upward trend will persist in the coming years, especially when considering the continuous stream of applications for licensing pending approval.

The sector's success story can be further demonstrated from the collaboration with internationally renowned custodians, and the acceptance of Cyprus Funds in Clearstream's Vestima platform, Bloomberg and Thomson Reuters. Also, Alternative Investment Funds (AIFs) and Undertakings for the Collective Investment in Transferable Securities (UCITS) can submit their registries for handling to the Central Depository and Central Registry (CSD) of the Cyprus Stock Exchange (CSE).

Cyprus has become a jurisdiction of choice for funds and fund managers because it’s a business-friendly European destination that applies common-law rules. Situated at the crossroads of three continents, Cyprus is an ideal location for Middle East funds seeking access to the European market, and international funds looking to invest in the MENA region. However, Cyprus is not a jurisdiction of choice simply because of its unique geographical position, CySEC prudently regulates the industry, which comprises an English-speaking and highly educated workforce. Most importantly, the costs of setting up and managing a fund are significantly lower than in other EU jurisdictions. With more than 60 Double Taxation Avoidance Agreements in place, Cyprus is the ultimate gateway for doing business in the EU. As a European Union Member State, Cyprus offers a harmonised regulatory regime for investment services, as it has adopted the UCITS, AIFM, and MiFID directives. More legislative updates will come into force soon. The continuous modernisation of the legal framework will reinforce even more the already well-rounded framework governing funds in Cyprus. Currently in line, the parliament is in the process of passing a legislative act, aiming towards the supervision and regulation of the fund administration services profession. The law will set high standards within the fund administration profession, and provide an extra layer of comfort to fund managers and investors.

CIFA is a full member of the European Fund and Asset Management Association (EFAMA), the representative association of the investment fund and asset management industry in Europe, and an associate member of the International Capital Market Association (ICMA) and a member of the International Investment Funds Association (IIFA). CIFA stands ready to assist institutional investors, family offices, wealth and asset managers, and other interested parties from the MENA region looking for the ideal base to set up their operations and business structure.

For more information on what Cyprus can offer to investment funds, please visit- http://www.cifacyprus.org/

Contact our dedicated team at +357-22-441133 or e-mail info@cifa.org.