Cyprus: A prime destination for investment funds and asset management

Cyprus has maintained the momentum and is fast becoming a key global centrefor investment funds and asset managers

By Andreas Yiasemides

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Andreas Yiasemides
Andreas Yiasemides

Published: Wed 27 Dec 2023, 1:00 PM

The investment fund sector in Cyprus is emerging as a highly promising and rapidly expanding part of its economy. This growth is notable even amidst current global challenges like market volatility and geopolitical tension. Despite the adverse impacts of Covid-19 pandemic, the war in Ukraine and more recently the hostilities in Israel and Gaza Strip, Cyprus has maintained the momentum and it’s becoming a key global centre for investment funds and their management.

The Cyprus Securities and Exchange Commission (CySEC) reports that by mid-2023, the total value of assets managed in Cyprus reached an impressive €10.7 billion. This figure represents a remarkable 308 per cent growth since 2016.

Additionally, Cyprus is quickly establishing itself as a leading cross-border hub for investment funds, with the majority of the assets invested internationally. This achievement is particularly notable given that only Ireland, Luxembourg, and Malta have higher investment rates outside their borders and considering Cyprus only began to develop this sector less than a decade ago.

Cyprus' growing status as a premier fund jurisdiction is further evidenced by the hosting of the International Investment Funds Association — IIFA's annual conference in October 2023. At this event, CIFA hosted IIFA members from around 30 countries, including the USA, Canada, India, China, and various EU states, representing over $71 trillion in managed assets.

Cyprus’ establishment as a leading destination for investment funds and asset managers is now clear. There are more than 330 licenced management companies and UCIs in Cyprus out of which 254 already have operations.

The country's unique positioning as a fund jurisdiction stems from several factors:

• Its European Union membership offers access to the EU market and a harmonised regulatory framework based on UCITS, AIFM, and MiFID Directives.

• Cyprus presents a cost-effective, tax-advantageous environment, supported by over 60 Double Taxation Avoidance Agreements.

• The local industry benefits from an English-speaking, highly educated workforce, and the costs for setting up and managing funds are significantly lower compared to other EU jurisdictions.

• Competitive set-up and operational costs combined with world-class professional services.

For organisations, especially from the Middle East, Cyprus' strategic location at the intersection of three continents makes it an ideal base for accessing the European market and for international funds interested in the Middle East and North Africa (Mena) region investments. Cyprus is actively strengthening its political and economic ties with GCC countries, particularly the UAE, enhancing its appeal as a hub for asset management operations in the region.

As a full member of the European Fund and Asset Management Association (EFAMA), of the International Investment Funds Association (IIFA), and an Associate Member of the International Capital Market Association (ICMA), CIFA is well-positioned to support institutional investors, family offices, wealth and asset managers, and others from the Mena region seeking to establish their operations and business structures in Cyprus.

— Andreas Yiasemides is the President of Cyprus Investment Funds Association.

To discover more about what Cyprus offers to Investment Funds, visit: www.cifacyprus.org

or reach out to our dedicated team at +357-22-441133, or via email at info@cifacyprus.org


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