12th Jul 2018
On 10 July 2018, Parliament passed an array of amendments to existing legislation introducing important changes to the fund industry in Cyprus. The amendments were initiated in an effort to capture a series of recent EU and international trends and best practices concerning the investment fund industry and aim to reinforce the position of Cyprus as an up-and-coming hub in the worldwide fund industry.
The new piece of legislation relating to the alternative investments funds (“AIF”) will replace the current Law 131(I)/2014 on Alternative Investment Funds. The emphasis is on the registered alternative investments funds (“RAIFs”) introduced for the first time and which aim to provide an affordable and less regulated fund structure in Cyprus. The procedure for registering in the register of RAIFs will be simpler than the authorisation procedure required for the alternative investments funds.
From the information currently available, pending the publication of the new law on AIFs, the key characteristics of the RAIFs will be the following:
The new set of amendments to the existing legislation also introduce the option for structuring an AIF as a limited partnership with inherent legal personality, as well as, significant tax benefits to the unitholders and the fund managers.
The amendments will come into force upon their publication in the Official Gazette of Cyprus which is expected to take place in the coming weeks. Further updates will be provided by our firm regarding this important and much anticipated development.