The main advantage of re-domiciliation of an offshore fund to Cyprus is to gain regulatory permission to market into the EU, as well as enjoy the advantages of low corporation tax (Only 12.5% on net profits), no capital gains or dividend tax on non-residents of Cyprus, efficiency, availability of an experienced workforce, cost competitiveness and most importantly, a business and flexible oriented regulatory environment.
Cyprus is a key destination for offshore funds seeking to domicile into the EU because of its many advantages.
Alternative Investment Funds (AIFs) are the most attractive form of funds available for all types of assets and structures and may take several legal forms.
Promoters of Cyprus investment funds are able to create diversified products using sophisticated investment strategies, including the use of holding structures.
Cyprus offers a simple, straightforward process for the re-domiciliation of investment funds whereby all types of investment vehicles can be re-domiciled from both offshore and other European jurisdictions.
Foreign funds will need to register in Cyprus and then merge or apply to receive regulatory permission. Once the legal entity is registered in Cyprus, it will submit an application to CySEC, which will review and approve all corporate and investment documents.
Foreign funds merging with a Cyprus investment fund may do so through the issuance of shares or units to the shareholders of the offshore fund, which is then dissolved.
The contribution in kind of all assets and liabilities is allowed. Cyprus allows for the establishment of Master and feeder-funds.