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AIFM

Alternative Investment Fund Management

AIFM

Alternative Investment Fund Managers (“AIFMs”) and Alternative Investment Funds (“AIFs”) are governed by the Alternative Investment Fund Managers Law of 2013. This law harmonises Cypriot legislation with EU Directive 2011/61/EC of the European Parliament and Council. The law and relevant directives aim to provide an internal market for AIFs and a harmonized regulatory and supervisory framework.

Moreover, it is predicted that the adoption of this will lead to the relocation of a significant number of Alternative Investment Funds and their managers to cost efficient EU jurisdictions providing them with an attractive legislative, regulatory and tax framework in which to host their operations.

Some of the key advantages offered by Cypriot AIFMs and AIFs is that they provide a gateway to the EU market and are subject to low taxation. Non-Cypriot investors can also benefit from Cyprus’s extensive double-taxation treaty network.

The Cypriot taxation framework has been specifically tweaked with a view to facilitating the island’s competitiveness in the fund industry. Barriers to micro holdings were lifted with the abolition of minimum holding percentages; the redemption of units are reclassified as a disposal. This offers investors tax free income. Indeed, investors resident in Cyprus are subjected to a mere 3% social defence contribution on dividends, previously this was 20%.

Once authorised in Cyprus, an AIF can be marketed in all other EU Member States by the AIFM.

Altus Citadel can assist with the following:
  • Re-domiciliation of an EU or non-EU AIFM to Cyprus
  • Corporate formation and ongoing administration
  • Promotion of application for authorization
  • Post licensing outsourcing
  • Compliance with continuing obligations
  • Fund administration services
  • Independent directors
Moreover, we can assist existing fund managers to a smooth transition in compliance with new regulatory framework. Specifically, we can:
  • Asses your current structure and advise if your structure or your activities are affected
  • Identify potential tax impacts (VAT and transfer pricing) and recommend solutions
  • Prepare an AIFM compliant analysis and action plan to achieve timely compliance in the most tax efficient manner
  • Advisory on both authorization requirements as well as continuing obligations

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