Our Law Firm advise on all aspects of establishing, administrating, developing regulation, supervision of a Cyprus International Collective Investment Company.
The Legal forms are two (limited or unlimited duration):
- International Fixed or Variable Capital Company
- International Unit Trust Scheme
- International Investment Limited Partnership
- Unit-holders can be another ICIS, IBC or non-resident experienced investor
- an ICIS marketed to the general public
- an ICIS marketed solely to experienced investors
- a private international collective investment scheme
Private funds are not registered under the Cyprus Securities and Exchange Committee but through the Central Bank of Cyprus. The Fund can offer its units to a maximum of 100 experienced investors. The fact that Private Funds are registered through the Cyprus Central Bank resolves to a much simpler procedure rather than going through the SEC. This process is actually a vetting procedure of the Fund Directors as well as having the required functions in place (Fund Manager, Administrators, Auditors, Custodian etc).
A Private Fund is basically a company with 2 classes of shares. Management shares have voting rights and are owned by the Fund Directors and Participating shares are issued to the experienced investors at a premium price. This minimizes the capital duty.
Just as any other Cyprus company, the fund’s income will be taxed in Cyprus at 10% (tax credit is provided against any tax paid abroad) and dividends will be distributed to the unit holders at 0% withholding tax based on the Local Income Tax Law. Furthermore, the fund can exploit the extensive Double tax Treaty network in order to attract dividends, interest and royalties from its operating countries at lower rates than normal. For example, a fund investing in e.g. UK, Russia or Ukraine will attract a 0% WHT on the profits paid to the Cyprus Fund after invoking the DTT between Cyprus and the respective countries.
Such Private Funds are favoured for investment in movable, immovable or intellectual property. The Fund administrators must be a Cyprus registered and regulated administration company; the custodian to the assets of the fund must be a local bank.