We can assist with formation of a Private Investment Fund or Experienced Investor Fund as follows:
- We have the required experience for the formation and administration of your fund. With highly experienced professionals in some of the most regulated and respected jurisdictions in the world, we are able to ensure all aspects of the fund are handled, whether your fund is open — ended or closed — ended.
- We can prepare and submit to the Central Bank the Preliminary Application for the initial feedback as to the suitability of the proposed project.
- Draft the constitutional documentation and the offering memorandum.
- Prepare, submit and follow up with the Central Bank on the final application for recognition by the Central Bank.
- We have the experience to help you deal with the complexities and pit-falls, so you can be sure your needs are met on time and accurately. We provide administration services to a wide range of clients both locally and internationally. Working in partnership with professional intermediaries, we can support you in the establishment of investment funds and a large number of local funds are now listed on different stock exchanges.
Once the recognition by the Central Bank is obtained, we can assist with the formation of the entity (i.e. the company, the partnership or the trust) that will operate as the Private Investment Fund or Experienced Investor Fund.
Once the Private Investment Fund is set up, we can provide administrative services including calculating the net asset value, preparing annual accounts and periodical financial reports as required by law. The fee for administrative services depends on their scope and volume and the quote can be provided on request.
Audit services for the Private Investment Fund can be provided by our associate company………………………………………,. The fee for audit services depends on the scope and volume of the financial transactions undertaken in a financial year and the quote can be provided on request.
The key taxation aspects applicable to an International Collective Investment Scheme (ICIS) are as follows.
- Dividend income received from foreign corporations is exempt from Cypriot taxation provided that the easily met dividend participation exemption rules are satisfied.
- Gains from the disposal of titles are exempt from all taxes. Titles are described as shares, bonds, debentures and similar titles as well as rights thereon (options, futures etc).
- Interest income earned by a CIS is subject only to income tax, less any allowable expenses, at the income tax rate of 10%.
- No withholding tax is imposed on dividend and interest payments made to non-Cypriot tax resident recipients as per the Cypriot local tax legislation.
- Withholding taxes suffered abroad can be claimed as a credit by Cypriot tax resident companies, including ICISs’, over income recognized in Cyprus subject to the extensive network of double taxation treaties that Cyprus has, the EU Directives and the local legislation.
- For fund managers who want to take tax residence in Cyprus, the following provisions may be of interest which are applicable for Cypriot tax resident unit holders:
- Redemption or buy-back of units or other interest in closed-ended or open-ended Cypriot ICISs is not subject to special defense contribution, since it does not constitute capital reduction. It is considered as disposal of titles, which is exempt from Cypriot taxation, thus redemption proceeds are tax exempt; and
- The special defense contribution rate for the so-called ‘deemed dividend distribution’ is 3% only instead of the regular 15%.