Cyprus Private Investment Funds, known as International Collective Investment Schemes (ICIS), are private funds that can be formed under the laws of Cyprus. A private ICIS can have up to 100 investors, also known as unit-holders. The purpose of a private ICIS is the collective investment of funds injected in such schemes by the unit-holders. It provides an arrangement that enables a number of investors to add collectively their assets, have these professionally managed and invested by independent managers/entities and, in case of successful investment, extract their profits in a tax efficient manner.
Benefits of Cyprus Private Funds
ICIS have a plethora of regulatory, tax, commercial and legal advantages, such as the following:
Private Funds can be established with limited and unlimited duration or with variable or fixed capital. They can also take the form of a limited company, trust or partnership, depending on the underlying circumstances applicable in each specific occasion.
Private Funds are fully regulated by the Central Bank of Cyprus.
Formation can be effected within weeks, subject to all conditions being met and subject to the workload of the Central Bank.
Cyprus private Funds benefit from significant tax incentives. A private ICIS is treated identically to any other Cypriot entity and, accordingly, enjoys a 10% flat corporate income tax on the annual net profits earned worldwide.
In addition, the following tax advantages are especially significant for an ICIS:
exemption from tax on profits from sale of shares and other financial instruments;
exemption from tax on foreign dividends received;
no withholding on interest and dividend payment made from Cyprus abroad;
no withholding tax on income repatriation;
exemption on profits on disposal of securities; and
a wide network of Double Tax Treaties is in place with more than 40 countries worldwide, securing tax incentives and encouraging the channelling of funds in other countries without or with reduced further taxation.