Cyprus is emerging as a pivotal financial center, uniquely positioned at the crossroads of Europe, Asia, and Africa. This strategic placement and an investor-friendly environment have transformed Cyprus into a prime location for diverse fund services. Novo Solution is at the forefront of this transformation, offering unparalleled expertise in navigating Cyprus’s evolving financial landscape.

The island’s commitment to aligning with international financial standards and its robust regulatory and fiscal frameworks position Cyprus as a preferred destination for European and global investors. This commitment is evident in the sustained growth and diversification of the Cypriot fund industry, making it a magnet for those looking to expand and diversify their investment portfolios.

Cyprus’s fund landscape is marked by a rich diversity, encompassing both UCITS and non-UCITS (ICIS) funds, each catering to distinct investor needs and strategies.

• UCITS: The Regulated Choice for Investors: In Cyprus, UCITS funds symbolize a regulated investment model harmonized across the EU. These funds stand out for their high investor protection and liquidity levels, presenting an ideal choice for those seeking transparent, EU-wide marketable financial instruments.
• Non-UCITS (ICIS): Flexibility and Diversity: Contrasting UCITS, the ICIS funds in Cyprus offer greater flexibility and cater to investors inclined towards more varied and potentially higher-yield investment strategies. These funds allow for a broader scope in investment policies and asset classes, aligning with the goals of investors pursuing bespoke investment solutions.

Both fund types operate within an investor-protective framework, offering a comprehensive range of investment opportunities. This inclusive approach caters to a broad spectrum of investor preferences, from those seeking the security and regulation of standard products to those desiring more specialized investment pathways.

Cyprus distinguishes itself in global finance with its significant tax advantages, a cornerstone feature attracting fund services. Notably, the absence of withholding taxes on dividends, interest, and royalties distributed from Cypriot entities to non-residents stands out, enhancing the efficiency of profit repatriation for international investors.

Moreover, Cyprus funds benefit from an advantageous tax environment, with tax exemptions on income derived from fund units or share disposals. This feature optimizes investors’ returns and cements Cyprus’s position as an attractive and competitive fund service jurisdiction.

Integrating AIFMD into Cyprus law is pivotal in enhancing investor confidence and aligning with European regulatory standards. This Directive, which harmonizes European regulatory frameworks, has significantly elevated investor protection measures and introduced stringent requirements for fund managers.

In Cyprus, adherence to AIFMD mandates ensures fund managers operate with heightened transparency and stringent risk management, reinforcing investor trust. This compliance underscores Cyprus’s reputation as a reliable and secure jurisdiction for fund services.

The investment landscape in Cyprus is marked by its wide-ranging and adaptable investment structures, catering to a spectrum of investor preferences. This versatility extends from conventional retail funds to more niche segments like private equity and venture capital ventures. Cyprus’s appeal lies in its ability to craft custom-fit solutions, accommodating the distinct needs of expansive institutional entities and discerning high-net-worth individuals.

Moreover, Cyprus distinguishes itself with the provision for setting up umbrella funds. These funds are characterized by their segmented compartments, each governed by its distinct investment strategy. This structure enables fund managers to craft a diverse investment portfolio under a unified fund umbrella, giving investors the leverage to align their assets with specific risk and return profiles.

Cyprus’s geographical positioning and EU membership are pivotal in establishing it as an international investment focal point. The island serves as an influential gateway within the EU and as a conduit to markets in the Middle East, North Africa, and Asia.

Cyprus’s extensive network of double tax treaties further enhances this international appeal. These treaties play a crucial role in fostering efficient cross-border investment flows, minimizing tax burdens, and propelling Cyprus to the forefront as a favorable locale for global fund services.

At Novo Solution, we pride ourselves on offering a comprehensive array of services tailored to the entire lifecycle of funds. Our approach encompasses everything from the genesis of a fund to its mature operational phases, ensuring a seamless fusion of expertise and regulatory adherence.

Our fund establishment services are marked by a meticulous approach, encompassing strategic structuring advice, detailed documentation preparation, and guidance through the labyrinth of regulatory approvals. Our deep understanding of the Cypriot regulatory terrain enables us to ensure that your fund comes to fruition and thrives within local and EU regulatory frameworks.

Once established, our management services encompass a range of activities crucial for the smooth functioning of your fund. This includes administrative support, accounting services, and regulatory reporting. Our team stays abreast of regulation changes, guaranteeing that your fund complies with evolving legal requirements. Our dedication to meticulous fund management ensures that operational aspects are handled efficiently, allowing you to focus on strategic growth and investment objectives.

Recognizing that each investor has unique requirements, Novo Solution prides itself on offering Personalized Solutions. We work closely with our clients to understand their needs and investment goals.

This client-centric approach allows us to tailor our services, whether it’s in fund structuring, asset allocation, or risk management. Our bespoke services are about meeting needs and anticipating and exceeding them, ensuring a fund management experience that is as rewarding as it is robust.

Cyprus’s tax framework for funds is a critical element in its global appeal as a premier fund management destination. The country’s tax structure is strategically designed to attract and retain international investors, featuring several key benefits:

• Zero Withholding Tax Regime: One of the most significant advantages is the zero withholding tax on dividends, interests, and royalties distributed by Cypriot funds to investors outside Cyprus. This policy is a substantial incentive for international investors seeking tax-efficient channels.
• Income Exemption for Funds: Another pivotal aspect is exempting funds from taxes on income generated through the sale of investments, such as shares and bonds. This feature maximizes the financial returns for investors by minimizing the tax impact on investment gains.
• Competitive Corporate Tax Benefits: Funds in Cyprus can capitalize on one of the EU’s most favorable corporate tax rates, set at 12.5%. This rate can be further optimized through strategic financial tools like the Notional Interest Deduction, enhancing the overall tax efficiency of the fund.
• Expansive Double Taxation Agreements: Cyprus’s extensive network of double tax treaties plays a crucial role in reducing the tax liability for cross-border investments, thereby reinforcing Cyprus’s position as a globally competitive hub for fund services.

This harmonious blend of tax benefits aligns with EU directives, positioning Cyprus as a top-tier fund establishment and management jurisdiction.

At Novo Solution, our approach to Cyprus Fund Management is anchored in stringent legal compliance, ensuring local and international regulatory standards adherence. Our legal framework encompasses:

• Rigorous AIFMD Adherence: We ensure that all Alternative Investment Funds (AIFs) under our management strictly comply with the Alternative Investment Fund Managers Directive (AIFMD), reinforcing transparency and safeguarding investor interests.
• Consistent Regulatory Reporting: Our team diligently manages all necessary regulatory reporting requirements, ensuring the funds consistently align with ongoing compliance mandates.
• Robust Risk Management Protocols: We prioritize adherence to rigorous risk management guidelines per regulatory standards. This commitment is integral to our fund management strategy, ensuring we uphold the highest financial integrity and investor protection levels.