Alternative Investment Fund
The Cypriot Alternative Investment Fund (“AIF”) regime
With the enactment of the Alternative Investment Funds Law 124(I)/2018 (the “AIF Law”) the Republic of Cyprus has modernised and significantly enhanced the regime governing Alternative Investment Funds (“AIF”) which can be registered and domiciled in Cyprus.
- AIFs with limited Number of Persons (“AIFLNP”)
- AIFs with Unlimited Number of Persons (“AIFUNP”)
- Registered AIFs (“RAIF”).
- Fixed Capital Investment Company (“FCIC”).
- Variable Capital Investment Company (“VCIC”).
- Limited Partnership, with or without a separate legal personality (“LP”).
- Common Fund (not available for “AIFLNP” or “RAIF”).
- Exemption from tax on profits from the sale of securities.
- Exemption from tax on dividend income (subject to certain conditions).
- No withholding taxes on repatriation of dividends, interest and royalties to non-residents.
- 12.5% corporate tax rate.
- Available of the use of Notional Interest Deduction (being an annual tax expense calculated as a percentage of equity).
- No stamp duty on the issue of units in AIFs.
- Investors in AIFs which are tax transparent are not deemed to have a permanent establishment in Cyprus.