2022-2023 Cyprus Country Report
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CYPRUSCOUNTRY REPORT <strong>2022</strong><br />
investor community. Investment funds have already invested more than €2 billion<br />
in several sectors of the Cypriot economy, such as shipping, hospitality, education,<br />
healthcare, and renewable energy. <strong>Cyprus</strong> offers both EU-regulated Undertakings of<br />
Collective Investment in Transferable Securities (UCITS) and Alternative Investment<br />
Funds (AIFs). In July 2018, the country upgraded its AIF framework and introduced<br />
Registered AIFs (RAIFs), which do not require authorisation by the supervising <strong>Cyprus</strong><br />
Securities and Exchange Commission (CySEC) to commence operations provided they<br />
are externally managed by an Alternative Investment Fund Manager (AIFM) based<br />
in <strong>Cyprus</strong> or another EU country. The upgraded legislation has been hailed ‘groundbreaking’<br />
and offers a significantly more time- and cost-efficient means of establishing<br />
AIFs in <strong>Cyprus</strong>. Today, the majority of alternative investment funds in <strong>Cyprus</strong> are of a<br />
small and medium size and focus on debt and equity securities, real estate and private<br />
equity. However, <strong>Cyprus</strong> has also attracted larger funds including one with assets of<br />
€500 million under management. The number of alternative investment funds has<br />
more than doubled in the last five years and foreign UCITS are now widely marketed<br />
in <strong>Cyprus</strong>, including ones promoted by international financial institutions such as JP<br />
Morgan, UBS and Julius Baer.<br />
GLOBAL SHIPPING HUB<br />
A<br />
major success story for <strong>Cyprus</strong> has been the maritime sector, which accounts for<br />
around €1 billion in annual revenue and approximately 7% of the island’s GDP<br />
– and of this figure, shipmanagement alone accounts for 5%. Apart from offering<br />
shipmanagement and business services to the industry, the <strong>Cyprus</strong> Registry is<br />
classified as the third largest merchant fleet in the European Union and the 11 th largest<br />
in the world. The country is also the EU’s largest shipmanagement centre and amongst<br />
the top three in the world. The sector has seen growth in the past few years and <strong>Cyprus</strong><br />
is currently looking at restructuring the commercial shipping sector to strengthen its<br />
competitive edge. Since introducing an advantageous EU-approved tonnage tax system<br />
in 2010, the island has continued to attract increasing numbers of shipping companies<br />
from across the world. The country’s maritime capital, Limassol, is home to some of the<br />
most influential names in shipping today managing around 20% of the world’s thirdparty<br />
managed fleet.<br />
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