2023-Cyprus-Country-Report
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CYPRUSCOUNTRY REPORT <strong>2023</strong><br />
development is an area where <strong>Cyprus</strong> punches well above its weight. Unprecedented<br />
investment into the sector and ground-breaking projects are establishing this small<br />
island, not only as an innovation and research hub, but as a regional centre of excellence<br />
providing strong links with the global scientific and technical innovation community.<br />
INVESTMENT FUND BOOM<br />
C<br />
yprus has big ambitions in the investment funds sector to target a bigger piece<br />
of the global asset management pie. The steady growth in both Assets under<br />
Management and in the number of fund structures licensed and active in <strong>Cyprus</strong> have<br />
underlined the strength and appeal of the novice domicile. Assets under Management<br />
(AuM) have seen a formidable increase from €2.7 billion in 2016 to €10.7 billion in<br />
the second quarter of <strong>2023</strong>, showing that it is not the sector’s size but its fast growth<br />
that has impressed, and is being recognised by the global asset management and<br />
investor community. Investment funds have already invested more than €2.5 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 in<br />
<strong>Cyprus</strong>, including ones promoted by major international financial institutions.<br />
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