General Overview
- Legal Basis: Governed by the Alternative Investment Funds Law of 2018.
- Regulatory Oversight: Supervised by the Cyprus Securities and Exchange Commission (CySEC) but with lighter regulation than a full AIF.
- Target Investors: Restricted to Professional and Well-Informed Investors (maximum 50 investors per fund – look through).
- Setup Timeframe: The setup timeframe ranges from 6 to 8 months, though it can vary depending on the complexity of the structure.
Key Features
- Corporate Flexibility: Can be structured as:
- Common Fund (CF)
- Variable Capital Investment Company (VCIC)
- Fixed Capital Investment Company (FCIC)
- Limited Partnership (LP)
- Investment Scope: No predefined restrictions; full flexibility to invest in any asset class.
- No EU Passporting: Cannot benefit from AIFM marketing passport but can still raise capital within Cyprus and some EU jurisdictions via national private placement regimes (NPPR).
- Lower Regulatory Burden: Lighter reporting and compliance requirements compared to full AIFs.
Taxation
- Corporate Tax: Subject to Cyprus’ standard 15% corporate tax rate.
- No Withholding Tax on dividend distributions to non-resident investors.
- No Subscription Tax on net assets.
- Access to Cyprus’ Double Tax Treaty Network for tax efficiency.
Governance & Service Providers
- Self-Managed or External Management: If structured as a company, it can be self-managed by its Board of Directors.
- Depositary Requirement: Exemption possible if:
- Total assets are below €100 million with leverage.
- Total assets are below €500 million without leverage and no redemption for at least five years.
- Central Administration: Must be maintained in Cyprus.
- Auditor: A Cyprus-registered auditor must be appointed.
Advantages of a Cyprus AIFLNP
- Lighter Regulatory Oversight: Lower compliance and reporting obligations than full AIFs.
- Cost-Effective Structure: No need for full AIFM oversight, reducing operational costs.
- Flexibility in Investment Strategies: No predefined investment restrictions.
- Attractive Tax Regime: Competitive tax benefits and access to double tax treaties.
Use Cases
- Private Equity & Venture Capital Funds
- Real Estate Investment Funds
- Hedge Funds & Debt Funds
- Niche Investment Strategies (Crypto, Fintech, etc.)
Setup & Support by KENDRIS Capital
- Assistance with AIFLNP structuring and CySEC registration.
- Drafting of regulatory documents (Fund Prospectus, Limited Partnership Agreement, etc.).
- Ongoing fund management, administration, and compliance services.
Cyprus AIFLNP Factsheet
Key contact
Nikolas Charalambous
Managing Director
MBA, BSc. Accounting
Kyriacos Antonaki
Head of AML & Compliance
MBA, BSc. Economics
More Fund Solutions
Luxembourg Reserved Alternative Investment Fund (RAIF)
Benefit from regulatory efficiency, flexibility in asset classes, cost-effectiveness, investor protection, scalability, and attractive exit options.
Cyprus Registered Alternative Investment Fund (RAIF)
Benefit from a fast and cost-effective set-up, a flexible investment strategy, EU passporting, and an attractive tax regime.
Malta Notified Alternative Investment Fund (NAIF)
Benefit from flexibility in asset classes, time and cost advantages, cross-border marketing possibilities and operational scalability.
Luxembourg Special Limited Partnership (SCSp)
Benefit from no direct regulation, high flexibility, tax efficiency, an investor-focused structure, cost-effective setup, and efficient transferability.
Luxembourg Specialized Investment Fund (SIF)
Benefit from a regulated yet flexible solution, broad investment scope, cost-effectiveness, EU passporting, and strong market recognition.
Luxembourg Investment Company in Risk Capital (SICAR)
Benefit from no diversification rules, tax efficiency, EU passporting, strong market recognition, and scalability.
Luxembourg Common Limited Partnership (SCS)
Benefit from high flexibility, tax efficiency, an investor-focused structure, cost-effective setup, and efficient transferability.
Cyprus Alternative Investment Fund (AIF)
Benefit from a flexible fund structure, investor protection, EU passporting, an attractive tax regime, and scalability.