Hedge Funds in CyprusUpdated on Wednesday 07th September 2016
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The hedge funds market has been developing rapidly in Cyprus in the last years, due to a strong regulation for international collective investment schemes (ICIS), enabled by the Bank of Cyprus in 1999. Hedge funds in Cyprus are usually incorporated to participate in investment schemes on the stock market and they can be set up as open-ended and closed-ended, but investors tend to prefer the first option. Our team of Cypriot lawyers can offer legal assistance for the registration of a hedge fund in Cyprus.
Regulatory framework applicable for Cypriot hedge funds
Hedge funds in Cyprus are regulated by a set of legal acts, as follows:
• Investment Service Law;
• Consolidated Market Abuse Law;
• Prevention and Suppression of Money Laundering Activities Law;
• Transparency Law;
• International collective Investment Schemes Law.
Hedge funds are usually addressed to professional investors, who have an extensive knowledge of the financial market. Through a hedge fund, the investors will be able to use advanced investment strategies in order to obtain a high return. The legal entity can operate on both the local market and the international ones.
The main regulatory body for hedge funds is the Bank of Cyprus and our team of Cypriot attorneys can provide assistance on the main requirements imposed by the institution at the registration of a fund.
Marketing Cypriot hedge funds
A legal entity set up as a private hedge fund will need to appoint a custodian, which must be a Cypriot bank. A private hedge fund should have a limited number of shareholders, which was established at maximum 100.
In this case, the investors are not allowed to sell the company’s assets to the general public. Moreover, the applicable legislation stipulates that the units of the ISICs can’t be transferred.
Another important aspect is that the minimum value of the initial investment (calculated by each individual investor) is set out at EUR 50,000.
Businessmen interested in receiving more details about the advantages of a hedge fund in Cyprus can address to our Cypriot law firm for legal representation.