Wealth management covers several activities associated with the administration of high net worth individuals’ estates. Among these, investment advice and financial services are often requested by those who need professional assistance in managing various assets.
Wealth management in Cyprus is available through various channels, as the country welcomes foreign investors and citizens interested in protecting their assets.
Below, our lawyers in Cyprus explain what wealth management implies and the services available for those interested in such services.
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The wealth management sector in Cyprus
Many high-net-worth individuals started to consider Cyprus a wealth management destination thanks to the country’s flexible types of investment companies and taxation system. Cyprus also has a very appealing residency scheme that allows foreigners to relocate and invest in the country.
| Quick Facts | |
|---|---|
| Regulatory body | Cyprus Securities and Exchange Commission (CySEC) under Law 87(I)/2017. |
|
Funds jurisdiction |
Cyprus holds membership in the European Union and is recognized as a reputable jurisdiction for wealth management. |
|
Fund types |
UCITS, and AIF. |
| Fund managers | We are licensed fund managers in Cyprus authorized by CySEC. |
| Fund administrator |
It is mandatory to appoint a licensed fund administrator in Cyprus. |
| Custodian bank (Yes/No) |
Yes, the Custodian needs to be either a domestic bank or a Cyprus-based company that has received approval from CySEC. |
| Passporting in Cyprus |
Fund managers located in Cyprus can leverage the advantages of passporting, enabling them to benefit from Cyprus’s cost-effective operational environment and strong legislative framework. |
| Double tax treaties |
50 |
| Stable political environment |
Cyprus boasts a stable economic and political environment. |
| Strategic location | Situated strategically between three continents, Cyprus enjoys advantageous economic ties with both Europe and Asia. |
| Currency |
Euro |
| Professional service providers |
Our team of seasoned professionals, including lawyers and auditors, is at your disposal to assist you with wealth management in Cyprus. |
| Investor protection |
Foreign investors receive identical constitutional protection for fundamental rights as local investors. The Constitution of Cyprus ensures equality for all individuals, regardless of nationality, and Article 23 safeguards the fundamental right to property ownership. |
| Compliance standards |
Wealth managers in Cyprus are required to strictly comply with rigorous standards for both compliance and anti-money laundering (AML). |
| Fintech hub | Fintech hub Cyprus, renowned for hosting forex companies, is increasingly drawing a diverse range of fintech businesses due to its low corporate tax rates and EU access facilitated by the passporting principle. |
The Cypriot banking system and the various types of investment vehicles transformed the country into a wealth management center. The Cypriot taxation system attracts many foreign investors that find very convenient wealth management solutions in the island starting with the low income and corporate tax rates. The legal framework represents another advantage for those opening trusts in Cyprus, thanks to the new International Trust Law.
Considering all the advantages the island provides to foreign individuals, Cyprus is about to become one of the most efficient wealth management centers in Europe.
The most common wealth management services available in Cyprus
Wealth management implies complex administration procedures when it comes to the estate of a client, especially when considering that the assets people or companies can hold are various.
Wealth management in Cyprus can imply:
- investment advice based on specific strategies;
- financial services in accordance with the investment strategy proposed;
- assets protection through various investment vehicles;
- estate planning and even accounting services.
Such services can be provided by banks or private companies specialized in the financial sector, and in Cyprus, there are several entities through which wealth management assistance can be obtained.
When choosing a private firm to work with, you can rely on our Cypriot lawyers for assistance in verifying if it meets your needs.
Who can provide wealth management services in Cyprus?
Cypriot and foreign high net worth individuals, as well as companies, can request wealth management administration services in Cyprus. Such guidance can be offered by banks which can also safekeep various types of assets, as well as market financial instruments in which their clients can invest. However, it is also possible for those interested to obtain such services from specialized firms that can advise on how to choose a specific investment strategy or assets to invest in, that can assist in drafting documents for the creation of trusts, wills, and other papers through which the protection of estate is ensured.
It is also possible to use the advice of a private service provider, such as a financial specialist or accountant who can keep track and monitor the performance of such assets.
It is important to note that wealth management in Cyprus is possible because of the legislation which favors the creation of various types of investment vehicles.
Our law firm in Cyprus can assist with the creation of investment funds and trusts that can be used for wealth management.
Estate planning through drafting a will in Cyprus
The testament is one of the simplest ways of ensuring efficient wealth management in Cyprus. High net worth individuals usually employ the will in order to leave their assets to their heirs. From this point of view, Cyprus is a great country to have a will drafted in, as real estate investment here can be left to those a foreign citizen wants to in accordance with the laws of this country.
Drafting a will in Cyprus is not complicated, and our lawyers are at the service of those interested in using such an instrument to divide their estate between heirs.
Financial instruments used in wealth management in Cyprus
Those who are considering other instrument to ensure their wealth grows can invest in various financial products. In Cyprus, these can use:
- equity;
- bonds;
- commodities.
These are usually targeted by professional investors, however, those interested in diversifying their income can also request the services of specialists in the financial field who can advise and even manage portfolios on their behalf.
In Cyprus, wealth management can take various forms, however, we recommend due diligence before choosing a specialist. If this is not the case of banks, when it comes to private individuals, these must be accredited with various associations or institutions.
Our Cypriot lawyers can offer support to those interested in protecting their assets and in need of legal advice on how to choose a service provider.
Investment vehicles in Cyprus
When it comes to wealth management, Cyprus provides several types of investment vehicles among which are:
- holding companies,
- international trusts,
- international collective investment schemes.
Cypriot holding companies are among the best wealth management vehicles because of the efficient tax planning solutions they provide. Among these, one can enumerate the low 12.5% corporate tax, the exemption on the capital gains tax when disposing of securities. Cyprus also has an extended network of double taxation treaties that provide low tax rates when dividends, interests and royalties are repatriated.
Cypriot international trusts also have many advantages such as trust funds that can consist of any movable or immovable property and can also be used as an investment vehicle.
Collective investment schemes in Cyprus may be set up under various forms such as international fixed capital company, variable capital company, or international investment limited partnership. International collective investment schemes in Cyprus are also recognized by the Central Bank.
What are the wealth management services provided by our Cypriot law firm?
Among the wealth management services our lawyers in Cyprus provide one can find:
- tax and estate planning solutions,
- investment portfolio management,
- private wealth management solution,
- cash management.
Statistics on Cyprus’ economy
Cyprus is one of the most financially sound economies in Europe. According to data provided by Heritage.org:
- the country ranked 33rd in terms of economic freedom in the 2021 Index, with a score of 71.4 points;
- compared to 2019, Cyprus gained 1.3 points in the report;
- Cyprus also ranked 19th in terms of economic freedom among the 45 European countries;
- the country’s investment freedom is one of the highest here with a score of 75 points;
- Cyprus has one of the highest scores in terms of fiscal health in the world – 82 points,
- it also scored 76.1 points in terms of business freedom.
If you want to set up a business or want more details about wealth management we invite you to contact our Cypriot attorneys.