Management Company in Cyprus

FEATURES OF CREATION

A management company in Cyprus is always the perfect solution for the European Union fund registration process.

This is facilitated by a huge number of reasons, among which it is worth highlighting a transparent registration process, an affordable taxation system in the country, an excellent legislative framework and law enforcement practice.

Therefore, for those who have not decided where the registration process of the management company should be carried out, it is worth reading this article.

ACTIVITIES OF GOVERNING ORGANIZATIONS IN CYPRUS AND THE LEGISLATIVE FRAMEWORK

A management company in Cyprus must comply with the following guidelines:

• the law on investment funds or alternative types of funds, which fully reflects the EU Directive entitled “On the Management Process of Alternative Investment Funds” (AIFMD);
• the law on regulated markets, work in the investment industry and other services provided as part of this process, which was formed at the points prescribed in the EU Directive under the title “On Markets Used in Practice of Financial Instruments”;
• the law on alternative investment model funds 131 (I) 2014;
• Law 78 (1) 2012, which reflected the clauses of the Directive entitled “On the formation of collective investments that take the form of securities of a valuable kind”
• Law on organizations.

Among the key bodies of national importance that are involved in the regulatory process of such institutions and fund organizations, as well as their marketing, is the Cyprus Commission, whose activities are related to the management of stock exchanges and securities of a valuable nature.

PECULIARITIES OF THE REGULATORY PROCESS OF THE MANAGING ORGANIZATIONS IN CYPRUS

Considering the base of laws of Cyprus, which is aimed at the regulatory process of managing institutions, you can make sure that it meets all the standards that are accepted at the European level.

This affects the fact that all companies located in the territory of this country have quite stringent requirements.

They are associated with the assessment of such an indicator as liquidity of assets, possible risks, as well as reporting, which must be systematically provided to investors and asset evaluators.

In addition, you should look at the fact that many services can be offered even by secondary parties involved in the provision of such services.

GOVERNANCE ORGANIZATION IN CYPRUS FOR STOCK INSTITUTIONS OF CATEGORY UCITS

Considering the fund organizations of the UCITS category, their management can be carried out both by external companies and independently. When choosing the second option, its construction should be implemented on an investment-type company, in which variable capital is fixed.

This leads to the fact that the management process will occur due to the work of the so-called board of directors. In addition, certain requirements are set for self-managed funds:

• initial capital should be no less than 300 thousand euros;
• the presence of two directors who have experience and certain knowledge in the field of doing business;
• organizational structure that will meet all established requirements.

In addition, such requirements must be observed:

1. The amount of initial capital should be at least 125 thousand euros. Its payment must be realized through the use of cash. In the event that the price of assets will be about 250 million euros, then the initial investment indicators should be increased proportionally by 0.002%.
2. The presence of appropriate personnel, the established joint-stock form of the structure, in which there are all the necessary technical and monetary instruments. This makes it possible, within the framework of the current legislation, to provide the offered services in full.
3. Persons who will be involved in the process of managing the institution must have special experience that has been gained with respect to the so-called management under the name UCITS.

GOVERNANCE ORGANIZATIONS IN CYPRUS FOR STOCK INSTITUTIONS OF CATEGORY AIF

If we conduct a comparative analysis with the example above, then when creating management organizations for funds of the AIF category, management companies as well as a way of self-government can be used for management.

When organizing a self-governing type fund, the construction of activity should be formed on the basis of an investment-type firm with both variable and fixed capital. Moreover, the management process should be carried out through the work of the board of directors.

In addition, the following requirements must be observed:

• the amount of initial capital should be about 300 thousand euros;
• the presence of two directors who have experience and certain knowledge in the field of doing business;
• organizational structure that will act in full compliance with the established criteria.

The management bodies should be located in Cyprus and a registered office should be located in this territory. It is also worth making sure that the managing organization has a license of the established type of CySEC type, which allows carrying out a similar type of work.

Another list of mandatory items should include the following:

• appropriate staff, established organizational structure and availability of capital that meets the initial conditions;
• the presence of a certain structural form by which the process of stock ownership occurs;
• the presence of two directors who have experience and certain knowledge in the field of doing business.

In the event that you need to obtain data related to investment funds or asset management in Cyprus, our company specialists will help you in solving this issue.