AIF, AIFLNP & RAIF – CySEC
What is CySEC and what does it do?
The Cyprus Securities and Exchange Commission (CySEC) is the independent public authority of Cyprus, accountable for overseeing the investment services market, the collective investment and asset management sector, and the crypto-asset activities conducted in and out of the Republic. CySEC’s vision is to ensure investor protection while establishing Cyprus as the one of the safest, most reliable, and most desirable investment harbors.
Why establish an Alternative Investment Fund in Cyprus?
An established Alternative Investment Fund (AIF) in Cyprus benefits from:
- Cyprus’s unique combination of memberships (e.g. European Union, Eurozone, Council of Europe, United Nations, World Bank, World Trade Organisation, International Monetary Fund, British Commonwealth).
- Cyprus’s proximity to 3 continents.
- Providing its investment services within the European Economic Area (EEA) through the European Union (EU) passporting framework.
- Cyprus’s attractive tax regime, which is one of the lowest among the EU member states, and includes more than 60 double tax treaties.
- A cost-efficient plan of administrative, operating, and living expenses.
Types of Alternative Investment Funds
An AIF can be distinguished in:
- AIF with an unlimited number of persons (AIF)
- AIF with a limited number of persons (AIFLNP)
- Registered AIF (RAIF)
Features of Alternative Investment Funds
In the table below we provide the key features of an AIF, indicating the different requirements for each of the AIF types:
| Feature | AIF | AIFLNP | RAIF |
|---|---|---|---|
| Legal Form | – Common fund, – Investment company, – Partnership. | – Investment company, – Partnership. | – Common fund, – Investment company, – Partnership. |
| Eligible Investors | – Professional, – Well-informed, – Retail. | – Professional, – Well-informed. | – Professional, – Well-informed. |
| Number of Investors | Unlimited | Up to 50 investors (applies for all compartments) | Unlimited |
| Min AUM within the first 12 months | EUR 500,000 | EUR 250,000 | EUR 500,000 |
| Fund Management | – Self-managed (in the case of an investment company or a limited partnership with separate legal personality), – Externally Managed by a fund manager. | – Self-managed (in the case of an investment company or a limited partnership with separate legal personality), – Externally Managed by a fund manager. | Always externally managed |
A depositary is mandatory to be appointed for all AIF, unless it is permitted not to in certain circumstances, regarding an AIFLNP.
Regulatory Capital Requirements
Minimum regulatory capital requirements depend on the investment fund type and if it is self-managed, as per the table below.
| Type of AIF | Capital Requirements |
|---|---|
| AIF | If self-managed: EUR 125,000 |
| AIFLNP | If self-managed: EUR 50,000 |
| RAIF | Not subject to minimum capital requirements. |
Application Fees
CySEC application fees depend on the investment fund type that is to be authorised, and more specifically, with the number of investment compartments included. Where there are multiple investment compartments, additional costs apply.
Annual Fees
The annual contributions payable by an AIF, vary based on the specific type of the fund and, similarly to the application fees, the number of investment compartments. An AIF that did not carry out any operations during the calendar year in which the authorisation was granted, is still subject to the annual fee.
Authorisation Timeframe
The authorisation timeframe for an Alternative Investment Fund and an Alternative Investment Fund with Limited Number of Persons is approximately 6 months whereas, for a Registered Alternative Investment Fund it is estimated to be 1 month. This effectuates if the documentation submitted to CySEC is adequate and the correspondence is prompt.
Obtaining a CySEC Alternative Investment Fund authorisation with SALVUS
The SALVUS Investment Funds Licensing team consists of specialised professionals able to support you in every step of your AIF authorisation with CySEC. Our team employs a high-quality project management and stands ready to support you in selecting the most appropriate type and structure of investment fund based on your business objectives and vision.
We work closely with our clients and their teams in collecting and preparing the necessary documentation for submitting a complete application to the regulator, ensuring instantaneousness. We further provide guidance and assistance, in order to satisfy all your post-authorisation regulatory obligations for the successful launch of operations.
Please contact us at info@salvusfunds.com if you are interested in establishing an AIF in Cyprus.