International Financial Services Companies
- A growing number of International Financial Services Companies ("IFCs") have established an international presence in Cyprus.
These firms offer a wide spectrum of financial services to the public, ranging from investment advice to the management of
investment portfolios and the establishment and operation of collective investment schemes.
Details on the establishment and operation of International Financial Services Companies in Cyprus can be obtained on request from us.
IFSCs can take various forms
- International Trustee Services Companies
- International Collective Investment Schemes
-
International Fixed Capital Company (IFCC)
- International Variable Capital Company (IVCC)
- International Unit Trust Scheme (IUTS)
- lnternational Investment Limited Partnership (IILP)
- Subsidiaries of Overseas Collective Investment Schemes (Feeder Funds)
- International Financial, Trustee Services, Mutual Funds
International Trustee Services Companies
The term ITC is used to denote either a branch of foreign incorporated company or an international company incorporated in Cyprus the main object of which is to act as a professional trustee. A professional trustee is an international business enterprise which is authorised by the Central Bank of Cyprus to offer trustee services to the public at large.
Normally, the Central Bank of Cyprus accepts applications for the establishment of an ITC from legal persons established in overseas jurisdictions, where, in the opinion of the Central Bank of Cyprus there is adequate regulation, and which already provide either trustee or financial or banking services to the public at large in their country of incorporation.
ITCs may make use of the 1992 International Trusts Law which provides for the formation of international trusts. This Law offers considerable incentives to non-residents clients of ITCs, since apart from the tax incentives, confidentiality and flexibility, it also protects the settlor in case of bankruptcy or liquidation of his property in any action or proceedings against the settlor at the suit of his creditors.
Details on the establishment and operation of International Trustee Services Companies in Cyprus may be obtained from our offices.
International Collective Investment Schems
- Cyprus introduced in May 1999, a legislation enabling the establishment and regulation of International Collective
Investment Schemes ("Schemes").
- The Central Bank of Cyprus (Bank) which is the regulatory and supervisory authority for Schemes, their managers and trustees,
may upon a written application, recognise a company incorporated under the Cyprus Companies Law, a trust created under the
International Trust Law or a partnership registered under the Partnership and Business Names Law, as an International
Collective Investment Scheme.
Under the new legislation, therefore, a Scheme may take one of the following forms:
- International Fixed Capital Company (IFCC)
- International Variable Capital Company (IVCC)
- International Unit Trust Scheme (IUTS)
- International Investment Limited Partnership (IILP)
All four legal types of Schemes, can either be of limited or unlimited duration.
A Scheme, once recognised, may be designated by the Bank as:
1. A Scheme to be marketed to the general public;or
2. A Scheme to be marketed solely to experienced investors; or
3. A private international collective investment scheme.
A manager of a Scheme must be approved by the Bank. In this respect, a manager must on an ongoing basis, satisfy, among other, the
Bank that, having regard to the investment policy and the particular investment objectives of the Scheme for which it acts as manager
that it has sufficient financial and operational resources at its disposal to meet its liabilities, as well as sufficient investment
expertise to conduct its business effectively.
Trustees of Schemes must also be approved by the Bank. Under the Law, only the following can act as trustees of Schemes:
1. A Cyprus local or international bank or an overseas bank established in a jurisdiction which in the opinion of the Bank exercises
adequate banking supervision and which has such minimum paid-up share capital as the Bank may from time to time prescribe; or
2. A local or international or an overseas professional trustee company which is adequately supervised and which has such minimum
paid up share capital as the Bank may from time to time prescribe; or
3. A company incorporated in the Republic, which is a subsidiary of a person referred to at (1) and (2) above, provided that
its liabilities are fully guaranteed by that person.
Every Scheme, its manager and trustee are subject to on-site inspections by the Central Bank of Cyprus. In addition, the Bank may,
under certain circumstances, apply to the Court in order to appoint an inspector to investigate the affairs of the Scheme,
its manager or trustee, or any associated undertaking of any of the aforementioned.
Every Scheme, its manager and trustee will also be subject to off-site monitoring and will, therefore, be required to furnish the Bank with such information and returns concerning the business of the Scheme, its manager or trustee as the Bank may specify from time to time.
The Bank may, under the Law, revoke the recognition of a Scheme or to require the replacement of its manager or trustee.
Details on the establishment and operation of International Collective Investment Schemes in Cyprus can be obtained from our offices.
Subsidiaries of Overseas Collective Investment Schemes (Feeder Funds)
An overseas CIS which wishes to establish a wholly owned international investment company in Cyprus (such structure is known as
"Feeder Funds" or "Two-tiered Funds") must submit to the Central Bank of Cyprus, as a matter of course, the following:
1. Placement Memorandum of the overseas CIS.
2. The investment objective of the overseas CIS
3. Details regarding the Manager and promoters of the overseas CIS.
4. Details regarding any regulatory approval given or applied for in the country in which the overseas CIS is already
incorporated/established or is to be incorporated/established.
5. Any other document or information, which the Central Bank of Cyprus may consider as necessary.
Normally and subject to the following paragraph, approval for the establishment of a subsidiary of an overseas CIS will
only be given if the overseas CIS itself would have been likely to obtain authorisation from the Central Bank of Cyprus,
for the establishment in Cyprus as a Cyprus CIS. In this regard, the Central Bank of Cyprus would give preference to
subsidiaries of overseas CIS which have already obtained an authorisation in a reputable jurisdiction.
In this connection, it should be emphasized that the Central Bank of Cyprus strongly prefers that overseas CIS applying
for the establishment of a feeder fund, should also have their management companies incorporated in Cyprus and/or a visible
preference in Cyprus of a form acceptable to the Central Bank of Cyprus (eg administration, Trustee/Custodian).
Successful applicants are issued with an Exchange Control Law permit which incorporates a number of "special" conditions.
Fiscal Incentives
The fees payable by Cypriot registered vessels are on the low side and may be favourably compared with those of other flags. Ship owners are initially attracted to the Cyprus Register by the inexpensive registration and annual fees and the excellent services offered.
Other important incentives are:
-
No tax on profits from the operation of a Cypriot registered vessel or on dividends received from a ship owning company
- No capital gains tax on the sale or transfer of a Cypriot registered vessel or the shares of a ship owning company
- No estate duty on the inheritance of shares in a ship owning company
- No income tax on the emoluments of officers and crew
- No stamp duty on ship mortgage deeds or other security documents
- Double tax treaties with 40 countries.
International Financial, Trustee Services, Mutual Funds
The Central Bank of Cyprus is the authority responsible for the licensing and supervision of international companies (i.e.
companies which are beneficially owned exclusively by non-residents) involved in the provision of financial and trustee
services as well as of International Collective Investment Schemes.
International Trustee Services Companies
" The term ITC is used to denote either a branch of foreign incorporated company or an international company incorporated in
Cyprus the main object of which is to act a s a professional trustee. A professional trustee is an international business
enterprise which is authorised by the Central Bank of Cyprus to offer trustee services to the public at large.
Normally, the Central Bank of Cyprus accepts applications for the establishment of an ITC from legal persons established in
overseas jurisdictions, where, in the opinion of the Central Bank of Cyprus there is adequate regulation, and which already
provide either trustee or financial or banking services to the public at large in their country of incorporation.
ITCs may make use of the 1992 International Trusts Law which provides for the formation of international trusts. This Law
offers considerable incentives to non-residents clients of ITCs, since apart from the tax incentives, confidentiality and
flexibility, it also protects the settlor in case of bankruptcy or liquidation of his property in any action or proceedings
against the settlor at the suit of his creditors.
Details on the establishment and operation of International Trustee Services Companies in Cyprus can be obtained on request
fro our offices.
Services, Mutual Funds
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