‘Cyprus funds grow along with our reputation’ – CIFA President

Cyprus funds grew 14 per cent in terms of assets under management in the first quarter of 2021, to €9.8 billion.

We asked Andreas Yiasemides, president of the Cyprus Investment Funds Association, to explain what is driving this growth.

“According to EFAMA, the fund sector in Cyprus has the highest growth rate in Europe. With a combination of an excellent legal and regulatory framework, tax incentives, excellent supporting environment, and low setup cost – we have created an extremely favourable climate for funds, and word is getting around.

During 2020 and the Covid-19 pandemic, the investment fund sector was tested in Cyprus and internationally and proved to be very resilient. We were optimistic that with the gradual normalisation of the situation, the sector’s growth rate would intensify, and we are pleased that these forecasts are confirmed.”

It’s important to note that funds registered in Cyprus are creating new jobs, he adds.

“Our industry is creating many jobs in new professions that have been developed. We have new positions, such as Portfolio Manager or Risk Manager. At the same time, the sector has a direct contribution to the economy through registration fees and taxes.

Cyprus has built a reputation as a financial services jurisdiction, and professionals from abroad increasingly recognise it as an excellent place to work.

A recent move to improve the legal framework has not gone without notice, Yiasemides notes.

“The consultation paper on a proposed draft law regulating investment fund administrators is close to publication as a final bill. We hope that it will be put to the vote in the House of Representatives in the coming months. The law would complete the sector’s legislative framework – it is the final piece of the puzzle,” Yiasemides explained.

“The existing specific requirements by the Regulator such as rules on capital requirements, provisioning, will be enhanced even further”..”

There has also been additional momentum because of Brexit.

“Fund managers from the UK who seek to have access to the European market after the transition period, are increasingly considering Cyrus as a European base.”

There is every reason for the high growth rate that Cypru

Cyprus funds grew 14 percent in terms of assets under management in the first quarter of 2021, to €9.8 billion.

We asked Andreas Yiasemides, president of the Cyprus Investment Funds Association, to explain what is driving this growth.

“According to EFAMA, the fund sector in Cyprus has the highest growth rate in Europe. With a combination of an excellent legal and regulatory framework, tax incentives, excellent supporting environment, and low setup cost – we have created an extremely favourable climate for funds, and word is getting around.

During 2020 and the Covid-19 pandemic, the investment fund sector was tested in Cyprus and internationally and proved to be very resilient. We were optimistic that with the gradual normalisation of the situation, the sector’s growth rate would intensify, and we are pleased that these forecasts are confirmed.”

It’s important to note that funds registered in Cyprus are creating new jobs, he adds.

“Our industry is creating many jobs in new professions that have been developed. We have new positions, such as Portfolio Manager or Risk Manager. At the same time, the sector has a direct contribution to the economy through registration fees and taxes.

Cyprus has built a reputation as a financial services jurisdiction, and professionals from abroad increasingly recognise it as an excellent place to work.

A recent move to improve the legal framework has not gone without notice, Yiasemides notes.

“The consultation paper on a proposed draft law regulating investment fund administrators is close to publication as a final bill. We hope that it will be put to the vote in the House of Representatives in the coming months. The law would complete the sector’s legislative framework – it is the final piece of the puzzle,” Yiasemides explained.

“The existing specific requirements by the Regulator such as rules on capital requirements, provisioning, will be enhanced even further”..”

There has also been additional momentum because of Brexit.

“Fund managers from the UK who seek to have access to the European market after the transition period, are increasingly considering Cyrus as a European base.”

There is every reason for the high growth rate that Cyprus sees to continue, Yiasemides points out.

“Our medium-term target is for Assets Under Management to surpass €20 billion soon. We believe we can achieve this goal within the next three years. Word will continue to spread about all the sector’s tax, legal and cost advantages, and these, along with every stakeholder’s efforts, will drive growth.”

The local sector took another step forward on June 14 when Indian authorities made Cyprus’s funds eligible with lighter KYC requirements. CIFA also intends to attract fund managers from India who seek a gateway to the EU.

Out of the 166 collective investment funds with activities in Cyprus, 123 invest in Cyprus, partially or entirely, and their investment in the country so far amounts to €2.2 billion.

And that is a considerable sum in a country where GDP is about €20 billion.