articles | 14 December 2016

Cyprus announces tax reform for investment funds

The government is preparing a new tax framework which will further strengthen investment funds sectors in Cyprus, to render the island one of the most attractive investment jurisdictions in the EU.

Speaking at the Cyprus Investment Funds Agency (CIFA) annual general meeting, Finance Minister Harris Georgiades said the government is finalising a new legislation which "will introduce an improved and more credible, effective and competitive framework in collective investments.”

"The Finance Ministry is preparing and in the coming months we will promote a reform in the tax regime which would accompany and strengthen even further the development of the sector,” he said.

The Minister added he is convinced that "this framework will render Cyprus as one of the most attractive and competitive jurisdictions for investment fund growth, offering the right balance between effectiveness and investor protection.”

On his part Undersecretary to the President, Constantinos Petrides vowed the government will continue to table reform proposals, despite the recent parliamentary rejection to the government bills for a reform in the civil service.

"We will continue to present proposals because this country has prospects if we set free the healthy forces of the private sector, the healthy forces of entrepreneurship,” he said, highlighting Cyprus’ capabilities "if we were not trapped in some attitudes, inefficiencies and distortions.”

Referring to entrepreneurship, Petrides said the government is preparing a bill in university spinoffs, linking entrepreneurship with university research, as well as a legal framework for venture capital, adding that shortly the Council of Ministers will discuss a proposal for visa-startups.

Angelos Gregoriades, the President of CIFA, on his part said the association will be as of tomorrow the association will become an ICMA associate member, adding Cyprus will host the 2018 AGM of the European Fund Managers Association.

Gregoriades said CIFA looks forward to the finalising of their proposals on the legal and tax framework in 2017, which will include the introduction of the Registered Alternative Investment Funds (AIF).

"The introduction of the registered AIF could be a key stage in the development of Cyprus as an alternative funds jurisdiction within Europe as we seek to increase the number of alternative investment funds in Cyprus,” he added.

Jeremy Browne, Special Representative of the City of London the EU, said that London, despite Brexit, will continue to be a global financial centre, but may lose some transactions directly linked with the UK’s EU membership status.

He indicatively said that approximately 10% to 15% of the economic activity in London is linked directly with EU membership, noting however that the vast majority of financial activity is of global nature.

Noting that London is a global player, Browne pointed out that financial services professionals in London are more than the entire population in Frankfurt and that London`s daily transactions in euro are more than the eurozone.

"This does not mean we don`t take Brexit seriously, there will some adjustment and there may be some functions which will relocate to other EU jurisdictions,” he went on to say.

But he highlighted the need for a mutually beneficial outcome in the negotiations between the UK and the EU.

Source: Famagusta Gazette

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