Cyprus Investment Firm

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What is a Cyprus Investment Firm?

Investment Firm or “IF” means a person that operates under an authorisation granted by the competent authority and provides one or more investment services to third parties or/and performs one or more investment activities on a professional basis.

Advantages of CIFs in Cyprus:

  • EU Passport. An Investment Firm licensed in Cyprus can be used for the provision of investment services from Cyprus in all EU markets, while it can also offer investment services to third countries.
  • Attractive Tax Environment. Cyprus has one of the lowest corporate income tax rates in the EU and Eurozone at 12,5%. Cyprus also offers full exemption from tax on gains from trading in securities and on foreign dividends. In combination with a wide network of double tax treaties, this gives many options for international tax planning.
  • Modern Regulatory Framework. Cyprus offers a competitive modern and transparent financial and regulatory framework.
  • Multinational Presence. There are currently many foreign banks with fully-fledged offices in Cyprus servicing the vast majority of Cyprus incorporated companies.
  • Cost Effectiveness. Professional services fees in Cyprus are highly competitive compared to other European jurisdictions, without compromising quality of service.
  • Strategic Geographic Location. Cyprus has a strategic location in the eastern Mediterranean Sea in the middle of three continents, namely Asia, Europe and Africa, and offers a gateway to the Middle East.
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Huge advantages of CIFs in Cyprus

Audit and Regulatory Reporting Services

Yiallourides & Partners Ltd can help you with the following

  • Conduct audit of the statutory annual financial statements based on International Financial Reporting Standards
  • Review half yearly reports as required by the Cysec Direct and Indirect Tax Services
  • Tax and VAT advice on Cypriot Tax and VAT implications arising from the operations of a CIF, including the review from a tax perspective of agreements and key relationships with business associates
  • VAT advice on right to recovery of VAT incurred on purchases and expenses, including partial exemption (apportionment) methods
  • Preparation and submission of written requests for Tax and VAT rulings to the Cypriot Authorities regarding the operations of a CIF
  • Assistance with Tax and VAT compliance issues, including assistance with preparation and submission of Tax and VAT returns
  • Assistance with preparation of objections to assessments raised by the Tax and VAT Authorities, including liaising with the Authorities during the process of examining the objections
  • Reviews of submitted Tax and VAT returns and assistance with corrections of mistakes and omissions, including liaising with the Authorities in providing information

A CIF must:

  • Establish satisfactory policies and procedures in order to ensure compliance, including all relevant persons, with its obligations under the Law and the directives, as well as appropriate rules governing personal transactions by such persons
  • maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps designed to prevent conflicts of interest from adversely affecting the interests of its clients
  • employing appropriate and comparable systems, resources and procedures in order to ensure continuity and regularity in the performance of investment and ancillary services and activities

(d) ensure, when relying on a third party for the performance of investment services or activities or operational functions which are critical for the provision of satisfactory service to clients and the performance of investment activities on a continuous basis

(e) have robust governance arrangements including a clear organizational structure with well defined, transparent and consistent lines of responsibility

(f) records should be kept of all services provided and transactions undertaken by it, which shall be sufficient to enable the Commission to monitor compliance with the requirements under the Law and the directives and in particular to ascertain that the CIF has complied with all its obligations with respect to clients or potential clients

(h) Use proper client identification procedures, record maintenance and internal reporting as provided by the Prevention and Suppression of Money Laundering Activities Law and by directives issued pursuant to the said law or/and to section 20 of the Law

(i) when holding financial instruments and funds belonging to clients, make adequate arrangements so as to safeguard clients’ ownership rights, and prevent the use of a client’s instruments and funds on own account except with the client’s express consent

(k) establish, implement and maintain:

  • decision-making procedures and an organisational structure which clearly and in documented manner specifies reporting lines and allocates functions and responsibilities
  • adequate internal control mechanisms designed to secure compliance with decisions and procedures at all levels of the CIF
  • adequate and orderly records of its business and internal organisation
  • adequate risk management policies and procedures which identify the risks relating to the CIF’s activities, processes and systems, and where appropriate, set the level of risk tolerated by the CIF
  • adequate systems and procedures to safeguard the security, integrity and confidentiality of information, taking into account the nature of the information in question
  • adequate business continuity policies aimed at ensuring, in the case of an interruption to its systems and procedures, the preservation of essential data and functions, and the maintenance of investment services and activities, or, where that is not possible, the timely recovery of such data and functions and the timely resumption of its investment services and activities
  • effective and transparent procedures for the reasonable and prompt handling of complaints received from retail clients or potential retail clients, and to keep a record of each complaint and the actions taken

(r) participate in an Investor Compensation Scheme subject to annual subscriptions

The above arrangements, processes and mechanisms must be comprehensive and proportionate to the nature, scale and complexity of the business activities of the CIF, especially when taking into account the nature and range of the investment services and activities it undertakes in terms of the said business activity.

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    A Cyprus Investment Firm (CIF) is one of the most useful tools in the European Union.

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