Cyprus Alternative Investment Fund with Limited Number of Persons (AIFLNP)

Benefit from lighter regulatory oversight, a cost effective structure, flexibility in investment strategies, and an attractive tax regime.

General Overview

  • Legal Basis: Governed by the Alternative Investment Funds Law of 2018.
  • Regulatory Oversight: Supervised by the Cyprus Securities and Exchange Commission (CySEC) but with lighter regulation than a full AIF.
  • Target Investors: Restricted to Professional and Well-Informed Investors (maximum 50 investors per fund – look through).
  • Setup Timeframe: The setup timeframe ranges from 6 to 8 months, though it can vary depending on the complexity of the structure.
     

Key Features

  • Corporate Flexibility: Can be structured as:
    • Common Fund (CF)
    • Variable Capital Investment Company (VCIC)
    • Fixed Capital Investment Company (FCIC)
    • Limited Partnership (LP)
  • Investment Scope: No predefined restrictions; full flexibility to invest in any asset class.
  • No EU Passporting: Cannot benefit from AIFM marketing passport but can still raise capital within Cyprus and some EU jurisdictions via national private placement regimes (NPPR).
  • Lower Regulatory Burden: Lighter reporting and compliance requirements compared to full AIFs.
     

Taxation

  • Corporate Tax: Subject to Cyprus’ standard 12.5% corporate tax rate.
  • No Withholding Tax on dividend distributions to non-resident investors.
  • No Subscription Tax on net assets.
  • Access to Cyprus’ Double Tax Treaty Network for tax efficiency.
     

Governance & Service Providers

  • Self-Managed or External Management: If structured as a company, it can be self-managed by its Board of Directors.
  • Depositary Requirement: Exemption possible if:
    • Total assets are below €100 million with leverage.
    • Total assets are below €500 million without leverage and no redemption for at least five years.
  • Central Administration: Must be maintained in Cyprus.
  • Auditor: A Cyprus-registered auditor must be appointed.
     

 

Advantages of a Cyprus AIFLNP

  • Lighter Regulatory Oversight: Lower compliance and reporting obligations than full AIFs.
  • Cost-Effective Structure: No need for full AIFM oversight, reducing operational costs.
  • Flexibility in Investment Strategies: No predefined investment restrictions.
  • Attractive Tax Regime: Competitive tax benefits and access to double tax treaties.
     

Use Cases

  • Private Equity & Venture Capital Funds
  • Real Estate Investment Funds
  • Hedge Funds & Debt Funds
  • Niche Investment Strategies (Crypto, Fintech, etc.)
     

Setup & Support by KENDRIS Capital

  • Assistance with AIFLNP structuring and CySEC registration.
  • Drafting of regulatory documents (Fund Prospectus, Limited Partnership Agreement, etc.).
  • Ongoing fund management, administration, and compliance services.
     

Cyprus AIFLNP Factsheet

Download

Key contact

Nikolas Charalambous
Nikolas Charalambous
Managing Director
MBA, BSc. Accounting
T +357 24 205300
Kyriacos Antonaki
Kyriacos Antonaki
Operations Manager
MBA, BSc. Economics
T +357 24 205300

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