Cyprus Private Investment Funds, known as private International Collective Investment Schemes (ICIS), are private funds that can be formed under the laws of Cyprus. A private ICIS fund can have up to 100 investors, also known as unit-holders. The purpose of a private ICIS fund is the collective investment of funds injected in such schemes by the unit-holders. It provides an arrangement that enables a number of investors to add collectively their assets, have these professionally managed and invested by independent managers/entities and, in case of successful investment, extract their profits in a tax efficient manner.

Tax Benefits and Advantages of Cyprus Private Funds

ICIS have a plethora of regulatory, tax, commercial and legal advantage. The following tax advantages are especially significant for an ICIS:

  • exemption from tax on profits from sale of shares and other financial instruments;
  • exemption from tax on foreign dividends received;
  • no withholding on interest and dividend payment made from Cyprus abroad;
  • no withholding tax on income repatriation;
  • exemption on profits on disposal of securities; and
  • a wide network of Double Tax Treaties is in place with more than 40 countries worldwide, securing tax incentives and encouraging the channelling of funds in other countries without or with reduced further taxation.

Types of Private Investment Funds in Cyprus

Under the applicable Cypriot legislation, namely the International Collective Schemes Law 47(I) of 1999 (the ICIS Law), the Central Bank of Cyprus is the regulatory and supervisory authority for ICIS and may, upon a written application, recognise a company, a trust or a partnership as an ICIS. The said forms an ICIS can manifest in are analytically described as follows:

International Fixed Capital Company (IFCC)

incorporated under the Companies Law and recognised to operate as an international fixed capital company pursuant to the ICIS Law. Its assets and unit holders are non-Cypriot residents and the share capital cannot vary, it remains fixed. The initial minimum capital required to set up an IFCC is US$100,000. If the IFCC is a private ICIS then it is exempted from this capital requirement. A private ICIS is one that has 100 or less investors.

International Variable Capital Company (IVCC)

incorporated under the Companies Law and operates as an international variable capital company under the ICIS Law. Its assets and unit holders are non-Cypriot residents and the share capital varies according to the participating investors at any given time. The share capital of the company is equal to the net asset value (NAV) of the shares of the company at any time.

International Unit Trust Scheme (IUTS)

an international trust created under the International Trust Law and recognised to operate as an International Unit Trust Scheme under the ICIS Law. (See Cyprus International Trusts). The assets are owned by the Schemes Trust in fiduciary for the trust beneficiaries

International Investment Limited Partnership (IILP)

a limited partnership registered under the Partnerships Law and recognised to operate as an international investment limited partnership under the ICIS Law. As with all limited partnerships (see Partnerships), there must be a general partner appointed who manages the fund and is responsible for the assets and liabilities of the fund. The limited partner will also be a member of the scheme. A general partnership can also have companies as partners.

Inner Workings of a Private ICIS

Setting up a regulated private International Collective Investment Scheme in Cyprus entails professional regulated services by qualified Advocates such as the award-winning lawyers of our Firm. It also involves other professionals, which must be approved by the Central Bank. Our Firm undertakes the provision of all professionals required for a private ICIS to be licensed, established and operate seamlessly and our Clients maintain the choice at all times to provide their own Investment Manager, Custodian or Auditors as long as these are approved by the Central Bank. In detail, the roles in an ICIS are usually as follows:

Investment Manager

The scheme may be managed internally through the executive Directors appointed upon the formation of the ICIS (who must be approved as to their investment experience and capacity by the Central Bank) or through a third party, an Investment Firm licensed by a regulating authority to act as Investment Manager of the particular Scheme or a general Fund Manager company. If a Cyprus Investment Firm is to be used as the Investment Manager, which we highly recommend, it must be licensed to provide portfolio management services under its Cyprus Securities and Exchange Commission (CySEC) licence. Our Firm can provide both individuals acting as Investment Managers of an ICIS as well as Fund Management companies undertaking the same role.


An established bank (in Cyprus or in another jurisdiction) is appointed as the custodian of an ICIS, subject to its approval of the Fund’s purpose and subject to such bank being approved by the Central Bank to act as the custodian. The custodian bank shall bear responsibility for holding and safeguarding the assets placed under the ICIS, should these be tangible or intangible assets. Our Firm maintains excellent approved intermediary relationships with banks in Cyprus and in Europe and can arrange for the appointment of the custodian bank.


ICIS without physical presence in Cyprus per se must appoint administrators that are approved by the Central Bank to administrate the private fund in Cyprus. The fund’s Cypriot administrators render their services with regard to book-keeping and accounting, compliance, reporting, filing, share issue, transfer and redemption and other relevant services. Our Firm arranges for the administrative requirements of a private International Collective Investment Scheme through its professional in-house administrators.


Qualified professional auditors appointed upon formation of the private ICIS attend to the annual audit, the bi-annual monitoring reporting and other compliance functions, all under the IFRS and applicable legislation. Our Firm arranges for the appointment of our affiliated qualified external auditors to provide the necessary services at the highest value and in full compliance with the regulatory requirements.

Legal Advisors

The ICIS’s lawyers draft various documentation such as the Memorandum and Articles of Association in the case of variable capital company (or partnership agreement or trust deed) and attend to the legal formation, licensing and regulatory compliance of the private ICIS both upon formation and afterwards. As recognised leaders in this practice area, we address the full range of a private fund’s legal needs.

Contact us to discuss how you can setup a private investment fund and receive our legal services and advice.

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