Twelve years of strategic progress in Cyprus’ investment funds ecosystem

The recent enactment of the Fund Administrators Law marks a pivotal milestone for the investment funds sector in Cyprus. This development further enhances the regulatory framework, reinforces transparency, and reflects the maturity of a sector that has been built over the past decade through sustained effort, strategic policymaking, and close collaboration between the State, CySEC (Cyprus Securities and Exchange Commission), and the private sector.

Back in 2013, the idea of Cyprus evolving into a credible European investment fund centre was ambitious. Today, that vision is materialising. With over 320 licensed fund entities and Assets Under Management exceeding €10 billion, the sector has emerged as one of the most dynamic pillars of the Cypriot economy. The introduction of new structures such as the RAIF, the alignment of legislation with European directives, and the expansion of a robust ecosystem of service providers have played a decisive role in this transformation - with further enhancements already underway to broaden the structuring options available to fund managers.

CIFA — established in 2013 — has been at the centre of this evolution. As the institutional voice of the industry, CIFA has consistently promoted legislative improvements, promoted Cyprus in key international markets, and collaborated with stakeholders at all levels to position the country as an attractive, competitive and fully compliant fund jurisdiction. All of this has been achieved without any financial support from the Government. Every single initiative — from international campaigns and roadshows to policy development and regulatory consultation — has been funded through CIFA’s own resources, contributed entirely by our members. These are companies and professionals who believe in the long-term potential of Cyprus as an investment destination and actively invest in the future of their industry.

This investment is carefully channelled. Our efforts aim to attract new fund structures, enhance the local ecosystem, and gradually position Cyprus as a credible option for institutional investors and international fund managers. In achieving these objectives, we are especially grateful for the unwavering support of Invest Cyprus, a key strategic partner since day one.

The investment funds sector contributes directly to the Cypriot real economy. Funds support vital sectors such as tourism, renewable energy, healthcare, education, and technology. These are not abstract capital movements — they are tangible investments that generate jobs, infrastructure, and long-term value.

The Fund Administrators Law is an important step forward, but our work does not stop here. CIFA is actively engaged in promoting the modernisation of the Partnership Law and proposing targeted amendments to the AIF and AIFM Laws. We are also working closely with the Ministry of Finance and CySEC to shape a modernised tax framework — one that enhances Cyprus’ competitiveness while ensuring legal certainty and regulatory clarity. In this direction, we have already submitted targeted and well-justified proposals to the Economics Research Centre of the University of Cyprus, which is leading the “Comprehensive Tax Reform” project.

Cyprus competes with leading fund jurisdictions – not by replicating their models but by offering a unique blend of regulatory quality, responsiveness and cost-efficiency. In this ongoing effort, CIFA remains fully committed to representing the sector responsibly and contributing meaningfully to the sustainable development of the Cypriot economy.

• By Maria Panayiotou, President, Cyprus Investment Funds Association (CIFA)