To obtain the licence, the proposed CIF shall exist in the form of a legal entity (for the setup of a Cyprus company learn more HERE) and submit a written application to CySEC which must be accompanied by a number of documents including:
1. Business plan, including a description of the operations, the organizational structure, forecasts for the first two financial years and the names of at least two experienced and reliable persons who shall run the business activities of the CIF.
2. A draft of the Articles of Association as they are expected to be in effect after the authorization of the CIF.
3. An excerpt of the criminal record, certificates of non-bankruptcy and resumes of the members of the board of directors, the executives and shareholders possessing a qualifying holding, as well as their answers to a questionnaire issued by CySEC.
4. A draft of the internal regulation (operations manual), depending on the investment and non-core services which the company aims to provide.
5. A draft organizational structure of the applicant company.
6. A description of the applicant’s computer network and electronic infrastructure.
7. A draft internal manual, in accordance with acceptable practices, for the prevention of the legalisation of the proceeds of criminal activities.
It should be noted that if the shareholders possessing a qualified holding in the applicant company (10% or more) are legal entities, then CySEC may also require the details mentioned at point 3 above by the ultimate shareholders.
Additional documents not expressly listed above may also be required at CySEC’s sole discretion.
CySEC will reach a decision within six calendar months following the submission of a duly completed application, on either granting a CIF authorization or refusing the application.
After the granting of the authorisation, CIF must comply with the ongoing obligations provided by the Law and the relevant CySEC directives.
Criteria for the appointment of directors and/or persons employed by the Cyprus Investment Firm
The persons who effectively direct the business of a CIF have to meet the following criteria:
1. Good repute
2. Sufficient experience to ensure the sound and prudent management of the CIF
3. Must be approved by CySEC.
Persons who act as nominee directors cannot be appointed in a CIF. There are no restrictions to appointing foreign nationals as Directors, but in practice, the decisions affecting the management and control of the Investment Firm must be taken in Cyprus, this will allow the CIF to benefit from the favourable Cyprus Tax regime.
Other persons employed by a CIF who are not Directors and who will provide investment services must have the necessary knowledge and expertise for performing their assigned responsibilities and must be registered in the public register maintained by CySec (CySEC’s public register requires success in CySEC’s exams).