Setting Up a CIF or AIFM in Cyprus: Step-by-Step Licensing & Operational Setup

Why Cyprus Is a Leading Hub for Investment Firms

Cyprus has established itself as one of Europe’s most attractive jurisdictions for investment firms and fund managers. With its EU passporting rights, competitive tax regime, English-speaking professionals, and a supportive regulator (CySEC), Cyprus is home to hundreds of CIFs (Cyprus Investment Firms) and AIFMs (Alternative Investment Fund Managers) serving global clients.

Whether you are a Wealth Manager, Broker/Dealer, Family Office, or Fund Manager, setting up in Cyprus allows you to operate under a respected EU framework while benefiting from a business-friendly environment.

1. Understanding the Types of Licenses: CIF vs AIFM

Cyprus Investment Firm (CIF)

A CIF is authorized by CySEC to offer investment and ancillary services — including portfolio management, brokerage, dealing on own account, and investment advice — under MiFID II. Common CIF types:

• Portfolio Management Firms
• Broker-Dealers / Execution-Only Firms
• Investment Advisers

Alternative Investment Fund Manager (AIFM)

An AIFM manages one or more Alternative Investment Funds (AIFs) in line with the AIFMD directive. Common structures:

• AIFs with unlimited investors
• AIFLNPs (Limited Number of Persons)
• RAIFs (Registered AIFs) — lighter regulation, quick registration via CySEC.

Both structures can be highly efficient, and many groups maintain both a CIF for client-facing operations and an AIFM for fund management activities.

2. Step-by-Step Licensing Process

Step 1: Choose the Right Structure

Decide between:

• Standalone CIF or AIFM, or
• Umbrella structure (CIF + AIFM under same group).

Your choice depends on business model, target clients, and planned activities.

Step 2: Incorporate a Cyprus Company

Form a Cyprus limited liability company (Ltd).

• Minimum 2 directors (at least 2 Cyprus residents recommended)
• Local registered office
• Fit and proper shareholders and board

Step 3: Prepare and Submit Application to CySEC

The CySEC application includes:

• Application form and detailed business plan
• Organizational structure and risk management framework
• Capital adequacy proof (minimum initial capital)
• Policies: AML, compliance, internal audit, governance
• Details of systems and outsourcing arrangements

Typical initial capital requirements:

• Activity Type Minimum Initial Capital
• Investment advice only €75,000
• Portfolio management, order transmission €150,000
• Dealing on own account €750,000
• AIFM (full-scope) €125,000 or 0.02% of AUM exceeding €250M

Step 4: CySEC Review and Approval

The regulator typically takes 3–6 months depending on completeness of documentation and responsiveness to clarifications.

Step 5: Post-License Activation

Once licensed, firms must:

• Appoint local AML, compliance, internal audit officers
• Register with investor compensation fund (where applicable)
• Set up operational infrastructure: client onboarding, portfolio management, trade execution, and reporting systems
• Submit initial capital confirmation and operational readiness reports

3. Building the Post-License Operational Setup

Obtaining the license is just the beginning — the real challenge starts once operations go live. New CIFs and AIFMs must quickly demonstrate that they have robust systems in place to comply with CySEC, MiFID II, and AIFMD ongoing obligations.

Key Operational Components

Function Description Technology Need

Client Onboarding &

KYC Capture client data, suitability assessment, AML checks Secure client portal with KYC workflow

Portfolio & Investment

Management Manage discretionary portfolios or funds PMS / OMS with real-time performance, exposure, and reconciliation

Regulatory Reporting CySEC returns, EMIR/MiFID II transaction reports Automated reporting engine

Function Description Technology Need

Fee & Commission

Management Calculate management and performance fees Customizable fee engine

Client Portal Transparency and engagement Branded, secure client dashboard

Data Consolidation Multi-custodian, multi-asset aggregation Data aggregation and reconciliation module

4. The Technology Stack: Building a Compliant and Scalable Infrastructure

For newly licensed CIFs and AIFMs, choosing the right technology partners early on can save months of operational pain.

Core Systems to Implement

1. Portfolio Management System (PMS) – central to managing assets, positions, transactions, and valuations.
2. Client Relationship Management (CRM) – track clients, interactions, and onboarding workflows.
3. Client Reporting & Portal – deliver transparent, professional investor communications.
4. Regulatory Reporting Automation – reduce manual risk in CySEC filings, EMIR, and MiFID II reports.
5. Bank & Custody Integrations – streamline data ingestion from custodians, fund administrators, and brokers.

Pro Tip: Regulators increasingly assess operational readiness as part of the licensing process. Demonstrating a modern, integrated tech stack can accelerate approval and build credibility with CySEC.

5. Why Many New CySEC-Licensed Firms Choose Reluna

Reluna helps CIFs, AIFMs, and Wealth Managers streamline their end-to-end operations — from onboarding to reporting — through an integrated SaaS platform built for regulated investment entities.

Key Reluna Modules:

• Portfolio & Fund Management
• Client Portal & CRM
• Multi-Custodian Data Aggregation
• Regulatory Reporting (MiFID II, AIFMD, EMIR)
• Performance Analytics & Consolidated Dashboards
• Document Vault & Compliance Tools

Reluna enables new firms to go live faster, reduce costs, and meet CySEC’s operational expectations from day one.

6. Timeline and Typical Costs

• Incorporation 1–2 weeks €2,000–€3,000
• Licensing Preparation 4–8 weeks €10,000–€25,000
• CySEC Review 3–6 months — Post-License Operational Setup 1–3 months €20,000–€60,000 (depending on tech stack)

7. Common Pitfalls to Avoid

• Submitting incomplete or unclear business plans
• Delaying the appointment of local compliance officers
• Underestimating IT and data management requirements
• Using spreadsheets instead of integrated systems
• Not preparing a clear outsourcing governance framework

8. Next Steps: Get Your Cyprus Investment Firm Ready for Launch

If you’re in the process of applying for a CIF or AIFM license — or have recently received one — this is the best moment to define your operational and technology backbone.

Reluna can help you:

• Map your business processes to CySEC regulatory requirements
• Implement a ready-to-go PMS/CRM/Reporting environment
• Launch client and compliance workflows in weeks, not months

Book a demo or consultation to see how Reluna accelerates your post-license readiness.