QUESTIONS ON REGISTERED ALTERNATIVE INVESTMENT FUNDS (RAIF) IN CYPRUS

A Registered Alternative Investment Fund (RAIF) is similar to an Alternative Investment Fund (AIF) with a key difference. A RAIF is registered, and by extension regulated, under the responsibility of an external Alternative Investment Fund Manager (AIFM), whereby all operational and marketing efforts are conducted under the liability of the AIFM.

The Cyprus Registered Alternative Investment Fund (RAIF) is accommodated under the umbrella structure of specialised and regulated European Compliance Fund Management Company, the external AIFM Fund Manager and is subsequently fully European passported. As opposed to an AIF, the establishment of a RAIF is attractive as it allows the fund to quickly establish a compliant structure in Europe avoiding timeconsuming procedures and the significant cost involved.

Q&A: 
1. What are the minimum capital requirements for a RAIF? 

There is no capital requirement to setup a RAIF, although, a RAIF must have a minimum of EUR 500,000 assets under management (AUM) within the first year of establishment. In contrast, a self-managed AIF would need 125,000 EUR of minimum capital requirement. 


2. What types of investors can the RAIF accept? 
- Well-informed investors 
- Elective Professional Investor 
- “Per-se” Professional Investor 


3. Is there any limit on the number of investors the can participate in a RAIF? RAIFs can have an unlimited number of investors.  


4. Who handles the onboarding of investors to the RAIF and the KYC process? 
The external AIFM handles all of these. 


5. Is the investor’s legal relationship with the RAIF or the external AIFM? 
The investor agreement will be between the RAIF and the investors, and not between the external AIFM and the investors. 


6. Who is responsible to produce all the agreements involved in operating and onboarding investors to the RAIF? 
The external Alternative Investment Fund Manager (AIFM).