Our team can provide assistance in structuring and setting up the structure under the FPI route and generally offer any kind of local assistance required.

Cyprus Investment Funds are now eligible in India

On 14 June 2021 the Government of India has designated the Republic of Cyprus as an eligible country for obtaining Category I FPI registration under the Securities and Exchange Board of India (SEBI) (Foreign Portfolio Investors) Regulation, 2019.

Accordingly, Cyprus based funds will now be able to register for a Category I FPI License and therefore benefit from the numerous advantages available to Category I FPIs, including:

1. Exemption from Indirect transfer provisions

Investors in Category I FPIs are exempted from the applicability of “Indirect Transfer” provisions under the Indian Income-tax Act, which are otherwise applicable to an overseas investor upon transfer of shares / interest in an overseas entity with assets in India.

2. Regulatory advantages

· Issue/ invest in Offshore Derivative Instruments (such as Participatory Notes), after compliance with the Know Your Client (KYC) norms as specified by SEBI;

· Lesser KYC documentation required by SEBI as compared to Category II FPI;

· Higher position limits for investing in derivatives.

According to the SEBI Regulations, appropriately regulated funds and unregulated funds whose investment manager is appropriately regulated and registered as a “Category I Foreign Portfolio Investor” are subject to lighter KYC requirements and enhanced trading limits and are also eligible to invest in ODIs.

So, the highly promising Indian market is now within reach of Cypriot-regulated funds and regulated fund managers, which may lead to further growth for the sector. “In combination with the low cost required to set up and manage funds and other investment structures, Cyprus is today a uniquely competitive entry point to EU-regulated fund management solutions.”