Cyprus investment funds sector aims for qualitative growth in 2026

Cyprus Investment Funds Association (CIFA) president Maria Panayiotou on Monday released a statement setting out the organisation’s priorities for 2026.

Panayiotou pointed to quality growth “in an environment of heightened regulatory requirements, technological transformation and intensifying international competition”.

She explained that in recent years Cyprus “has not limited itself to creating an institutional framework to attract investment structures”, but has instead built “a functional and reliable market, characterised by regulatory consistency, transparency and international credibility”.

At a time when investors are seeking not only returns but also predictability, she said the Cypriot jurisdiction “has proven that it can support the entire life cycle of an investment fund, from establishment and marketing, to operation, reporting and exit”.

Within this framework, Panayiotou pointed to Cyprus’ key competitive advantages, which she said can be summarised in “the threefold proposition of European passporting, practical flexibility and specialised human capital”.

Full alignment with the European regulatory framework, combined with fast licensing procedures, she said, “creates a business-friendly environment”, while the mature ecosystem of professional services with international experience “supports complex and demanding investment strategies”.

At the same time, she explained that the profile of investment structures choosing Cyprus “is evolving in qualitative terms”.

In particular, she referred to growing interest in private equity and private credit, as well as in investments in sectors such as technology, energy, sustainability and shipping.

As investors place increasing emphasis on risk management, liquidity management and transparency in decision-making, Panayiotou said this “is raising the overall standards of the ecosystem”.

Looking ahead, she said 2026 is expected to be “a year of increased regulatory challenges”, with the implementation of AIFMD II, DORA, strengthened AML obligations and developments around MiCA.

Although the rising cost of compliance “creates pressure, especially for smaller organisations”, she explained that the new requirements “act as a quality filter”, enhance the market’s long-term credibility and may also lead to synergies and consolidation.

Panayiotou also placed particular emphasis on the ESG framework. Within the European regulatory environment, including SFDR and the Taxonomy, she said the Cypriot market “is increasingly turning towards investments in the real economy”, such as renewable energy projects, sustainable infrastructure and social investments, “where sustainability is measurable and verifiable”.

In this context, she explained that CIFA “systematically invests in the training of its members”, so that the ESG approach is “based on data and robust governance, rather than communication practices”.

At the same time, she said technology is transforming the sector, “shifting it from simple digitisation to data-driven compliance, advanced risk-monitoring tools and heightened cyber-resilience requirements”.

Moreover, she explained that DORA now clearly establishes that “digital resilience is a matter of management and corporate culture, and not merely a technical IT issue”.

For the next two years, Panayiotou identified three key challenges: “the need for specialised human capital”, “managing regulatory complexity without losing competitiveness”, and “targeted international promotion based on data and proven success stories, in markets that match Cyprus’ profile”.

Reflecting on the direction ahead, she said: “In recent years, we have demonstrated that Cyprus can operate as a mature European investment funds jurisdiction.”

The next chapter, she explained, is “qualitative scaling. More activity, but with even greater emphasis on governance, resilience and long-term value”.

She added that CIFA wants “investment structures with real substance, strong operational presence and international reach”, noting that if this is achieved, “the investment funds sector can act as a catalyst for the overall upgrade of the country’s economic model”.

Panayiotou concluded that CIFA remains committed to “supporting its members, strengthening cooperation with supervisory and state authorities, and promoting Cyprus as a reliable and competitive international investment funds centre”, making a meaningful contribution to sustainable growth and the long-term resilience of the Cypriot economy.