Cyprus

As far as forex brokerage is concerned, Cyprus is one of the most acclaimed jurisdictions to establish one.

overview

Cyprus

A Cyprus Investment Firm (CIF) License will be issued.

Since Cyprus is a member of European Union (EU), financial service providers are governed by both the national laws enforced by the Cyprus Securities and Exchange Commission (CYSEC), as well as the regional laws of the EU, the Markets in Financial Instruments Directive (MiFID).

Extremely low entry barrier, as the initial capital required starts from €125,000.

With one of the lowest corporate tax rates in the EU region, Cyprus stands out as a favourite offshore activities destination for all kinds of businesses.

Profits from the sale of financial instruments are not subject to capital gain tax.
  • Time frame: 4-6 Months
  • Taxation: 12.5% (On Audit)

License:  
  • Standard License – broker can hold clients’ money but cannot trade on its own account
  • Full License – broker can deal on its own account (Market Maker)

A holder of such license is referred to as Cyprus Investment Firms (CIF). As Cyprus is an EU member state, all CIF companies are entitled to Passporting, i.e. opening of offices in other EU member states without having to apply for a local license in that jurisdiction.
Application Process:
For each Director, Shareholder and Ultimate Beneficial Owner:
  • Notarised / Certified True Copy of Passport
  • Notarised / Certified True Copy of Proof of Address
  • Notarised / Certified True Copy of Bank Statement
  • Bank Reference Letter
  • Curriculum Vitae (C.V.)

For each Corporate Shareholders of the company:
  • Certificate of Incorporation
  • Memorandum of Association
  • Articles of associations
  • Articles of Incorporation
  • Register of Directors  
  • Register of Shareholdings
  • Certificate of Good Standing (if the company is over a year old)

Other Required Documents:
  • Liquidity Provider Agreement
  • Proof of Source of Wealth
Company Structure:  
  • Minimum 1 shareholder
  • 2 Executive & 2 Non Executive Directors

Taxation:
  • Dividend are not subject to withholding tax
  • Corporate Gain are not subject to tax
  • Standard corporate tax rate at just 12.5% 
  • Value-Added Tax (VAT) at only 19%
  • Double Taxation Agreements with many countries

Accounting and Auditing:
  • Audit must be carried out in Cyprus
  • Audited financial statements and tax return must be filed within 3 months from the publication of balance sheet
  • Accounting records must be kept in the office

Others:
  • Registered Agent & Office – Yes
  • Company Secretary – Yes
  • Professional Indemnity (PI) Insurance Cover – Yes
  • Local employees – Yes

CIF License comes in 2 categories:

1. Standard License:

  • Capital requirement: EUR 125,000
  • Suitable for brokerages operating under STP / A-Book Model

 

2. Full License:

  • Capital requirement: EUR 730,000
  • Suitable for brokerages operating under Market Maker/ B-Book Model


Permitted Activities:

  • Investment Services
  • Execution of orders on behalf of clients
  • Portfolio management
  • Reception and transmission of orders for various financial instruments
  • Investment advice
  • Underwriting of financial instruments 
  • Placing of financial instruments on a firm commitment basis
  • Operation of a Multilateral Trading Facility
  • Dealing on own account
  1. Review and Conduct Due Diligence Checks on Directors and Ultimate Beneficial Owners (Know Your Customer (KYC) Policy)

  2. The dedicated team from Offshore Tech & Intermediary Services will perform name check and reservation at the Registrar of Companies (ROC) of Cyprus

  3. Preparing Application Forms, Compiling Necessary Documents & Reviewing of Application

  4. Submission of Application with the Cyprus Securities and Exchange Commission (CYSEC)

  5. Follow up with CYSEC
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