Cyprus is a great place for business due to its friendly tax system and good location. Getting a Cyprus Forex License (CySEC) gives companies the chance to trade in markets across the European Union, showing that Cyprus is a top business center. Alparanjo can help you with all the steps to get your forex company licensed and registered in Cyprus.
Cyprus is not only a beautiful Mediterranean island but also an important financial and business hub in Europe. The Cyprus Securities and Exchange Commission (CySEC) gives out Forex Licenses, which follow European standards to control financial market activities. Only companies that meet certain rules can offer brokerage services, manage investments, give financial advice, and handle other financial tasks.
Having a CySEC license improves a company’s reputation and lets it work legally in the EU. It also puts the company on the official list of trusted brokers. The EU’s Markets in Financial Instruments Directive (MiFID) and Cyprus laws ensure clear and safe services for customers, helping protect investors and encouraging competition. With a Cyprus Forex License, companies can offer services across the EU and access EU passports, allowing them to do business in the European Economic Area.
In Cyprus, there are three main types of licenses for businesses that want to trade in forex. These licenses are given by the Securities and Exchange Commission (CySEC) under Law 87(Ι)/2017. Each license offers different levels of responsibility and what a company can do, like managing client money and following rules. Here is a simple guide to the available licenses:
Basic License: This license requires at least €50,000 in capital. It is good for companies that want to offer advice on investments or manage portfolios but do not hold clients' money or investments directly.
Standard License: With a minimum capital of €125,000, this license allows companies to process client trades directly through a system without holding the money or orders themselves. It carries some risk due to changes in liquidity and spreads.
Full License: This license requires at least €730,000 in capital. It allows companies to handle client trades and act as a counterparty, giving better liquidity and protection from market changes. The company is also allowed to hold client money and financial assets.
To choose the right license and understand the rules, it's best to get expert advice. Alparanjo can help explain the requirements and assist you in selecting the right license for your business.
Getting a Cyprus Forex License from CySEC helps you enter the European market and boosts your company’s reputation. Being listed as an official broker increases client trust and shows your business is legal.
The license is given by following strict EU rules (MiFID) and Cypriot laws, ensuring your business is transparent and fair in the financial market.
Cyprus offers a good balance of flexible rules and market safety. This helps businesses find legal solutions while lowering regulatory and financial pressures.
Cyprus has a low corporate tax rate of 12.5% with no withholding tax, making it a favorable place for financial businesses.
With a Cyprus Forex License, you can work throughout the EU without needing extra licenses, making it easier to expand your business.
Cyprus has a well-developed support system for brokers, offering professional advice and help with getting a license.
To run a Forex business in Cyprus, you need a Cyprus Forex license. This license shows that
your company meets the rules and standards:
Getting a Forex license in Cyprus is important for companies that want to work in the European financial market. If you follow all the steps and meet the requirements, it usually takes 4 to 9 months for the regulator to review your application. Here’s a simple breakdown of the steps:
Registration: First, you need to register a Cypriot investment firm (CIF) that meets all the requirements from the Cyprus Securities and Exchange Commission (CySEC). This includes verifying the identity of shareholders and directors and appointing the right officers.
Documentation: Next, gather all necessary documents, like a business plan and manuals, to show that you are ready to meet all regulatory rules.
Bank Account: You must open a bank account to hold the minimum required share capital before applying for the license.
Application: After preparing your documents, submit your application to CySEC. Be ready for any requests for more information. You will also need to pay a government fee of €3,000 when you apply.
Decision: The review process can take up to 9 months. If your information is incomplete or incorrect, it could take up to 10 months.
Approval: Once your application is approved, your company will become a licensed Forex broker. This allows you to officially start operations in the EU and gain trust from clients.
Expedited Review: If you want to speed up the process, you can choose an expedited review service for an extra fee of $25,000. This can shorten the time to 3 to 4 months. It’s a good idea to consult with a legal team first to avoid any delays.
Application Form: A fully filled-out application for the license in the required format.
Board Information: Information about board members, senior managers, and major shareholders.
Legal Documents: Official legal documents for the company, including the articles of association and memorandum of agreement.
Registered Office: A certificate that shows the company has a registered office in Cyprus.
Directors List: A list with details of the directors and company secretary.
Company Structure: An overview of the company’s structure and organization.
Operational Guidelines: Guidelines for how the company will run its internal operations and activities.
Development Strategy: A three-year development strategy for the company.
AML/KYC Policies: Anti-Money Laundering (AML) and Know Your Customer (KYC) policies.
For each member of the management team and key shareholders, you must provide:
Certified copies of their passports.
Certificates showing their place of residence.
Professional resumes that detail their experience in finance.
Educational certificates related to their finance studies.
Complete identity verification documents (KYC).
Criminal record certificates and proof of financial stability.
Individual application forms.
In Cyprus, it's important to follow tax rules to avoid fines. All companies need to submit annual tax returns and financial statements that meet international standards. To stay clear about taxes in Cyprus, here are some key points:
Corporate Income Tax: The tax rate is 12.5% on profits made in Cyprus.
VAT (Value Added Tax): The general VAT rate is 19% on goods and services produced in Cyprus.
Annual Levy: Each company must pay a fee of €350 to keep its business status.
Social Insurance: The social insurance contribution is 17%, shared between employers and employees, to provide social security.
The main authority for the forex market is the Cyprus Securities and Exchange Commission (CySEC). This is a government body that regulates the securities and investment services market in Cyprus. CySEC's goals are to protect investors, ensure fair financial markets, and oversee investment companies.
CySEC is responsible for licensing companies, controlling exchanges, and ensuring companies follow the rules. The forex market in the European Economic Area is also regulated by the Markets in Financial Instruments Directive (MiFID II), which started in Cyprus in 2018.
This rule aims to make the market clearer, protect investors better, and create a healthier financial system in Europe. While some countries have stricter rules, Cyprus has kept its approach flexible to meet the basic requirements of MiFID II.
MiFID II is a detailed regulation from the European Parliament and Council that aims to improve market transparency and protect investors while preventing market abuse. It includes rules for various financial instruments and services, requiring companies and markets to follow certain trading rules and improve investor protections.
The measures in place are designed to protect investors and build trust in the financial market through these key rules:
Segregation of Customer Funds: Forex brokers must keep customer money separate from their own, ensuring it is protected.
Client Categorization: Brokers must classify clients as retail or professional, customizing services based on their experience and risk levels.
Investor Compensation Rule: This rule protects investors in Cyprus up to €20,000 if a broker goes bankrupt, through the Investor Compensation Fund (ICF).