Cyprus financial firms – regulated by the EU and internationally recognised
Cyprus established itself as an EU jurisdiction of preference for companies from other EU countries and for companies from outside of the EU, for the provision of Investment Services such as Payment and E-Money services, Asset and Wealth Management, Brokers and Dealers, Financial Advisors, Fund Management and Regulated Funds, and Insurances. The Cyprus Securities Commission CySEC is the regulating body of Cyprus issuing licences to Cyprus Investment Firms (CIF) for legally offering and carrying out various financial services, as per MiFID II, MiFIR and other relevant EU Directives.
Cyprus and its regulating bodies are specialised on attracting and serving Cyprus Companies that offer and carry out investment-related services.
Cyprus has fully adopted all EU Directives and Regulations that effect investment services and financial markets. The advantage of Cyprus is that, unlike many other EU countries, it has implemented respective EU Directives directly into national law, almost without any changes or modifications. While many other EU countries, such as France, Italy or Germany, for example, modified the provisions of respective EU directives as per their national needs, Cyprus transferred EU legislation into national legislation. This provides Cyprus Investment Firms (CIF) with utmost freedom as provided by EU legislation, and ensures full compliance of Cyprus Investment Firms (CIF) with EU legislation at the same time.
The straight-forward approach of Cyprus by directly applying the provisions of respective EU Directives makes Cyprus one of the most attractive EU jurisdictions for Payment and E-Money services, Asset and Wealth Management, Brokers and Dealers, Financial Advisors, Fund Management and Regulated Funds, and Insurances.
The following Investment Services and activities are regulated and subject to granting of a licence prior to commence business. A Cyprus Investment Firm (CIF) has to apply for at least one of the below services:
In addition to the above, Cyprus Investment Firms (CIF) may apply for the following non-core services and activities. A Cyprus Investment Firm (CIF) may apply for below ancillary services only in combination with one of the above main services or activities.
Financial Instruments in the sense of respective laws include:
Only companies registered in Cyprus may apply for a Cyprus Investment Firm (CIF) Licence. Acquiring a Cyprus Investment Firm (CIF) Licence is a bit more complicated then setting up a Cyprus company. The preparation of the licence application takes usually one to two months, client’s smooth and swift cooperation provided. The reviewing of the licence application by the regulator CySEC may take up to six months. If additional requirements of CySEC have to be satisfied, this period may take longer.
The minimum paid-up share capital of a Cyprus Company applying for a Cyprus Investment Firm (CIF) licence depends on the services and activities that shall be offered and provided. The required minimum paid-up capital must be retained at the Cyprus Investment Firms (CIF) at all times. The required minimum paid-up capital may increase as per the business volume of the Cyprus Investment Firms (CIF).
Minimum paid-up capital EUR 75.000
Activities allowed, without holding client funds:
Minimum paid-up capital EUR 150.000
Activities allowed, while holding client funds:
Minimum paid-up capital EUR 750.000
Activities allowed in addition to the above ones, while holding client funds:
In order to grant a Cyprus Investment Firm (CIF) licence, the ownership of an applying Cyprus Company must be fully disclosed. In case no shareholder holds at least 10% of the company shares, those shareholders must be fully disclosed that exercise significant influence on the management of the company and its operations.
In case that the shareholder(s) of an applying company are legal persons, the natural persons that manage the shareholding company must be identified and disclosed, as well as the shareholders of the shareholding company. If the shareholders of the shareholding company are legal persons again, the aforementioned procedure repeats until the ultimate beneficial owners (natural persons) are reached. Information regarding beneficial owners is not made public anywhere.
The Board of Directors of a Cyprus Investment Firm (CIF) must consist of at least two executive directors and two independent non-executive directors.
The executive directors that effectively manage the Cyprus Investment Firm (CIF) must provide necessary knowledge, experience and integrity, satisfying CySEC prior to the granting of the licence. The directors of the company must dedicate appropriate time for the execution of their duties, be of good reputation and must have the knowledge, experience and capabilities to manage a Cyprus Investment Firm (CIF) and to clearly understand its activities and the risks of the Cyprus Investment Firm (CIF).
The management of a Cyprus Investment Firm (CIF) must be undertaken of at least two persons – the four-eye principle; they must be of good reputation and experiences and acknowledged enough to ensure professional, safe and prudent management of the company.
The head office of a Cyprus Investment Firm (CIF) must be located in the Republic of Cyprus. It must be fully staffed, and employed persons performing any of the licenced investment services must be holder of a respective certificate issued by the Ministry of Finance after successful examination.
Cyprus Investment Firms (CIF) are required to comply with a number of organisational provisions. Some of them are: