Forex broker license in Cyprus

As a member of the EU, today’s country is completely compliant with the EU Markets in Financial Instruments Directive (MiFID).

There are two types of licenses that apply for forex broker license in Cyprus and usually the companies are known as CIF – Cyprus Investment Company:

• Standard license – approx. 125,000.00 EUR, the broker can keep clients’ money, but cannot trade for his own account;
• Full license – requires approx. EUR 730,000.00 – the broker can perform transactions on his own account (market maker);

Depending on the type of license, additional fees may vary.

As an additional advantage, all CIF companies have the right to a passport, that is, to open offices in other EU countries without the need to obtain a local license.

General information

Company structure

• Only one shareholder (can also be a legal entity, without citizenship restrictions)
• 2 executive and 2 non-executive directors. There are demands for their stability
• Details of beneficial owners – disclosed to authorities
• Information about shareholders is part of publicly available documents
• Information about directors – Part of publicly available documents

Taxation

• Low corporate tax (12.5%)
• 0% corporate income tax
• The lowest VAT rate is 19%
• No dividend tax
• A wide network of agreements on the avoidance of double taxation
• Access to EU directives and VAT registration in the EU
• Accounting demands – mandatory regular accounting and provision of audited reporting

A registered office is mandatory

Local employees – Needed (3 or more)

The company name

The company name must end with “LIMITED” (no other suffixes are allowed) and must be approved by the Registrar of Companies.

N.B.

• Limited links for company name: state, national, or local government name.
• Any name that suggests illegal activity or implies royal or government patronage is prohibited.
• The Registrar may reject any name which he considers undesirable or contrary to the public interest.
• The company name must be identical or similar to the name of an existing company.
• In the event that a foreign language is used for the company name, the Registrar may request a translation to ensure compliance with the above restrictions.

Basic requirements

According to the current legislation, Cyprus Forex License (CySEc) allows only registered legal entities that have fulfilled all the demands to log in and obtain a forex license Cyprus. Considering the basic conditions, the CIF must:

• fulfill the demands for the minimum authorized capital – from 125 thousand EUR for STP, from 730 thousand EUR for Market Making;
• to appoint a person with the status of a professional investor to the position of director;
• purchase a full-fledged office with at least four directors;
• collect a complete list of documents related to the brokerage business or activity as a trader;
• agree with the regulatory body on the candidacies of key personnel in relation to reputation;
• submit a business plan with a financial forecast for at least 3 years of activity;
• develop and agree with the regulator manuals for operation, risk management and AML;
• appoint external and internal (Cypriot) auditors;
• identify the risks of managers and specialists in relation to compliance;
• submit personal data of all directors and shareholders;
• prepare certificates of no criminal records for each director (two executive and two non-executive), as well as for each shareholder of a country investment company.

The process of obtaining a Cyprus Forex License

On the one hand, the Cypriot regulator sets rather strict demands for investment companies, on the other hand, it is quite loyal in comparison with some other states, where the work of individual brokers and market creators is regulated by very strict rules and regulations.

If we divide the procedure for obtaining licenses for brokers in country into stages, we will highlight the following:

1. registration of a country investment firm (CIF);
2. registration of a corporate bank account with capital deposit;
3. collection and submission of necessary documents to Cyprus (CySEc) Forex License;
4. obtaining a license within 6 months from the date of submission of documents if all mandatory and additional demands are met.

Foreign investors and businessmen planning to work in the EU as a separate to get Cyprus brokerage license or creator of the financial market should remember that all documents for the registration of a Cypriot investment firm and obtaining the corresponding license are submitted only in Greek or English. The translation must be notarized and legalized, which will be assisted by our Cypriot representatives.