Cyprus has become a first-level licensing jurisdiction in Europe. The first reason why is, clearly, its top corporate tax system (a mere 12.5%). Second, the most popular licensing jurisdiction in the EU was the UK, which means that, after Brexit, the situation has changed. Many have looked at Cyprus as the most effective way to enter the European market with a license with full passporting rights. Third, it has a reputable regulatory entity, the Cyprus Securities and Exchange Comission, which is tough, but fair and transparent. Fourth, licensing processes are normally swift, transparent, and not as expensive as in other jurisdictions.

Cyprus is unrivaled for financially-oriented family offices wishing to establish their own financial businesses in Cyprus and for financial investors looking to gain entry into the European market.

After understanding the frame of the financial services industry in Cyprus and its wonderful opportunities, you’re probably wondering how to set up a financial services firm in Cyprus. Investment firms must be licensed by the Cyprus Securities and Exchange Commission (CySEC), and they can provide financial assistance through representatives and branch offices across the EU.

The license includes brokerage services, portfolio management market making, and investment advice. The minimum number of directors is two executive, and two non-executive directors, of which the majority must be based in Cyprus. The firm must have at least three local employees: The head of back office, the head of dealing room, and the compliance officer.

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The minimum capital requirements are:

• For brokers who don’t hold client funds: €50k

• For brokers who hold client funds €125k

• For market makers: €730k

The process takes 6 to 8 months through the regular route, or 3 to 4 months through the fast track, with a €25k fee.

Now, let’s go into details. First of all, only legal entities in Cyprus can apply for an Investment Firm authorization from the CySEC. The firm will need a physical operation presence. In other words, an adequate local office with all the necessary personnel. This will allow the company to apply for an investment firm authorization from the CySEC to provide the following services:

Investment services:

• Reception and transmission of orders concerning one or more financial instruments.

• Execution of orders on behalf of clients

• Dealing on own account.

• Portfolio management

• Investment advice

• Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis

• Placing financial instruments without a firm commitment basis

• Operation of a Multilateral Trading Facility (MTF)

• Operation of an Organized Trading Facility (OTF)

Ancillary services:

• Safekeeping and administration of financial instruments for the account of clients. This includes custodianship and related services such as cash/collateral management and excluding maintaining securities accounts at the top tier level.

• Granting credits or loans to an investor to allow him to carry out a transaction in one or more financial instruments, where the firm granting the credit or loan is involved in the transaction.

• Advice on capital structure, industrial strategy and related matters and advice and services relating to mergers and the purchase of undertakings.

• Foreign exchange services where these are connected to the provision of investment services.

• Investment research and financial analysis or other forms of general recommendation relating to transactions in financial instruments

• Services related to underwriting

The application procedure requires to submit an Application Form to obtain CIF authorization. The form provides all the necessary information about the firm, the services it will provide, its shareholders, directors, and seniors managers. It must also include the following documents, whenever they apply:

1. Incorporation Documents of the Company:

• Certificate of registration/incorporation from the Registrar of Companies

• Certificate of shareholders

• Certificate of the registered office from the Registrar of Companies.

• Certificate of good standing

• Memorandum and Articles of Association (in Greek)

• Certificate of the applicant’s directors and secretary

2. Capital Evidence – All relevant agreements, contracts, certificates proving the existence of Capital raised.

3. Shareholders Documents – In the case of Legal Entity, the same documents as point 1 above apply. In the case of a Natural Person, then a certified copy of ID or Passport, Proof of Residence, and a CV is required. Personal questionnaires dully completed from each Natural Person and/or UBO (persons that exceed 10% shareholding in the Company).

4. For each Senior Management / Director:

• Certified copy of ID or Passport

• Non-bankruptcy certificate

• Clean criminal record

• Personal Questionnaire

5. Organizational structure chart of the Company.

6. Business Plan.

7. Company Manuals.

• Internal Operations Manual

• AML Manual

8. Certifications of the representative for external auditors and legal advisers of the Company.

9. For existing/already established Companies, annual financial account statements for the last three year.

Who are we, and what can we do for you?

One of the most sophisticated and robust asset protection and diversification strategies is creating an investment firm. It will give you access to a wide array of investment funds, vehicles, and strategies.

We know that one of the most difficult parts is obtaining a license in a reputable jurisdiction. It’s easy to get lost; it costs a lot of money, and a minor mistake can lead the process astray. It is almost impossible without an experienced helping hand. 

And that’s where we come in. Our experts are unrivaled in Cyprus. They are a first-level multidisciplinary team that will help you in all stages of the process.

Licensing takes months of preparation, capital, and stress without even knowing if you will receive the license. Our experts will make it easier for you.

It does not matter if you are a broker, IB, asset manager, market maker, EMI, or bank. We are here to help. Our experts will give you full guidance, greenlight your regulatory compliance, and help you plan your business’ architecture.

Our team has years of experience setting up FX, CFD, Market Making, Cryptocurrencies, and Investment Brokerage Firms as well as ICOs, and E-Money Institutions in Cyprus.

The process is a simple five-step process:

1. Registration of the company’s name
2. Incorporation
3. Registration with the local authorities (social security, VAT, etc.)
4. Acquiring the license 
5. Activation of the license

Thus, our experts will help you with:

• Incorporation and registration with all relevant authorities

• Preparation and review of license application package

• Assistance with branches and offices across the EU

• Tax and accounting advisory

Cyprus is one of our favorite financial licensing jurisdictions. It’s a top gateway to the EU market thanks to its tax and regulatory benefits. 

Want to obtain a financial license for an investment firm in Cyprus? Enquire now!

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