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Obtain Forex License in Cyprus

Cyprus Forex License

Cyprus offers a very well established environment for a Forex broker firm. It is a well-known and is one of the top choices in the EU for acquiring of a financial license. It follows very strict rules and regulations as implemented by the financial services authority of Cyprus (CySEC – The Cyprus Securities and Exchange Commission).

Cyprus offers a very well established environment for a Forex broker firm. It is a well-known and is one of the top choices in the EU for acquiring of a financial license. It follows very strict rules and regulations as implemented by the financial services authority of Cyprus (CySEC – The Cyprus Securities and Exchange Commission).
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Licensing Services

Incorporation & obtaining license: from 5 to 9 months

Minimum paid up capital: EUR ~ 125,000.00 or EUR 730,000.00 depending on the licence type (STP or MM)

License government application fee: 4,000.00 EUR +19% VAT

Investors compensation fund: EUR 20,000.00- 30,000.00 (approx.)

License renewal government fee: EUR 4,000.00 + 19% VAT


Overview

The financial services regulatory body in Cyprus is the 'Cyprus Securities and Exchange Commission' (CySEC).Being a member of the EU, Cyprus is in full compliance and duly harmonized with the EU Markets in Financial Instruments Directive(MiFID)

There are two types of licenses in Cyprus applicable for forex and usually the companies are known as CIF – Cyprus Investment Firm:

  • Standard license –approx. EUR 125,000.00, broker can hold clients’ money but cannot trade on its own account;
  • Full license - requires approx. EUR 730,000.00 – broker can deal on its own account (market maker);

Depending on the license type, side fees may change.

As an additional benefit, all CIF companies are entitled to Passporting, i.e. opening of offices in other EU member stateswithout having to obtain a local license.

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Licensing Criteria and Procedures for Applying for Cyprus Forex License

Notable features
Procedure
Documents Required

General information

Company structure

  • Only one shareholder (can also be a legal person, no nationality restriction)
  • 2 executive and 2 non-executive directors. There are requirements in terms of their residency
  • Beneficial owners' details – disclosed to the authorities
  • Shareholders' details –part of public record
  • Directors' details – Part of public record

Taxation

  • Low corporate tax (12.5%)
  • 0% tax for corporate gain
  • Lowest VAT at 19%
  • No withholding tax on dividends
  • An extensive network of double-taxation treaties
  • Access to EU directives and EU VAT registration

Accounting requirements - Regular accounting and Audited accounts submission is required

Registered office - Required

Local employees - Required (3 and more)

Company name

A Company name must necessarily end in “LIMITED” (no other suffix is allowed) and must be approved by the Registrar of Companies.

N.B.

  • Restricted connections for company name: name of state, national or local government.
  • Any name that implies illegal activity or implies royal or government patronage is restricted.
  • Registrar may reject any name which it considers undesirable or contrary to the public interest.
  • Company name is restricted to be identical or similar that of an existing company.
  • In case when foreign language is used for company name the translation may be asked by Registrar to ensure conformity to above listed restrictions.

In order to obtain a license, the following steps will be carried out:

  • Gathering and preparing all of the documents for initial verification
  • Once the initial stage is done, the originals will have to be couriered
  • Incorporation of a company in Cyprus
  • Applying to CySec for license
  • During the process, CySec will require additional documents that will have to be provided in order to back-up certain data
  • Preparation of ad-hoc documents and communication with CySec
  • Application will be processed with CySec
  • Conditional approval will be provided by CySec

Once the initial approval is done, Offshorelicense will have to provide proof of local presence (local office), data on the employees and pay the remaining government fees.

In order to obtain license, Offshorelicense will fill all necessary application forms and also acquire apostilled corporate documents. 

For that reason, please provide us with the following documents.

For bank:

(Each beneficial owner, shareholder, director, authorised signatory and secretary must provide)

  • A notarized copy of valid passport
  • A copy of proof of residential address (ex. utility bill that is not older than 3 months)
  • A notarized copy of Letter of Reference form Bank, Attorney or Accountant

For local regulatory authority:

(Each beneficial owner, shareholder, director, authorised signatory and secretary must provide)

  • CV
  • A notarized copy of valid passport
  • A copy of proof of residential address (ex. utility bill that is not older than 3 months)
  • Professional letter/bank reference
  • A notarized copy of a University Diploma
  • For shareholder – bank statement with enough funds to cover the capital requirements. Funds should be from the provable source.

N.B.

  • If documents are not in English language or language of particular country, then they must be accompanied by a notarized translation.
  • Please ensure that notarization is in English language if not then please provide with notarized English translation.

Additional documents may be requested by the regulatory authority or local Bank at any point to certify specific information