Cryptocurrency Regulation in Cyprus

The regulatory framework of cryptocurrency ecosystem in Cyprus is harmonised with crypto legislation in the European Union (EU) and therefore is currently mainly focused on consumer protection, anti-money laundering and counter-terrorist financing. The rules of the framework span from the registration of the cryptocurrency companies to the monitoring of their operations.

The main legislation that distinguishes and regulates cryptocurrencies in Cyprus is the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2007 (the AML/CFT Law), enforced by the the Cyprus Securities and Exchange Commission (CySEC) who’s responsible for supervising compliance with regulations of anti-money laundering and counter-terrorist financing (AML/CFT) among crypto asset service providers (CASPs) operating in or from Cyprus.

The CySEC also manages the Innovation Hub, established to contribute to the development of the financial ecosystem in Cyprus by offering guidance on regulations and compliance as well as initiating a dialogue that helps the authorities to gain better understanding about the concerns and ideas expressed by the market participants.

Cyprus cryptocurrency regulation

CASP is a person who provides or performs one or more of the following services or activities to or on behalf of another person:

  • Exchange between cryptographic assets and fiat currencies
  • Exchange between cryptographic assets
  • Control, transfer, storage and/or preservation, including storage, of cryptographic assets or cryptographic keys or facilities that permit the control of cryptographic assets
  • Offer and/or sale of cryptographic assets, including original proposal
  • Participation and/or provision of financial services with respect to the distribution, supply and/or sale of cryptographic assets, including the original offer

Under the Money Laundering/Financing of Terrorism Act, the main duties of the CASP are:

  • Implementation of due diligence procedures by LCCs and other clients
  • Economic profiling of its customers
  • Identify sources of funds of their clients
  • Monitoring of transactions with crypto-assets of clients and addresses of purses
  • Identification and reporting of suspicious transactions

Another component of the Cyprus legal framework is the directive on the Register of Providers of Cryptographic Assets (CySEC Directive), which relates to the above-mentioned AML/CFT Act. The CySEC directive regulates the creation, maintenance, operation and modification of the CASPs Register and defines the conditions for their inclusion in the Register.

The CySEC directive applies to the following CASPs:

  • Crypto companies providing or conducting services or activities from Cyprus, regardless of whether they are registered in other registers of the EU countries.
  • Crypto companies that provide or perform services or activities in Cyprus, except for persons who provide or perform services or activities in Cyprus related to cryptocurrencies and who are registered in another EU country for services or activities that they provide.

The CySEC oversees the activities of CASPs, performing the following key tasks:

  • Management of the CASP registration process
  • Determination of the suitability and competence of the CASP Board of Directors and beneficiaries
  • Assessment of suitability of CASP organizational structure
  • Assessing the suitability of internal cybersecurity mechanisms
  • Monitoring of the implementation of the measures taken by the Commission, with particular emphasis on the detection and reporting of suspicious transactions
  • Identifying the Source of Client Funds

Classification of activities of CASP, which determine the type of cryptographic license:

  • Class 1 (starting capital – EUR 50,000) – investment advice
  • Class 2 (initial capital – 125,00 EUR) – CASP providing the service specified in Class 1 and/or any of the following services:
  • Receiving and transmitting customer orders
  • Execution of orders on behalf of clients
  • Exchange between cryptographic assets and fiat currency
  • Exchange between cryptographic assets
  • Participation and/or provision of financial services related to the distribution, offering and/or sale of cryptocurrencies
  • Assets, including original proposal
  • Placing cryptographic assets without a fixed liability
  • Portfolio management
  • Class 3 (starting capital – 150,000 EUR) – CASP, providing any services specified in Class 1 or 2 and/or:
  • Administration, Transfer of Ownership, Transfer of Site, Storage and/or Storage, including Storage, Cryptographic Assets or Cryptographic Keys or Means Providing Control over Cryptographic Assets
  • Underwriting and/or placing cryptographic assets with a firm liability
  • Functioning of a multilateral system that brings together multiple third parties by buying and selling interests in crypto assets in a way that leads to a transaction


Crypto Regulation in Cyprus When planning to carry out crypto-activities in Cyprus or from Cyprus, it is necessary to start with the establishment of a company in Cyprus, which will then allow CASP to apply for registration of CASP.

The most popular type of business structure in Cyprus is the Private Limited Liability Company (LLC), which can be created by foreigners.

Basic requirements for private limited liability companies:

  • A fully operational office should be established in Cyprus, including the recruitment of local staff on a permanent basis
  • No minimum capital requirement
  • Requires a secretary and at least one director (the director and secretary may be the same person as the company may be one member)
  • Appropriate policies and procedures in accordance with local regulations
  • Effective internal organizational structure for transparent and smooth operation of the company

Most popular crypto business events in Cyprus:

  • Initial Coin Offers (ICOs)
  • Cryptocurrency mining
  • Crypto Exchange
  • Management and administration of cryptographic wallets
  • Crowdfunding for crypto startups
  • Installation of ATMs for cryptocurrencies

Key steps for opening a Private Limited Company for crypto-activities in Cyprus:

  1. Reservation of a unique company name
  2. Preparation of the necessary documentation (constituent agreement, charter, constituent documents, etc.)
  3. Application and necessary documentation for approval by the Cyprus Registrar of Companies
  4. Payment of company registration fees at the Cyprus Registrar of Companies
  5. Opening a corporate bank account
  6. Registration with the Tax Department
  7. Applying for CASP registration with CySEC

Each Cypriot company must pay an annual fee of 350 euros to the Registrar of Companies, which is due on 30 June of each calendar year.


Lower tax rates than in most European countries

No restrictions on mining

Possibility for owners to manage the company remotely

Simplified account opening


All CASP planning to provide services in Cyprus or from Cyprus are required to register with CEEC before commencing operations. It usually takes up to six months to process an application.

If CASP is established in the European Economic Area (EEA) or a third country and is registered with one or more relevant national authorities for AML/CFT purposes for all services or activities implemented or planned in Cyprus (i.e. with the participation of residents of Cyprus, including incorporated or unincorporated companies based in Cyprus), it is necessary to submit a notification to CEEC, providing evidence of the effective registration of each service or activity. If these services or activities are not covered by the framework governing registration for AML/CFT purposes, an application for registration as CASP must be submitted to SIC.

Requirements for applicants:

  • Company registered in Cyprus
  • Good reputation, knowledge, experience and skills of company directors (founders)
  • A minimum of 4 directors, two of whom will manage the business, and the remaining two will be independent
  • Develop appropriate domestic policies and procedures in accordance with the regulatory framework
  • Provision of seed capital
  • For online transactions, a web site owned and operated by the applicant should be shared
  • Evidence of no conflict of interest between employees and customers
  • Transparent and functional management and operations
  • Development of systems and procedures for secure data processing and protection to prevent loss or unauthorized access to data of clients on crypto assets
  • Establishment of administrative and accounting procedures as well as effective risk assessment procedures

Capital requirements for applicants:

  • Initial capital requirements depend on the above classification of crypto-activities and range from EUR 50000 to EUR 150,000
  • Own funds should be maintained at the same level as the large amount:
    • The required initial capital as per the classification of crypto activities
    • 25% of the CASP’s fixed expenses during the previous year. This condition will be imposed gradually:
      • 1 January 2022 – 30% of the above-mentioned amount
      • 1 January 2023 – 60% of the above-mentioned amount
      • 1 January 2024 – 100% of the above-mentioned amount

How to Register with the CySEC

First of all, CASPs planning to provide services in or from Cyprus must fill out an application form, which includes a variety of questionnaires and requirements to attach all relevant documents.

The submission of an application should be made in a printed form and accompanied by a USB flash drive, which should contain one unlocked PDF file with all documents attached to the application as well as a relevant certificate confirming that the content of the USB flash drive is the same as the original documents submitted to the CySEC.

A prerequisite for accepting the application is the payment of the applicable fees to the CySEC accounting department, located at “AIAS” Building, Diagorou Str. 19, 1097 Nicosia, on the 1 st Floor and the presentation of the relevant receipt. Therefore, all applicants should first visit the accounting department to settle the fees and collect the receipt, which can only be issued after showing either the application for granting authorisation or a copy of its first page. The receipt will enable them to present relevant documents to the department located on the ground floor of the same building.

The fees are as follows:

  • 10,000 EUR – consideration of an application (non-refundable)
  • 5,000 EUR – annual renewal of registration

Successful applicants won’t be required to pay a renewal fee for the first year of their registration.

The fees might also be paid via bank transfer, in which case the accounting department should be notified via email [email protected] by referencing a relevant request of service and attaching the first page of the application form along with the proof of the bank transfer. Once the payment is received, the accounting department will email the receipt.

Applicants should be prepared to include the following information in the application:

  • Company details (from its name and registered office address to a clear definition of the services a company intends to provide)
  • Information about the capital (amount, sources, relevant contracts) proving that the CASP owns funds required by law
  • Information about the beneficiaries (group structure, including names and relationships) who must be of good repute and have the ability to maintain a sound financial structure for the CASP
  • Information about the company’s board of directors (a relevant questionnaire, proof of suitability to hold a management position, details about induction and training of the management) who must have impeccable reputation, be knowledgeable, skilled, experienced and capable of carrying out their duties
  • Financial details (forecast information and financial statements where applicable)
  • Organisational and operational information (initial three-year operations plan, organisational structure and internal procedures) proving that the company will act in the best interests of its customers as well as minimise risks of loss or imprudent operations

A CASP Register application should be accompanied by an extensive list of documents proving that the company complies with the local regulations. The following documents should be attached to the application form:

  • All corporate documents of the crypto company (incorporation certificate, certificate of directors, shareholders, HQ address, internal operation manual, etc.)
  • Business plan, including marketing strategy and financial/accounting workflows
  • Documentation of internal AML/KYC procedures, including customer onboarding workflows
  • Addresses of all crypto asset wallets and public keys managed by the CASP
  • Documentation of data management workflows and procedures

Upon obtaining the authorisation and the posting of the company’s name on the CySEC website, the company should contact the Information Technology Department via email [email protected] with the reference “TRS Credentials – company name – authorisation number” to obtain its credentials for the CySEC Portal in order to electronically submit company-related information and documents.

The CySEC publishes the Register on its website, which is accessible to the public, providing the following information about the registered CASPs:

  • Name, trading name, legal type and legal entity identifier
  • Physical address
  • Services being offered and/or the activities the CASP may legally offer and carry out
  • Website address of the business

Registered CASPs are allowed to request the following amendments that may cost 1,000-5,000 EUR:

  • Changes in the services or related activity of the provider
  • Update of the crypto wallet address
  • Updated details of a board member or any member of management
  • New details about beneficiaries
  • Updates of the provider’s website

Crypto regulation in Cyprus overview

Period for consideration
6 months Annual fee for supervision 5,000
State fee for application
10,000 EUR Local staff member Required
Required share capital from 25,000 EUR Physical office Required
Corporate income tax 12.5% Accounting audit Required

Taxation of Cryptocurrency Companies in Cyprus

Cyprus cryptocurrency companies are required to pay the same taxes as other businesses. They may also be eligible for appropriate tax relief and benefit from more than 65 double taxation agreements between Cyprus and other countries.

The standard corporate income tax rate in Cyprus is 12.5%, which is one of the lowest in the EU. If a company is a tax resident (incorporated or registered) in Cyprus, all its income from local and foreign sources is taxable. The tax is paid on a temporary basis and is based on self-evaluation, which may be reviewed by the taxpayer at any time before 31 December of the relevant tax year. Payments are made twice a year, on 31 July and 31 December. The overpaid taxes are returned, while the outstanding debt results in an annual interest rate of 3.5 per cent.

Resident shareholders and resident Cypriot tax companies are required to pay a special insurance premium. In all cases, it is paid by the company and collected from dividends, passive interest and rental income. The rates, including exceptions, are as follows:

  • Dividends received by resident shareholder from resident and non-resident Cypriot companies 17
  • Dividends received by Cyprus Resident Tax Company usually amount to 0% if they do not meet certain conditions
  • Interest income from normal business of an enterprise received by either a resident shareholder or a resident tax company – 0%
  • Other interest income received by resident shareholder or resident tax company – 30
  • Rental income (less than 25%) received by either resident shareholder or tax resident company – 3%

The standard VAT rate in Cyprus is 19%, and it is set for the sale of products and most services in Cyprus. However, under EU law, the provision of services related to the exchange of cryptocurrencies for traditional currencies and the exchange of traditional currencies for cryptocurrencies is not subject to VAT.

Reporting requirements in Cyprus

Cryptographic companies operating in or from Cyprus must comply with the International Financial Reporting Standards (IFRS). Managing Directors are required to maintain transparent and accurate accounting for the preparation of financial statements and the clarification of transactions.

The accounting records must be kept in the company’s registered office for 6 years from the end of the relevant year and must be ready for submission to the Tax Office at their request or visit.

The financial statements shall be submitted to the shareholders of a company at the annual general meeting, which may first be held within 18 months from the date of foundation of a company. In addition, the financial statements should be audited by an authorized local auditor in accordance with IFRS rules. It is important to note that auditing is mandatory for all companies registered in Cyprus, regardless of their size or activities.

Each year, within 42 days of the company’s annual general meeting, audited financial statements must be submitted to the Registrar of Companies together with an annual declaration.

Failure to comply with reporting and auditing obligations is a criminal offence for which managing directors are responsible.

Our team of highly qualified lawyers will be more than happy to provide you with individual support in registering with CySEC and obtaining a cryptographic license in Cyprus. Not only are we well prepared to guide you through the crypto application process, we are committed to helping you set up a company in Cyprus, optimize taxes and provide accounting services.


ESTABLISH A CRYPTO COMPANY IN CYPRUSIn Cyprus, business cryptocurrency is recognized as a separately regulated area that provides certainty for entrepreneurs and investors and allows for innovation in a favorable environment.

Cyprus business environment has the following advantages:

  • A stable and reliable legal system that meets international standards and is trusted by an increasing number of international companies;
  • Favorable tax system (low corporate taxes and benefits such as full exemption from tax on international dividends, allow to optimize taxes)
  • Company creation process streamlined, simple and not too expensive
  • No housing requirements for business owners
  • Safe environment offering high quality professional business services (for example, modern banking system)
  • EU membership allows Cypriot companies to reach one of the largest and most prosperous markets in the world
  • The opportunity to acquire Cypriot citizenship and thus become an EU citizen through investment, for example, in a new company (at least 2 million. Euros)
  • Cyprus authorities are willing to cooperate with crypto market participants for continuous improvement of regulation

All Cypriot companies are largely governed by the Companies Act, which is largely based on the English Companies Act 1948. These provisions cover the creation, operation and insolvency of various types of companies.

The public register of Cypriot companies is maintained by the Cyprus Registrar of Companies. This body is responsible for the registration of companies, the maintenance of information on patents, trademarks and other business information.

Cyprus cryptographic companies or cryptographic asset service providers (CySEC) are controlled by the Cyprus Securities and Exchange Commissionwhose primary responsibility is to enforce the provisions against money laundering and terrorist financing (AML/CFT). The Authority now considers crypto companies to be financial service providers and requires them to obtain a licence.

The following crypto-events are rapidly gaining popularity in Cyprus:

  • Initial Coin Offers (ICOs)
  • Cryptocurrency mining
  • Crypto Exchange
  • Management and administration of cryptographic wallets
  • Crowdfunding for crypto startups
  • Installation and administration of cryptocurrency ATMs

In order to engage in any of these economic activities, you should start by choosing a legal business structure that fits your business model (volume and scope of activities, governance structure, etc.).

Types of business entities

There are several business structures from which you can choose depending on your business needs, among them – Private Limited Interest Company (Ltd) and Open Limited Liability Company (Plc). Regardless of the type of legal structure, each Cypriot company must pay an annual fee of 350 euros to the Cyprus Registrar of Companies by 30 June of each calendar year.

The main advantages of Cyprus limited liability companies:

  • No restrictions on nationality of founders (owners) of companies
  • Shareholders shall be responsible for obligations of a company only within the limits of their investments
  • The company may be partially exempted from corporate income tax if it is not a tax resident in Cyprus

Private Company Limited by Shares (Ltd)

The most common type of legal business structure in Cyprus is a Private Company Limited by Shares (Ltd) which can be established by non-resident foreigners in accordance with the Cyprus Companies Law, Chapter 113.

Key features of a Private Company Limited by Shares (Ltd):

  • The company name must end with an Ltd
  • At least one shareholder and a maximum of 50 shareholders
  • At least one director (can be a shareholder)
  • A company secretary (local or foreign, natural or legal person)
  • The rights to transfer shares are restricted
  • Public subscription to its shares or debentures isn’t permitted
  • The company’s directors can decline to register the transfer of shares without giving any explanation
  • If it’s a company with a sole member, he/she is authorised to exercise all the powers of the general meeting and the decisions must be put in writing
  • Minimum of two shares of stock at any nominal value

Public Limited Company (Plc)

This type of business entity is valued and selected by entrepreneurs planning to raise capital by offering shares to the general public since it doesn’t have any restrictions on the transfer of shares. The shares can be listed on a stock exchange.

Other features of a Public Limited Company (Plc) include:

  • The company name must end with Plc
  • At least seven shareholders (no maximum number)
  • At least two directors
  • A secretary (local or foreign, natural or legal person)
  • The share capital must be paid up prior to the issuance of the trading certificate

Requirements for crypto companies

Legal requirements for any limited liability company planning to engage in crypto-activities:

  • A unique and compatible company name is a prerequisite and must be approved by the Cyprus Registrar of Companies (i.e. it cannot be offensive or indicate a relationship with the Government)
  • Registered office in Cyprus (mailbox not allowed), where authorities can send notifications and notices and where the company documents are stored; registered office address is visible in the public registry
  • A fully operational field office, including the recruitment of local staff on a full-time basis
  • In order to comply with local cryptography rules, each cryptographic company must establish appropriate internal procedures, primarily related to AML/CFT before starting economic activities
  • It is also necessary to develop an effective internal organizational structure that will ensure the transparent and smooth functioning of the company

Basic documents required for the establishment of a limited liability company in Cyprus:

  • Memorandum of association
  • Articles of association
  • Official application (HE1 form) signed by the Authorized Attorney at the Registry of the District Court
  • Declaring the address of the company’s registered office (HE2 form)
  • Statement by Director and Secretary (HEZ form)
  • In the case of online registration, the witness sign
  • If you want to create a translation file to receive certified copies of the Charter and Charter in a language other than Greek, a certified translation by a sworn translator is required in Cyprus
  • For a joint-stock company (PLC), list of directors who have agreed to act as directors (HE5 form)

The memorandum of association shall contain at least the following information:

  • Company name
  • Company objectives
  • Claim that the liability of its members is limited
  • Amount of equity with which the company will be registered and its division into shares
  • Information about the founders, their signatures and the number of shares received
  • Signature of witness confirming signatures of founders
  • Signature of the lawyer who drafted the memorandum of association

The charter should include, among other internal management principles, rules governing the number and method of appointment of directors; Has legal responsibility for the management and representation of the company, as well as maintaining accounting records and submitting company tax returns. It may also contain rules defining the division of responsibilities between directors if there is more than one.

No matter what type of organization you choose to register, its directors may be legal or natural persons, residents or non-residents of Cyprus. You must appoint resident directors if you want to have effective management and control in Cyprus, making the company a tax resident in Cyprus.

Capital requirements vary depending on the specifics of the crypto activities which are classified as follows:

  • Class 1 – 50,000 EUR for CASPs providing investment advice
  • Class 2 – 125,00 EUR for CASPs providing services referred to in Class 1 and/or any of the following services:
    • Reception and transmission of client orders
    • Execution of orders on behalf of clients
    • An exchange between crypto assets and fiat currency
    • An exchange between crypto assets
    • Participation and/or provision of financial services related to the distribution, offering and/or sale of crypto assets, including the initial coin offering (ICO)
    • Placement of crypto assets without a firm commitment
    • Portfolio management
  • Class 3 – 150,000 EUR for CASPs providing any of the services referred to in Class 1 or 2 and/or the following services:
    • Administration, transfer of ownership, transfer of site, holding, and/or safekeeping, including custody, of crypto assets or cryptographic keys or means enabling control over crypto assets
    • Underwriting and/or placement of crypto assets with a firm commitment
    • Operation of a multilateral system, which brings together multiple third-party buying and selling interests in crypto assets in a way that results in a transaction

The own funds must be maintained at all times and be at least equal with the greater amount of the following:

  • The required initial capital as per the classification of crypto activities
  • 25% of the CASP’s fixed expenses during the previous year. This condition is imposed gradually:
    • From 1 January 2022 – 30% of the above-mentioned amount
    • From 1 January 2023 – 60% of the above-mentioned amount
    • From 1 January 2024 – 100% of the above-mentioned amount

Every company limited by shares must hold a general meeting of the members of the company (a statutory meeting) within 1-3 months from the date on which the company is allowed to start its operations.

Any Cypriot company regardless of its size and type of activities is required to submit its financial statements and the directors’ report to an auditor for auditing. The management is responsible for ensuring that all accounting documents are regularly updated and kept at the registered office where they can remain available for the review of the authorities. Such documents must be kept for at least six years since the end of the relevant financial year.

What you need to do

The formation process can take up to a month, and the registration usually takes up to five working days, provided that the constituent documents are properly prepared. You can open a company by providing a power of attorney that will save your time and effort.

To open a cryptographic company in Cyprus, the following steps should be taken:

  • Apply for a company name reservation in the Registration of Companies of Cyprus (the approval process takes up to three days, and the successful reservation is valid for six months)
  • Preparation of the necessary foundation and licensing documents
  • Open a corporate bank account
  • Transfer authorized equity
  • Payment of registration fees from the Cyprus Registrar of Companies
  • 165 EUR on regular registration
  • Additional 100 EUR for accelerated registration
  • Apply for registration with the necessary documents to the Cyprus Registrar of Companies
  • Apply for CASP registration with CySEC
  • Registration with the Tax Department

All CASP planning to provide services in Cyprus or from Cyprus are required to register with CEEC before commencing operations. The application process usually takes up to six months.

Taxation of Cypriot crypto companies

The taxes are collected and administered by the Tax Department and the tax year coincides with the calendar year. The tax treatment usually depends on the type and purpose of economic activities and the residency status of a crypto company.

A company is tax resident in Cyprus if it’s managed and controlled from Cyprus or if it’s incorporated or registered in Cyprus but is managed and controlled from abroad. Tax residents are liable for paying taxes on the income sourced in Cyprus and abroad.

Cypriot companies are liable for paying the following taxes:

  • Corporate Income Tax (CIT) – 12,5%
  • Capital Gains Tax (CGT) – 20%
  • Special Defence Contribution (SDC) – 3%
  • Value Added Tax (VAT) – 19%
  • Social Security Contributions (SSC) – 8,3%
  • Stamp Duty (SD) – 0%-0,2%

If you’re planning to establish a crypto company in Cyprus, our trusted and dynamic team of Regulated United Europe (RUE) is here to provide guidance to you. We offer comprehensive advice on company formation, licensing and taxation. Moreover, we’ll be more than happy to step in if you’re looking for financial accounting services. We guarantee efficiency, confidentiality and meticulous attention to every detail that impacts your business success. Contact us now to book a personalised consultation.










 Nicosia 1,244,188 EUR $29,535

Crypto Regulation in Cyprus 2023

In 2023, Cyprus largely maintains the same national regulatory framework but since it functions in line with the EU regulations, its evolution is firmly tied to the EU-wide gradual regulatory changes which should eventually stabilise the cryptocurrency market, infuse more trust into the crypto businesses, and consequently accelerate a wide-spread adoption of crypto products and services.

Improved EU-wide Crypto Support and Rules

In 2022, the European Securities and Markets Authority (ESMA) published a report on the distributed ledger technology pilot regime (DLT Pilot) which is part of the Digital Finance Package introduced by the European Commission in 2020 to foster the potential of digital finance and mitigate associated risks. The report provided guidance on certain technical elements and made recommendations on compensatory measures on supervisory data. The pilot is launching in March 2023, and its review is planned for 2026.

Similar to a regulatory sandbox, the DLT Pilot enables safe experimentation with cryptographic technologies. It also allows ESMA to assess whether the regulatory technical standards developed under the Markets in Financial Instruments Regulation (MiFIR) related to certain trading transparency and data reporting requirements require new amendments in order to be effectively applied to securities issued, traded, and recorded via distributed ledger technology.

Moreover, the EU continues to improve cryptocurrency regulations by introducing new and clarifying the existing rules that apply to European Crypto Asset Service Providers (CASPs). In 2022, the Economic and Monetary Affairs Committee approved the Markets in Crypto-Assets (MiCA) regulation for a vote by the European Parliament and the EU members.

MiCA’s regulatory framework for the prevention of market abuse seeks to eliminate market manipulation, disclosure of insider information, and insider trading. The amendments include the improved definition of crypto-related inside information, surveillance, and enforcement mechanisms. In addition to the assurance of market stability, MiCA is also designed to encourage the development and adoption of crypto-related products and services.

Key changes introduced by MiCA:

  • Environmental responsibilities – significant CASPs will be required to publish the levels of their energy consumption on their business websites and share these data with national authorities, which will help contribute to the reduction of the high carbon footprint of cryptocurrencies
  • The European Banking Authority (EBA) will be authorised to maintain a public register and conduct enhanced AML/CFT checks of non-compliant CASPs which are crypto businesses whose parent companies are registered in countries that are classified by the EU either as third countries, posing high money laundering risks, or non-cooperative jurisdictions for tax purposes
  • Stablecoin issuers operating within the EU will be required to build up a sufficient liquid reserve with a 1:1 ratio, partly in the form of deposits which will allow all stablecoin holders to be offered a claim by the issuer at any given time and free of charge; the supervision of stablecoins will be performed by the European Banking Authority (EBA)

Cryptocurrency Licence in Cyprus in 2023

In 2023, the CySEC, the anti-money laundering and counter-terrorist financing (AML/CFT) supervisor for cryptoasset operations, will continue to grant the same types of crypto licences to businesses operating in Cyprus:

  • Class 1 – for CASPs that provide investment advice (initial capital requirement – 50,000 EUR)
  • Class 2 – for CASPs that provide the service referred to in Class 1 and/or any of the below services (initial capital requirement – 125,00 EUR)
    • Reception, transmission of client orders and execution of orders on clients’ behalf
    • The exchange between cryptoassets and fiat currency, and between cryptoassets
    • Participation in and/or provision of financial services related to the distribution, offering or sale of cryptocurrencies
    • Assets, including the Initial Coin Offering (ICO)
    • Placement of crypto assets without a firm commitment
    • Portfolio management
  • Class 3 – for CASPs that provide any of the services referred to in Class 1 or 2 and/or engage in the below-mentioned activities
    • Administration, ownership transfer, site transfer, holding and/or safekeeping of cryptoassets (including crypto wallets) or cryptographic keys or means enabling control over cryptoassets
    • Underwriting and/or placement of crypto assets with a firm commitment
    • Operating a multilateral system, which brings together multiple third-party crypto buyers or sellers who carry out transactions

The decision on the licence is normally made within six calendar months. To start the application, a CASP has to fill out such CySEC’s forms as Application for CASP Registration and for Amendment of CASP Registration and a number of questionnaires, related to the company’s management and beneficiaries.

The following licensing fees are collected by the CySEC:

  • 10,000 EUR – consideration of an application (non-refundable)
  • 5,000 EUR – annual renewal of registration (successful applicants aren’t required to pay a renewal fee for the first year of their registration)

Key requirements for the applicants remain the same:

  • A company must be incorporated in Cyprus
  • The company’s directors must be fit and proper – experiences, knowledgeable, and with a good reputation
  • A minimum of 4 directors, two of which will manage the business activities and the remaining two will be independent
  • Possession of initial capital (50,000–150,000 EUR depending on the class of the licence)
  • Internal AML/CFT policies and processes ensuring transparent and frictionless business operations
  • Secure data processing systems and procedures designed to prevent data loss or unauthorised access to clients’ data of cryptoassets
  • Administrative and accounting workflows in accordance with the size and complexities of the business

To incorporate a company in Cyprus, which will be eligible for a cryptocurrency licence in 2023, start with deciding what legal structure will suit your crypto project best. The most popular type of business structure in Cyprus remains a Private Limited Liability Company (LLC) which can also be incorporated by foreign nationals.

You should note that an LLC requires a fully operational office in Cyprus, where local staff would be working on a full-time basis. This includes a secretary and at least one director (a director and a secretary can be the same person, since this company can be a single-member company). Needless to say, all of the above-mentioned crypto-related regulatory requirements also apply.

Cryptocurrency Taxes in Cyprus 2023

For now, the standard Corporate Income Tax rate is 12.5%, but it is set to increase to 15%. This is in line with the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) which has been introduced by the Organization for Economic Cooperation and Development (OECD) and G20.

In 2023, the following types of income continue to be exempt from the Corporate Income Tax:

  • Dividends (entire amount)
  • Interest, including interest income sourced from the ordinary course of business (entire amount)
  • Foreign exchange (FX) gains, except for FX gains sourced from trading in foreign currencies and related derivatives (entire amount)
  • Capital gain from the sale of intellectual property rights under the IP regime (entire amount)
  • Profit of a permanent establishment maintained outside Cyprus (entire amount)
  • Gains received from the sale of securities (entire amount)

Key deadlines related to the Corporate Income Tax in 2023:

  • 1 August 2023 – submission of the provisional tax return (TD.6 form) which is a declaration of a company’s 2023 forecasted chargeable income and a calculated tax liability, and payment of 50% of the tax (not applicable to companies who don’t expect profits during the tax year)
  • 31 December 2023 – second and final instalment of temporary tax
  • 31 December 2023 – a revision of the tax amount without incurring the 10% surcharge can be made for the current tax year

If the forecasted profit declared is less than 75% of the actual profit, there will be interest and a 10% surcharge on the amount of tax underpayment, in addition to the regular rate of the Corporate Income Tax.

In July 2022, with the goal to attract and retain foreign talent, new Personal Income Tax exemptions for employment income became available. First of all, 20% of the employee’s salary (maximum annual amount of exemption is 8,550 EUR) is exempt from income tax for seven years if their first employment in Cyprus started on or after the 26th of July 2022, before the employment they weren’t residents of Cyprus for at least three consecutive tax years, and were employed outside of Cyprus by a non-resident employer. The new law doesn’t require such individuals to become Cyprus tax residents in order to benefit from the new 20% exemption, and the employers aren’t required to be Cyprus tax residents either.

50% of the employee’s salary is exempt from the Personal Income Tax for 17 years if their first employment in Cyprus began on or after the 1st of January 2022, their annual salary exceeds 55,000 EUR, and their employees weren’t residents of Cyprus for at least 10 consecutive years immediately before the start of their employment.

Also, lawyers from Regulated United Europe provide legal support for crypto projects and help with adaptation to MICA regulations.


“From A to Z, I provide expert guidance to kickstart your venture. With a deep understanding of Cyprus legal landscape, I offer comprehensive legal advice and ensure your compliance with local regulations. Let’s turn your dreams into reality in Cyprus!”

Adelina Sahhova


email2[email protected]

Additional information

RUE customer support team


“Hi, if you are looking to start your project, or you still have some concerns, you can definitely reach out to me for comprehensive assistance. Contact me and let’s start your business venture.”


“Hello, I’m Sheyla, ready to help with your business ventures in Europe and beyond. Whether in international markets or exploring opportunities abroad, I offer guidance and support. Feel free to contact me!”


“Hello, my name is Diana and I specialise in assisting clients in many questions. Contact me and I will be able to provide you efficient support in your request.”


“Hello, my name is Polina. I will be happy to provide you with the necessary information to launch your project in the chosen jurisdiction – contact me for more information!”



At the moment, the main services of our company are legal and compliance solutions for FinTech projects. Our offices are located in Vilnius, Prague, and Warsaw. The legal team can assist with legal analysis, project structuring, and legal regulation.

Company in Lithuania UAB

Registration number: 304377400
Anno: 30.08.2016
Phone: +370 661 75988
Email: [email protected]
Address: Lvovo g. 25 – 702, 7th floor, Vilnius,
09320, Lithuania

Company in Poland Sp. z o.o

Registration number: 38421992700000
Anno: 28.08.2019
Phone: +48 50 633 5087
Email: [email protected]
Address: Twarda 18, 15th floor, Warsaw, 00-824, Poland

Regulated United Europe OÜ

Registration number: 14153440–
Anno: 16.11.2016
Phone: +372 56 966 260
Email:  [email protected]
Address: Laeva 2, Tallinn, 10111, Estonia

Company in Czech Republic s.r.o.

Registration number: 08620563
Anno: 21.10.2019
Phone: +420 775 524 175
Email:  [email protected]
Address: Na Perštýně 342/1, Staré Město, 110 00 Prague

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