Cyprus Forex License 2025

Advantages of the Cyprus Forex License

Cyprus has been famous for forex trading since it was among the first countries to recognize it as a viable part of the financial industry by starting to create an infrastructure and legalizing the activities. With all the accumulated experience and honed infrastructure, Cyprus remains one of the most reputable and popular jurisdictions for forex traders. While forex activities in Cyprus are strictly regulated by the European Union, the country maintains a simplified process for the licensing of forex companies, thereby giving applicants the opportunity to save on time and resources while working in parallel on a solid business model.

Application requirements, and the steps to be followed, are rather transparent, clear, and usually achievable with the support of such legal advisors as Regulated United Europe (RUE); they constantly change to serve business needs and protect the financial industry-security at all levels. This means that if a quality application is presented in accordance with relevant regulations, you will most likely be able to get your forex license in an efficient manner without having to return to the application again and again to fulfill additional, unexpected requirements. Besides, there is a fast-track option available for application processing.

Such Cyprus forex companies are exposed to several EU rules, for instance, Markets in Financial Instruments Directive II (MiFID II), which provides for the application of basic standards. CySec is in charge of enforcing such standards and probably is one of the most prominent and most vital regulators of forex companies and dealing centers, providing services in international financial markets, though it does not force excessive regulations. The regulatory environment is mainly easy to comply with and at the same time allows the offering of reliable services, meaning you’ll have a smaller regulatory and financial burden but are trusted and respected just as traders licensed in such prestigious jurisdictions as the UK, Switzerland, or the US.

The license provides EU passporting rights, meaning the licensee can offer financial services in other European Economic Area jurisdictions without having to establish a physical office branch or apply for a new license in every EEA country where one plans on doing business, because once the Cyprus forex license is granted, notification of relevant national financial authorities will be sufficient. Obtaining a license in such relatively inexpensive jurisdiction as Cyprus and conducting an activity in the wealthiest countries is widely practiced due to the opportunity to optimize operational costs. One more layer of security for investors is that such companies are under control from the authorities of the country of their origin and of the country hosting them, and they regularly exchange relevant information.

Another significant benefit is that the Cypriot banking system is one of the most reliable banking systems in the whole world because it’s controlled by the Central Bank of Cyprus according to the EU standards. Cypriot banks are oriented towards innovations and provide a wide range of services both in English and other languages, which makes them accessible to international entrepreneurs. With each of them, you can expect international transfers, all kinds of loans, business cards, insurance products, internet banking, and so on. Also, Cypriot banks are confidential and never disclose information about their clients to any third party without the consent of a client or order of the court. Banks in Cyprus are among the best options to go for if you need a private, secure bank, with stability coming from EU-based banking.

The taxation system of Cyprus is one of the best in Europe. The Corporate Income Tax rate is as low as 12.5%, and there’s no Withholding Tax. In most cases, most of the dividends received from other Cyprus tax resident companies, interest, profits arising from the sale of securities, and a few more types of profits are exempted. Furthermore, Cyprus has more than 65 international agreements on the avoidance of double taxation, which creates favorable conditions for cross-border investments and decreases the burden for international entrepreneurs also being tax-resident companies.

FOREX LICENSE IN Cyprus

Cyprus Forex Licenses Tiers

Depending on the scope of your business activities, you can choose from 3 main tiers of forex licenses in Cyprus, grantable by CySEC under Law 87(Ι)/2017. The authority oversees the forex broker by demanding reports on capital adequacy, enforcing financial compliance of the company, and the professional competencies of employees. Whatever license is granted, the licensee is obliged to keep the share capital of at least the minimum level set by it.

Following are the key classes of Cyprus forex authorization:

Laws and Regulations in Cyprus about Forex

The Forex market in the EEA is set to a harmonized set of rules provided by the already-mentioned Markets in Financial Instruments Directive II, whose basic provisions came into effect in 2018 within Cyprus. While countries such as Switzerland and the UK have gone way above these minimum requirements of MiFID II, Cyprus has decided only to meet the basic requirements, leaving room for more flexibility while also offering safety and security within the financial market. Generally speaking, this law allows more competition and protection for investors but also encompasses the financial market, making it more sound and transparent.

Among the key MiFID II regulations, the segregation of funds is probably one of them. It became mandatory that Forex brokers keep their clients’ funds in addition to the company’s money and deposit them into different bank accounts. This approach allows clients’ funds to be protected because, in case of some financial upsets, the broker cannot use the money. While some EU countries are cautious in implementing this rule, Cyprus has adopted a more flexible interpretation that our team here at Regulated United Europe (RUE) can explain to you personally in a private consultation, which you can request by following the link.

Another worth noting is the categorization of clients according to the MiFID II provisions. Forex brokers are supposed to establish firm principles in regard to categorizing their clients into either retail traders or professional traders/investors and must make such categorization in accordance with established principles. Once the brokers classify their clients according to relevant knowledge, they can then appraise risks, provide appropriate products and services, thus shielding inexperienced traders from high-risk activities.

The investor compensation rule is one of the most crucial factors in terms of protection for clients against bankruptcy of the broker. According to MiFID II, in such events, customers within the EEA – including Cyprus – are covered up to 20,000 EUR, while customers who reside outside the EEA are eligible for 1,160 EUR. This is a function exercised in Cyprus by the Investor Compensation Fund, provided that a broker is its member. Any application for compensation is submitted by any non-professional investor-client of an ICF member who is entitled to compensation from the ICF for claims against such member arising out of the covered services provided by the member regardless of his legal status, nationality, or place of residence.

Cyprus

Capital	Population	Currency	GDP
Nicosia	1,244,188	EUR	$29,535

How to Establish a Cyprus Investment Firm (CIF)

Due to the above advantages, many international entrepreneurs consider the CIF as a precious tool to pursue forex trading business across the EEA. It is easy but tough to set up a new company in Cyprus, as a forex company also needs to fulfill the EU’s regulations regarding anti-money laundering/countering the financing of terrorism (AML/CFT).

The following are the requirements one has to fulfill for setting up a CIF:

• At least four directors—two executive and two non-executive—are appointed; three of whom have to be residents of Cyprus.
• Creation of a BoD, whose members will have to prove their excellent reputation and relevant professional competencies.
• Erection of an office in Cyprus and key employees approved by CySEC.
• Paying at least the minimum authorized capital to the bank account opened in the country.

Remember that the amount of the authorized minimum share capital depends on the tier of the forex license you are going to apply for. The basic license applicants are required to deposit 50,000 EUR, the standard license ones called to deposit 125,000 EUR, and the full license applicants have to transfer 730,000 EUR. What is more, all the licensed brokers are expected to invest a specific amount of money into the above-mentioned ICF.

For the incorporation, you should prepare the following documents:

• Memorandum and Articles of Association
• A clear and detailed business plan
• A financial plan
• Proof of deposited authorized minimum share capital
• Certified passport copies of the directors and secretary of the company
• Proof of the company’s registered address in Cyprus
• Certified copies of passports and proof of good standing of the ultimate beneficial owners of the company

The following should form the content of the company’s business plan:

• Management plan
• Description of services to be offered by the firm
• Organizational structure, together with the background of key office holders
• Operational guide
• AML/CFT policies and procedures in accordance with national and EU legislation
• Risk management and compliance procedures
• Marketing plan
• Market analysis report
• Market segmentation and distribution channels
• Details of payment transactions

The financial plan will have to specify:

• Profit and Loss statement
• Balance sheet
• Cash flow statement
• Capital requirements
• Capital source
• Revenue and cost projections
• Quarterly budget forecasts for the next 3 years under target and stress scenarios
• Any other essential information, assumptions, and explanations

Once all the documents are ready, the application should be filed with the Registrar of Companies in Cyprus. At the same time, remember that a newly incorporated company is not yet allowed to provide financial services unless licensed by CySEC.