Foreign exchange (Forex) is an innovative type of business that brings together buyers and sellers from all over the world, regardless of time and place. In other words, buyers and sellers immediately conduct foreign exchange transactions. Cyprus is considered an attractive location for the foreign exchange market. Attractive regulatory and taxation schemes as well as low operating costs and high quality financial, accounting and legal services motivate international Forex companies to do business in Cyprus. Furthermore, Cyprus legislation is harmonized with EU directives, as Cyprus is a full member of the EU. To be precise, as a member of the EU, Cyprus is fully aligned with the EU Markets in Financial Instruments Directive.
bitcoin price today
Nonetheless, it should be emphasized that Forex companies need to be authorised by the Cyprus Securities and Exchange Commission (CySEC) in order to conduct business activities and provide services in Cyprus. Forex companies fall under the category of Cyprus investment companies. Therefore, Forex companies must comply with the provisions of Law 144(I)/2007.
The main requirement is that the applicant must be a Cyprus company with a specially drafted memorandum and articles of association. In addition, the company headquarters must be located in Cyprus.
1. Submit all company documents such as Certificate of Incorporation, Director/Secretary Certificate, Shareholders Certificate, Memorandum and Articles of Association, etc. together with the Cyprus Investment Company Application Form (Form 144-03-01).
2. Submit a three-year business plan, internal procedures manual, and anti-money laundering and know-your-customer (KYC) procedures.
3. CySEC will make a decision within six months of receipt of the application and supporting documents.
- The company memorandum must clearly state the nature of its business activities.
- Applicants must meet minimum capital requirements.
- At least one director is a permanent resident of the Republic of Cyprus and meets CySEC’s criteria that the director must be a reputable and experienced individual.
- The company needs to have an office in Cyprus.
- The company is obliged to develop internal control mechanisms, procedures and policies.
- CySEC must be satisfied that the company has internal procedures to avoid potential conflicts of interest with clients.
Applicants must pay the relevant fees in accordance with the provisions of Directive DI144-2007-04 Part I of 2011 and Directive DI144-2007-04A of 2012.
The fee payable is EUR 3.000 plus:
One. EUR 1.000 per investment service in paragraphs 1, 5 and 7 of Part I of Annex III of the Law;
b. EUR 1.500 for each investment service in paragraphs 2 and 4 of Part I of Annex III of the Law;
C. EUR 2.000 per investment service/activity in paragraphs 3 and 6 of Part I of Annex III of the Law;
d. 10.000 euros for investment activities in Annex III of Part I of the Act8;
e. EUR 500 per ancillary service of Annex III, Part II of the Law;
Reporting and Compliance Requirements: Finally, it should be noted that CySEC-licensed investment firms have ongoing reporting obligations to CySEC. In addition, they are obliged to comply with anti-money laundering regulations and have “know your customer” procedures in place.