The financial regulator in Cyprus is the Cyprus Securities and Exchange Commission (CySEC). Many globally recognized top Investment Firms have already set a footprint in Cyprus, or have moved their headquarters in Cyprus, in an effort to acquire the relevant Cyprus Investment Firm (CIF) License under EU Markets in Financial Instruments Directive (known as “MiFID”) from CySEC and operate as a regulated investment services firm from Cyprus in all EU markets, Russia, the Middle East, Africa, Asia or other third countries
Being part of the EU and therefore having to comply with the MiFID Cyprus is being used as a springboard for immediate access and easy setting up in prestigious financial markets within the EU (Frankfurt, London etc) through the use of Cyprus financial services entities which can operate under a portfolio management licenses and act as fund managers to ICIS. The legislation put in place is constantly under review, to regulate and harmonize operations in the financial services sector.
Cyprus Investment Firm License – The Benefits:
- EU Regulation: An Investment Firm licensed by CySEC falls under the EU MiFID. As such, it receives a license valid across the EU.
- EU Single Passport: An Investment Firm licensed by the CySEC can offer investment services, establish representative offices or establish fully operational branches in any desired location within the EU without any additional requirements from that (host) EU State, whilst being supervised
from CySEC directly.
- Low Capital Requirements: Investment Firm (acting also as Principals – Market Maker) are required to maintain between EUR 80.000 to EUR 1.000.000 as minimum capital requirement depending on the type of investment services offered and whether the firm will hold client funds.
- Low Operating and Licensing Costs: Compared to other EU countries, Cyprus offers one of the most competitive operating and licensing cost packages for Investment Firms.
- Strong Economy & Financial System: Macroeconomic stability with successful economic performances such as high growth rate, low inflation and low unemployment rates. Banking, accounting, and legal services are extremely efficient and are few of the strong points of the local economy.
- Favourable Tax Regime: Cyprus benefits from a low corporate tax regime and an impressive range of double taxation treaties with more than 40 countries. Tax advantages to Cyprus Investment Firms:
– Corporate tax is only 12,5% on net profits
– Profits from disposal of securities are tax free
– No tax on payment of dividends to non-Cyprus tax residents
A.G.Paphitis & Co. LLC