Opening a financial company in Cyprus falls under various laws, depending on the activities to be completed. More than that, the licensing requirements are also different based on the undertaking of the respective business.
If you want to start a company in Cyprus in order to operate in the financial sector, we invite you to read our article on this subject. Any questions and even support related to the registration and the procedure of obtaining afinancial license in Cyprus will be handled by our local team of specialists.
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How to register a Cypriot financial company
In order to register a financial company and obtain a financial license in Cyprus, the investor will have to follow the standard procedure applicable to commercial companies set up here, a process which begins at theRegistrar of Companies, the main institution that supervises the registration and the activities of Cypriot businesses.
An important aspect of the business is choosing a legal entity that will suit the needs of the investors. This will be highlighted through the statutory documents of the future company, which will have to be drafted with the assistance of a professional specialized in Cypriot legislation.
The investor will have to propose a business name, which will receive approval from the Registrar of Companies after the businessman submits the compulsory documents.
The companyshould also be registered with the relevant authorities for taxation and social contributions. It is important to know that the registration for taxationand value added taxis performed by the Tax Department.
Activities completed by financial companies in Cyprus
The following list of activities undertaken by financial businesses is quite important as they reflect the special licenses to be obtained from the local authorities, namely:
- banking operations;
- investment fund management;
- fintech activities, including those related to cryptocurrencies;
- insurance and reinsurance operations;
- Forex activities;
- financial advisory services.
All these activities also require financial licenses in Cyprus, which are subject to various issuance criteria.
With respect to the authorities issuing such permits, they are the Cypriot National Bank and the Securities and Exchange Commission.
Our company formation agents in Cyprus can offer detailed information on each type of license.
Common requirements when applying for a financial license in Cyprus
When filing for a financial license, there are a few common conditions that apply to all financial companies. Among them are:
- appointing managers with experience in their field;
- the same managers should have a good reputation and no criminal record;
- securing a minimum share capital;
- drafting specific documents, such as a prospectus;
- having a local presence in Cyprus.
In order to establish a local office, the shareholders must register a company. It is also possible to buy a shelf company in Cyprusand skip the incorporation procedure. However, the licensing phase must still be completed, as well as ensuring compliance with the other requirements above.
You can rely on our Cypriot company formation specialists no matter the way you want to create your financial enterprise.
Documents required to obtain a financial license in Cyprus
An important part of the Cypriot company formation process in the financial sector is filing the necessary documents to obtain the operating license. In most cases, the following papers will be requested by the authorities (CySEC or the National Bank):
- the Memorandum and Articles of Association of the legal entity;
- the identification papers of the owners;
- information about the professional background of the managers;
- a declaration on the business income of the company;
- a business plan;
- a recommendation letter from the bank with which the company works;
- a bank statement proving the share capital was deposited;
- a description of the services provided;
- information about the mechanisms and control of the movement of funds;
- anti-money laundering regulations;
- a chart of the organization of the departments in the company.
Please note that for company directors, clear criminal records and non-bankruptcy certificates are required, alongside ID or a passport.
Our local consultants can offer more information on the documents to prepare when filing for a financial license in Cyprus.
Minimum share capital requirements for various financial activities
One of the most important considerations to take into account when opening a Cypriot financial company is the capital you need to deposit to get the license. In this line of business, ensuring financial solvency is crucial. This means that:
- for a Cypriot banking license, the minimum capital is EUR 5 million;
- for credit institutions, the lowest amount accepted to obtain a license is EUR 1 million;
- for investment management companies the minimum share capital ranges from EUR 50,000 to EUR 750,000 depending on the services provided.
Setting up a branch of a foreign financial company in Cyprus
Foreign credit companies can operate in Cyprus by setting up branch offices that must be authorized by the National Bank. This requirement applies to financial enterprises in non-EU/EEA countries and implies:
- filing an application with the Bank;
- filling out various questionnaires by a company representative;
- providing various information about the company;
- paying the application fee.
The information to be provided implies:
- the operations, types of activities, and the structure of the company;
- the Certificate of Incorporation of the parent company;
- a description of the procedures mentioned in Section 19, Article 2 of the 1997 Business of Credit Institutions Laws.
It is important to know that in Cyprus, financial institutions must have at least 2 executive directors.
Our company formation consultants in Cyprus can assist with the registration of a branch and can advise on the documentation to prepare to obtain a financial license.
How long does it take to obtain a financial license in Cyprus?
Setting up a financial company in Cyprusmay take longer than starting a business in another sector, mainly due to the licensing phase, which takes longer. Here is what to expect:
- the regular licensing process takes about 6 to 8 months to complete in most cases;
- lower times of 3 to 4 months are also available if you pay an expedited processing fee.
The banking system in Cyprus
One of the economic sectors in which businessmen can set up their operations is the financial field, which is rather diverse here. The financial sector comprises companies set up as banks, insurance companies, and other types of legal entities related to this field. The Cypriot legislation referring to this field is aligned with the regulations imposed by the European Union, and our team of company formation representatives in Cyprus can offer assistance for the registration of a financial business on the local market.
Our team of experts in company formation matters in Cyprus presents the banking system in Cyprus, which is based on the following structure:
- cooperative credit sector;
- domestic banks;
- subsidiaries of Greek banks;
- foreign banks.
Businessmen interested in receiving more details on how to establish a company and obtain a financial license in Cyprus can address our team of Cypriot company formation agents for assistance on this matter.