News: Why is it better to open forex business in Cyprus

More and more Forex-companies in the world are registered in Cyprus to enter the market of European countries. So this already popular offshore becomes a world famous investment and financial center. Having obtained the license of an investment company in Cyprus, the owner of the business enters the EU markets, can operate in the territory of Asia, Russia, Africa, and the Middle East.

The procedure for issuing licenses is determined by the EU Directive on the markets of financial instruments. The regulator is the Cyprus Securities and Exchange Commission.

Registration of business in Cyprus. Advantages

1. A Cyprus license operates throughout the EU for working in the Forex market.
2. It takes less than six months to process the license.
3. Operative costs when registering a company in Cyprus are 35-40% lower than in Western Europe.
4. Low corporate tax, a large number (over 40) of agreements on avoidance of double taxation, a 10% rate on corporate income, no tax on payment of dividends to non-residents and on income from securities.
5. Minimum authorized capital - 80 000 - 1 000 000 euros.
6. There is no currency control, and qualified international banking services are provided.

How to Start a Forex Business in Cyprus: Main stages

Stage 1. Company registration in Cyprus.

This usually takes less than a month. Requirements are as follows:

• at least one director;
• maximum of 50 shareholders;
• the presence of a secretary and registered office in Cyprus, the Memorandum of Association and the Charter;
• paid-in capital.

Stage 2. Registration with tax authorities.

The registration process must take place no later than within 60 days from the date of incorporation.

Stage 3. Opening of a bank account.

It is possible to open an account in any currency. It takes literally one day. In Cyprus, branches of many international banks are opened.

Stage 4. Accounting and reporting.

Annual audit and filing of financial statements are mandatory. Audit is conducted by a Cyprus auditing firm.

Stage 5. Application (statement) to the regulator of Cyprus (Securities and Exchange Commission) in order to:

• receive and transfer guarantees on behalf of the investors;
• execute orders/instructions on behalf of investors;
• conduct transactions with regard to financial instruments at own expense;
• obtain investment advice;
• obtain guarantees for the placement of financial instruments, etc.

The application is also submitted in case of necessity to receive various types of additional services (granting credits to investors, consulting on the issues of doing business, services in the sphere of currency transactions, etc.).

It is also necessary to coordinate the designated employees with the regulator, namely:

• four directors (manager, two executive and two non-executive ones). Three of them must be the residents of Cyprus;
• risk manager and compliance specialist;
• internal auditors;
• legal consultants.

The amount of the share capital of an investment company depends on the type of services provided.

So, if the Forex-broker acts only as an agent, the amount of capital will be 200 000 euros. Forex-broker, providing the appropriate services and that is in contact with third party funds, will be required to contribute 1,000,000 euros.

Stage 6. Immigration issue.

It can arise when hiring employees of a company. Citizens of the EU or the EEA can be employed in Cyprus without obtaining a special permission. While citizens of third countries must obtain prior approval from the Immigration Department. Such employees can hold positions of executive directors, managers, middle management personnel, other key employees and support staff in a foreign company.

Let's remind that the license of the investment company in Cyprus is a guarantee of the clients' safety, reliability, professionalism and efficient work of the broker, as well as access to the markets of Europe and third countries.