Cyprus is an increasingly popular destination for setting up Forex companies due to the country’s attractive tax regime and reputation as a financial centre. Forex companies are considered to be Cyprus Investments Firms and therefore are regulated by the Cyprus Securities and Exchange Commission (CySEC). To set up a Forex company a license is required by CYSEC and the process to obtain such a license involves several steps and conditions. As Forex companies are investment firms with a high degree of responsibility, the process to set up a Forex company is more complex and time consuming than setting up a common company.
Share capital requirements vary depending on the type of investment firm and the services to be provided. A company that will only deal with portfolio management and offer investment advice, only requires a minimum share capital of 50.000 Euros. However, companies that operate a multilateral trading facility require a share capital of 730.000 Euros.
Applications to obtain the license are usually processed within around 3 or 4 months from the date of submission. CySEC has a maximum of 6 months to process applications. It must be noted that it generally takes around 1 month to prepare before actually filing the application due to the large volume of documents and information required. It is also possible to purchase a ready made Forex company instead of setting up a new one.
PROCEDURAL KEY POINTS
1. Process to obtain license from CySEC takes around 3-4 months. CySEC has a maximum of 6 months to process applications.
2. A Cyprus company must be registered before applying for the license from CySEC.
3. Corporate documents of the company are required. The company must have physical presence in Cyprus.
4. A detailed 3 year business plan and operations manual is needed.
5. Clean criminal records must be filed for the shareholders, employees and the Board of Directors.
6. Know-your-client and anti-money-laundering policies must be submitted.
7. Requirement for a minimum of 1 director who is a resident in Cyprus to act as executive director. The executive director must have investment background.
1. Offering advice in regards to Forex companies, the procedure of setting up one and the requirements.
2. Preparing the application to obtain the license from CySEC.
3. Collecting all relevant documents that must be submitted together with the application.
4. Preparing the business plan that must be filed to CySEC.
5. Acting as a compliance officer.
6. Providing executive and non-executive directors.
7. Other related services.