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Foreign exchange (Forex) trading 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, sellers and buyers make foreign exchange transactions immediately. Cyprus is considered an attractive place for the Forex market. Attractive regulatory and tax schemes along with low cost of operation and high-quality financial, accounting and legal services motivate international Forex firms to set up their business activities in Cyprus. Furthermore, Cyprus legislation is harmonized with EU Directives, as Cyprus is a full member of the European Union. Precisely, as an EU member state, Cyprus is fully harmonized with the EU Market in Financial Instruments Directive.

However, it must be underlined that a Forex company must be authorized by the Cyprus Securities and Exchange Commission (CySEC) in order to start its business activities and offer its services in Cyprus. Forex companies belong to the category of Cyprus investment companies. Consequently, Forex companies must comply with the provisions of Law 144(I)/2007.

Application procedure:

A main requirement is that the Applicant must be a Cyprus company, with a specially drafted Memorandum and Articles of Association. In addition, the Company must be based in Cyprus.

Criteria for granting a license:

1. Submit all corporate documents such as the certificate of incorporation, certificate of directors/secretary, shareholders, articles of incorporation 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 decide within six months after receiving the application and supporting documents.

Main requirements:

• The Company Memorandum must clearly indicate the nature of its business activities.
• The Applicant must meet the minimum capital requirements.
• At least one director is a permanent resident of the Republic of Cyprus and meets the CySEC criteria, i.e. directors must be reputable individuals with sufficient experience.
• 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 in place to avoid a potential conflict of interest with its clients.

Application fee:

In accordance with the provisions of Part I of Directive DI144-2007-04 of 2011 and Directive DI144-2007-04A of 2012, the Applicant must pay the corresponding fee.

The fee to be paid is 3,000 euros increased by:

on. 1,000 euros for investment service of sections 1, 5 and 7 of Title I, Annex III of the Law;

B. 1,500 euros for investment service of section 2 and 4 of Title I, Annex III of the Law;

against 2,000 euros for investment service/activity of sections 3 and 6 of Title I, Annex III of the Law;

D. 10,000 euros for the investment activity 8 of Title I, Annex III, of the Law;

me. 500 euros for complementary service of Title II of Annex III of the Law;

Reporting and compliance requirements: Finally, it should be noted that CySEC licensed investment firms have an ongoing duty to report to CySEC. In addition, they are required to comply with anti-money laundering regulations and develop “Know Your Customer” procedures.