Providing practical solutions is what we do best at Eltoma Property. Forex is a huge market in Cyprus. In this case, it is in relation to the formation of EU-regulated Cypriot Investment Firms (CIF) for Brokers in the Foreign Exchange or Forex market.
The CIFs are licensed to offer portfolio management and brokerage services in the EU and third countries.
The substantial benefit in the creation of a CIF is that income acquired from the transactions in financial instruments is not taxed, since there is no capital gains tax in Cyprus.
Another benefit of CIF is low corporate tax (12.5%). In addition, an investment company that is associated to proprietary trading activities, dealing on own account, can benefit as well from a compressed account opening procedure while building counterparty partnerships with global investment houses.
The system for the creation of an account with an esteemed counterparty usually takes several days and the provision of copy of CIF license will, in most situations, be sufficient to begin trading activities (no disclosure of Shareholders, provision of certified corporate documents will be necessary).
We offer a comprehensive PDF on Cyprus Investment Firm which covers the benefits and requirements for setting up CySEC regulated entity.
An investment firm regulated in Cyprus can provide one or more of the following services:
1 – Reception & transmission of orders in regards to one or more financial instruments
2 – Fulfilling the clients’ wishes
3 – Dealing with own account
4 – Portfolio Management
5 – Investment advice
Authorising loans or credits to an investor and so permitting him/her to carry out a transaction in 1 or more financial instruments, where the business authorizing the loan or credit is involved in the transaction.
ForEx (Foreign Exchange) services in which these are connected to the provision of investment services
Financial analysis & investment research or other forms of general recommendation relating to transactions in financial instruments.
Approximate registration time:
The process of application usually takes approximately 6-8 months. Following this, 2 months should be given for preparation & submission of the necessary documents to the Cyprus Securities and Exchange Commission (CySEC). CySEC will then review the application and grant license within 4 to 6 months period.
Procedure to apply:
Documents which need to be prepared:
- Application form in the company’s name with detailed information
- Application form in Shareholders name with supporting documents including copies of passport, non-criminal record certificates, non-bankruptcy certificate
- Organisational structure of the company
- Organisational structure of the group (if any)
- Business plan
- Internal procedures manual
The internal procedures manual consists of 50-60 pages documents which explain internal policies of the business. It is organized in line with MiFID regulations (Markets in Financial Instruments Directive) & takes into consideration several policies eg conflict of interest policy, risk management policy, best execution policy, business continuity policy etc.
Following this, a business plan is a 30-40-page document which outlines the company’s strategy, organizational structure & also includes financial projections for the following 3 years of operation based on 3 different cases (optimistic, pessimistic, expected results).
Moreover, our firm will prepare the complete set of documents for our clients.
Apart from gaining CySEC license, business should also hire certified professionals for positions of a Dealer, Broker, Portfolio Manager. These people should possess certificates of Cyprus Ministry of Finance for provision of investment services.
In terms of collaboration, Eltoma Property works only with professional partners who have experience in obtaining licenses and have a complete understanding of operation of CIF gained through practical experience.
Our services are not limited to preparation of the application for license, but also full support in the creation of business activities eg. Advice regarding the minimizing of costs, renting in Cyprus, outsourcing solutions, recruitment of skilled professionals to fill in the necessary positions etc.