Most Read Contributor in British Virgin Islands, January 2017
Cyprus can offer a solution to international firms and
institutions seeking certainty over access to the EU Single
The most pressing Brexit concern for UK-based credit and
financial institutions relates to the terms on which they will
continue to have access to the EU Single Market and related
passporting rights if and when the UK leaves the European
Post Brexit, unless passporting rights are maintained through
specific UK-EU trade agreements or the UK retains membership of the
EEA, the UK will be considered a "third country" from a
financial services regulatory perspective, meaning that financial
institutions based there will be unable to operate throughout the
EEA as seamlessly as they do today.
Until then and unless third-country equivalence is agreed as
part of the UK's exit arrangements, the financial services
industry in the UK could be set for a considerable period of
uncertainty before an outcome materialises.
Cyprus as a solution for UK-based financial institutions
Cyprus is one of a very small number of 'Anglo-centric'
jurisdictions in the EU that offers the right mix of
business-friendly ingredients to UK-based financial institutions
looking for a new home or alternative EU-based trading hub
Cyprus is already a pre-eminent Euro-hub for foreign exchange
(FX) broker-dealers and other MiFID business and is gathering pace
as a go-to jurisdiction for professional alternative investment and
private equity funds and management business covered by AIFMD.
Cyprus is also the back office par excellence to the world's
large financial centres: a position earned due to its reliable
common law heritage, English-educated workforce, skilled services
industry, an attractive headline corporate tax rate and lower
overhead costs than those associated with most European
Recent pro-business changes in domestic tax legislation and the
regulatory framework bear testimony to the Cypriot government's
commitment to aligning Cyprus with what professionals in the
private sector have sought for years: placing Cyprus on the world
map of financial services and fund-friendly jurisdictions.
With Brexit in mind, this will no doubt prove invaluable for
firms which are already established in the UK and who may be
unwilling or unable to uproot their local workforce post-Brexit.
Cyprus can offer such firms the flexibility to maintain current
operations through carefully crafted outsourcing arrangements.
Cyprus' historical relationship with the UK
Cyprus is possibly the most pro-UK jurisdiction within the EU.
Outside of the British Isles, Cyprus is the only member state of
the EU that adopts English common law as binding or persuasive
principle in cases not governed by local legislation. This means
that Cyprus will, in general terms, always look to the judicial
precedent and opinion of the courts of England and Wales over other
jurisdictions in matters of contract, negligence (civil wrongs),
and commerce more generally.
The reason for such closeness with the UK is, of course,
historical: Cyprus was itself a UK Crown Dependency until
independence in 1960. Cyprus' close historical and continuous
association with the UK means that it will be one of the most
active voices in the EU for UK interests, especially those that are
of direct relevance to it and those involving financial
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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