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.
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