Cyprus Investment Firm (CIF)
What is a Cyprus Investment Firm (CIF)?
A Cyprus Investment Firm or otherwise called a “CIF” is a Cyprus firm intending to provide investment services or perform investment activities in the Republic.
Cyprus Investment Firms as well as any third-country firm (through the establishment of a branch) intending to provide investment services or perform investment activities in the Republic, shall be established, licensed and authorized to operate by virtue of the “Law Which Provides For The Provision Of Investment Services, The Exercise Of Investment Activities, The Operation Of Regulated Markets And Other Related Matters Law 87(I)/2017” and as amended from time to time (hereinafter the “Law”)
Under the same law, the Cyprus Security and Exchange Commission (CySEC) processes, approves or rejects applications for the authorization of Cyprus Investment Firms and it also regulates and issues guidelines and regulations on the activities and operations of the CIFs.
A Cyprus Investment Firm, depending on its license authorization, can offer services such as Forex Trading, Portfolio Management, Investment Advice and Brokerage Services.
Investment Services & Financial Instruments
|Reception and transmission of orders in relation to one or more financial instruments.|
|Execution of orders on behalf of clients.|
|Dealing on own account.|
|Provision of investment advice.|
|Company registration fees (fast track – 2 to 5 days)|
|Placing of financial instruments without a firm commitment basis.|
|Operation of an MTF.|
|Operation of an OTF.|
|Units in collective investment undertakings|
|Options, futures, swaps, forward rate agreements and any other derivative contracts relating to securities, currencies, interest rates or yields, emission allowances or other derivatives instruments, financial indices or financial measures which may be settled physically or in cash|
|Options, futures, swaps, forwards and any other derivative contracts relating to commodities that must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination events|
|Options, futures, swaps, and any other derivative contract relating to commodities that can be physically settled provided that they are traded on a regulated market, a MTF, or an OTF, except for wholesale energy products traded on an OTF that must be physically settled|
|Options, futures, swaps, forwards and any other derivative contracts relating to commodities, that can be physically settled not otherwise mentioned above and not being for commercial purposes, which have the characteristics of other derivative financial instruments|
|Derivative instruments for the transfer of credit risk|
|Financial contracts for differences|
|Emission allowances consisting of any units recognized for compliance with the requirements of Directive 2003/87/EC|
|Options, futures, swaps, forward-rate agreements and any other derivative contracts relating to climatic variables, freight rates or inflation rates or other official economic statistics that must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination events, as well as any other derivative contracts relating to assets, rights, obligations, indices and measures not otherwise mentioned above, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are traded on a regulated market, OTF, or an MTF/td>|
Cyprus Investment Firm’s Minimum Start-up & Regulatory Capital
According to the provisions of the Law, Cyprus Investment Firms require a minimum regulatory capital in order to be authorized to operate. This capital must be available at the beginning of the authorization process, and also maintained throughout the entire licensed activity of the CIF.
|Minimum Regulatory Capital Based on the Activities||Capital in Euro|
Cyprus Investment Firm Licensing Criteria
To obtain the licence, the proposed CIF shall exist in the form of a legal entity (for the setup of a Cyprus company learn more HERE) and submit a written application to CySEC which must be accompanied by a number of documents including:
1. Business plan, including a description of the operations, the organizational structure, forecasts for the first two financial years and the names of at least two experienced and reliable persons who shall run the business activities of the CIF.
2. A draft of the Articles of Association as they are expected to be in effect after the authorization of the CIF.
3. An excerpt of the criminal record, certificates of non-bankruptcy and resumes of the members of the board of directors, the executives and shareholders possessing a qualifying holding, as well as their answers to a questionnaire issued by CySEC.
4. A draft of the internal regulation (operations manual), depending on the investment and non-core services which the company aims to provide.
5. A draft organizational structure of the applicant company.
6. A description of the applicant’s computer network and electronic infrastructure.
7. A draft internal manual, in accordance with acceptable practices, for the prevention of the legalisation of the proceeds of criminal activities.
It should be noted that if the shareholders possessing a qualified holding in the applicant company (10% or more) are legal entities, then CySEC may also require the details mentioned at point 3 above by the ultimate shareholders.
Additional documents not expressly listed above may also be required at CySEC’s sole discretion.
CySEC will reach a decision within six calendar months following the submission of a duly completed application, on either granting a CIF authorization or refusing the application.
After the granting of the authorisation, CIF must comply with the ongoing obligations provided by the Law and the relevant CySEC directives.
Criteria for the appointment of directors and/or persons employed by the Cyprus Investment Firm
The persons who effectively direct the business of a CIF have to meet the following criteria:
1. Good repute
2. Sufficient experience to ensure the sound and prudent management of the CIF
3. Must be approved by CySEC.
Persons who act as nominee directors cannot be appointed in a CIF. There are no restrictions to appointing foreign nationals as Directors, but in practice, the decisions affecting the management and control of the Investment Firm must be taken in Cyprus, this will allow the CIF to benefit from the favourable Cyprus Tax regime.
Other persons employed by a CIF who are not Directors and who will provide investment services must have the necessary knowledge and expertise for performing their assigned responsibilities and must be registered in the public register maintained by CySec (CySEC’s public register requires success in CySEC’s exams).
CySEC’s Application Expenses & Annual Fees
CySEC’s Application Expenses
- A single lump sum of Euro 7.000 (Seven Thousand) is paid to CySEC with the submission of the CIF’s application for authorization.
- A single lump sum of Euro 3.500 (Three Thousand Five Hundred) is paid to CySEC with the submission of an application for the extension of the CIF’s license.
Depending on the CIF’s license type and/or the extension of the license, expenses may vary.
CySEC’s Annual Fees
A fixed charge the level of which is determined:
- to five thousand (5.000) Euros for the CIF or IF registered in a third country which provides services in the Republic via a branch, which falls under article 10(7),
- to six thousand five hundred (6.500) Euros for the CIF or IF registered in a third country which provides services in the Republic via a branch, which falls under articles 10(4) and 10(6),
- to eight thousand (8.000) Euros for the CIF or IF registered in a third country which provides services in the Republic via a branch, which falls under article 10(2),
- to ten thousand (10.000) Euros for the CIF or IF registered in a third country which provides services in the Republic via a branch, which falls under article 10(1), plus
Accumulated increment according to the product of the turnover of the CIF or of the branch of the Investment Firm registered in a third country which provides services in the Republic, provided that the turnover exceeds five hundred thousand (500.000) Euros, by the respective scale of percentages, as defined below:
- 0.75% for a turnover between five hundred thousand (500.001) and one million (1.000.000) Euros;
- 0.1875% for a turnover between one million one (1.000.001) and five million (5.000.000) Euros;
- 0.1125% for a turnover between five million one (5.000.001) and ten million (10.000.000) Euros;
- 0.0975% for a turnover exceeding ten million one (10.000.001) Euros.
The increment is calculated on the basis of the annual audited financial statements of the previous year.
CIFs that provide services in relation to CFDs shall pay, in addition to points (a) and (b) above a fixed sum of three thousand (3.000) Euros.
Cyprus Investment Firm Licensing Process Duration
By virtue of article 7(3) of the Law, CySEC has the obligation to inform the applicant, within six months of the submission of a duly completed application, on either granting a CIF authorization or refusing the application authorisation.
Why Choose our Licensing Services
As a Boutique Firm, we strive with passion and commitment to achieve excellence throughout each project. Our tailor-made services are rendered in a diligent and proactive manner, thus producing tailored fit solutions to support our clients’ business and/or personal growth.
Due to the specific nature of the licensing process, it is extremely important to acquire services from experienced and professional consultants in order to avoid a rejection of the application by CySEC. In cases where an application is rejected by CySEC, remedial actions (appeal) can take up to two years, while the company’s shareholder(s) cannot operate anywhere in the EU during that time.