Investment Companies

Investment Companies

The setting up of a Forex company is more complex than the setting up of an ordinary company as it is then classed as a Cypriot Investment Firm (CIF) and must comply with the laws regulating such activities as well as the Cyprus Companies Law.

Companies licensed as CIF’s have ongoing reporting requirements to the Cyprus Securities and Exchange Commission (CYSEC), and have to comply with Anti Money Laundering requirements and have a stringent Know Your Client procedure in place.

Any Cyprus company wishing to conduct the business of Forex trading, has to apply to be licensed by CYSEC.

The main requirements are:

  • The Memorandum of the Company must have specific clauses regarding the nature of this business.
  • The applicant company must fulfill the minimum capital requirements depending on the type of company which you want to establish. You will need to provide us with further details as to the type of activities that the proposed company will be carrying out so that we can advise you as to the minimum share capital requirements. As a rough guide though, please see as follows for the initial capital requirement:

  • Market maker (dealing on one’s own account) €730,000
  • Broker (safeguarding clients’ funds) €125,000
  • Broker (not safeguarding clients’ funds) €50,000

  • At least one director who is resident in Cyprus to act as Executive director and who passes the ‘fit and proper test’.
  • The company has physical office space in Cyprus.
  • Set up an internal control mechanism. CYSEC will want to see that the company has in place internal rules and procedures to oversee potential problem areas, contingency plans, server protection, client protection etc.
  • The suitability of the shareholders. As with the directors, the shareholder need to pass a fit and proper test, specifically though a background check whereby CYSEC is satisfied that they have a clean criminal record as well as experience in the business.
  • CYSEC must be satisfied that the company has such internal procedures so as to avoid any potential conflict of interest with its clients.
The setting up of a Forex company in Cyprus provides many advantages such as:

  • Attractive, low tax regime.
  • Relatively simple application procedure as well as low application fees when compared to other EU jurisdictions.
  • The possibility for transferring the license to operate in other EU jurisdictions.
It is difficult to provide you with a completely accurate time frame for the incorporation of your company and for obtaining the required license but we estimate that it will take approximately 2-4 months from commencing the procedure until the issuing of the license which will allow you to operate. It is worth noting that under the laws here in Cyprus, the relevant authorities are obliged to decide whether to accept the application within a period of 6 months.

Once we have incorporated the Cyprus company, we will have to set up a bank account for you with a bank here in Cyprus and pay in the amount which you require for the share capital of the company.

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