How to Get a CASP License in Cyprus Under MiCA

Cyprus is becoming a top choice for cryptocurrency businesses. Its clear regulations, low taxes, and location within the European Union (EU) make it an ideal spot for companies in the crypto space. With the introduction of the Markets in Crypto-Assets Regulation (MiCA), Cyprus offers businesses a solid foundation to operate legally and grow. In this article, the CX Financia team outlines the steps to obtain a Crypto Asset Service Provider (CASP) license under MICA in Cyprus, highlights its benefits, and provides key information about the process.

In this article, the CX Financia Compliance Team explores the step-by-step process of obtaining a CASP license in Cyprus, offering expert insights into regulatory requirements, application procedures, and key compliance considerations

Why Choose Cyprus for a CASP License Under MiCA?

Cyprus is known for its strong financial and legal systems. Over time, it has become a hub for blockchain and crypto companies. For this reason, Cyprus is becoming a top choice for cryptocurrency businesses. Here’s why:

• Regulatory Clarity: CySEC (Cyprus Securities and Exchange Commission) oversees crypto businesses. This means companies operate under EU-approved rules that promote transparency and protect consumers.
• Tax Benefits: Cyprus offers one of the lowest corporate tax rates in Europe at 12.5%. Additional tax incentives make it attractive for businesses.
• Access to EU Markets: A CASP license allows companies to operate across all EU member states without needing separate approvals.
• Growing Blockchain Ecosystem: The country is home to experts in blockchain, crypto, and financial services. This creates an environment where businesses can thrive.

Cyprus combines business-friendly policies with access to Europe’s growing crypto market, making it an excellent choice for setting up operations. For detailed guidance on CASP registration, visit our Crypto Asset Services Providers (CASP) Registration page.

Benefits of a CASP License Under MiCA

A CASP license offers more than just legal compliance. Here are key advantages:

1. EU Market Access: Operate freely across all 27 EU countries under MiCA’s unified framework.
2. Credibility: Being licensed by CySEC boosts trust among clients, investors, and partners.
3. Tax Efficiency: Businesses benefit from low taxes and exemptions on specific types of income.
4. Operational Freedom: Unlike some jurisdictions, Cyprus imposes no restrictions on cryptocurrency mining or related activities.
5. Banking Opportunities: Additionally ,licensed CASPs are more likely to secure banking services compared to unregulated entities.

A license not only legitimizes your business but also opens doors to growth opportunities across Europe.

Types of CASP Licenses

Depending on your business model, CySEC offers three types of licenses tailored to the services your business provides:

Licence Type	Services Covered	Capital Requirement
Class 1	Investment advice only	€50,000
Class 2	Includes Class 1 services plus crypto-fiat exchanges, crypto-crypto exchanges, portfolio management	€125,000
Class 3	Includes Class 1 & 2 services plus custody and safekeeping of crypto assets	€150,000

Legal Framework for CASP License Under MiCA in Cyprus

To operate legally in Cyprus, the CASP licensing process is governed by strict laws designed to protect consumers and prevent financial crimes.

• AML Law: The Prevention and Suppression of Money Laundering Law requires businesses to implement anti-money laundering (AML) measures and monitor transactions closely.
• MiCA Regulation: MiCA introduces EU-wide rules for crypto-assets covering disclosures, governance, and market abuse prevention. It aims to create consistency across all member states.
• CySEC Directives: These include specific guidelines for registering and operating as a CASP in Cyprus.

This legal framework ensures that licensed businesses operate responsibly while fostering innovation in the sector.

Requirements for Obtaining a CASP License Under MiCA

To apply for a CASP license in Cyprus, you must meet several criteria:

1. Company Formation
   • Your company must be registered in Cyprus or another EEA country.
   • A physical office presence is required within Cyprus.
2. Board Structure
   • Appoint at least four directors (two executive and two non-executive). Most should reside in Cyprus.
   • Directors must have relevant experience and pass CySEC’s suitability tests.
3. Capital Requirements
   • Maintain minimum share capital depending on your license type (€50,000–€150,000). This ensures financial stability.
4. Compliance Policies
   • Develop detailed AML/CFT policies tailored to your operations.
   • Establish internal controls for risk management.
5. Documentation
   • Submit a business plan outlining your services.
   • Provide governance frameworks, IT security policies, and continuity plans.
6. Application Fee
   • Pay €10,000 when submitting your application to CySEC.

Meeting these requirements demonstrates your readiness to operate within a regulated environment.

Licensing Process Step-by-Step

Here’s how the licensing process works:

1. Company Registration
   • Incorporate your company in Cyprus with local staff and office space.
2. Document Preparation
   • Draft all required documents including AML policies, business plans, and operational manuals.
3. Application Submission
   • Submit your application electronically through CySEC’s portal along with supporting documents.
4. Review Period
   • CySEC reviews applications within 3–6 months depending on their complexity.
5. Approval & Licensing
   • Once approved, you’ll receive your license and can begin operations under CySEC supervision.
6. Annual Renewal
   • Pay an annual fee (€5,000) and submit compliance reports to maintain your license.

This process is designed to ensure that only well-prepared businesses receive licensing approval.

Transitioning Under MiCA Regulations

Starting December 2024, MiCA will enforce stricter regulations for crypto businesses across Europe:

• During this transition period, existing CASPs must transition from local rules to MiCA by July 2026.
• New applicants must comply with enhanced requirements such as higher disclosure standards and stronger governance frameworks.

The transitional period allows businesses time to adapt while maintaining continuity in their operations.

Strategic Advantages of Operating from Cyprus

Considering these factors, establishing a presence in Cyprus provides several strategic advantages:

• Access Europe’s expanding cryptocurrency market without additional licensing hurdles.
• Benefit from cost-effective entry points such as acquiring existing licenses.
• Operate within a stable legal system that supports long-term growth.

These advantages make Cyprus one of the most attractive jurisdictions for crypto entrepreneurs looking to scale their operations globally.Setting up in Cyprus offers several strategic benefits:

• Access Europe’s expanding cryptocurrency market without additional licensing hurdles.
• Benefit from cost-effective entry points such as acquiring existing licenses.
• Operate within a stable legal system that supports long-term growth.

These advantages make Cyprus one of the most attractive jurisdictions for crypto entrepreneurs looking to scale their operations globally.

How CX Financia Can Help

Given the complexities involved in obtaining a CASP license, applying without proper guidance can be challenging. CX Financia specializes in helping businesses meet regulatory requirements efficiently:

• Company Incorporation and Staffing:We assist with company incorporation and hiring local staff.
• CASP Licence:We prepare comprehensive application packages tailored to your needs.
• On going Compliance support:We provide ongoing support post-registration including compliance audits and reporting assistance.

For assistance with obtaining a CASP license in Cyprus or for more information about licensing requirements, feel free to contact us at inquire@cxfinancia.com.

Final Thoughts

To sum up,obtaining a CASP license in Cyprus is more than just meeting legal obligations—it’s about positioning your business for success in one of Europe’s most promising markets for cryptocurrency innovation. The country’s regulatory clarity, tax benefits, and access to EU markets provide unmatched opportunities for growth. If you’re ready to take the next step toward securing your license under MiCA, contact us today!