Since the UK has confirmed its plans to leave the single market, many UK regulated financial services firms risk losing access to EU markets and clients. As such, these firms are avidly looking for alternative jurisdictions for business.
A combination of several favourable factors has led to Cyprus to become a popular jurisdiction among investors and entrepreneurs. Cyprus, with its immediate citizenship options, business-friendly environment, and unique tax advantages, is rapidly moving toward becoming the EU based trading hub.
UK based financial institutions gain the following advantages for setting up their business in Cyprus.
Cyprus joined the European Union in 2004 with its advanced, high-income economy. It has been a full member of the EU ever since. Being a member of the EU, Cyprus encourages a single market and enables free movement of goods and services.
The country boasts of a strategic geographic location where three continents converge. Cyprus location is very central, makes it a gateway to Europe and an international hub with easily accessible markets.
Cyprus’ long-standing special relationship with England
Cyprus is a former British colony, and its long-standing history with England has forged deeply entrenched ties. The two countries have multi-faceted relations, including political, commercial, economic, and cultural. Even after the Brexit, the two countries are trying to keep their ties as close as possible.
Cyprus’ corporate and commercial laws
Commercial and corporate laws of Cyprus are primarily based on English law and EU directives. Therefore the rules governing the critical matters of business including regulations on the formation, price and payment, enforcement and remedies, passing of title and risk, exclusion of liability, choice of law and jurisdiction, and arbitration, etc. remain mostly the same.
EU and OECD recognized and compliant jurisdiction
As a result of agreements with the OECD or Organisation for Economic Cooperation and Development, Cyprus is now a credible EU jurisdiction for conducting investment activities. Being an EU and OECD recognized and compliant jurisdiction has gained Cyprus an admirable reputation for professional services and doing business.
EU financial services directives fully implemented (MiFID)
Cyprus’ financial sector legislation is in line with international best practice. It has synchronized local regulations to the Acquis Communautaire, which has enabled Cyprus to develop as a reputed financial and fund center.
Cyprus offers the full spectrum of EU regulated financial services products, the most relevant being MiFID, AIFMD, UCITS, and CRD IV. A Cyprus-based MiFID firm can provide investment services from Cyprus seamlessly throughout the EEA by simply “passporting” its license in compliance with MiFID, either on a cross-border basis or by establishing a branch in the target jurisdiction.
The Investment Services and Investment Activities Firms Law 2007 (known as the Cyprus Investment Firms Law, or CIF Law) implements MiFID locally and in consequence provides the legal framework for investment services and investment activities as well as for the registration, regulation of operations and supervision of Cyprus Investment Firms (CIFs). Under the provisions of the CIF Law, locally incorporated and domiciled firms operating within or from Cyprus become regulated by the Cyprus Securities and Exchange Commission (CySEC).
CySEC is also responsible for some supervision of branches of Investment Firms from elsewhere in the EU/EEA exercising their passporting rights.
Tax and fiscal advantages
Cyprus has implemented a simplified and transparent tax system. The tax legislation of the country is fully compliant with the OECD, European Union, Financial Stability Forum (FSF), and Financial Action Task Force (FATF).
With a corporate tax rate of 12.5% = Cyprus stands proud as one of the lowest tax jurisdictions in the European Union.
In an endeavor to maintain a stable and robust economy, Cyprus offers excellent infrastructure and focuses on professional services. The country provides first-rate accounting, legal, banking services; has a strong communication network; and a highly educated, qualified, and multilingual workforce to aid business activities.
Cyprus is an exceptional choice of jurisdiction for finance businesses.
As a Cyprus based boutique consulting firm, with a specialization in investment services licensing, we are in a unique position to offer superior support in incorporating your business in Cyprus. You can visit our website at cxfinancia.com on follow us on linked-in, for more information regarding licensing or corporate services, you can always get in touch with C.X. Financia by sending us an email at [email protected] or via skype at CX Financia Support.