To set-up a firm in Cyprus is fairly easy and fast, however for an investment firm you need to acquire the relate license and authorization which has its own set of requirements. Following are the steps on what you need to know in order to set-up a CIF (Cyprus Investment Firm).
Step 1 – Register a the Firm’s Name
The very first thing you need to consider is the firm’s name, you can do a preliminary check for a name availability through the website of Company Registrant Commissioner. Once you have decided on the name you need to apply the Registrant
Step 2 – Register the Firm
For this step you will need a certified lawyer to draft the Memorandum and Articles of Association of your firm as well as sign the HE1 application form. The information requested by the Registrant and needed to complete the related application forms are:
- A brief description of the main objects of the company
- The share capital amount and shareholders’ full names, passports and addresses
- Names, addresses, passport details of the proposed directors and secretary
- If the shareholders are legal entities you will need to provide the ultimate beneficiary owners’ details as well
Step 3 – Post-registration obligations
All companies are required to Register with the Inland Revenue Department and obtain a tax identification number (TIN) which will be us and Social Insurance Services. These applications are a matter of bureaucracy and take just a couple of days.
Step 4 – Register for Investment Services
The Regulator for Investment Firms in Cyprus is CySEC (Cyprus Securities and Exchange Commission). CySEC issues licenses depending on the Investment Services the firm will provide which are:
- Reception and transmission of orders in relation to financial instruments;
- Execution of orders on behalf of clients;
- Portfolio management;
- Provision of investment advice;
- Dealing on own account;
- Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis;
- Placing of financial instruments without a firm commitment basis;
- Operating a Multilateral Trading Facility;
If the Firm will hold the client’s funds and use services from 1-4 the minimum capital requirement is €125,000, for services 5-8 the minimum capital is €730,000. For you application to CySEC you will to show evidence of capital funds by depositing them under a Bank Account in the Firms name.
Also for the application you will need to provide the Firms incorporation documents acquired from previous steps as well as the shareholder documents as in step 2. Additionally you will need to provide full names, passports, non-bankruptcy certificate, clean criminal records and Personal Questionnaire for directors. Personal Questionnaire must be also completed from shareholders having a share percentage of 10% and more.
Essential requirements are that the Firm’s head offices will be based in Cyprus and have at least 4 Directors (2 executives and 2 non-executives) which are Cypriot residents.
Step 5 – Activation of License
Once approved by CySEC you will not be able to operate immediately. To activate the license CySEC has in place additional conditions to make sure the Firm is fully capable to operate and will allow for a timeframe up-to 6 months for the Firm to set-up. CySEC then will perform inspections and activate your license. The activation requirements are:
- Establish fully operational offices in Cyprus
- Have in place policies and procedures to be in compliance with the applicable laws and regulations
- Have key personnel in place and provide evidence of their knowledge and expertise as well as license to perform their duties for the departments required under the law
Even though the process is easy to follow and implement, it is highly recommended to seek the help of professional advisers when establishing a CIF, as regulatory requirements can be exhaustive and create time-delays or unexpected cost.
CX Financia’s expert advisers can act as your guide and offer consultation to all or the step of your choosing. Our network of experts can help you navigate the bureaucracy with ease, allowing you to focus on your core business activities.