Cyprus Investment Firms (CIFs) are a gateway to the provision of investment services in the European Union and due to the taxation benefits enjoyed, are considered an advantageous option to consider for entering the European Union investment services market.

Many leading international firms have chosen Cyprus as a base, following the development of the sector internationally and the number of Cyprus Investment Firms has risen to over 150 in recent times, indicating the potential for growth of the sector in Cyprus.

With the introduction of MiFID (Markets in Financial Instruments Directive 2004/39/EC) by the European Union to facilitate a harmonized regulation over investment services across Member States, Cyprus has become a significant jurisdiction for investment services providers due to significant tax benefits, cost effective set up and licensing processes and access to the Single Passport, i.e. the ability to provide the authorised services in all Member States.

The provision of investment and ancillary services is regulated by the Cyprus Securities and Exchange Commission (CySEC), a highly reputable and innovative regulator, and is governed by the Investment Services and Activities and Regulated Markets Law of 2007 – Law 144(I)/2007 (as amended) and provides for a modern and transparent regulatory framework.

In 2012, Cyprus became the first jurisdiction to regulate Binary Options as financial products, as the Cyprus Securities and Exchange Commission included binary options in the list of financial instruments that fall within the remit of the Investment Services and Activities and Regulated Markets Law of 2007 as amended.

Entities that wish to provide investment services in relation to Binary Options must apply to the CySEC for a Cyprus Investment Firm license.

A CIF enjoys all the tax advantages provided to Cyprus companies. Furthermore, there is no withholding tax on subscription or redemption of units.

The initial capital requirements as well as other requirements for the obtainment of a license by the Cyprus Securities and Exchange Commission depend on various different attributes of the CIF, including the investment and ancillary services that the CIF will provide.

A CIF’s head office must be situated in the Republic and shall be fully staffed.

The identities of the shareholders of the CIF, as well as the percentages of the shares they hold must be disclosed to CySEC.

Our firm may assist with the application process, as well as the post licensing phase and may undertake the preparation and submission of application to CySEC, preparation of supporting documents such as organisational structure for the purpose of the application and anti-money laundering manual, outsourcing of non-core functions and advisory services.

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