Establishing a Payment Services Firm in Cyprus in 2026

1. What are the key advantages of establishing a payment services firm in Cyprus?

In an era of rapid technological progress and digitalisation, Cyprus has proven itself as a prominent financial hub for businesses looking to set up a Payment Service Provider (PSP) or an Electronic Money Institution (EMI).

• Attractive Tax Regime: Companies benefit from one of the lowest corporate tax rates in Europe, with no tax on dividends or profits from the sale of securities, no withholding tax for non-resident shareholders, and access to over 60 double tax treaties supporting efficient cross-border structuring.
• Strong Professional Services Ecosystem: Cyprus provides a well-established ecosystem of legal, regulatory, accounting, audit, and banking services, enabling firms to meet regulatory requirements efficiently and scale operations within a compliant EU framework.
• EU Membership, Regulatory Stability, and Passporting: Cyprus offers a stable and transparent regulatory framework as an EU Member State, combined with commercial flexibility that is attractive to international entrepreneurs and fintech companies. Cyprus-authorised PSPs and EMIs benefit from EU passporting rights, allowing them to provide services across all EU Member States without additional licensing or physical presence, supporting cost-effective expansion.

These factors make Cyprus a smart choice for fintech companies seeking to leverage regulatory and commercial advantages to establish a payment services firm.

2. What is the difference between an EMI and PSP? 

A Payment Service Provider (PSP) can be licensed to offer a wide range of services under the EU Payment Services Directive (PSD2). Depending on which services are offered, different business models can be developed to meet the needs of various financial markets.

The services and activities of a Payment Service Provider (PSP):

1. Cash deposits into a payment account and related account management
2. Cash withdrawals from a payment account and related account management
3. Execution of payment transactions, including:
   • Direct debits (one‑off or recurring)
   • Card or similar device payments
   • Credit transfers, including standing orders
4. Execution of payment transactions using a credit line, including:
   • Direct debits
   • Card payments
   • Credit transfers
5. Issuing payment instruments and/or acquiring payment transactions
6. Money remittance services
7. Payment initiation services (PIS)
8. Account information services (AIS)

The main difference between an EMI and a PSP is that an EMI can provide all payment services and also issue electronic money. Electronic money is digital value stored electronically, issued in exchange for funds, and used for payments accepted by third parties. Technology is essential to an EMI’s licensing and operations, supporting online platforms, customer transactions, and debit card issuance.

Contact us at info@salvusfunds.com  if you would like more information on acquiring a Payment Service Provider or an Electronic Money Institution license in Cyprus; our Licensing team is ready to help you.

3. What are the licensing and minimum capital requirements?

First, the company must be incorporated in Cyprus, with both its registered office and head office located in Cyprus.

As part of the application, the following information must be submitted to the Central Bank of Cyprus (CBC):

• A programme of operations describing the payment services to be provided
• A business plan, including financial forecasts for the first three years
• Proof of the required initial capital
• A description of governance arrangements and internal controls
• The organisational structure, including any planned use of agents or branches
• Identity of the directors and senior management responsible for the management of the institution and its payment services activities

The minimum capital requirements for an EMI and PSP are showcased in the table below: 

4. Can a Payment Services provider provide crypto-asset services?

Payment services are regulated under the Payment Services Law, which transposes PSD2 into Cyprus law, while MiCA establishes a separate framework for crypto-asset activities and services. A Payment Service Provider (PSP) seeking to offer crypto-asset services must assess each proposed activity individually, as the applicable regulatory treatment depends on the nature of the service.

In particular, where services involve electronic money tokens (EMTs), firms must consider their dual nature as both crypto-assets under MiCA and electronic money under PSD2. In this context, certain activities, such as the transfer of EMTs on behalf of clients or the custody and administration of EMTs, may qualify as payment services, while other activities, such as the exchange of crypto-assets for funds or other crypto-assets, do not constitute payment services.

Where the proposed activities qualify as crypto-asset services under MiCA, the firm is required to obtain authorisation as a Crypto-Asset Service Provider (CASP) from CySEC, irrespective of whether it already holds a payment services licence under PSD2. In practice, most crypto-asset activities, including exchange, custody, and execution, will require separate authorisation under MiCA. Accordingly, depending on the business model, a firm may be subject to separate or dual regulatory requirements under MiCA and PSD2. This means that firms must clearly map each activity to the relevant regulatory framework and obtain the appropriate authorisation before offering crypto-asset services.

5. How can SALVUS support you? 

The SALVUS Payment Services Licensing team is composed of industry experts delivering end-to-end support for PSP and EMI licensing in Cyprus, enabling clients to leverage Cyprus’s regulatory and commercial advantages with confidence. We guide clients through every stage of the authorisation process with the Central Bank of Cyprus, applying a proven and structured project management approach to identify the most suitable payment services for each business model. By optimising the licensing strategy and documentation process, we manage the full preparation and submission of applications, ensuring a streamlined, efficient, and regulator-ready outcome aligned with EU regulatory requirements. 

Beyond licensing, SALVUS supports firms in establishing and scaling fully compliant payment institutions, helping clients take advantage of Cyprus’ financial ecosystem through assistance with key personnel recruitment and compliant outsourcing arrangements. Following authorisation, our dedicated Regulatory Compliance team works closely with clients to optimise governance, strengthen compliance frameworks, and ensure ongoing adherence to EU and Cyprus regulatory obligations, supporting long-term operational efficiency and regulatory resilience.

For more information on obtaining a Payment Service Provider (PSP) or an Electronic Money Institution (EMI) license in Cyprus, reach out to us at info@salvusfunds.com ; our Licensing team is ready to assist you. 

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The information provided in this article is for general information purposes only. You should always seek professional advice suitable to your needs.