Establishing a CySEC Investment Firm in Cyprus in 2025
As a thriving financial hub at the crossroads of Europe, Asia, and the Middle East, Cyprus has emerged as a premier destination for investment and business expansion. With a dynamic economy and a well-regulated financial sector, the island nation continues to attract global firms seeking a strategic gateway into the European market. At the heart of this growth lies the Cyprus Securities and Exchange Commission (CySEC), the independent regulatory authority dedicated to ensuring a secure and transparent securities market. Through rigorous supervision and investor protection measures, CySEC plays a pivotal role in shaping Cyprus as a trusted jurisdiction for the establishment of Cypriot Investment Firms (CIFs), with demand for CIF licenses steadily rising.
In this article, the SALVUS Investment Firms Licensing team explores the key advantages of setting up an Investment Firm in Cyprus. Our experts provide in-depth insights into investment and ancillary services, as well as the relevant capital requirements. Additionally, we outline how SALVUS can streamline the entire licensing process. The article highlights the following core aspects:
1. Why establish a Cyprus Investment Firm (CIF) under CySEC?
2. Investment & Ancillary Services and Capital Requirements
3. Licensing Timeframe
4. How SALVUS can support your CIF licensing
1. Why establish a Cyprus Investment Firm under CySEC?
The Cypriot financial ecosystem maintains a solid foundation for the establishment of an Investment Firm in Cyprus, evolving it into a reputable and an international financial center. The investment services sector in Cyprus, thrives, due to its unique combination of memberships. Cyprus holds memberships in the European Union, the Eurozone, the Council of Europe, the United Nations, the World Bank, the World Trade Organization, the International Monetary Fund, and the British Commonwealth.
Along with these advantages, an established Investment Firm in Cyprus benefits from numerous international conventions and a strategic location that bridges three continents, providing access to a broad network of markets. The country also offers a cost-efficient plan for administrative, operational, and living expenses, making it an attractive destination for businesses.
Additionally, Cyprus boasts a modern legal framework with extensive affiliations, enabling firms to provide investment services across the European Economic Area (EEA) through the European Union (EU) passporting framework, thereby eliminating the need for additional licenses within the EEA. The island’s favorable tax regime, one of the lowest among EU member states, further enhances its appeal, complemented by more than 60 double tax treaties that facilitate cross-border business.
Moreover, the ability to outsource various services allows firms flexibility in structuring their workforce, optimizing both the number and skill set of employees. The growing sectors of payment and crypto services have also contributed to the development of a diverse and highly educated talent pool, further strengthening Cyprus as a preferred jurisdiction for investment firms.
2. Investment and Ancillary Services & Capital Requirements
Cyprus Investment Firms can operate through varying business models, using a combination of investment and ancillary services, offered for different financial instruments.
Each model shall be strategically designed to align with the business plan and objectives established during the licensing phase. The following table outlines the range of investment and ancillary services that a firm can potentially offer as a Cyprus Investment Firm.
| Type of service | Included services |
|---|---|
| Investment Services | 1. Reception and transmission of orders relating to one or more financial instruments 2. Execution of orders on behalf of clients 3. Dealing on own account 4. Portfolio management 5. Investment Advice 6. Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis 7. Placing of financial instruments without a firm commitment basis 8. Operation of a Multilateral Trading Facility (MTF) 9. Operation of an Organised Trading Facility (OTF) |
| Ancillary Services | 1. Safekeeping and administration of financial instruments for the account of clients, including custodianship and related services such as cash/collateral management and excluding maintaining securities accounts at the top tier level 2. Granting credits or loans to an investor to allow them to carry out a transaction in one or more financial instruments, where the firm granting the credit or loan is involved in the transaction 3. Advice to undertakings on capital structure, industrial strategy and related matters and advice and services relating to mergers and the purchase of undertakings 4. Foreign exchange services where these are connected to the provision of investment services 5. Investment research and financial analysis or other forms of general recommendation relating to transactions in financial instruments 6. Services related to underwriting 7. Investment services and activities as well as ancillary services of the type included under Section A or B of Annex 1 related to the underlying of derivatives included under points (5), (6), (7) and (10) of Section C of the MiFID II Directive where these are connected to the provision of investment or ancillary services |
In adherence to the European Investment Firms Regulation and Directive (IFR/IFD), CIF entities shall maintain specific capital levels based on the investment and ancillary services they provide.
During the licensing process, potential CIF are required to satisfy the regulator of their ability to maintain the prescribed permanent minimum capital requirements, as illustrated in the table below.
| Investment Services | Capital Requirements |
|---|---|
| Any of the below: 1. Reception and transmission of orders concerning one or more financial instruments, 2. Execution of orders on behalf of clients, 4. Portfolio management, 5. Investment advice, 7. Placing of financial instruments without a firm commitment basis. Without holding client funds. | €75,000 |
| Any of the below: 1. Reception and transmission of orders concerning one or more financial instruments, 2. Execution of orders on behalf of clients, 4. Portfolio management, 5. Investment advice, 7. Placing of financial instruments without a firm commitment basis. With holding client funds. | €150,000 |
| Any of the below: 3. Dealing on own Account 6. Underwriting of financial instruments and/or placing financial instruments on a firm commitment basis. Plus any of the below: 1. Reception and transmission of orders concerning one or more financial instruments, 2. Execution of orders on behalf of clients, 4. Portfolio management, 5. Investment advice, 7. Placing of financial instruments without a firm commitment basis. With holding client funds | €750,000 |
Once the CIF receives its license and commences operations, capital requirements are recalibrated, factoring for the firm’s fixed overheads and the associated risks stemming from the services rendered.
Contact us at info@salvusfunds.com if you are interested in establishing a Cyprus Investment Firm; our Investment Firms Licensing team is ready to answer your questions.
3. Licensing Timeframe
The completion of the entire application process is estimated to be between 12 to 16 months. However, in our experience, this is subject to the varied workload of CySEC and the quality of the required information that has been provided to the regulator.
It is also essential to recognize that the process to CIF licensing is inherently dynamic. Its success depends greatly on the applicant’s readiness to respond to regulatory inquiries promptly, providing the information and documentation needed.
4. How SALVUS can support your CIF licensing
The SALVUS Investment Firms Licensing team draws on its extensive expertise in licensing Cyprus Investment Firms across a wide range of business models and strategic objectives. With a refined project management approach, we ensure a seamless selection of investment and ancillary services that align perfectly with your business vision and operational needs.
We act as a reliable bridge between your applying firm and the regulatory authority, simplifying the licensing process by coordinating the collection and submission of all required information and documentation. Additionally, our expertise extends to assisting in the recruitment of a competent team while strategically optimizing the distribution of your financial resources between human capital and technological infrastructure.
Upon the successful acquisition of your CIF license, our Regulatory Compliance team stands ready to guide you through the activation of the license and ensure the fulfilment of all post-licensing regulatory obligations.
Contact us at info@salvusfunds.com if you are interested in establishing a Cyprus Investment Firm; our Investment Firms Licensing team is ready to answer your questions.
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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.