Establishing a Payment Services Firm in Cyprus in 2025

1. Why establish a payment services firm in Cyprus? 

In an era of rapid technological advancement, Cyprus has positioned itself as a leading financial hub, attracting businesses and entrepreneurs seeking to establish a Payment or Electronic Money Institution. As a well-established EU jurisdiction, Cyprus offers a highly competitive tax regime, with net profits subject to one of the lowest corporate tax rates in Europe. Additionally, sales of titles and dividends are tax-exempt, while non-residents benefit from no withholding tax on dividends, interest, and royalties. With over 60 double tax treaties in place, businesses operating in Cyprus can optimize their international tax planning strategies. 

Beyond its favorable tax landscape, Cyprus boasts a robust professional services sector, providing high-quality legal, compliance, accounting, and banking support. This extensive network enables financial institutions to allocate resources efficiently while ensuring regulatory compliance and operational effectiveness. 

Moreover, Cyprus-based PSP and EMI entities gain access to the entire EU market through the passporting framework. This allows them to offer services across EU member states without the need for additional authorization or the establishment of a physical branch, providing a seamless expansion opportunity within the European financial ecosystem. 

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

A PSP can obtain a license to offer a range of services and activities as outlined in the EU Payment Services Directive 2015/2366 (PSD2). Depending on the combination of services provided, different business models emerge to cater to the needs of various financial markets. 

Among the core services, a PSP can be authorized to provide are facilitating cash deposits and withdrawals from payment accounts, alongside all necessary account management operations. Additionally, PSP entities can execute payment transactions, including fund transfers between accounts, direct debits (both recurring and one-off), payment transactions via cards or similar devices, and credit transfers, including standing orders. When transactions are backed by a credit line, PSP entities can also process payments through direct debits, card-based transactions, and credit transfers. Other key services include issuing payment instruments, acquiring payment transactions, handling money remittances, offering payment initiation services, and providing account information services. 

The distinction between an EMI and a PSP lies in the additional capabilities of an EMI. While an EMI can provide all the payment services mentioned above, it is also licensed to issue and manage electronic money. Electronic money is defined as a stored monetary value that represents a claim on the issuer, is held electronically or magnetically, is issued upon receiving funds, and can be used for payment transactions accepted by third parties. 

Technology plays a fundamental role in the licensing and operation of an EMI, enabling seamless transaction processing through online platforms, electronic money issuance, and even debit card services tailored to clients’ needs. 

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?

Applying either for a PSP or an EMI license to the CBC, an applicant must consider the following requirements: 

• incorporation of the legal entity in Cyprus. 
• registered office, as well as head offices situated in Cyprus. 
• Submit to the CBC the following information along with the application: 
  • a programme of operations indicating the particular type of payment services, 
  • a business plan including a forecast budget calculation for the first three financial years, 
  • evidence of holding the required initial capital, 
  • a description of the governance arrangements and internal control mechanisms,  
  • the organisational structure disclosing as applicable, the intended use of agents and branches, 
  • the identity of directors and persons responsible for the management of the institution and of the payment services activities. 

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

4. How can SALVUS support you? 

The expert SALVUS Payment Services Licensing team is dedicated to guiding you through every stage of your PSP or EMI licensing application. With a structured project management approach, we help you identify the most suitable payment services for your business model while ensuring a seamless application process. Acting as a liaison between you and the regulator, we handle the preparation and submission of all required documents with efficiency and precision. 

Beyond licensing, we assist in building your operational foundation by supporting the recruitment process and setting up outsourcing arrangements that align with regulatory expectations. Once your institution is successfully authorized, our Regulatory Compliance team provides ongoing guidance to ensure full compliance with regulatory and reporting obligations. 

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. 

#StayAhead

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