Head of International Corporate Law and Fintech Practice
Expert in fintech, crypto, and international corporate law with over 20 years of experience. Specializes in crypto licensing (VASP/CASP), iGaming business support, and international structuring, asset protection, and OSINT analytics for risk assessment and due diligence.
LICENSE FOR PAYMENT SYSTEM IN CYPRUS
Cyprus is a globally recognized and reputable financial and business center thanks to a favorable legal and tax environment for fintech businesses. The legal system arose from English common law.
What are the advantages of acquiring a license for a payment system?
- Financial institutions work confidentially, control the currency, and the information processing process, and have the right to provide a wide range of services.
- The legislation of the field under consideration is clear and structured.
- The minimum level of tax burden.
To provide financial services in Cyprus, it is necessary to obtain an appropriate license.
Which regulatory body issues licenses for payment systems in Cyprus?
The Central Bank of Cyprus is the regulator of payment services and electronic money – it controls and issues licenses for fintech companies such as payment systems and issuance of electronic money.
The provision of electronic money services in Cyprus is governed by the Electronic Money Laws of 2012 and 2018.
The Cyprus Securities and Exchange Commission (CySEC) regulates the activities and ensures compliance of financial rules and operations with the European harmonized financial law MiFID.
What are the main requirements for a licensee?
To obtain a banking license, several requirements must be met:
- Having a good business reputation, work experience in the financial industry, and relevant education.
- Completion of the identification procedure by submission of identity documents by the company owners.
- A certain department of the company should be managed by one responsible person.
- Each payment service must be described and included in the operations program.
- The company’s activities must comply with EU requirements regarding the fight against the legalization of illegally obtained income.
- Availability of a business plan for at least 3 years.
- Availability of start-up capital.
- The licensing body is provided with a detailed description of all management mechanisms, control over the flow of funds, and evidence of its effectiveness.
- Description of the structure of the organization.
- Availability of an external auditor and legal counsel.
During the procedure, the company’s head office must be located in the territory of its jurisdiction. At the same time, the founder can only be a legal entity. By law, natural persons cannot obtain a license.
The company needs to appoint two chief executive officers. Three of them must be residents of Cyprus.
What does the process of obtaining a license look like?
As mentioned above, the Central Bank of the island is responsible for issuing licenses for financial activities. This procedure is not quick. He reviews the submitted documentation within 4-6 months. At the same time, preference is given to those companies that were created strictly according to the selection criteria.
What documents are required to prepare a license application?
- Letter of recommendation received from the main bank of the founder’s country.
- Personal information about company managers.
- Documents testifying to the business reputation and confirming the source of the participants’ funds and their well-being.
- Permission to transfer data, which is understood as a commercial secret, to the authorities that control the functioning of the head office.
- A well-thought-out business plan.
- Information on the professional suitability of managers of different levels according to the position he hold.
- Information about the location of the main office.
- Permission from the founding country to open bank branches.
Not the last role for obtaining a license is played by the ability to confirm the level of income of your business.
All financial institutions of Cyprus are entered in the Unified State Register. Document circulation here is conducted in English.
Commission fees
Registration and authorization of companies are not subject to commissions.
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