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Starting and Managing a Business in Cyprus CRYPTO SETTLEMENTS IN CYPRUS

Taras Miroshnychenko

Head of International Corporate Law and Fintech Practice

E-mail

miroshnychenko@prikhodko.com.ua

Phone numbers

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.

CRYPTO SETTLEMENTS IN CYPRUS

On May 15, 2018, the Cyprus Securities and Exchange Commission (CySEC) published Circular C. 268. The law is entitled “Introduction of new rules, regulation of the production of financial instruments in virtual currencies”. In this law, CySEC clarified several aspects of cryptocurrency regulation in Cyprus. First of all, they announced that cryptocurrencies are not currently regulated by CySEC.

Second, the Circular made it clear that the cryptocurrencies produced could be classified as financial instruments under Cypriot law. In particular, derivatives in cryptocurrencies can be classified as one of three financial instruments:

as “any other contract relating to securities which may be settled in physical or in cash”;
as “financial contracts for the difference in prices”; or
as “any other production contracts relating to assets not mentioned in this section that have the characteristics of other production financial instruments”.

Accordingly, investment services for cryptocurrency derivatives may need to be explicitly authorized by CySEC depending on the specific characteristics and use of the investment services.

Third, the Law contains an inexhaustible list of obligations of a firm that provides investment services in derivatives on cryptocurrencies:

These firms must behave honestly, fairly and professionally and serve the best interests of their clients. Acting on behalf of its customers requires companies to provide transparent and accurate information and to avoid providing misleading information. Transparent and honest information includes providing customers with an accurate estimate of fees and costs.
Companies that provide derivatives in cryptocurrencies must manage their customers accordingly, including reporting on the risks associated with investing in cryptocurrencies. In addition, CIF must act in the interests of its customers.
Firms must have effective product management mechanisms.
Firms offering these financial services must maintain sufficient capital to cover the risks of investing in cryptocurrency.

Cryptocurrency lawyer in Cyprus

Assistance to a crypt lawyer in Cyprus

Legal use of cryptocurrency
Legalization of income from cryptocurrency transactions and investments in cryptocurrencies
Bitcoin and Ethereum mining
Advising on EMI
Taxation of withdrawal of assets in fiat money
Legal support of ICO and IEO projects
Structuring blockchain companies
Assistance to crypto investors
Assistance of a lawyer in investing in cryptocurrencies
Registration of ICO / IEO / DeFi and Mining

We provide full legal support for cryptocurrency transactions, ICO / IEO, DeFi registration and cryptocurrency mining, which is why you came to this page when entering “cryptocurrency lawyer”, “cryptocurrency lawyer”, “bitcoin lawyer consultation” into the search engine. cryptocurrency assistance “,” bitcoin advice “,” cryptocurrency legal advice “,” blockchain agreement “,” etherium contract “,” legal advice on cryptocurrencies and taxes “.

Assistance of a lawyer in Cyprus – Bitcoin and cryptocurrency

Therefore, the assistance of lawyers in cryptocurrencies, their mining, registration of IEO, DeFi and other crypto projects is a set of measures aimed at formalizing such relationships in full compliance with current legislation of Cyprus and the EU.

The most common questions to our lawyers are:

Payment for services, works, real estate and other assets in Cyprus by Bitcoin (BTC) and Ethereum (ETH). Truth or myth?
In which cities in Cyprus can you exchange Bitcoin, Ethereum, Ripley and other cryptocurrencies?
How to buy goods for bitcoin in Cyprus?

You can get answers to these and other questions by calling our lawyers or leaving your phone number.

Importantly! We recommend a mechanism for acquiring certain property for a “crypt” by concluding a mine contract. The conclusion of a contract of sale of goods or services where payment is made in cryptocurrency may be declared null and void in court because the crypt as a currency is not recognized at the legislative level in Cyprus. For example, cryptocurrency in Cyprus is not recognized as a means of payment, and by virtue of some regulations and positions of central authorities is equated to surrogate money.

Cryptocurrency exchange in Cyprus (Cyrene, Larnaca, Limassol, Nicosia)

Buying and selling cryptocurrency in Cyprus through Prykhodko and partners is profitable and safe. Try us at work!

Our lawyers are well versed in all trends in the settlement of cryptocurrency in the world, including in Cyprus, and guarantee the most secure ways to use it.

The corporate tax rate in Cyprus was raised to 15%. Doesn't this create problems for Ukrainian business?

On the contrary, it is a strategic advantage. The Tax Code of Ukraine provides for exemption from CFC taxation if the effective rate in the foreign jurisdiction is at least 13%. The 15% rate in Cyprus automatically allows legally exempting the profit of a Cyprus company from additional taxation in Ukraine.

How does the updated IP Box regime for IT companies work?

The Cyprus IP Box applies the Modified Nexus Approach, where the benefit depends on actual development costs. If a company develops software locally, 80% of qualifying profit is exempt from taxes. The 15% corporate tax applies only to the remaining 20% of profit, giving an effective tax rate of 3%.

Is it necessary to pay tax on undistributed profit and the annual company levy?

No. The Deemed Dividend Distribution (DDD) rule was completely abolished for profits generated from January 1, 2026. The annual fixed Annual Levy of €350 was also abolished starting in 2024.

Can I get Cyprus tax residency as a business founder?

Yes, the “60-day rule” applies to business founders. It allows you to obtain tax resident status by staying in Cyprus for only 60 days a year if you own or rent housing, have business ties to the country, and are not a tax resident of another state.

What is Notional Interest Deduction (NID) and who is it suitable for?

NID is a powerful incentive for capital-intensive businesses (e.g., industrial or investment holdings). It allows deducting notional interest on the amount of new equity capital introduced from the taxable base. The deduction amount equals the yield of 10-year government bonds of the country of investment plus 5%. This tool can reduce taxable profit by up to 80%.

Successful cases on the topic: