Forex trading license, Cyprus, Can the paid Up Capital cover expenses?
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A Forex Trading Company in Cyprus needs to be licensed by the Cyprus Stock Exchange Commission to operate as a Cyprus Investment Firm (CIF) and provide foreign exchange services where these are connected to the provision of investment services. The type of services that will be offered by the Forex Trading Company is solely based on the type of CIF they would like to be. Typically other Forex Trading Companies apply for Reception and Transmission of Orders, Execution of Orders and Dealing on Own Account when they have their own trading platform however there are a few that also apply for Investment Advice and Portfolio Management.
According to the Law the capital requirements are as follows:
A CIF that provides reception and transmission of orders in relation to financial instruments and/or execution of orders on behalf of clients and/or portfolio management and/or provision of investment advice and holds clients' money or/and client's financial instruments, must have an initial capital of at least two hundred thousand euro (€200.000)
A CIF that provides reception and transmission of orders in relation to financial instruments and/or provision of investment advice and does not hold clients' money or/and clients' financial instruments, and which for that reason may not at any time place themselves in debt with their clients, may have an initial capital of at least eighty thousand euro (€80.000); or at least forty thousand euro (€40.000) and professional indemnity insurance covering all member states or some other comparable guarantee against liability arising from professional negligence, that it enters into with an insurance undertaking, representing an amount of at least one million euro (€1.000.000), per claim, and in aggregate at least one million five hundred thousand euro (€1.500.000) per year for all claims.
A CIF that provides one or more of the following investment services or/and performs the following investment activities shall have an initial capital of at least one million euro (€1.000.000):
(a) dealing on own account;
(b) underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis;
© placing of financial instruments without a firm commitment basis;
A CIF that wishes to apply, for example, for dealing on own account and reception and transmission of orders will need to have an initial capital of €1.000.000.
The money need to stay as deposit in the bank account for the live time of the company!
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According to the Law the capital requirements are as follows:
A CIF that provides reception and transmission of orders in relation to financial instruments and/or execution of orders on behalf of clients and/or portfolio management and/or provision of investment advice and holds clients' money or/and client's financial instruments, must have an initial capital of at least two hundred thousand euro (€200.000)
A CIF that provides reception and transmission of orders in relation to financial instruments and/or provision of investment advice and does not hold clients' money or/and clients' financial instruments, and which for that reason may not at any time place themselves in debt with their clients, may have an initial capital of at least eighty thousand euro (€80.000); or at least forty thousand euro (€40.000) and professional indemnity insurance covering all member states or some other comparable guarantee against liability arising from professional negligence, that it enters into with an insurance undertaking, representing an amount of at least one million euro (€1.000.000), per claim, and in aggregate at least one million five hundred thousand euro (€1.500.000) per year for all claims.
A CIF that provides one or more of the following investment services or/and performs the following investment activities shall have an initial capital of at least one million euro (€1.000.000):
(a) dealing on own account;
(b) underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis;
© placing of financial instruments without a firm commitment basis;
A CIF that wishes to apply, for example, for dealing on own account and reception and transmission of orders will need to have an initial capital of €1.000.000.
The money need to stay as deposit in the bank account for the live time of the company!
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You may want to look in to the Seychelles and more specific the Seychelles Mutual Fund or Seychelles CSL (Company with Special License) this is both faster and cheaper than the CySec license in Cyprus.
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Disclaimer: Nothing I say should be taken as tax, legal or financial advice. Anything I say is for general informational purposes only. Always seek independent professional advice.
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Disclaimer: Nothing I say should be taken as tax, legal or financial advice. Anything I say is for general informational purposes only. Always seek independent professional advice.
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