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Crypto License in Cyprus

Cyprus is among the leading jurisdictions in Europe for starting a cryptocurrency business. Gofaizen & Sherle provides quality support and expertise in obtaining a Cyprus crypto license remotely. We guarantee fast, efficient solutions and offer comprehensive licensing services

Businesses in Cyprus planning to develop in cryptocurrencies must obtain a license from CySEC. Getting a Crypto License in Cyprus can be challenging, but licensed companies enjoy several benefits.

Cyprus provides an open legislative system for crypto businesses with clear rules set by CySec. The regulator has extensive experience in controlling cryptocurrency companies. The Cyprus ecosystem includes crypto communities, traders, and financiers and provides bank accounts for licensed companies. Its loyal taxation distinguishes it.

Firms seeking authorization must register as financial services providers. Essential requirements include a physical office in Cyprus, a local bank account, an experienced team, compliance with EU directives, and adequate customer records and data security systems.

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Advantages of Obtaining a Crypto License in Cyprus

Structured legislation

The Cypriot regulator, CySec, has deep experience regulating brokerage firms, ensuring clarity and predictability in requirements and expectations. Legislation is consistent and predictable, guaranteeing reliability for service providers.

Efficient tax system

Cyprus’ tax policy favors corporate growth and development, making it more attractive than many European countries.

Wide choice of licenses

Providers can choose from various investment licenses tailored to meet specific needs.

Recognition of various financial instruments

The island is ready for innovation, recognizing various financial instruments, including cryptocurrency products.

A vibrant crypto ecosystem

Cyprus has a thriving environment of crypto communities, traders, brokers, and financial experts. Regular specialized events and forums attract business people from all over the world.

Access to banking services

With a Cyprus cryptocurrency exchange license, entrepreneurs can settle payments through Cypriot banks, an advantage not easily found in other European jurisdictions.

Favorable tax policy

In Cyprus, entrepreneurs can benefit from some of the most competitive tax rates, offering effective optimization of income and dividend taxes compared to most EU countries.

Procedure for obtaining a Crypto License registration in Cyprus

FAMILIARIZE YOURSELF WITH CYSEC REQUIREMENTS

Step 1

Study all formal requirements and CySEC guidelines for license applicants. The official CySEC website provides up-to-date information, including the latest changes to legislation and regulations. You may need to consult legal and financial experts to understand the requirements fully.

PREPARE CORPORATE DOCUMENTS

Step 2

Gather all the necessary corporate documents: certificates of incorporation, memoranda, articles, and more. Ensure that all documents are current and in compliance with Cypriot law. It is essential to translate the documents into English or Greek.

DEVELOP GUIDELINES

Step 3

Create detailed anti-money laundering guidelines and measures. These manuals should be by international and Cypriot standards. They may include customer identification methods, reporting procedures, and other essential aspects of the operation. It is also worth consulting with anti-money laundering experts to draft effective and competent manuals.

COMPLETE AND PAY FOR THE APPLICATION FORM

Step 4

Fill in the application form, check all details, and pay the required fee to open a Crypto License in Cyprus. Before submitting, ensure all parties in the application form are correct and up to date. After checking all the details, make the payment of the relevant fee.

SENDING DOCUMENTS TO CYSEC

Step 5

Use the required forms and questionnaires from the official CySEC website for correct processing.

WAITING FOR A DECISION

Step 6

So remember that CySEC may consider your application for up to 6 months.

It is recommended that you stay in touch during this period and be prepared to provide additional input or clarification if needed. Be aware of possible requests from the regulator and respond promptly, which may speed up the review process. In addition, keep an eye on the CySEC website for updates on possible legislation or licensing procedure changes.

CONSULTATION

Step 7

Please contact crypto-licensing experts in Cyprus for more advice or clarification as needed.

Crypto Lawyers in Cyprus

Kiryl Zaremba

Position

Senior Associate, Business Development Manager
José Augusto Estigarribia

Position

Associate, Key Account Manager

Find more information about the Cyprus crypto license

REQUIREMENTS FOR A CYPRUS CRYPTO LICENSE

To successfully obtain a Crypto License in Cyprus, the applicant must fulfill several conditions. These can be divided into the following key points:

  • The company must be registered in Cyprus and have at least four directors, two of whom are executive directors. CySEC must approve these directors as qualified professionals in their business.
  • The company must have commercial premises in Cyprus and employ staff with Cypriot citizenship to carry out the critical functions of the business.
  • Appropriate policies and procedures for preventing money laundering and terrorist financing, by Cypriot law, must be developed and provided.
  • Mechanisms are needed to ensure the business’s smooth running and sustainable operation. The company must have clearly defined procedures and lines of communication for effective management.
  • The applicant company needs to meet the minimum initial capital requirements set by CySEC – between EUR 50,000 and EUR 150,000, depending on the license type.
  • The company must submit regular reports to CySEC and comply with anti-money laundering requirements. In addition, the company must have mechanisms to record customer information (“Know Your Customer”).
  • Executive directors resident in Cyprus will be the primary contacts for CySEC, particularly for reporting and inspection matters.
  • The company should have internal regulations that minimize potential conflicts of interest with clients.

REQUIREMENTS FOR CASPS REGISTRATION

The procedure for establishing a corporate structure in Cyprus is divided into four key points. The initial phase involves compiling all necessary documents for the application, including official records and data on the company’s registration and its office space. It also requires the approval and submission of a unique company name, distinct from others already registered in Cyprus. The entire package of documents is sent to the Cyprus Registrar of Companies for review, and a final decision is usually made within five working days.

In terms of applying for CASP licensing, the process can be complex and requires consideration of several factors:

  • The company must be registered in Cyprus and have a full-fledged office and staff.
  • Careful consideration should be given to the reputation of all participants, from beneficiaries to service providers.
  • Particular attention should be paid to formalizing beneficiary reports and corporate policies.
  • All questionnaires and forms should be neatly completed and included in the application package.
  • Make sure the CASP license class you choose meets the capital requirements.
  • Customer identification procedures (KYC) should be strictly followed, and the associated risks should be assessed.
  • Financial transaction planning and a continuous monitoring system to detect suspicious transactions are critical.
  • It is essential to have clearly defined internal policies and procedures to prevent possible conflicts of interest with clients.

Given the preparation of all necessary documentation, the process is expected to take one to two months.

REGISTRATION OF A CRYPTO COMPANY IN CYPRUS

The regulatory body CySEC imposes several strict criteria and documentary requirements to officially launch a cryptocurrency business in Cyprus. The key ones are listed below:

  • Official business formation papers: Legal documents proving the state registration of your organization, such as articles of incorporation and statute, are required.
  • Managerial credentials: Provide resumes and short biographies of key team members to assess their qualifications.
  • Commercial Plan: Prepare a detailed business plan outlining financial expectations, marketing strategies, and an analysis of potential risks.
  • Internal policies and guidelines: Documents that explain your company’s policies, including anti-money laundering (AML) practices and Know Your Customer (KYC) policies, are required.
  • Proof of financial strength: Documents that prove your financial stability, such as income and expense statements or guarantees from a bank, must be provided.
  • Proof of identity of shareholders and managers: Proof of residence and other information to identify critical individuals is required.
  • Legal Statements: Documents proving that your activities comply with legal requirements, including anti-money laundering and counter-terrorism.
  • Additional licenses: This should also indicate that it already operates in other countries and has privileges there.
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Please note: You should consult with legal experts in the field for the most up-to-date and detailed information.

Type of License

There are currently three types of Crypto License Cyprus, based on different capital requirements:

1 type

This license is issued to CASPs whose main activity is financial advisory services.

The required authorized capital is 50,000 euros.

2 type

Allows to provide consultations as well as a variety of financial services, including accepting applications and transferring clients’ orders, executing orders on behalf of clients, converting cryptocurrencies into fiat, exchanging between different crypto-assets, participating in financial transactions related to cryptocurrencies, risk-free placement of crypto-assets and investment portfolio management.

The required authorized capital is 125000 euros.

3 type

CASP provides various type 1 and type 2 financial services, administration and transfer of ownership of crypto-assets, secure storage and management of cryptographic keys, and creates a multi-party system for convenient crypto-asset transactions.

The required authorized capital is 150000 euros.

Overview of Cyprus Cryptocurrency Regulation

Project time frames Up to 6 months
State fee for application 10000€
Required share capital from 25000€
Corporate income tax 12.5%
Annual supervision fee 5000€
Local staff member AML Officer, Director
Physical office Required
Accounting audit Required
Sustainability Sustainable
Bank account options Some European EMIs, Midshore EMIs

What is the CASP law in Cyprus

Suppose you are a Crypto Asset Service Provider (CASP) and operate in the context of the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Law. In that case, you must formally register with the Cyprus Securities and Exchange Commission (CySEC) in Cyprus or elsewhere.

Suppose you are already a registered CASP in the European Economic Area (EEA) and carry out activities related to Cyprus (including the participation of Cypriot residents or organizations in Cyprus). In that case, you must provide documentation confirming your up-to-date registration for each specific service or activity. If your actions do not meet the AML/CFT registration framework, you should apply for CASP registration before CySEC.

New companies planning to start operating in or from Cyprus must first register with CySEC.

Existing companies providing significant cryptoasset services must apply for registration before CySEC and fully comply with the legislation on the prevention of money laundering and terrorist financing, as well as the relevant directives issued under that legislation.

The applicable regulatory framework for CASPs is based on:

  • The Law on Combating Money Laundering and Terrorist Financing.
  • The CySEC directive regarding the registry of cryptoasset service providers.
  • CySEC Directive on the Prevention and Suppression of Money Laundering and Terrorist Financing.

These documents are essential for regulating cryptoasset activities and ensuring compliance with the legislation in this area.

Taxation of cryptocurrencies in Cyprus

Holders of Cyprus cryptocurrency exchange licenses can take advantage of low corporate income tax rates. It is important to note that cryptocurrencies are considered a taxable asset in Cyprus, which implies that Crypto Asset Service Providers (CASPs) are liable to pay standard income taxes.

Currently, income derived from trading cryptocurrencies is taxed at 12.5%. It is important to note that income derived from cryptocurrency activities can be reduced by considering the costs associated with its receipt. This tax structure makes Cyprus an attractive destination for cryptocurrency transactions and related services.

Fees and Costs

The registration fees for the application are €10,000. It is important to note that successful applicants are exempted from the additional cost for the first year of their registration.

After that, there is a fee of €5,000 to renew the registration for one year. These fees ensure an efficient and reliable registration and renewal process for crypto asset service providers (CASPs).

FAQ on obtaining a crypto license in Cyprus

How can I get a Crypto License in Cyprus?

You should apply to the Cyprus Securities and Exchange Commission (CySEC) to obtain a Crypto License in Cyprus. You need to submit a package of documents and go through the application process.

How much is a crypto license in Cyprus?

Registration fees in Cyprus for a cryptocurrency license are €10,000 per review, with a possible exemption for the first year. Additionally, there is a cost of €5,000/year to renew it.

How is crypto regulated in Cyprus?

Cryptocurrencies are regulated in Cyprus under the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) legislation. Companies must comply with the requirements of this legislation.

Is crypto taxed in Cyprus?

In Cyprus, income from trading cryptocurrencies is taxed at 12.5%. This tax applies to profits derived from cryptocurrency activities.

What is a CASP crypto-asset service provider?

Crypto Asset Service Provider (CASP) provides a wide range of cryptocurrency-related services and is subject to regulation by CySEC.

Can non-residents of Cyprus own crypto companies?

Non-residents of Cyprus are authorized to own and operate cryptocurrency companies in Cyprus.

Are crypto licenses issued for a specific period in Cyprus?

Cyprus cryptocurrency exchange licenses are issued indefinitely but are regularly checked and updated according to legislation.

Are audits conducted for cryptocurrency companies in Cyprus?

CySEC inspects and monitors cryptocurrency companies in Cyprus to ensure compliance with money laundering and terrorist financing prevention legislation and other regulations.

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