Technological innovation is reinventing the financial sector, which is how fintech emerged in countries all over the world, including Cyprus. Now, it is possible to set up fintech businesses to operate in various branches of the finance industry.
In this article, our companyformation in Cyprus consultants explain a few aspects related to opening a fintech business. You can rely on us for starting a fintech company in Cyprus.
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Registration requirements for fintech companies in Cyprus
You can open a company in Cyprus as a local or foreign investor by following the same rules when it comes to undertaking fintech activities. The conditions to respect are as follows:
- you must register the company in Cyprus;
- you are required to appoint at least one resident director (EU residents are also accepted, however, it is also possible to apply for a residence and work permit for a non-EU citizen);
- after registering the entity, you must file for the appropriate license, in accordance with the fintech activity to complete.
Many foreign investors choose to buy shelf companies in Cyprus and then make the necessary amendments to comply with the applicable fintech regulations. So, you also have this option, should you want to skip the incorporation formalities.
How to register a Cypriot fintech business
When opening a fintech company in Cyprus under the form of an LTD (limited liability company), initially, all the necessary documents must be prepared. Our team of experts in company formation in Cyprus can definitely help you in this phase.
Then, a name for the company must be chosen, and an approval application has to be submitted to the Companies Registrar.
After the name has been approved, the entrepreneur can begin collecting the necessary documents in order to register the company with the Companies Registrar. Our company formation advisors in Cyprus can help you with the entire registration procedure.
You may need specific permits and licenses depending on the type of economic activity you plan to engage in after completing the procedure related to company registration in Cyprus. Also, if your enterprise will influence the environment, you should notify your municipality. The same institution must be notified once more if you inhabit a commercial property and need to take action to ensure fire safety.
Fintech regulations in Cyprus
Since we mentioned the requirement to comply with fintech rules, here are some of the laws to respect in Cyprus:
- the Electronic Money Law 81(I)/2012;
- the Provision and Use of Payment Services and Access to Payment Systems Laws 31(I)/2018;
- the Payment Services Act;
- the Investment Services Law 87(I)/2017;
- the Provision of Crowdfunding Services for Businesses Law 123(I)/2024.
Not all rules must be adhered to, only those that fit the profile of your fintech company in Cyprus.
Licenses for Cypriot fintech businesses
In most cases, setting up a fintech company in Cyprus also implies filing for specific business licenses. They can be issued by the Central Bank or by the Securities and Exchange Commission. The first institution releases authorizations for activities related to virtual money issuance and administration, while the second one issues permits related to investment in crypto assets.
You can rely on our Cypriot company formation specialists for support in drafting the licensing file and submitting it to the relevant authority.
Types of fintech activities in Cyprus
Here are a few business ideas that prove to be the most profitable ones in the industry:
- mobile transfer and payments: this is technology that enables less expensive, more affordable, and quicker money transfer;
- personal finance and banking: this is comprised of mobile or online banking, financial planning, wealth or asset management and so on;
- crowdfunding the venture capital: this includes venture capital investments and equity crowdfunding platforms;
- other business ideas: our company registration agents in Cyprus can provide further information on what these other business ideas may consist of.
Why open a fintech company in Cyprus
There are numerous reasons why you can decide to set up a fintech business in Cyprus, and among the most powerful ones are:
- the low corporate tax applied at a 12.5% rate;
- the personal income tax relief available for businesspersons who invest in innovative companies and startups (which is often the case of fintech enterprises);
- the intellectual property box regime which provides for a deduction of 80% on the notional expenses related to profits from qualifying immaterial assets, such as patents, software, and copyrights.
With respect to the personal income tax relief, it applies as follows:
- the deductible amount cannot exceed 50% of the taxable income obtained by the investor during the tax year in which the investment was made;
- the exemption may also be obtained for another period of a maximum of 5 years, under the same 50% taxable income rules;
- the maximum amount that can be deducted per year cannot exceed EUR 150,000.
Our company formation consultants in Cyprus can offer detailed information on the incentives you can obtain if you open a fintech company.
In case you would like to learn more about the fintech industry in Cyprus, or for help to open a Cypriot company, please contact our friendly staff.