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Cyprus has been one of the most popular Forex broker licensing destinations in the EU for many years. This new article is about all the benefits and downsides of the jurisdiction, and also about what one intends to get a broker license in Cyprus needs to be prepared for.
We have highlighted key reasons why many successful Forex brokers obtain a license in Cyprus. So, the key benefits are:
Those are inarguable advantages for those intending to get a Forex license in Cyprus. And what about the disadvantages?
Cyprus seems to be perfect for engaging in Forex activities in the EU market but there are certain drawbacks that may disconcert potential Forex brokers.
Costly servicing is a major drawback. The approximate cost of maintaining an office, including premises rental, purchase of computers and office equipment, telecommunications, minimum salaries for managers and employees, and the services of internal and external auditors is EUR 130,000.00 to 170,000.00 annually.
The above amount does not include the salaries of two top executives – Chief Executive Officer and Chief Accountant which will cost a pretty penny. In Bulgaria, for instance, the expenses will be half as much, although this is also an EU jurisdiction.
Anyone putting the quality and reputation of Cyprus first should be prepared to incur substantial costs.
It is important to understand that the budget for launching a Forex company in Cyprus includes several types of expenses:
License type. Depending on the type and quantity of services, the minimum authorized capital for obtaining the license is:
Important: the regulator pays close attention to the financial capacities of license applicants so in practice availability of a much larger amount will need to be confirmed.
Office rental. Investment companies in Cyprus have to maintain a fully functional office. Some functions in the course of company operations may be performed from abroad. The rental price depends on the scale of broker’s activities and number of employees. The bottom office rental price in Cyprus is 500 euro.
Director salaries. At least two executive directors (one being a resident of Cyprus, can act as the CEO) and minimum of three non-executive directors (two being Cypriot citizens). The chief executive director must have banking or financial experience and a good reputation. The required monthly salary for an executive director is EUR 3000, for non-executives — EUR 1500. It is imperative to take these expenses into account when planning the broker launching budget.
Employee salaries. It is obligatory for the Forex broker to have the following employees:
Employment expenses will depend on the employment qualifications and start at EUR 10,000 monthly.
Setting up bank accounts. Brokers need to set up bank accounts in Cyprus to support their operations. First, one has to open an account to contribute the authorized capital. Second, an account is required for the company’s operations (to pay salaries, rentals etc.).
Careful and elaborate preparations should be made to obtain a broker’s license in Cyprus quickly and smoothly. Do not hesitate to seek professional help. SBSB Firm has extensive experience in providing this kind of services so email us at [email protected] or give us a message on Telegram for a top-quality consultation.
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