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CYPRIOT INVESTMENT FIRMS (CIF)

We offer a complete range of consulting services related to the establishment and operation of Cypriot Investment Firms (CIFs).

Our services include:

  • Advising on selecting the proper form of presence in Cyprus
    • Cypriot Investment Firm (CIF)
    • Branch of the Investment Firm (I.F.) of the home company
  • Authorisation and establishment of a Cypriot Investment Firms. We prepare a complete application file which includes:
    • Internal regulation Manual
    • Money Laundering Manual
    • Business Plan
    • Completion of relevant Cyprus Securities and Exchange Commission (CySec) forms
    • A variety of documentation
  • CIF registration after the authorisation
  • Selection of qualified staff/directors in accordance with the provisions of the CySec’s Directives
  • After granting of the license we offer:
    • Legal support
    • Accounting support
    • Training courses
    • Internal Audit services
    • Compliance and Anti-Money Laundering services

 

Investment Services and Activities and Regulated Markets Law of 2007 - Law 144(I)/2007

A brief description of the provisions of the above Law which in no way is exhaustive and further professional advice should be sought.

Opportunities ahead
The new legal framework offers the comfort for potential investors and business to consider seriously Cyprus as a potential place for their permanent establishment. The low tax rates and the service industry infrastructure provided in addition to the low administration costs add further to Cyprus’s competitiveness.


The Law/Directives
In compliance with the European Union Directives regarding the Financial Services Companies the Parliament passed the “Investment Services and Activities and Regulated Markets Law of 2007 - Law 144(I)/2007”. The Cyprus Securities and Exchange Commission (The Commission) having the jurisdiction, according to the law, issued several directives regarding the requirements for granting permission for operation as Financial Services Company.


Financial Services Companies
The Law defines Financial Services Companies as companies that operate under licence from the relevant regulatory authorities which in this case is the Cyprus Securities and Exchange Commission (The Commission), providing to third parties any of the following investment services and activities (core services):

• Reception and transmission of orders in relation to one or more financial instruments
• Execution of orders on behalf of clients
• Dealing in own account
• Portfolio Management
• Investment advice
• Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis
• Placing of financial instruments without a firm commitment basis
• Operation of Multilateral Trading Facility


More specifically the law defines:

Investment Firm (I.F.) means a person that operates under an authorisation granted by the competent authority and provides one or more investment services to third parties or/and performs one or more investment activities on a professional basis, and includes a CIF but not a credit institution;

Branch means a place of business other than the head office, which is part of an IF, which has no legal personality and which provides investment services or/and performs investment activities, and which may also perform ancillary services for which the IF has been authorised; all the places of business set up in the same member state by an IF with headquarters in another member state shall be regarded as a single branch;


Article 6(5) of the Law
The CIF authorisation is valid in all member states and shall allow the CIF to provide the services or/and perform the activities, for which it has been authorised, in all the member states, either through the establishment of a branch or the free provision of services or performance of activities


Organisational requirements (Article 18 of the Law)
The most organizational requirements that a CIF has to fulfill in order to obtain the license from the Commission are defines at article 18 of the law.


Share Capital Requirements
The minimum required issued and fully paid share capital of a Financial Services Company depends on its core activities and is analyzed in table below:

                                                Issued and Fully paid Share Capital

Investment Service

Share Capital (€)

Comments

Reception and Transmission

200,000

Holds clients' money or/and client’s financial instruments

Execution of orders

200,000

« «

Portfolio Management

200,000

« «

Provision of Investment Advice

200,000

« «

Reception and Transmission

80,000

Does not holds clients' money or/and client’s financial instruments

Provision of Investment Advice

80,000

« «

Dealing on own account

1,000,000

Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis

1,000,000

Placing of financial instruments without a firm commitment basis

1,000,000

Operation of Multilateral Trading Facility

1,000,000


Further requirements

  • The Board of Directors of a CIF shall consist of at least:
    • two executive Directors and
    • two independent non- executive Directors.
  • The majority of the Directors of the CIF shall be residents of Cyprus
  • The management of a CIF must be undertaken by at least two persons meeting the following requirements:
    • Shall be of sufficiently good repute and sufficiently experienced as to ensure the sound and prudent management of the CIF
  • The CIF shall have a General Manager, who shall:
    • have detailed knowledge of all of its activities,
    • render his services in full and exclusive employment at the CIF
    • be a resident of Cyprus
  • The General Manager of the CIF may be one of the executive Directors
  • Employees/ key persons of the CIF shall render their services in full and exclusive employment at the CIF so that the following objectives are achieved:
    • the CIF shall operate independently from all other businesses of the group, to which it, possibly, belongs,
    • the employees/ key persons of the CIF shall be specified and accessible at all times
    • the reporting lines of the employees/ key persons shall operate within the CIF and not within the group to which the CIF, possibly, belongs,
    • the CIF shall independently offer the necessary substance
  • Article 77 of the Law defines the requirements for establishment of a branch in Cyprus by an IF incorporated in a member state
  • Article 78 of the Law defines the requirements for establishment of a branch in Cyprus by an IF incorporated in a third country.


Cypriot Investment Firms-Guidelines



 

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