Company Registration
2 Weeks
Local Director?
No
Bank Account Opening
4 Weeks
Travel Required?
No
Cyprus Banking License
- Applying for a Cyprus Banking License can be a time-consuming and difficult procedure. Tetra Consultants provides the entire range of services necessary to assist your company in complying with the obligations of the regulator. Our service package includes company formation, drafting of important documents, provision of registered address and registered local agent, and corporate bank account opening along with the final submission of banking license application.
- Cyprus’ banking and finance business sector has changed significantly after the 2009-2013 economic crisis and consequent EU bailout. The economic crisis was largely prompted by exposures to the Greek economy and sovereign debt, as well as a severely heavily leveraged real estate sector; all of these factors resulted in Cyprus banks’ portfolios containing an unacceptably high proportion of non-performing loans (NPL), sometimes exceeding 50%. In exchange for EU bailout support, the Cyprus government signed the ‘The Economic Adjustment Programme Memorandum of Understanding (MoU) in March 2013.
- The assessment of the banking system’s requirements and shortcomings was an important aspect of the MoU process. Following that, significant objectives were established and steps were taken to attain them. This comprised credit institution recapitalization and restructuring, as well as improving the regulatory and supervisory frameworks of the banking and financial sectors. While the journey to these goals was frequently harsh, the ultimate result was local banks and financial institutions that were rationalized, stable, well-funded, and, most crucially, invested in corporate governance.
What are the benefits of obtaining a Cyprus Banking License?
Tax optimization
- A corporate tax rate of 12.5%, with no dividend or capital gains taxes, withholding taxes, or taxes on securities profits. There are no taxes on your company’s foreign-sourced income.
Pro-business government
- Following the 2013 economic crisis, Cyprus took a huge step toward a pro-business policy. They offered a slew of tax breaks and opened the nation to investors, establishing an appealing non-dom status, authorizing tax incentives for fund managers, establishing CBI and RBI programs, and revising banking regulations to allow banks to securitize loans. This lowered non-performing loans and provided the island with new FDI, which has subsequently rejuvenated the Cypriot economy.
Access to a larger market
- By establishing an offshore business in Cyprus, you will get full access to the EU market. You can conduct business in other EU member states without obtaining extra permits, therefore a Cypriot license allows you to conduct business freely within the EU.
Straight forward process
- Obtaining a finance license is, as usual, a difficult procedure. Nonetheless, the procedures for obtaining a financial license in Cyprus are severe enough to enable only legitimate participants while being flexible enough to be appealing.
Who is the regulatory authority of Cyprus financial services?
- The national authority for banking regulation, supervision, and resolution in the Republic of Cyprus is the Central Bank of Cyprus (“CBC’’). The CBC is governed by the Central Bank of Cyprus Law 2002, (‘’CBC Law’’). The CBC Law specifies the main responsibilities of the CBC in relation to banking regulation in the Republic of Cyprus.
- Since Cyprus is part of the Eurozone since January 2008 (and as such part of the Single Supervisory Mechanism (“SSM”), the European Central Bank (“ECB“) assumed a number of tasks concerning policies relating to the prudential supervision of credit institutions established in SSM participating member states, which have been conferred on it by the Council Regulation (EU) No 1024/2013.
- Additionally, the Cyprus Securities and Exchange Commission (CySEC) oversees operations and makes sure that financial rules and procedures adhere to the European MiFID financial harmonization law.
What are the activities allowed under a Cyprus Banking license?
According to the Cyprus Business of Credit Institutions Law, a bank is forbidden from engaging in any operations other than those authorized by the banking license granted by CBC. The following activities are permissible:
- Accepting deposits and other repayable funds
- Lending
- Provision of payment services
- Issuing and administering other means of payment including travelers’ cheques and bankers’ drafts
Guarantees and commitments - Trading for own account or for the account of customers in
- Money market instruments including cheques, bills, and certificates of deposit;
- Foreign exchange;
- Financial futures and options;
- Exchange and interest-rate instruments;
- Transferable securities.
- Participation in securities issues and the provision of services relating to such issues
- Advice to undertakings on capital structure, industrial strategy, and related questions and advice as well as services relating to the purchase of undertakings and mergers
- Money broking
- Portfolio management and advice
- Safekeeping and administration of securities
- Credit reference services
- Safe custody services
- Issuance of electronic money
What are the regulatory requirements to obtain a Cyprus banking License?
Minimum capital:
- The law sets the minimum amount of capital for an applicant at €5,000,000 and it is required to be maintained throughout the course of the business operation of the banking entity.
- The initial capital can consist of one or more of the elements referred to in Article 26 of Regulation (EU) No. 575/2013:
(a) Capital instruments, provided the conditions laid down in the subsequent articles and regulations are met;
(b) Share premium accounts related to the instruments referred to in point (a);
(c) Retained earnings;
(d) Accumulated other comprehensive income;
(e) Other reserves. - The Central Bank may authorize specific categories of credit institutions whose initial capital is less than the limit mentioned above, provided that the following conditions are fulfilled:
- The initial capital is not less than €1,000,000;
- The Central Bank shall inform the Commission and the European Banking Authority of the reasons for making use of this option.
Management:
- At least two (2) Executive Directors who effectively direct the business of the Credit Institution are required.
Registered office:
- The company must register its office in Cyprus and carry out banking business and/or provision of banking services in the country.
What legal entities can operate as a bank in Cyprus?
The legal entities that can operate as banks are the following:
- A credit institution incorporated in the Republic of Cyprus under the provisions of the respective company law;
- A credit institution incorporated and authorized in a member state pursuant to corresponding legislation of that member state in order to operate in the Republic of Cyprus through a branch;
- A credit institution established and authorized in a third country pursuant to corresponding legislation of that country in order to operate in the Republic of Cyprus through a branch.
Additionally, aside from banks, payment institutions (allowed to supply and execute payment services throughout the EU) can be licensed to operate as such by the CBC, if they satisfy the appropriate conditions since the Payment Services Directive has been incorporated into Cypriot legislation through the Payment Services Law. The Central Bank of Cyprus is the responsible body in Cyprus for the authorization and supervision of such payment institutions.
What is the process of acquiring a Cyprus Banking License?
Step 1: Cyprus entity formation
- Tetra Consultants helps set up a company in Cyprus, guiding clients through the best setup options while considering required capital and local operational rules. Instead of just handling paperwork, they review background details of directors and owners to meet compliance standards. Next, they compile the identification records needed under regulations before submitting everything officially. Once approved, the registry issues proof of registration along with key constitutional papers defining how the business operates
Step 2: Opening a corporate bank account
- Tetra Consultants sets up a company bank account at a trusted Cypriot bank. While doing so, they deposit the necessary minimum capital tied to the CySEC license meeting financial rules ahead of submission.
Step 3: Preparation of license application and other documents required
- Tetra’s legal team drafts key paperwork such as a clear business strategy, financial records, anti-money laundering measures, or coverage terms – in line with CySEC rules. These versions go to clients for feedback and digital approval, so every model follows compliance needs
Step 4: Meeting local economic substance requirements
- Tetra Consultants maintains local presence through appointed secretaries, office addresses, and resident directors when required. In addition to that, they assist in hiring professionals such as AMLCOs or compliance officers, meeting CySEC’s continuous operational and management requirements
Step 5: License application filing
- Tetra Consultants sends the full application to CySEC, gets clients ready for possible regulator talks while guiding them through each step. Once approved, the Cyprus crypto license is granted – clients then receive support to start activities on schedule.
What are the documents required to obtain a Cyprus banking license?
Cyprus issues banking licenses, which indicates that specific rules and regulations are applicable to applicants. In addition to the nation’s strict legislation regulating the incorporation of corporations, a significant level of authorized capital as well as a comprehensive set of documentation is needed which may include, but not be limited to –
- Bank name and its legal structure
- Names and CVs of the bank directors
- Certificates of proof that there is no criminal liability of applicants and directors
- Details of the applicant with all requested information and documents.
- Program of operations with all required information and documents.
- Business Plan with all required information and documents.
- Structural organization description.
- Evidence of Initial Capital.
- Measures to safeguard the funds of electronic money users and/or payment services users.
- Governance arrangements and Internal Control Mechanisms.
- Procedure for monitoring, handling, and following up on security incidents and security-related customer complaints.
- Process for filing, monitoring, tracking, and restricting access to sensitive payment data.
- Business Continuity Arrangements.
- Principles and definitions are applicable to the collection of statistical data on performance, transactions, and fraud.
- Security policy document.
- Internal Control Mechanisms to comply with obligations related to Money Laundering and Terrorist Financing (AML/CFT obligations).
- Identity and suitability assessment of persons with qualifying holdings in the applicant.
- Identity and suitability assessment of members of the management body and key function holders of the electronic money institution.
- Identity of Statutory Auditors and Audit Firm.
- Any other documents which can support the application form
What is the timeline of obtaining a Cyprus banking license?
- The CBC has up to 6 months from the date of receipt of a new application (excluding the period spent answering questions and gathering further information) to communicate a decision. If the application is approved and a license is provided by CBC, the licensed bank must prepare for its establishment and operation within a maximum of 12 months.
- If the Central Bank refuses to grant a credit institution authorization to start a business, it must notify the applicant in writing of its decision and the reasoning for the decision within 6 months of the date of receipt of the application or, if the application is incomplete, within 6 months of receiving of all the information required to make a decision. In any case, a decision to grant or deny authorization must be made within 6 months of the application’s submission.
- An authorized credit institution may repudiate its license by notifying the Central Bank in writing. The return is effective from the date of the notice or, if a later date is specified, the return is effective from that day. If a later date is specified in the notice, the credit institution may set an earlier date for the return, which shall not be earlier than the date of its initial notification, by a new written notice to the Central Bank. The return of authorization is irrevocable unless it is specifically stated that it will be effective at a later date and the Central Bank accepts the revocation prior to that date with written notification to the credit institution.
How much does it cost to obtain a Cyprus banking license?
- The overall engagement cost is determined by the services you require from Tetra Consultants. From helping you with the incorporation procedure to getting the banking license, we will support you with a variety of services. The total sum that will be charged includes the licensing fee, the business registration price, and any extra expenses that could be incurred.
- Before we start the registration process, we will go through the entire engagement cost with you in detail so that you know exactly what you are paying for. Before beginning any engagements, Tetra Consultants aims to be upfront and forthright about the engagement costs. Our appointment letter will clarify all of these terms and conditions apparent.
Our services
- Tetra Consultants will assist you with the comprehensive set of services to obtain a Cyprus banking license which will include assisting in the formation of a corporation that will apply for a bank license, collating necessary background information to submit an application for a bank license, and preparing the significant corporate documents along the bank license application.
- Additionally, Tetra Consultants will be providing advisory services to our international clients with respect to any yearly compliances and the maintenance of offshore banking license that they may face.
- Moreover, Tetra Consultants will be providing recommendations on the regulatory compliance solutions for the business, placing the bank into full operation once it gets the required certifications and licenses. We will ensure smooth communications with the local Central Bank, regulatory authorities, and government officials throughout the whole course of the engagement.
- Tetra Consultants’ team of licensing experts is proficient with attaining other offshore financial licenses depending on your business activities and long-term goals.
Find out more!
- Contact us to find out more about how to obtain a Cyprus banking license. Our team of experts will revert within the next 24 hours.
FAQ’s
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