Cryptocurrency regulation in Cyprus

Many perceive Cyprus only as a fashionable resort, forgetting that this country is part of the EU, has excellent economic stability, and issues crypto licenses. Today we want to discuss crypto regulations in Cyprus, evaluate all the advantages and disadvantages of this jurisdiction, and tell you how to get a work permit here. Many perceive Cyprus as offshore, but it is on the OECD safelist, which includes countries with high tax standards. By getting a work permit here, you can be sure that you are obtaining a permit in a prestigious country.

Features of obtaining a work permit in this jurisdiction

Cyprus cryptocurrency regulation requires that every organization that operates in this jurisdiction is required to obtain a work permit and pay taxes regularly. A permit in this jurisdiction allows you to work legally throughout the EU.

Obtaining a cryptolicense is a rather complicated process that involves the passage of essential steps. To begin with, you need to collect a package of papers and check how your organization meets all the demands of government agencies. Next, people in business have to apply to the relevant government authorities. The company needs to collect a large package of papers:

  • Documentation on compliance with the KYC/AML policy;
  • Detailed business plan;
  • Financial plan for at least 3 years;
  • Complete data about beneficiaries and much more.

You can obtain a cryptocurrency license in Cyprus within 4-6 months if all documents are in order.

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Benefits of this jurisdiction

Getting a permit in this jurisdiction has a large number of advantages, so a large number of firms seek to work here.

It is due to the low tax rate. It allows you to direct profits to business development.

In addition, it has no restrictions on mining, which is very convenient if you wish to work in this industry. The demands for authorized capital here are less than in some areas (for example, Lithuania), so this jurisdiction is suitable for small starters and crypto farms.

To do business here, you do not need to live in this country, as management can be done remotely, which is very convenient for non-residents.

As you can see, the state authorities of this country have created relatively simple rules for regulating the crypto industry, which helps such organizations to work and develop stably.

How to start your business in this country?

If people want to open a crypto organization that will work from this jurisdiction, they need to go through several necessary steps:
  • Consider the business model and services you plan to provide;
  • Reserve a unique name;
  • Creation and submission of necessary papers to the relevant regulatory authorities;
  • Payment of duty;
  • Applying for a permit.
It isn’t easy to go through all the above steps on your own, so there is a need to seek help from lawyers. The specialists of our company will accompany your organization at all stages of creation, which will help to get a work permit much faster and easier.

What are the demands of a crypto organization?

Your organization must meet specific requirements if you want to work with cryptocurrency Cyprus. Among the most important are the following:
  • The organization must be registered in that jurisdiction;
  • At least 4 directors;
  • Excellent reputation and experience of key employees;
  • Risk assessment.
The minimum amount of the authorized capital is 50 – 150 thousand euros. The size of the authorized capital should constantly increase as the number of investors grows. Company money and client assets must be strictly separated. Your organization must comply with AML policies. You are required to verify your clients and store data about their transactions. You must report suspicious activity to the appropriate government authorities if you notice suspicious activity.

Reporting requirements

Your organization’s reporting must comply with IFRS. It means you must keep an honest and open record of your activities. Once a year, you must convene your directors and shareholders in a public meeting and give a complete account of your organization’s activities over the past year. After this meeting, you must submit an annual report to the regulatory authorities. The inspector will examine your company’s activities and decide to renew the permit. All activity records of your organization must be kept at the local office.

CYSEC: how to register?

People must undergo the registration process if they want their organization to operate within the law. You have to fill out an application and provide all the necessary information in printed and electronic form on a flash drive. You also need to pay fees: 10 thousand euros for the consideration of the application and 5 thousand for the annual renewal of the permit.

The license here is issued for only a year, after which the firm must undergo a comprehensive check and re-pay the fee.

After the application is ready, people have to contact the Department of Information Technology by email. You will be provided credentials for the unique portal, where you can submit data and papers related to the organization.

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This portal will publish all public data about your organization. It is so that your users and investors can verify that your organization has a local permit.

Taxation

Crypto regulations require all organizations in this jurisdiction to pay taxes regularly. It is worth saying that the tax system here is quite complex, which includes the following types of taxes:
  • Corporate income tax – 12.5%;
  • Tax on capital gains – 20%;
  • VAT – 19%, and some others.
As you can see, the corporate tax in this jurisdiction is one of the smallest among the EU countries, which makes this jurisdiction very attractive for doing crypto business. If you need help understanding the taxation conditions in this jurisdiction, you can seek help by contacting our specialists. They will analyze the activities of your company and calculate how much taxes you are required to pay regularly.

The main types of firms that can obtain a work permit

If people want to open a Cyprus crypto firm, they need to choose one of the types of business entities. The choice mainly depends on whether you plan to list your shares in the general auction. Next, we want to talk about these types in more detail.

Ltd

It is the most common type of business model among crypto organizations in this jurisdiction. It has these features:
  • From 1 to 50 shareholders;
  • At least 1 director;
  • The organization must have a secretary;
  • The right to transfer shares is limited.
Both citizens of this country and non-residents can register as such an organization.

Plc

This type is suitable for organizations that wish to raise investment by publicly selling their shares to the general public. The shares of such companies may be listed on the stock exchange. If you need help understanding the types of business entities, you can seek help from our organization’s specialists. They will answer your questions and tell you what type of organization your organization is.
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How can our company help you obtain a work permit?

Getting a work permit if you don’t have a law degree can be incredibly difficult. In this case, you should contact our specialists for help. They have extensive experience in this area, and you can simply trust the professionals in smoking.

Our lawyers will help to draw up the necessary papers, check how your organization complies with the requirements of state regulation, and give recommendations on what changes need to be made. In addition, if you issue a power of attorney for our specialists, they will represent your interests in state bodies, which means that your participation in licensing will be minimal.

Conclusion

If people in business want their organization to be successful and snowball, they must obtain permission to work in a respectable jurisdiction. Cyprus has very favorable taxation and relatively simple regulation of the crypto industry. A license in this jurisdiction allows you to work legally throughout the EU. You can contact the specialists of our firm, who will help you draw up the necessary papers and represent your interests in state bodies.

FAQ

Yes, quite simple rules have been created here to regulate the crypto industry to protect users against fraud and money laundering.

Yes, you can use licensed exchanges and other trading platforms to purchase crypto assets.

Yes, every crypto organization operating in this jurisdiction must pay taxes regularly.

Yes, there is no law here that prohibits mining. For this type of crypto activity, special regulation rules have been created.