Cyprus became a member of the European Union in 2004, and CySEC was founded in 2001. It opened doors for companies registered in Cyprus to enter the European market. Entering the EU greatly changed Cyprus’s financial regulatory framework, which many considered the country as a tax haven in the past. Companies who had obtained a Cyprus Forex License issued by the country are allowed to freely carry out brokerage-related activities in the EEA or European Economic Area.
Cyprus’s tax policies has changed drastically over the years. Cyprus became a popular offshore financial center from 1890s. Large amount of capital from Eastern Europe and the surrounding region came into the market to invest, which has won Cyprus a good reputation. One main reason was because of Cyprus’s competitive tax policies as its corporate income tax is as low as 12.5%, comparable to many European countries, Cyprus provided one the most competitive tax regime. Interest income, income from overseas businesses, as well as income from the sale of securities are exempt from tax. There are many tax perks on dealing with dividends, interest, royalties, and more when dealing with company revenues. For businesses dealt or operating in Cyprus, it follows a uniform tax rate of 12.5%. With the image gained as a flexible jurisdiction to obtain a Forex brokerage license, online trading activities via the country rose, and brokers, large or small, continued to register for a license in the island. In a short time, Cyprus become one of the most preferred choices for broker dealers around the globe who for a proper jurisdiction to be regulated under. Most of these companies registered through CySEC hope to use its sound reputation to enter and create a market within Europe, as the view is if they become regulated under CySEC, clients will feel the company is being credibly licensed, as the jurisdiction has earned good reputation over these years.
CySEC licenses provide lots of flexibility for brokers, for example, brokers can publish their license information and licenses on their official website. This enhances trust when dealing with traders who only open account with highly regulated entities. In addition, attaining bank accounts with Europe’s or world’s largest bank becomes less of a hassle as Cyprus regulated companies have good credibility status. The broker can work with credible payment providers, this however greatly enhances customers’ trust. Cyprus’s regulatory body continue to gain global recognition and trust with many customers as well as financial intermediaries. Companies supervised and regulated with CySEC signifies that the company has the financial strength and integrity to operate the broker dealer business, thus leaving a positive impression for the customer. Through obtaining a CySEC license, customers will feel more assured and protected.
If obtaining a Cyprus Forex License is what you are looking for, please do not hesitate to contact us.