EMI license in Cyprus 2024

Cyprus is one of the prominent financial hubs in the EU (European Union). It is well-known for its fintech-friendly legal framework, favourable tax regime, and strategic position.

It stands out as a strategic destination for financial services, providing reliable infrastructure and a favourable regulatory environment for businesses looking to establish EMIs (Electronic Money Institutions).

Why Establish an EMI in Cyprus

Thanks to technological advancements, Cyprus has stayed ahead in the ever-changing financial landscape. As an established EU jurisdiction, the country attracts entrepreneurs and businesses globally to grasp opportunities and even establish an EMI to benefit from:

• A chance to offer services across the European Union through the passporting framework without establishing any branch in another state or seeking additional authorisation.
• A wide network of experts allocating financial resources and providing high-quality compliance, banking, accounting, and legal services.
• The country’s attractive regime with a net profit is subject to the lowest taxes in Europe. In addition, non-residents can enjoy no withholding taxes on royalties, interests, and dividends and can take advantage of over 60 double-tax treaties the republic has already secured.

Services EMI Offers

Licensed EMIs in the country are authorised to provide different financial and payment services. The main ones include cash withdrawals, executions of payment transactions, and payment account operations. EMIs also provide other services, including issuance of e-money, accounting information services, IT-based payments/telecommunications payments, money remittance, acquiring/issuing payment instruments, and credit-funded transactions.

Obtaining an EMI License

To get a license, you will have to meet certain requirements. First, you must ensure legal operation per the Cyprus Companies Act. Second, you must appoint Cyprus residents (two executive directories), compliance officers, IT experts, back office workers, and non-executive directors). Lastly, you must have enough capital to cover your business operations.

Getting or applying for an EMI license in Cyprus involves several steps, which are important to acquiring the license. These steps include the following:

1.      Application Preparation

This first step involves gathering the necessary documentation and information. These often include due diligence reports, financial projections, and business plans, among other details.

2.      Application Submission

You must submit your completed application and the supporting documentation to the Central Bank of Cyprus. The bank is the regulatory authority liable for regulating and supervising EMIs in Cyprus.

3.      Application Review

The bank reviews applications and supporting documentation to evaluate whether they meet the license's regulatory requirements and eligibility criteria. Typically, this process takes a few months to complete.

4.      On-site Inspection

After applications are approved, the bank conducts on-site inspections of applicants’ facilities to ensure companies have all the necessary infrastructure, controls, and systems to run as EMIs.

5.      Issuance of the License

If applicants successfully finish the inspection and meet the regulatory requirements, the bank will issue a license, allowing companies to start their business operations.

The bottom line is that EMIs in the country provide many benefits, from strategic positioning to tax incentives and regulatory advantages. With a favourable legal system, dynamic fintech market, and skilled workforce, the country creates a suitable environment for EMIs to succeed.