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banking, financial and insurance services,” states Phidias Pilides, President of the Cyprus Chamber of Commerce and Industry. “We have a highly conducive tax system with a corporate tax rate of only 10% (the lowest in the European Union and one of the lowest internationally), more than 45 double tax treaties including Russia, China, the United States of America, most European and Middle Eastern countries, along with a liberal foreign direct investment regime and freedom of movement of foreign currency,” he argues.


Indeed, according to CySEC the contribution of the 20 largest CIFs to the Cyprus economy has


become quite substantial, paying approximately €40.5 million in taxes in the last 4 years with transactions for 2011 amounting to roughly €2.1 trillion.


Operating environment


Favourable tax regimes have long been an attractive bait to any company but are fairly pointless if the operating environment does not bring in business. So according to Managing Director, Dr. Stelios Platis of MAP S.Platis, a Cyprus-based regulation consultancy firm, which obtained licenses for over 50 Cyprus Investment Firms since the harmonisation of EU financial legal infrastructure, getting to grips with the EU’s MiFID (Markets in Financial Instruments Directive) was critical to helping push Cyprus to the front of the FX registration queue so soon after it joined the European Union in 2003.


Vladimir Kisyov


“We’re even seeing US brokers seeking opportunities in Europe, as their domestic regulations become tighter, for example the restriction on leverage multiples offered to clients.”


“We helped regulators in understanding the sector very quickly with the implementation of MiFID and worked closely with CySEC in this respect,” says Platis. “I’d say that CySEC’s experience on regulatory issues and understanding the mechanics of the forex business is now certainly better than most other European jurisdictions. Tey’ve become very good in dealing with the ethics of the industry and this has helped them streamline licensing.”


And CySEC’s learning curve has been steep, in his opinion. After joining the EU and seeing the advantages that MiFID and other European financial rules could give Cyprus, they were quick to learn. “Even in 2008 it was a matter of educating some


46 | INSTITUTIONAL FX SERVICES - THE BROKERS HANDBOOK 2012/2013


Vitali Boutbaev


“Cyprus has managed to create attractive conditions for capital markets’ participants and we believe that it will become an even more recognized place for international trading and investments,”


regulators that some features of delivering FX trading services, like bridging technologies, were not condemnable. But CySEC is not a soft touch - it has imposed fines for non-compliance on quite a few brokers,” reveals Platis.


Now the country boasts a regulatory framework in line with the EU both in terms of transposition of the legal texts as well as the practical implementation and application, with a view to ensuring that investors and entrepreneurs have high levels of protection. “Being licensed by the CySEC gives to a firm the necessary credibility of complying with the


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