Fintech in Cyprus feels very comfortable and is growing dynamically. This is facilitated by the efforts of the Cypriot authorities to create an enabling environment for the development of digital technologies in general. For example, in early 2020, Cyprus created a new sub-Ministry of Innovation and Digital Policy, which aims at transforming Cyprus into a competitive and dynamic economy that works with research, innovation and technological progress. The agency will formulate and implement a national strategy in the field of innovation, digital policy and artificial intelligence.
If you are planning to start a fintech business in Cyprus, this article will be at handy to you. Should any questions arise, you can seek a legal advice on the fintech industry in Cyprus by contacting our company professionals.
Booming Fintech
In 2012, Cyprus implemented the Digital Strategy in line with the European Digital Agenda. It has also adopted an advanced cybersecurity system. The authorities are now in the process of preparing a detailed blockchain strategy to apply in various industries.
Meanwhile, our company's experts provide advice on ensuring the confidentiality of data when using blockchain technology in Cyprus.
Mild regulation
Cyprus follows a sectoral model of financial supervision, which means that each sector is controlled by a separate regulator. Activities related to banking, securities and insurance are subject to separate supervision by the authorities. The regulation of fintech services in Cyprus is also subject to the sectoral supervision model
The IQ Decision UK experts provide legal advice on the regulation of the financial services sector in Cyprus. If you are planning to register a fintech company in Cyprus, or get a license from a Cypriot private fund manager, it would be feasible to consult a lawyer on the regulation of fintech activities on the island of Cyprus.
A generous Fintech proposal
Various combinations of technological solutions, such as blockchain and smart contracts, AI and robo-advisors, data collection and analytics, virtual reality solutions, electronic signatures, APIs and other algorithmic, software and technological solutions - all of them to name just a few, have seized to be a novelty in the Cypriot financial services market for quite a long time. Private companies are stimulating government interest in these technologies as they seek to incorporate them into their business models. Blockchain is also considered in terms of its ability to store huge amounts of data. This is crucial in the industry, where compliance with many financial laws requires the secure data storage and transmission.
More advanced solutions
The PSDII (Payment Services Directive) has forced banks to turn to innovative technologies to meet their obligations. The introduction of APIs as a means of maintaining open banking channels demonstrates the transition of the banking sector to technological solutions. In addition, existing banks seek to use other technology initiatives to accelerate the delivery of their services while minimizing their costs. For this reason, existing banks are turning to augmented reality (AR) and virtual reality (VR) solutions to implement some of their services. One striking example is the remote registration process, which will make it easier to open accounts even when customers are physically absent.
For more information on the implementation of APIs and open banking in Cyprus, we advise you to consult a lawyer for licensing payment services in Cyprus in accordance with PSDII.
Electronic identification
We should not forget about electronic signatures and other electronic services that allow you to provide remote services to banking and other financial institutions. For example, the Regulation on Electronic Identification and Authentication of Trust Services (eIDAS) regulates certain aspects of electronic identification, electronic signatures and other electronic services. EIDAS primarily seeks to create a pan-European structure in which citizens of one Member State can use their electronic identification (eID) to access the services of another Member State.
More information on the current issue will be provided to you by our experts during the consultation on the use of financial technologies in the banking sector of Cyprus.
International fintech services
Cyprus provides an opportunity for international activity without imposing excessive restrictions. Cyprus offers a comprehensive passport control system that allows EU institutions to exercise their passport rights and conduct business in Cyprus without hindrance.
Cyprus has lifted all restrictions on currency controls.
The final word
Cyprus is fully in line with the structure of EU financial services, as required as an EU Member State.
A favorable tax system and access to an extensive network of double taxation agreements stimulates business activity in Cyprus. In addition, tax benefits are provided to start-ups that are technology-oriented and can operate in the financial sector.
If you are interested in legal support in obtaining a license for financial activities in Cyprus, contact the IQ Decision UK staff lawyers. You can also request legal advice on the tax regime for fintech companies in Cyprus from our highly qualified specialists.
