The Republic of Cyprus has emerged in recent years as a key location for Forex/CFD brokerages. It has a unique position as both a member of the European Union with relatively strict ESMA regulation for the protection of retail client, and as a traditional offshore financial center in its own right, with a very deep supportive infrastructure of ancillary brokerage services such as tech, accountancy, and legal specialists – the country enjoys a very skilled and highly educated workforce. It may be true that more Forex/CFD brokerages are domiciled in the Republic of Cyprus than in any other single country.
There are additional reasons why Cyprus is such a popular choice of location for new Forex brokerages today. Cyprus has a relatively low-tax regime with only a 10% flat tax on corporate profits. Under ESMA regulations, Cyprus brokerages may offer their services to any resident of the European Union, although a few European Union countries have introduced their own laws which can make opening a retail Forex/CFD brokerage account difficult.
Although Cyprus is covered by ESMA, its national regulator CySEC generally takes the approach of applying a light yet firm regulatory touch. CySEC has drawn up easy-to-follow guidelines for setting up business as a brokerage, so it is perhaps uniquely attractive. Although CySEC has in the past been accused of not being as firm as should be expected from a member state of the European Union, recent years have seen it update its regulations with new initiatives aimed as cutting out burgeoning white-collar crime and financial abuses.
Cyprus has changed immeasurably over recent decades since it was ravaged by war in 1974 and seen as part of an inherently unstable region. Its prosperity and financial sophistication have grown exponentially to make it one of the wealthiest and most politically stable countries in the entire Mediterranean.
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