Why Are There So Many Forex Brokers In Cyprus

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Anyone who has browsed a number of Forex comparison sites may have noticed that there are significant number of Forex brokers based in Cyprus. Today we are going to explain the reasons behind why so many Forex brokers choose the small island of Cyprus as a base for operations.

Low Taxes

Being based in Cyprus has a number of benefits; one of the most obvious benefits is the low rate of corporation. The Cyprus boasts the European Union’s lowest rate of corporation tax. The rate of corporation tax on the island is currently a flat 10%. The only other European Union country to charge such a low rate of corporation tax is Bulgaria, which itself has seen a small influx of Foreign exchange brokerages in recent years. This makes Cyprus a very attractive destination for those who looking to open a brokerage, as company can reduce its overall tax bill significantly.

European Union Membership and MiFID

MiFID stands for the Markets In Financial Instruments Directive and is a European law that harmonises investment regulation throughout the 30 states of the European Economic Area. Essentially MiFID sets out a minimum regulatory framework which must be adopted and followed by all the countries in the European Economic Area. MiFID also maintained the passport principle introduced by previous European Union law, this principle means that a firm regulated in a MiFID country can offer its services to citizens and residents of other European Economic Area countries. Cyprus is a member of European Economic Area and the European Union, meaning that Cypriot based brokerages can offer their services to citizens of any other EEA country. While MiFID ensures a minimum standard of financial regulation, regulation does vary in each jurisdiction. For instance, Cyprus insures retail customer funds up to the amount of 20,000 Euros, while in Britain funds are insured up to £70,000 pounds should a regulated investment happen to collapse.

Large Financial Sector and Skilled Workforce

It is not only low taxes and European Union membership which attracts many retail brokers to Cyprus, the island also boasts a large financial sector. Low tax rates and a solid business saw Cyprus grow to be one of Europe’s larger financial hubs, with the financial services sector growing rapidly after the breakup of the USSR in 1991. This means that brokerages are able to recruit all the staff they need without too much hassle. A large retail FX brokerage requires a number of specialist staff including traders, risk managers and compliance staff. These specific needs leads to brokerages being drawn towards jurisdictions which have a strong financial services sector.

Internet & Telecoms Infrastructure

In addition to the other factors mentioned above, Cyprus already has a strong telecommunications infrastructure in place. While Cyprus doesn’t have Europe’s strongest internet infrastructure, in recent years Cyprus has vastly improved its telecoms infrastructure. The nation is currently in the process of making fibre-optic broadband available nationwide and fibre optic broadband is readily available in a number of urban locations including Nicosia, Larnaca and Limassol. One can easily imagine how important a strong telecoms infrastructure would be in running a serious Foreign exchange brokerage.

Concluding Thoughts

It has been suggested that the recent economic crisis in Cyprus might dent the islands reputation and lead to a flock of brokerages to move elsewhere, however this hasn’t been the case. This is mainly due to the fact that the crisis didn’t see any clients losing any of their deposited funds. The draw of Cyprus as a destination for Foreign exchange brokerages has been confirmed in recent months with a number of new brokers applying for licences. As long as Cyprus continues to offer competitive rates of corporation tax and remains a member of the European Union, the island is likely to be favoured by many Forex brokers.
what we want: 1+1+1+1+1+1+1+1+1=9 <3
what market delivers: 1+2+8+7-4+0-5+8-4-5+1=9 :problem:


Re: Why Are There So Many Forex Brokers In Cyprus

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mntiwana wrote: Tue Jul 11, 2017 6:37 am Hi guys
Do you think,traders are same safe and protected with Cyprus based brokers as in Europe and like wise level countries ?
i think ,no,only brokers are more free in Cyprus than to Europe
Hi mntiwana
I think you could rely on Brokers based in Cyprus. At least if they follow pretty strictly the rules of CySec and are audited by global firms like Deloitte for example that gives some additional safety feeling. Also broker membership at ICF will guarantee 20.000 payable compensation if something happend.
The main question for any brokers no matter of the country is if they can provide post trade reports where you could see exactly which LPs filled the orders. For me this is very important because when let say you complain you get a unique number that you could go to CySec site and report so they could investigate and if something wrong they could get their license

Re: Why Are There So Many Forex Brokers In Cyprus

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LazarR wrote: Wed Jul 12, 2017 7:55 pm Hi mntiwana
I think you could rely on Brokers based in Cyprus. At least if they follow pretty strictly the rules of CySec and are audited by global firms like Deloitte for example that gives some additional safety feeling. Also broker membership at ICF will guarantee 20.000 payable compensation if something happend.
The main question for any brokers no matter of the country is if they can provide post trade reports where you could see exactly which LPs filled the orders. For me this is very important because when let say you complain you get a unique number that you could go to CySec site and report so they could investigate and if something wrong they could get their license
Would you like put more light on PTR (post trade report)
Indicator is just a tool.

Use it only if it can benefit you. Leave it if you don't know how to use it optimally.


Re: Why Are There So Many Forex Brokers In Cyprus

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Yes mntiwana. It is basically showing details from each step of executing the order from sending it to the broker, passing it to the liquidity pool and ending with the name of the bank that filled the order if it is forex for example :) You also see the price at which the order was filled, the slippage if any and of course the execution duration.
Here is an example that I found of such report. This got me very interested to search more on the topic back then when I was looking for a broker and defined my choice :)

Re: Why Are There So Many Forex Brokers In Cyprus

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LazarR wrote: Wed Jul 12, 2017 10:15 pm Yes mntiwana. It is basically showing details from each step of executing the order from sending it to the broker, passing it to the liquidity pool and ending with the name of the bank that filled the order if it is forex for example :) You also see the price at which the order was filled, the slippage if any and of course the execution duration.
Here is an example that I found of such report. This got me very interested to search more on the topic back then when I was looking for a broker and defined my choice :)
Thanks,and good addition in my knowledge which i was not aware of :)
Indicator is just a tool.

Use it only if it can benefit you. Leave it if you don't know how to use it optimally.

Re: Why Are There So Many Forex Brokers In Cyprus

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bonifaas_abe wrote: Thu Jul 13, 2017 4:09 pm In my opinion the brokers located in Cyprus could be trusted if they are fully registered , in good standing with CySec and MiFid compliant .Cyprus has really strong regulations and what is more important strong customer protection.
It seems,experts surfers have good opinion for Cyprus based brokers,when i was counting them all along with other islanders team (Seychelles,Caribbean) that are more active these days :)
Indicator is just a tool.

Use it only if it can benefit you. Leave it if you don't know how to use it optimally.


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