Obtaining crypto licenses, white label consulting,
ICO/STO, supporting NFT marketplaces, drafting policies
for crypto projects, DAOs, and gamify projects
For more than 13 years, SBSB Fintech Lawyers has been consulting in fintech, crypto, gambling, and investments. And quite recently, our team has expanded the range of services. We help clients adapt to MiCA requirements and obtain crypto licenses in Cyprus and other EU countries, such as Germany or Malta. For digital asset companies expanding into Europe, Cyprus offers a competitive corporate tax rate.
What Is a CASP License in Cyprus?
The Markets in Crypto-Assets Regulation, abbreviated as MiCA, was adopted by the European Union in 2023. Under this document, crypto-asset service providers can operate across EU jurisdictions under a mandatory license. According to Article 3, paragraph 1 of MICA, licensed crypto-asset services include the following activities classified into three groups:
- Class 1. Execution of orders on behalf of clients, placing crypto-assets; providing transfer services for crypto-assets on behalf of clients, receiving and transmitting orders for crypto-assets on behalf of clients, providing advice on crypto-assets, and providing portfolio management for crypto-assets.
- Class 2. In addition to Class 1, the category includes the custody and administration of crypto-assets on behalf of clients, the exchange of crypto-assets for funds, and the exchange of crypto-assets for other crypto-assets.
- Class 3. It combines the above two classes and adds operation of a trading platform for crypto-assets.
To operate legally with crypto assets providing any of the above services, a full MiCA authorisation through the Cyprus Securities and Exchange Commission (CySEC) is essential. Old national CASP registrations are not prolonged or renewed.
How Is Cryptocurrency Regulated in Cyprus?
In Cyprus, the cryptocurrency regulatory environment is supervised by CySEC under key standards such as MiCA. The Cyprus Securities and Exchange Commission is a local independent public financial regulatory agency launched in 2001. The corporate body has a range of responsibilities, which include:
- supervising and controlling the operation of the Cyprus Stock Exchange together with its participants and transactions, investment companies, and consultants;
- granting operation licenses to investment firms, regulating and issuing authorisations for crypto-asset service providers.
- imposing penalties and other sanctions under the provisions of the stock market legislation.
Before submitting a license application to CySEC, a CASP must be incorporated and registered as an entity in Cyprus following a well-structured legal procedure.
What Are the Benefits of Getting a Crypto License in Cyprus?
Getting a crypto license in Cyprus is a comprehensive and approachable process. Here, local crypto expertise is properly established. Local advisory and technical services are ready to provide audits, tax planning, etc. In addition, the local legal system is based on English common law with a predictable framework that international entities registered in Cyprus can easily adapt to.
What Are the Advantages of a CASP License in Cyprus?
Cyprus is a beneficial jurisdiction for international business operations due to free access to European markets and regulatory credibility. This contributes to a trustworthy partnership with global customers. Here, businesses can be sure their legal rights are protected.
A license granted in Cyprus enables the business to offer crypto services in the European Union under MiCA. The company can freely move capital across the EU market. A significant advantage is double taxation agreements with over 60 countries, which prevent the same income or capital from being taxed in various jurisdictions.
What Are the Requirements for Obtaining a CASP License in Cyprus?
The business should prove its local presence, which means that both a registered company with a specified share capital and physical headquarters must be maintained in Cyprus. For local incorporation, the board of directors must consist of at least four directors. At least two directors must be executives and pass suitability tests. An AML officer must be a resident of Cyprus. The company pays a €10,000 application fee to CySEC. Further, annual fees of €5,000 must be paid.
Obtaining a CASP license in Cyprus requires an applicant to submit a set of documents, including an AML/KYC/CFT policy, memorandum and articles of association, organisational structure, and descriptions of monitoring systems for all business activities. In addition to internal documents, a business plan must be developed.
What Are the Capital and AML/KYC Requirements for CASPs in Cyprus?
Minimum initial capital refers to the license class. Class 1 requires €50,000. Classes 2 and 3 require €125,000 and €150,000, respectively.
CASPs must implement AML/KYC/CFT procedures: verify client identities, ensure financial transparency, apply CDD measures towards any transaction exceeding €1,000, check high-risk profiles, and prevent suspicious activities by reporting them to MOKAS (the Unit for Combating Money Laundering). Before submitting an application, internal AML/KYC policies must be developed.
How Does the CASP Licensing Process Work in Cyprus?
The CASP licensing process in Cyprus includes company incorporation, executive director appointment, and submission of documents to the Cyprus Securities and Exchange Commission. Administrative timelines are quite predictable and typically span 3 to 6 months.
What Are the Steps to Apply for a CASP License in Cyprus?
An entity should pass five major stages to obtain a CASP license in Cyprus, including:
- Preparing licensing documentation, including a draft of a business plan and internal cybersecurity and KYC policies, among other things.
- Paying the fee known as a single, non-recurring examination fee, equal to €10,000.
- Submitting a set of required documents to CySEC for review.
- Waiting until CySEC reviews the documents within about a month, sufficient for a preliminary check of the package, and about 3-6 months in addition for a full review and assessment.
- Receiving final authorisation and starting to operate across the European Union.
After the license is obtained, the CASP can officially run business in compliance with CySEC’s ongoing regulatory requirements, which include regular reporting and governance.
How Is a CASP Company Incorporated in Cyprus?
In Cyprus, CASPs are incorporated by registering a local company through the Department of Registrar of Companies. The individual must approve a name for the company, set up a minimum share capital of €1,000, and appoint at least one director (for licensing, at least two executive directors are required). To establish physical operational substance, they must open an office with a registered physical address in Cyprus, hire local employees, and hold management meetings on the island only.
When everything is ready, an applicant submits an approved company name, internal documents, information about directors, and KYC compliance papers to the department online or by post. When the company is registered, it must be registered with the Tax Department within 60 days.
How Does the Application Submission to CySEC Work?
The application submission to CySEC is a rigorous process. However, in terms of physical bureaucracy, it is not complicated. There is a CySEC web portal for correspondence and the Transaction Reporting System (TRS) for financial reports. To use them for submission of an 188-01 application form intended for CASP registration together with documents, an applicant is expected to have a valid digital signature and request a username and password from CySEC’s IT department.
How Does the CySEC Review Process Work?
The Cyprus Securities and Exchange Commission typically interacts with an applicant and asks follow-up questions to clarify the information. Within up to 25 days upon submission, the regulatory body verifies if the set of documents is complete and correct. Then, within up to 6 months and even more, a detailed compliance assessment continues.
What Happens After CASP License Approval in Cyprus?
Companies running businesses under a CASP license in Cyprus must maintain minimum capital requirements, pay annual fees, and submit periodic financial and operational reports to CySEC. Also, they are responsible for AML/CFT tracking.
What Is the Tax Regime for Crypto Businesses in Cyprus?
In Cyprus, there is no special tax regime exclusively for CASPs, which pay a corporate income tax rate of 15%. This is quite a moderate level compared with other EU member states. Additionally, a new 8% tax on profits from the disposal of crypto-assets was introduced in 2026. VAT of 19% may also be paid where applicable.
What Should You Know Before Applying for a CASP License in Cyprus?
You should know that a crypto license in Cyprus is a perfect choice for those who value speed, lower operational costs, and moderate taxes. But if you are looking for higher institutional prestige, you can obtain a CASP license in Austria. Anyway, cryptocurrency regulation is conducted under Europe’s MiCA framework and offers EU-wide passporting. SBSB lawyers are ready to provide comprehensive legal support with crypto licensing, no matter which EU member state you choose.
FAQ About CASP License in Cyprus
Who regulates CASP licenses in Cyprus?
The main regulator for CASP licenses in Cyprus is the Cyprus Securities and Exchange Commission (CySEC). Depending on the business model, the Central Bank of Cyprus may also be involved for services overlapping with payment or e-money activities.
How long does it take to obtain a CASP license in Cyprus?
For a well-prepared application, the standard review period is usually around three months, although the exact timeline can vary depending on the complexity of the business and the quality of the documentation submitted to CySEC.
Which crypto services require a CASP license in Cyprus?
Under MiCA, services such as operating a crypto-asset trading platform, exchanging crypto-assets for funds or other crypto-assets, providing custody and administration of crypto-assets, and executing orders on behalf of clients typically require CASP authorisation.
Can an existing VASP registration be converted into a CASP license?
Yes, Cyprus provides a transitional regime that allows existing VASP-registered providers to migrate to full CASP authorisation, subject to meeting MiCA requirements and CySEC’s additional national rules before the transition deadlines.
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