International Financial Services Guide Cyprus
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<strong>Cyprus</strong>Profile Digital Series<br />
<strong>International</strong> <strong>Financial</strong> <strong>Services</strong><br />
Fintech<br />
<strong>Cyprus</strong>’ fintech cluster continues to grow, with<br />
some 250 fintechs reportedly calling the island<br />
home. Companies based in <strong>Cyprus</strong> have expertise<br />
across the entire fintech spectrum, including<br />
payments, asset management, regtech, insurtech,<br />
as well as crypto-trading platforms and cryptoexchanges.<br />
To foster its fintech ecosystem, <strong>Cyprus</strong> has<br />
launched a number of initiatives. Chief among<br />
them is the Innovation Hub, which provides a<br />
sandbox-like environment and serves as the<br />
formal point of contact between CySEC and the<br />
Companies based in<br />
<strong>Cyprus</strong> have expertise<br />
across the entire<br />
fintech spectrum,<br />
including payments,<br />
asset management,<br />
regtech, insurtech,<br />
as well as cryptotrading<br />
platforms and<br />
crypto-exchanges.<br />
fintech community. The ‘Hub’ reviews and provides non-binding feedback to the<br />
companies operating under its umbrella, which allows for the seamless transfer<br />
of information on how existing regulation applies to new products or business<br />
models, whilst also helping identify what regulatory frameworks might need<br />
to be established to meet tomorrow’s needs. The sandbox is just one cog in<br />
<strong>Cyprus</strong>’ ambitus plan to establish itself as a Mediterranean fintech hub. Other<br />
initiatives are incentives for fintech firms, a Startup Visa Scheme to attract and<br />
retain tech talent and the establishment of a €20 million fund with an emphasis<br />
on start-ups and innovative companies. Having adopted a national blockchain<br />
strategy in 2019, <strong>Cyprus</strong> is also taking steps to adopt crypto-related regulation,<br />
with the country’s finance ministry releasing a national risk assessment on<br />
crypto at the end of 2021.<br />
<strong>Cyprus</strong> has also set out to attract<br />
crowdfunding service providers<br />
and platforms. Crowdfunding is<br />
increasingly seen as an alternative<br />
form of finance for small and mediumsized<br />
enterprises and start-ups which<br />
often find it difficult to access bank<br />
finance. Similar to its decision to<br />
be a first-mover in regulating forex<br />
firms, in 2020, <strong>Cyprus</strong> introduced<br />
national rules for investment-based<br />
crowdfunding, ahead of EU regulation<br />
which came into force at the end of<br />
2021. In October 2021, <strong>Cyprus</strong> also<br />
launched a digital nomad visa, inviting remote workers to move to the island.<br />
Visa holders who either work as an employee of a foreign company or as a selfemployed<br />
will have the right to reside in <strong>Cyprus</strong> for one year, with a possibility<br />
of renewal for a further two years. The idea of the nomad visa is to strengthen<br />
<strong>Cyprus</strong>’ position as a digital hub. <strong>Cyprus</strong>’ improved environment for fintech and<br />
crowdfunding platforms has been reflected in increased foreign investment,<br />
and there are hopes for more.<br />
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