Little under a year following the Cyprus financial crisis last March, and amid a deep financial crisis that is still plaguing most sectors of the economy in the country, praising reports about Cyprus’ impressive performance have been recently published in many European and other media. This has led the country’s President, Nicos Anastasiades, to declare, during his recent speech at the ceremony for the Cyprus Export Award 2012, that “It seems that Cyprus in on track for a new economic miracle, which does not elude the attention and the appreciation of our international lenders but also of the international press.”
Despite this note of optimism, one should bear in mind that a year after the bailout, it is fair to argue that the economy of Cyprus is still in deep trouble and that its formerly thriving banking sector has been reduced to half its former size. However, it is also true that foreign incorporation is definitely one form of rebounding business on the island.
One of the main reasons behind this is that Cyprus still offers a very attractive tax environment, although at the time of the bailout the international lenders forced the government to nudge the corporate tax rate up to 12.5 percent, from the previous 10 percent. That is still the lowest rate in the euro zone however, on par with Ireland and well below Germany’s 29.5 percent and France’s 33.3 percent.
Proof that foreign incorporation is still alive and kicking in Cyprus is the fact that the registration of new companies reached 1,454 in January of 2014 alone. This figure is more than double the nadir of last spring, after the bailout, and even slightly more than the total number of new companies that were registered in December 2012, before the collapse. As a result, there are now about 273,000 companies on Cyprus’s corporate registry, a staggering figure in a country whose population is only 839,000.
The resilience and even the further flourishing of Cyprus as the base for many financial services companies, mostly of foreign interests, is also reflected in the increased workload that the Cypriot regulator, CySEC, is faced with. Indeed, since the beginning of the year several registrations of Administrative Service Providers took place, while there is also an ever increasing number of new applications pending for approval. Moreover, several additions have also been made in the list of approved CIFs, such as for example Dragon Options, which got its license on 30 January 2014.
Another significant development which paves the way for even more brokers, especially binary options brokers to be licensed in Cyprus is the fact that since February 4th 2014 all three major binary options platform providers are licensed by CySEC. Novox Capital Ltd, which obtained its CIF status on this day, parents OptionXP and OptionBit, two of TRADOLOLOGIC’s binary options brokers.
The move by Tradologic to get regulated in Cyprus will result in many of its white labels following suit, which in turn means that the number of CySEC licensed binary options brokers is bound to increase. The two rivals of Tradologic in the field of binary options software developing, namely SpotOption and TechFinancials, have both already received licenses by CySEC and have since extended it to many of their different brands.
It appears that the Cypriot regulator, just like the services sector of the Cypriot economy, is proving far more resilient than many may have thought until recently. Especially following the sudden closure of Ioption and certain other incidents involving CySEC regulated entities, the Commission had come under a lot of fire and criticism. However, CySEC appears to be bouncing back and the prospects ahead are once again looking promising.