How Come So Many Online Brokers are Based in Cyprus?

How Come So Many Online Brokers are Based in Cyprus

Since the introduction of online trading, the industry has seen massive growth, and online brokers have proliferated. You can now get brokerage services from a myriad of brokers in the UK for different purposes and at varying price points. However, even though they operate in the country, many might not be based in the UK and are instead in domiciles such as Cyprus.

Over the last few years, many online brokers have been moving their primary operations into Cyprus because of their tax policies and an environment that supports the financial sector. Cyprus is also a member of the EU and is close to the Asian markets, making it a convenient place to operate from. This piece will explore why so many brokers choose Cyprus as their base and why it matters. You can also use the link for some of our trading guides.

How Come So Many Online Brokers are Based in Cyprus?

1. Low Taxes

Low Tax

CySEC, or the Cyprus Securities and Exchange Commission, was established in 1988 and has since become one of the best legal jurisdictions to offer financial services from. For instance, the UK has a 19% corporate tax, while Cyprus only levies a 12.5% rate, which is considerably lower than the UK. This is one of the main contributing reasons for so many brokers moving to the Island nation.

Furthermore, online brokers can pay Cyprus corporation taxes and still offer their services in the UK and the rest of the European Union. With lower taxes, they can make more profit and have more resources to dedicate to RND and other business development projects.

2. Infrastructure


Cyprus is a relatively developed country with all the infrastructure any international corporation would expect. There are frequent flights to the island, good roads, an excellent internet network, and the legal framework to conveniently run financial services such as online brokerages. The government also supports the financial industry, and brokers might have more wiggle room than they would operating from the UK.

In addition, Cyprus is now one of Europe’s largest financial centers and part of the 100 most significant financial hubs. This and other factors have attracted a diverse pool of talent that online brokers moving to the island nation have benefited from.

3. Markets in Financial Instrument Directive (MiFID)

Besides being part of the EU, Cyprus is also part of the MiFID, an EU regulatory requirement that aims to increase transparency and standardise the European financial market. It reduces the red tape around the financial sector across Europe and makes it easier for brokers and other players in the industry to transact across their own borders. However, we are uncertain how Brexit affected the UK’s standing in the continent.

Nonetheless, Britain, Germany, Ireland, France, and Cyprus are some of the few countries that have fully embraced this directive, and online brokers are taking full advantage.

4. Good Weather

There is nothing as lovely as being able to kick your feet up or dip your toes in the sand after a good day’s work. Unfortunately, the weather in the UK is damp and gloomy and not always suitable for outdoor relaxation. On the other hand, Cyprus is surrounded by white sandy beaches and is sunny throughout the year. It is also a major tourist hub with a hospitality industry that rivals the best in any part of the world.

This makes it a prime spot for online brokers looking for better weather, tax policies, and an excellent place to raise a family.

This is Why Cyprus is a Trading Hot-Spot

This is Why Cyprus is a Trading Hot-Spot

Running a business is a fine art of balancing overheads and industry regulations while maximising your profit potential. Most of us would also like to run a business from our home countries, but as online brokers have shown, it might not always be the financially viable thing to do. For instance, the financial industry in the UK is highly regulated and taxed, making it harder for brokers. Even though you can still earn a reasonable profit while operating from here, it might be worth looking at deciles such as Cyprus.

Cyprus is not only a beautiful place to live and work, but it’s also kinder to your business and might make all the difference between breaking the next financial risk barrier.


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