This article was written by Demetris Taxitaris, General Manager of EU regulatory consulting firm MAP S.Platis.
Since the Brexit vote, a lot of businesses have been considering increasingly their strategy relating to the matter and the selection of the jurisdiction or jurisdictions to operate from. Uncertainties surrounding the matter remain, such as, whether it will ever happen, timing, steps, the resulting relationship between the UK and the European Union (EU) and whether any special arrangements will apply. There are also uncertainties regarding the impact on businesses, whether this will even be positive or negative overall, as surely the UK would be considering measures to mitigate or even reverse any negative consequences. For example, tax and other incentives may be extended to companies by the UK authorities in this effort.
At MAP S.Platis, our duty as EU’s leading financial services consultants in this environment of heightened uncertainty is to provide clients with a credible strategy which will mitigate their business risks. Our main advice to our clients is to consider maintaining an additional license in an EU jurisdiction which is friendly to their business model. Setting up in a jurisdiction like Cyprus will provide peace of mind in the event there will be restrictions for financial services firms operating from within the UK at an EU level. Indeed, this comes with a cost like every contingency plan. However, the selection of Cyprus as an EU jurisdiction provides a very cost-efficient regulatory solution which can be used alongside any existing FCA license. This is a tested model which has been already structured by our award-winning consultancy teams and implemented by a number of our clients, involving a CySEC license and a license in other jurisdictions including the UK.
Cyprus offers a number of advantages.
It is an EU jurisdiction under MiFID and the single EU market. Its authorities understand and appreciate the financial services industry, including the forex/CFD industry, better than many in the EU, enjoying governmental support at the highest level, hence the evolution into a hub in recent years where MAP S.Platis has played a critical and determining role. A series of new rules issued by the regulator in recent months have toughened the regulatory framework to an extent, aligning it even more to EU rules. At the same time, Cyprus is cost-efficient boasting a very favourable tax environment, with a skilled workforce and advanced infrastructure. It has recently passed through a thorough review by EU authorities, the European Commission and the European Central Bank, and the International Monetary Fund and is close to countries with advanced and innovative technologies. As a result, it can be a credible alternative even without Brexit in the context of a business model already operating via other countries.
MAP S.Platis, as the firm which led the process of turning Cyprus into one of EU’s financial services hub, can assist in the implementation of such a risk mitigating strategy. Boasting the largest number of regulatory compliance consultants specialising in the industry in the region, an excellent track record and having applied and tested the model repeatedly in the past, it is an ideal partner. Our presence in the UK and overall UK strategy underpin our commitment in responding effectively to change, maintaining a leadership position in the industry while catering for our clients’ needs.