Country overview

Cyprus

Country stats

Rating Points

420

This indicator describes the overall rating of a given jurisdiction on several parameters according to cryptocurrency operations - market volume, crypto regulation, business climate, taxation framework.

Crypto Penetration

1.2%

Estimated percentage of crypto users out of the country's total population based on public data.

Legal Entities

Number of crypto companies registered in the country based on regulator data if available or other types of public data.

Regulation Points

200

An overall assessment of the granularity of crypto regulation in a given country. A high score is also given to countries where cryptocurrency transactions are highly regulated.

Amount of crypto users

14 400

Total amount of crypto users out of the country's total population based on public data.

Taxation points

This figure, according to our analysts' calculations, indicates the overall level of tax burden for cryptocurrency transactions in a given country. The higher the indicator, the lower the burden.

Market volume points

2.3

A rough estimate of this jurisdiction's retail crypto market relative to the rest of the world. The higher the indicator, the higher the market potential.

Status of crypto

Legally allowed

General status of cryptocurrency regulation in this jurisdiction.

Crypto payments

Legally allowed

The legal status of cryptocurrency payments for goods and services in a given country based on information from regulators, public data and feedback from our community.

Security Level

Minor danger

The overall level of security in a given country based on open data.

Crypto Salaries

Only part

The legal status of cryptocurrency salaries to employers in a given country based on information from regulators, public data and feedback from our community.

Business Climate

Good

Overall assessment of the friendliness of this country for crypto-business. This indicator takes into account the cost of obtaining a license and the attitude towards crypto entities in the country.

Stablecoin Regulation

Basic

This indicator is evaluating the regulation of stablecoins in a given country. Complex regulation means that it is possible to issue steiblcoins and obtain a license for this activity. Basic regulation means that the issuance of stablecoins is possible, but not all legal aspects are defined in the law. Standard regulation means that there is a legal practice of steylcoin circulation in a given country.

Bad Factors

This section describes the unfavorable economic factors for crypto-business in a given country. These are countries that are under sanctions or on the FATF grey list and other factors.

Types of licenses

Crypto-to-crypto

This license type allows VASP to provide legal exchange from one cryptocurrency to another.

Crypto-to-fiat

This type of license regulates the exchange from cryptocurrency to fiat.

Wallet/Custody

This country has a legal licensing procedure for companies that store cryptocurrency - - crypto wallet providers and custodians.

Cryptofund

This indicator means that investment funds, trusts, and crypto funds can get regulator approval to provide their activity in the country.

Good

Medium

Bad

intro

Cyprus is a member of the EU, and it’s been known for years as an offshore with complicated crypto regulation framework. Binance, Bybit, and many other crypto companies are licensed here. However, it has some pressure from other EU members and FATF. Recently, Binance was rejected from Cyprus license in June 2023. In 2024 after MiCAR implementation in the EU demand on crypto licenses there is increasing - this jurisdiction has granted (1) a long period for local CASPs (VASPs) to implement MiCAR requirements - about 19 months until July of 2026. Most other EU countries give only 6 months transition period or even no time.

Security level

Cyprus has a minor danger security level according to our rating. Jurisdiction has 67.4 points (from 100) for safety level in Numbeo crime rating (2). The homicide level (3) is 1.3 per 100,000 inhabitants a year. Level of firearm-related death (4) 1.00 per 100,000 inhabitants a year.

Crypto Payments

According to Pahalaw (5), there is currently no specific legal framework for cryptos in Cyprus; it is neither forbidden nor banned. It may not be used to obtain citizenship status or tax residence directly as all payments must be effected in fiat currencies. At the same time, it’s free to use as a payment method by agreement.

Crypto Salaries

Based on Pahalaw (5), local companies can freely use cryptos to form a contract with an employee, provided such volatile payments are entirely accepted. However, all contributions to the Social Insurance will be made in fiat currency (EUR) on the given salary stated in an employee’s contract.

Legal

Based on GLI (6), current regulations in the country defining the status of crypto operations are included in the AML directive. Crypto Asset Service Provider (CASP) is the term that describes crypto entities in Cyprus legislation. They have the following operations:

Exchange between crypto-assets and fiat currencies.

In the country, there is a separate crypto regulator - CySEC. And here, you may find the text of AML law (7). Based on the CySEC site (8), Cyprus's required initial capital for crypto licenses differs from 50,000 to 150,000, depending on the license type. There are the following types of crypto permits issued in Cyprus in the table below:

Type of license	Licensed activities
CASP Class 1	CASPs that provide investment advice
CASP Class 2	CASPs providing the service referred to in Class 1 and/or any of the following services: • reception and transmission of client orders • execution of orders on behalf of clients • exchange between crypto-assets and fiat currency • exchange between crypto-assets • participation and/or provision of financial services related to the distribution, offering, and/or sale of crypto-assets, including the initial offering • placement of crypto-assets without a firm commitment • portfolio management.
CASP Class 3	CASPs that provide any of the services referred to in Class 1 or 2 and/or • administration, transfer of ownership, transfer of site, holding, and/or safekeeping, including custody, of crypto-assets or cryptographic keys or means enabling control over crypto-assets • underwriting and/or placement of crypto-assets with firm commitment • operation of a multilateral system, which brings together multiple third-party buying and selling interests in crypto-assets in a way that results in a transaction.

In November 2022, CySEC received 27 applications (9) for crypto licenses and approved 5. Five more legal entities from other EU countries were approved for operations in Cyprus.

After MiCAR implementation in the EU, the number of CASPs in the country increased. Howev, CySEC terminated (10) registrations of new CASPs in October 2024 by the end of the year. At the same time Cyprus stays one of the best place for CASPs operations in the EU - CySEC gave 19 months for operating CASPs to adapt new MiCAR requirements - most other EU countries give only 6 months, and Lithuania, for instance, didn't grant any transition period. Accodring to Xinhua News (11) CASPs registered in Cyprus before 17th of October can operate with the old license until 1 July of 2026.

New CASPs probably will be able to get license in 2025 after CySEC will prepare proper procedures including MiCAR updates. More information about these updates you can find in CySEC Circular C648 (12).

Taxation

Tax name	Index
PIT tax Min	0
PIT tax Max	35
Corporate tax (CIT)	12,5
Min Individual CGT (for crypto)	20
Max Individual CGT (for crypto)	20
Wealth tax Min	0
Wealth tax Max	0

Based on CyAuSe (13) Cyprus has the same approach to crypto transactions as to foreign currency income operations income.

CIT

Based on PWC (14), all companies tax residents of Cyprus are taxed on their income accrued or derived from all sources in Cyprus and abroad. A non-Cyprus tax resident company is taxed on income accrued or derived from business activity that is carried out through a PE in Cyprus and on certain other payments arising from sources in Cyprus. CIT is 12,5%. Based on Mondaq (15), crypto trading as a business has a standard CIT flat rate of 12,5%.

CGT

Based on Mondaq (15), 20-35% CGT is applied for “physical persons at the income tax rate (progressive rates from 20% to 35% for profits exceeding Euro 60,000 per annum).

PIT

Cyprus has 0-35% PIT rate (also called PAYE) according to PWC guide (16). It’s imposed on the worldwide income of individuals who are tax residents in Cyprus. For instance, crypto salaries and nonprofessional crypto trading. Individuals who are not tax residents/not domicicle persons of Cyprus usually are not taxed on their foreign income.

Source: PWC

Links

1)Xinhua (english version). Cyprus not to accept new crypto service applications in line with new EU rules

2)Crime Index by Country 2023 Mid-Year

3)List of countries by intentional homicide rate

4)List of countries by firearm-related death rate

5)IMMIGRATION, TAX, CORPORATE & REGULATORY ASPECTS OF CRYPTOCURRENCIES IN CYPRUS. Article

6) Blockchain&Cryptocurrency law and Regulations 2023 | Cyprus

7)DIRECTIVE OF THE CYPRUS SECURITIES AND EXCHANGE COMMISSION FOR THE PREVENTION AND SUPPRESSION OF MONEY LAUNDERING AND TERRORIST FINANCING. PDF-file

8)CRYPTO ASSET SERVICES PROVIDERS (CASP). CySEC is the anti-money laundering and counter-terrorist financing (AML/CFT) supervisor for crypto-asset operations undertaken in or from Cyprus.

9)CySEC steps up supervision of crypto-assets. Article
10)WMR. CySEC suspends new CASPs applications
11)Xinhua News. Cyprus not to accept new crypto service applications in line with new EU rules
12)CySEC Circular C648

13)Cyprus Crypto Tax for Companies and Individuals. Article

14)Corporate - Taxes on corporate income. PWC

15)Cyprus: Cyprus Crypto Tax For Companies And Individuals. Article

16)Cyprus. Individual - Taxes on personal income. PWC

Last update: November 2024

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intro

Security level

Crypto Payments

Crypto Salaries

Legal

Exchange between crypto-assets and fiat currencies.

Type of license	Licensed activities
CASP Class 1	CASPs that provide investment advice
CASP Class 2	CASPs providing the service referred to in Class 1 and/or any of the following services: • reception and transmission of client orders • execution of orders on behalf of clients • exchange between crypto-assets and fiat currency • exchange between crypto-assets • participation and/or provision of financial services related to the distribution, offering, and/or sale of crypto-assets, including the initial offering • placement of crypto-assets without a firm commitment • portfolio management.
CASP Class 3	CASPs that provide any of the services referred to in Class 1 or 2 and/or • administration, transfer of ownership, transfer of site, holding, and/or safekeeping, including custody, of crypto-assets or cryptographic keys or means enabling control over crypto-assets • underwriting and/or placement of crypto-assets with firm commitment • operation of a multilateral system, which brings together multiple third-party buying and selling interests in crypto-assets in a way that results in a transaction.

Taxation

Tax name	Index
PIT tax Min	0
PIT tax Max	35
Corporate tax (CIT)	12,5
Min Individual CGT (for crypto)	20
Max Individual CGT (for crypto)	20
Wealth tax Min	0
Wealth tax Max	0

Based on CyAuSe (13) Cyprus has the same approach to crypto transactions as to foreign currency income operations income.

CIT

CGT

Based on Mondaq (15), 20-35% CGT is applied for “physical persons at the income tax rate (progressive rates from 20% to 35% for profits exceeding Euro 60,000 per annum).

PIT

Source: PWC

Links

1)Xinhua (english version). Cyprus not to accept new crypto service applications in line with new EU rules

2)Crime Index by Country 2023 Mid-Year

3)List of countries by intentional homicide rate

4)List of countries by firearm-related death rate

5)IMMIGRATION, TAX, CORPORATE & REGULATORY ASPECTS OF CRYPTOCURRENCIES IN CYPRUS. Article

6) Blockchain&Cryptocurrency law and Regulations 2023 | Cyprus

7)DIRECTIVE OF THE CYPRUS SECURITIES AND EXCHANGE COMMISSION FOR THE PREVENTION AND SUPPRESSION OF MONEY LAUNDERING AND TERRORIST FINANCING. PDF-file

8)CRYPTO ASSET SERVICES PROVIDERS (CASP). CySEC is the anti-money laundering and counter-terrorist financing (AML/CFT) supervisor for crypto-asset operations undertaken in or from Cyprus.

13)Cyprus Crypto Tax for Companies and Individuals. Article

14)Corporate - Taxes on corporate income. PWC

15)Cyprus: Cyprus Crypto Tax For Companies And Individuals. Article

16)Cyprus. Individual - Taxes on personal income. PWC

Last update: November 2024