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Open Banking

Open Finance

An island country in the eastern Mediterranean Sea, Cyprus Cyprus attracts Fintech businesses across the EU as it provides access through passporting.

According to the DataReportal, 91% of Cypriots had access to the internet in 2021. Of all Cypriot citizens using the internet, 47% use the internet for online banking, which is 19% below the EU average. Additionally, Cyprus ranks 17th in the integration of digital technologies and 20th for digital public services among EU countries.  

Cyprus falls under the PSD2 legislation. PSD2 is a European Directive that regulates electronic payment services and was implemented in all EEA countries in 2016 and went live in September 2019.  

The EU Commission has announced its intention to adopt an Open Finance regulatory framework.

According to The Global Findex Database, 93% of Cypriots had bank accounts in 2021, leaving 7% unbanked. 

The low corporate tax rates of 12.5% on profit and dividend participation exemption, offer an attractive setting for businesses, Fintech included. In addition, Cyprus attracts Fintech businesses across the EU as it provides access through passporting. Passporting enables firms that are authorised in any EU or EEA state to trade freely in any other with minimal additional authorisation. These passports are the foundation of the EU single market for financial services. 

Cyprus has been known as a home for foreign exchange (forex) companies, and it is gradually attracting a broader array of Fintech businesses. As of 2022, there are 14 authorised electronic money institutions (EMIs) and 10 authorised payment institutions (PIs), as well as another 43 pending applications (32 EMIs and 11 PIs), according to the Central Bank of Cyprus.

Cyprus ranks 21st in human capital among EU countries in the Digital Economy and Society Index (DESI) 2022. The human capital measures digital skills, the proportion of employed people working as ICT specialists, female ICT specialists, and enterprises offering ICT training.

The Cyprus Securities and Exchange Commission is considering establishing a regulatory sandbox.

Cyprus falls under the PSD2.