Eternity Law International — News — What is Cyprus Investment Firms structure?

What is Cyprus Investment Firms structure?

Published:
June 11, 2021

If you have ever faced with question “What is CIF structure?”  you know that they have special organizational structure and features that make them different from another companies and individually described. In this article, we would like to get you acquainted with Cyprus distinctive traits.

What is CIF (Cyprus Investment Firms) structure?

First of all let talk about board of directors. You are bound with step to submitting an application to CySEC, find and select a board of directors for CIF in the event that it has not been elected before. The minimum requirements are as follows, regardless of the range of investment and additional services:

  • the firm must hire two executive directors who will work for it on a full-time basis;
  • the presence of a non-executive director who will be a shareholder;
  • the presence of two non-executive independent directors.

A minimum of four directors is required. In addition, most of the representatives on the board of directors of the applicant company for the CIF must be residents of Cyprus and reside there. Often, CySEC invites shareholders to also become members of the board of directors.

Presumably, executive directors are hired full-time after CySEC conducts pre-approval and provides final approval for the firm.

One representative of the Council can act as a director, overseeing issues related to the fight against illegal circulation of funds – AML. For this individual, this will be an addition to the CySEC AML inspection. In addition to the above, within 3 months after obtaining prior authorization, the following functions must be performed without fail:

  1. The Compliance Officer and the Anti-Money Trafficking Officer must be permanently employed and located outside Cyprus. This position may be the same person depending on the risks of the company, its scale and the nature of the business. This person is required to pass the CySEC AML Exam and CySEC Extended Validation.
  2. With regard to the head of the brokerage department, if it is necessary to offer and perform an appropriate investment service regarding the receipt and transmission of orders, then a person residing in the territory of Cyprus must be appointed to this position. This person must pass either the basic or advanced CySEC exam.
  3. As for the head of the transaction department, this employee must be hired if the firm applies for permission to provide investment services for the conduct of operations. The employee must carry out his work outside Cyprus and work full time only for his company. Requires advanced CySEC verification.
  4. Risk manager can hire a full-time employee.
  5. The function of the head of the accounting department, who will deal with storage and back office, can be outsourced, or two people can be involved in this activity.
  6. For the role of the head of the information technology department, you need to hire a full-time employee; in addition, important responsibilities assigned to this department can be outsourced and use an external service provider.
  7. The function of the internal auditor should be outsourced.
  8. The function of the external auditor should also be outsourced.

Summing up, creation of powerful organization structure is a little bit complicated and responsible process. That’s why we are always open to give relevant legal advice and our professional assistance with any requests. We always have ready-made licensed companies or turnkey solutions with qualified staff and we will be glad to present them especially for you. Hope that we replied for question “What is Cyprus Investment Firms (CIF) structure?”

For details: Julia.z@eternitylaw.com / Telegram @juliazhil

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