Cyprus: Licensing And Supervision Of Electronic Money Institutions (EMI)

Question 1: Who can set up an Electronic Money Institution?

  • Electronic money services in the Republic of Cyprus may only be provided by an electronic money institution which has been granted an authorisation by the Central Bank of Cyprus (CBC).
  • An authorisation for the operation of an electronic money institution is only granted to a legal person which has been incorporated and has its head office in the Republic of Cyprus.
  • The following persons may provide electronic money services in the Republic of Cyprus without obtaining the prior approval of the CBC:
    • Banks licensed by the CBC or by a competent supervisory authority of another EU member state.
    • Cooperative credit institutions which have been licensed by the Authority for the Supervision and Development of Cooperative Societies of Cyprus.
    • Institutions which provide postal payment services and which issue electronic money by virtue of relevant legislation.
    • The European Central Bank and national central banks when not acting in their capacity as monetary or other public authorities.
    • Member states or their regional or local authorities when not acting in their capacity as public authorities.
    • Electronic money institutions that have been granted and maintain a valid authorisation to operate by the competent supervisory authorities of other EU member states.

These institutions may either exercise the right of establishment or the right to provide services on a cross - border basis, provided that the competent authorities of the home member state submit to the CBC a notification.

Question 2: Are there any restrictions?

Restrictions exist on:

  • The amount of the initial capital that electronic money institutions are required to maintain.

    • A legal person applying for authorisation shall maintain, at the time of authorisation, an initial capital of at least EUR 350.000
  • The amount of own funds that electronic money institutions are required to maintain.

    • Capital requirements for the issue of electronic money shall be equal to 2% of the average value of electronic money in circulation.
    • Capital requirements for the provision of payment services not connected with the issue of electronic money are defined by the Central Bank in one of the following three methods:

Method Α

  • The electronic money institutions own funds shall amount to at least 10 % of its fixed overheads of the preceding year.
  • This amount may be adjusted in the event of a material change in an electronic money institution's business since the preceding year.
  • Where an electronic money institution has not completed a full year's business by the date of the calculation, the requirement shall be that its own funds amount to at least 10 % of the corresponding fixed overheads as projected in its business plan, subject to any adjustments at the request of the Central Bank.

Method Β

  • Where payment volume (PV) represents one twelfth of the total amount of payment transactions executed by the electronic money institution in the preceding year:

    • 4,0 % of the slice of PV up to EUR 5 million, plus
    • 2,5 % of the slice of PV above EUR 5 million up to EUR 10 million, plus
    • 1 % of the slice of PV above EUR 10 million up to EUR 100 million, plus
    • 0,5 % of the slice of PV above EUR 100 million up to EUR 250 million, plus
    • 0,25 % of the slice of PV above EUR 250 million
    • The electronic money institution's own funds shall amount to at least the sum of the above elements multiplied by the scaling factor k which is defined as 0,5 , 0,8 or 1 according to the payment services provided.

    Method C

    • The electronic money institution's own funds shall amount to at least the relevant indicator (refer to point a below), multiplied by the multiplication factor (refer to point b below) and by the scaling factor k which is defined as 0,5 , 0,8 or 1 according to the payment services provided.

      1. The relevant indicator is the sum of the following:

        1. interest income less interest expenses,
        2. commissions and fees received, and
        3. other operating income.
      1. The multiplication factor shall be:

      2. 10 % of the slice of the relevant indicator up to EUR 2,5 million;
      3. 8 % of the slice of the relevant indicator from EUR 2,5 million up to EUR 5 million;
      4. 6 % of the slice of the relevant indicator from EUR 5 million up to EUR 25 million;
      5. 3 % of the slice of the relevant indicator from EUR 25 million up to 50 million;
      6. 1,5 % above EUR 50 million.

Question 3: Summary of the process

  • Legal persons interested in obtaining an authorisation for providing electronic money services, must

    • complete and submit to the CBC an Application for authorisation as an Electronic Money Institution (EMD/Q1)
    • ensure that all required data and documents are included in the application before submitting it to the CBC (refer to question 4)
  • Legal persons

    1. which hold/propose to hold, directly or indirectly a shareholding of 10% or more in the share capital of the applicant or
    2. which are partners in an applicant partnership must complete the Questionnaire EMD/Q2
  • Natural persons

    1. who hold /propose to hold directly or indirectly a shareholding of 10% or more in the share capital of the applicant,
    2. who are partners in an applicant partnership and
    3. who are directors/proposed directors of the applicant as well as persons who will be responsible for the management of the applicant. must complete the Questionnaire EMD/Q3

Question 4: Information required to be submitted

For the purpose of obtaining an authorisation as an electronic money institution, interested persons must submit

  • an application to the CBC
  • accompanied by the following information and documents

    1. a program of operations, setting out in particular the issue of electronic money and the type of any possible payment services envisaged
    2. a business plan including a forecast budget calculation for the first three financial years, which demonstrates that the applicant is able to employ the appropriate and proportionate systems, resources and procedures to operate soundly
    3. evidence that the legal person applying for authorisation holds the required initial capital of at least EUR 350.000
    4. a description of the measures taken to ensure compliance with the safeguarding requirements prescribed in section 13 of the Electronic Money Law of 2012
    5. a description of the applicant's governance arrangements and internal control mechanisms, including administrative, risk management and accounting procedures, which demonstrates that these governance arrangements, control mechanisms and procedures are proportionate, appropriate, sound and adequate
    6. a description of the internal control mechanisms which the applicant has established in order to comply with obligations in relation to the Prevention and Suppression of Money Laundering Activities Laws of 2007 and 2010 on information on the payer accompanying transfers of funds, as amended or replaced
    7. a description of the participation of the applicant in a national or international payment system as well as the intended arrangements for outsourcing of operational activities, the intended use of agents and branches and the intended use of natural or legal persons for the distribution and redemption of electronic money
    8. the identity of the persons that have, directly or indirectly, control of the applicant, including the identity of the natural persons that hold, directly or indirectly, shares or voting rights in one or more legal persons that have control of the applicant, as well as details on the size of the actual participation of these persons and their suitability, taking into account the need to ensure the sound and prudent management of an electronic money institution
    9. the identity of directors and persons responsible for the management of the electronic money institution and, where relevant, persons responsible for the management of the issue of electronic money and the provision of payment services activities, as well as evidence that they are of good repute and possess appropriate knowledge and experience to issue electronic money and perform payment services, and in particular copy of clean criminal record report, no bankruptcy report, description of professional andacademic qualifications, managerial or board positions held in other legal persons, previous employments and experience in the issue of electronic money and the provision of payment services
    10. the identity of statutory auditors
    11. the applicant's legal status and articles of association and
    12. the address of the applicant's head office.


  • No authorisation shall be granted by the CBC unless it has been satisfied that the electronic money institution maintains an adequate organisational framework for its electronic money services business.
  • This includes

    • a clear organisational structure with well-defined, transparent and consistent lines of responsibility,
    • effective procedures to identify, manage, monitor and report the risks to which it is or might be exposed,
    • adequate internal control mechanisms, including sound administrative and accounting procedures.
  • Therefore, applicants must ensure that the arrangements, procedures and mechanisms described in their business plan are comprehensive and proportionate to the nature, scale and complexity of the electronic money services applied for.

Question 5: How long does the CBC approval process take?

  • Within three months of receiving a duly completed application for authorisation as an electronic money institution, the CBC shall decide on the application and notify the legal person applying for authorisation of the approval or the rejection of the application.
  • An application shall be considered as being duly completed only if it is submitted with all the required information (refer to question 4).
  • Rejection of an application shall be duly justified

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
6 Nov 2017, Workshop, Nicosia, Cyprus

The main objective of our workshop will be to provide participants with an update on what were the main changes that occurred during 2017, to present and analyze IFRS 15 and also to present, help participants gain an understanding of and discuss what lies ahead, through the use of practical examples and by demonstrating the effects on various companies.

27 Nov 2017, Seminar, Nicosia, Cyprus

Our 2017 Direct and Indirect Tax update is ideal for individuals that would like to get-up-to speed with the latest tax developments both locally and internationally.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.