27/09/25
Cyprus has become a preferred entry point for Payment Service Providers (PSPs) and Electronic Money Institutions (EMIs) seeking access to the EU market. The Central Bank of Cyprus (CBC) oversees licensing and supervision under EU-aligned laws, offering passporting rights across the European Economic Area (EEA).
📜 Key Facts & Regulatory Framework
• Cyprus transposes PSD2 (Directive (EU) 2015/2366) through the Provision and Use of Payment Services and Access to Payment Systems Law and the Electronic Money Directive (2009/110/EC) via the Electronic Money Laws. The CBC is the competent authority for PSP/EMI licensing and supervision.
• Minimum initial capital requirements are: €350,000 for EMIs, €125,000 for PSPs providing core payment services, and in some limited-scope cases, lower thresholds may apply, subject to CBC assessment and EU rules.
• A Cyprus-licensed PSP/EMI can exercise passporting rights across the EEA, enabling service provision without the need for separate authorisations in each member state.
🔍 Analysis & Comparison
• Licensing timelines in Cyprus are generally cited as 6-9 months for a conditional authorisation where applications are well-prepared, but in practice can extend to 12-18 months depending on the complexity of services, completeness of submissions and CBC scrutiny.
• Compared to some EU jurisdictions, Cyprus balances regulatory credibility with cost efficiency and a clear licensing framework. However, applicants must demonstrate genuine local substance and compliance capacity.
• Forex brokers and investment firms fall under a separate MiFID II regime, where capital thresholds may be significantly higher than for PSPs/EMIs depending on the scope of authorised activities.
📈 Practical Examples & Sector Impact
• Fintech firms offering e-wallets, remittance or account information services often choose the EMI license, as it permits a broader range of activities than a PSP licence.
• Payment platforms use Cyprus to expand into multiple EU markets by passporting, avoiding duplicative national authorisations.
• High-risk sectors such as forex, iGaming, or crypto are subject to stricter CBC review, with enhanced AML/KYC, safeguarding and operational resilience requirements.
💡 Conclusion
Cyprus offers PSPs and EMIs a legally sound path to EU market entry, with defined capital requirements, CBC supervision, and passporting opportunities across the EEA. While licensing is achievable, it requires careful planning: strong governance, local presence, risk management and AML/CFT frameworks are essential.
NUR Legal supports clients in structuring PSP and EMI applications, ensuring compliance with CBC rules, PSD2, the E-Money Directive, and emerging EU regulations such as MiCA. Visit us at NUR-Legal.com or contact us directly at info@nur-legal.com
Emil Korpinen