Is Cyprus losing its status as a global Forex headquarters?

Author: Petros Kalaitzis

Cyprus has proven itself to be the number one destination for Forex-related businesses. A developed infrastructure along with an impressive pool of talented professionals has secured its leading position in all things Forex.

In recent years though, there’s been a lot of talk about a change that’s coming to Cyprus. Many countries in APAC and Dubai in the Middle East are catching up with favourable regulations and attractive tax rates, all designed to attract businesses and investors alike.

As more countries are taking action towards becoming the next big centre of trading, the logical question arises – will they overtake Cyprus?

We’re not fortune tellers, but as someone with a long history with the world of Forex, here is what we think about it.

Cyprus is not likely to lose its Forex hotspot any time soon. It’s true that alternative markets are growing, but Cyprus has created a unique knowledge centre and strong infrastructure. This means that companies looking to start operations there can be confident they’ll find all the specialists they need to ensure their business runs smoothly. This can be replicated, but it takes years, if not decades, and a lot has to go according to plan, for example, governments need to be consistently in favour of the initiative to give market players and investors confidence.

The rise of new Forex centres is a symptom of a growing global market. Nowadays, more people than ever have access to technology and are interested in trading and investing. Demand creates supply, so naturally, more companies are launched, and more governments are willing to participate in this sector of the economy. That’s why it’s more likely that Cyprus will coexist with other local Forex centres, rather than lose its position.

Lastly, Cyprus is very attractive to brokers who are looking to work with regulated and transparent markets. Cyprus is an EU member, so anyone who operates there falls under MiFID regulations and hass complete access to the European market.

Bottom line

Although Cyprus has faced certain challenges over the past years, and new up-and-coming financial hubs have somewhat threatened its leadership position, it’s very unlikely that we’ll see any drastic changes in the near future. The financial sector is dynamic, but it’s very conservative at the same time.

Cyprus is still considered the best pool of candidates for FX companies, and it also allows companies to have an EU footprint via the local regulator. These two combined cannot be found in any other European country at this moment.

A known and well-established market, such as Cyprus, will continue to be very attractive, especially if local authorities continue to support and invest in the sector.