In May, a record number of participants came to Cyprus for the fifth annual iFX Expo conference, an event that brings together players in the growing online currency trading and investing sector. In fact, there was so much demand for the event that it had to be moved to a larger venue.
This is just the latest sign of Cyprus’ emergence as a center of the industry, which includes all types of online retail foreign currency trading, ranging from platforms for binary options to those offering copy trading.
The Cypriot regulatory agency, CySec, is responsible for overseeing many of the world’s largest online trading platforms. When Cyprus joined the European Union more than a decade ago, and updated its policies to conform with EU standards, that meant that the already large number of Cypriot online trading platforms gained access to European markets.
It also meant that many European companies flocked to Cyprus to gain regulation, especially in 2014 when CySec became the first body globally to officially regulate binary options as financial instruments.
Of the 213 investment firms licensed in Cyprus, 130 of them deal in forex or binary options.
Another advantage that Cyprus offers these firms is the lowest corporate tax rate in the European Union.
The online trading sector, and related industries, such as accounting and auditing, account for a large and growing part of Cyprus’ economy. In 2010, for example, only 10% of job vacancies advertised through manpower agency GRS Global Recruitment Solutions, were for forex trading.
In 2014, that number had grown to 30%, according to GRS. The sector employs both native Cypriots as well as many expatriates.
The sector was not affected significantly by the 2013 banking crisis in Cyprus, when due to overexposure to risky Greek bonds, many banks had to be bailed out by the European Union and International Monetary Fund, and some of the largest depositors lost portions of their money as part of a controversial solution to save the banks.
The crisis sparked an increase in unemployment and a slowdown in consumer spending. However, the forex sector emerged unscathed, and absorbed many of the unemployed who had previously worked in banking.
Although, like any regulatory body, CySec rules are often changing as the global financial sector undergoes shifts, Cyprus continues to be an attractive place for online forex trading firms to set up shop.
photo credit: Foreign Exchange via photopin (license)