Offshore Banking Units

The licenses are granted by the Governor of the Central Bank of Cyprus. As a general rule they are usually issued to subsidiaries or branches of banks enjoying a good reputation, internally established in Countries with acceptable banking supervision and subscribe to principles embodied in "Concordat" issued by the Basle Committee there are more than 40 such units established with many more applications pending.

There are various conditions and requirements which depend on a number of factors:

• Legal form- subsidiary or branch size and international standing.
• They cannot be brass plate entities and must be fully fledged and fully staffed facilities.
• They cannot transact business with Cypriot residents or conduct business in Cyprus Pounds.
• They can only make foreign loans to residents with Central Bank permission.
• They are subject to Supervision and Inspection by the Central Bank of Cyprus.
• The Central Bank will require a letter of comfort from the applicants head office and extracts from the minutes of the relevant board meeting resolving the establishment of an OBU in Cyprus.
• They will be required to pay an annual fee to the Central Bank of Cyprus of US $ 15000. They must comply with the relevant provisions of the Bank Business (Temporary restrictions) Law CAP 124.

"OROS"

Offshore representative offices is an alternative vehicle formed under similar provisions with an annual fee of US $ 5000 payable to the Central Bank. It's purpose is to conduct only liaison activities between Head Office and branches abroad or local non resident clients. They must have an administrative office in Cyprus.