Opening a bank account in the EU has become very challenging in recent years due to the enhanced due diligence and KYC procedures.
However, there are many options available to the owner of a company for bank account opening depending on the needs, type of business, number of transactions etc.
The first thing that a prospective client should note is that the procedure to open a company in Cyprus is entirely separate from the procedure to open a bank account.
Setting up the company is very easy and takes around 7 – 10 working days. You can read my set up guide here for more information.
When it comes to banking a Cyprus company owner has basically three options:
- Open a bank account with a Cyprus commercial bank.
- Open a bank account with an EMI like Revolut.
- Open a bank account in another EU country besides Cyprus.
In this article I will talk about options 1 and 2. I wrote more about bank account opening here.
With refence to option 1, opening a bank account with a Cyprus commercial bank has as a precondition to have business establishment in Cyprus, unless the company is a holding company.
Business establishment means that the company must have real economic presence in Cyprus.
So what is "real economic presence"?
Basically it is a requirement that the company must have physical presence or activity in Cyprus which is usually proven by renting offices and employing personnel. Thus the bank will require to see a lease agreement and an employment agreement. To effect the above the company should:
- Rent offices in Cyprus in self contained premises or shared.
- Employ staff, even on a part time basis.
- Register with the Department of Social Security as an Employer and pay social security contributions.
Many businesses can do without a bank account with a traditional commercial bank because they do not really need it. In fact nowadays online banks or electronic money institutions (EMIs) like Revolut offer much quicker set up options, better service and far more flexible administration of the bank account.
To compare the time needed to open a bank account with a Cyprus commercial bank v. Revolut, consider that a commercial bank will need around 2, 3 months to open a bank account whereas Revolut takes 3, 5 days! The procedure is more or less the same, the documents needed, due diligence and KYC, the difference is that Revolut does all these electronically and fully utilizing the digital technology. In terms of costs i.e. fees and charges Revolut is also much cheaper. Indicatively I note that for a Revolut business bank account there is a €25 euro per month charge where as Bank of Cyprus charges €50!. So it is no brainer!
At the moment, Revolut holds a banking license for the EEA (European Economic Area), which was granted by the Bank of Lithuania.
What is important though for Cypriot companies is that customers in Cyprus who set up a business bank account have their deposits protected under the deposit guarantee scheme.
Further, Revolut was granted authorisation by the Cyprus Securities & Exchange Commission (CYSEC) on 12/08/2022 to offer crypto services and digital asset services in Cyprus and across the European Economic Area (EEA) – the 27 European Union member states, plus Iceland, Liechtenstein and Norway.
We have assisted many clients to open a bank account with Revolut since our law firm works via a dedicated
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.
