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OFFSHORE BANKING UNITS (OBUS)
Offshore Banking Companies or branches may be registered in
Cyprus under certain provisions and requirements imposed by the Minister of Finance who is
the licencing authority and who acts on the recommendation and consent of the Central Bank
of Cyprus under the provisions of the Banking Business (Temporary Restrictions) Law
Chapter 124. The policy of the licencing authorities is that only international
enterprises or their subsidiaries, established in countries where there is good banking
supervision are eligible for a licence to operate in Cyprus as an OBU.
In granting the license the Minister of Finance imposes the
following conditions which the parent company must accept in writing before the
commencement of the business:
- the OBU parent shall provide the Central Bank appropriate
letters of comfort
- the Cyprus OBU shall operate as a fully staffed office and
not as a brass plate operation
- the Cyprus OBU shall operate on an offshore basis and all
dealings shall be with non-residents and shall be denominated in currencies other than the
Cyprus Pound.
- The Cyprus OBU must supply the Central Bank with any
information regarding its activities, obligations and disclosure of information
- The Central Bank shall have the supervision and inspection
of the Cyprus OBU and for this supervisory function the Cyprus OBU shall pay to the
Central Bank an annual fee of USD 15000.00
- The Cyprus OBU shall supply the Central Bank if so requested
with any information necessary in order to satisfy them about the OBU’s ability to
meet its obligations and its adherence in general to sound banking standards
- The Cyprus OBU shall not carry on any onshore banking
business
- All local expenses incurred shall be covered by funds
imported from abroad
- Generally there are no conditions regarding the minimum
liquidity ratio, minimum reserves at the Central Bank, maximum interest rates etc.
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