The online trading industry, focusing on the offering of derivatives products such as Contracts For Differences (CFDs), remains profitable and lucrative for both experienced players and start-ups, despite encountering numerous hurdles and challenges over the years.

The EU offers a unique regulatory advantage as the offering of investment services on FX and CFDs products is regulated at EU level through the application of Markets in Financial Instruments Directive (more commonly known as “MIFID II”). The main feature of the MIFID II is called passporting, which means that once you are licensed in any of the member states of the EU, you may offer your products throughout all 27 membered states of the EU.

For the above-mentioned reasons, identifying a suitable jurisdiction amongst the EU membered states is the cornerstone decision of every founder looking to establish an EU operation.

Over the years, the online trading industry was scattered around several EU hubs, the main one being Cyprus, along with Bulgaria and Malta.

As all industry veterans know, lack of proper regulatory oversight led to repeated scandals in the above mentioned hubs, which in turn led to heightened regulatory scrutiny and a growing regulatory grudge  towards industry players, compliant and non-compliant alike. As a result, industry players seeking to establish their operations in either Cyprus, Bulgaria or Malta often find themselves discouraged to do so.

Why Greece?

Recently, a contender has emerged – Greece.

Greece offers most of the advantages of Cyprus, Bulgaria and Malta, without their respective disadvantages.

Greece is a recovering economy, which is constantly looking to attract foreign investment. The local work force is highly skilled and affordable. Office rent prices are relatively attractive. The local regulator has experience regulating FX/CFDs operations, but unlike its colleagues in Cyprus, Bulgaria, and Malta, is not looking to discourage applicants. Furthermore, the Greek market is far from being saturated as the one in Cyprus.

For those who value AML ratings and listings and all that derive from them, the recent addition of Bulgaria to the FATF’s list of jurisdiction sunder increased monitoring (also referred to as the “grey list”) adds another hurdle. Malta was removed from the very same list in 2022, but the mere appearance on that list has crippled its reputation, with a lasting effect.

In comparison to the above-mentioned EU member states, Greece is neither listed nor was it listed on any grey or black lists, the Greek market is not as saturated as Cyprus and the Greek regulator seems to be welcoming new applicants.

Greek Investment Firm License – Structure and Main requirements

Your FX/CFDs operation in Greece will be structured through setting up and licensing a Greek Investment Firm (AEPEY)  in Greece under the supervision of the Hellenic Capital Markets Commission (HCMC).

The requirements for applying and maintaining an investment firm license in Greece are quite like those in Cyprus, Bulgaria and Malta, given that they are mandated by MIFID II, which sets standards at EU level.

The main requirements of setting up an investment firm in Greece consist of:

• Establishing a local company in Greece.
• Establishing a local physical presence in Greece, consisting of an operational office and several mandatory functions as listed below.
• Hiring of two executive directors. Both directors need to be based in Greece, carry extensive industry experience and be full time employees of the company.
• Hiring a compliance officer (“CO”). CO will need to be based in Greece and be a full-time employee of the company.
• Hiring a head of operation / head of back office. This person will need to be based in Greece and be a full-time employee of the company.
• Engage with local auditors, internal auditors and risk management in Greece. These functions may be outsourced to external providers.
• Always meet the minimum capital requirement of 150,000 EUR.
• Establish corporate and segregated clients’ monies account with Greek and EU banks.
• Pay the one-time mandatory contribution to the Investment Guarantee Fund of 200,000 EUR.

Kindly note that the above list of requirements is in no way exhaustive.

Conclusion

The regulatory environment for FX/CFDs brokers is heavily scrutinized and complex, varying significantly between onshore jurisdictions and offshore jurisdictions. When it comes to setting up in the EU, there are multi level rules and regulations. First, there is the EU level, setting minimum standards for all EU member states to follow. Then, there are state level rules and regulations, along with matters which are not set at EU level but do assist us in choosing between states. These matters include, amongst others, taxation, availability of skilled workforce and the local prices of labor and office rentals. FX and CFDs Brokers must consult with legal experts to navigate the intricate regulatory frameworks effectively. Staying informed about ongoing legislative changes is crucial, as the landscape is continually evolving in response to the industry’s growth and public policy shifts.

Other solutions in Greece

Greece is also becoming a prominent online gaming and sports betting jurisdictions, where operators, technology providers, platform providers and even media affiliates are required to be licensed. If you are looking to set up your online gaming business in Greece, we can help you.

Should you require further details or assistance with setting up your FX/CFDs venture in Greece, or alternatively looking to set up an online gaming or sports betting operation in Greece, please do not hesitate to contact us.

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