Forex Broker License
The Forex market is rapidly expanding, and in many countries, this type of economic activity is already regulated at the legislative level. Participants in the securities market who provide brokerage services must possess not only relevant education, extensive professional experience, and an impeccable reputation but also the appropriate license.
Furthermore, trust in a financial institution depends on the country where it is registered. Our team assists with obtaining brokerage licenses in optimal jurisdictions within the shortest possible timeframes.
Forex broker licence is the most legally important document for any broker. The obligation to obtain a licence for brokerage activities binds the whole world.
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What is a trader’s permit?
The forex trading license is a special permit that a trader or broker must obtain in order to work. There are many countries in the world where grants are issued for Forex operations. Each state has its own complexity, cost, terms of obtaining a mandate, as well as prestige of the territory itself.
The major advantage of licensed vendors is the ability to openly advertise their services. All national regulators oblige them to provide clients with high-quality services and ensure their funds in case of bankruptcy. Therefore, if an enterprise has a license, then for a trader, it becomes a certain guarantee of its reliability. The certifying of the industry helps to reduce various speculations in the market.
Why should you choose Fintech Harbor Consulting to receive Forex trading license?
The company’s lawyers are familiar with the procedure for obtaining forex licenses in many countries. Our colleagues are constantly keeping abreast of the latest legislative changes.
Through an extensive network of partners around the world, we help an international clientele in this challenging, regulated industry.
Price of obtaining a Forex license
Obtaining a forex brokerage license is a complex and jurisdiction-specific process that involves adhering to legal and regulatory requirements.
Each country has its own rules for filing applications for a forex broker license. Minimum capital requirements vary. For example, those who want to work in the USA will have to pay the most (min. 20 million dollars). But it is one of the most reputable in the world and will give access to customers with huge financial capabilities. In other states, it is not so expensive – for example, in the UK and a number of other lands, you can acquire a mandate for 100 thousand dollars.
Applicants have to provide documents about key persons, internal anti-fraud policies, and much more. But there are general rules. First, you need to register a legal entity in the country where you want to work as a broker. Be sure to have a real office in this state. All applicants for forex trading license must conduct business in a transparent manner and provide the regulator with an impressive list of.
Procedure for Obtaining a Forex License:
1. Choose the Jurisdiction
Depending on the objectives and capabilities of your company, you should choose the most appropriate jurisdiction. If you are focused on the most favorable conditions, then Cyprus, Malta, island jurisdictions, etc. will be an excellent choice. If you are focused on privileged clients, you will have to obtain a license in Switzerland or the USA.
2. Business structure and business plan
As with other businesses, it is worth developing a detailed business plan as well as a legal structure for the company or associated companies. This will be necessary when applying for a brokerage licence, as well as when opening accounts and other preparatory work.
3. Company formation
In most cases, the company is established in the same jurisdiction where the licence is obtained. This may be due to both the requirements of the regulator and the convenience of servicing and conducting the company’s business. But there are also other cases. For example, to obtain a brokerage licence in the Comoros Islands. In order to improve the situation with the opening of bank accounts, etc., other jurisdictions are used to open a company.
In addition, at the time of incorporation it is also worth paying attention to the preparation of legal documentation that will be required during the application for a licence and other preparatory actions, including preparation of the company’s capital for approval by the regulator.
4. Regulator Compliance
This is the most important step in getting a brokerage licence as it is what determines whether the company is approved for a licence or not. Actually after the registration of the company, the representatives apply for a forex brokerage licence. After that, it will be processed by the regulator for some time. The processing time of the application directly depends on the workload of the regulator, as well as its requirements. Therefore, if we are talking about a US or Swiss licence, it can be processed for a very long period of time. On the contrary, other, less reputable regulators will consider an application for several months.
During the review of the application, the regulator verifies that the company complies with the requirements of the country’s legislation and meets all the requirements for obtaining a licence.
5. Compliance and Risk Management
Both for obtaining a licence and for the subsequent operation of the company, anti-money laundering and terrorist financing strategies and policies need to be developed.
6. Decision and Licensing
The authority will review your application and may request additional information or clarification. This process can take several months or longer. Upon approval, you will receive your forex brokerage license.
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Comparison of forex license requirements in popular jurisdictions
General information
Mauritius
The main reasons for the popularity of this small territory for obtaining the offshore forex license are the loyal attitude of the government towards foreign investors, clear and stable legislation, minimum requirements for the authorized capital, and document circulation. Financial services is one of the growing sectors of the economy of Mauritius.
Cyprus
Cyprus is an attractive country for many types of entrepreneurial activity. Membership in the European Union, favorable geographic location, and flexible taxation allow both residents and foreign citizens to comfortably manage their business. Most of the famous investment companies are located in Cyprus as the best solution for working in EU.
Seychelles
The main advantages of a offshore forex license in Seychelles are low costs for company registration and office maintenance. Also, there is no need to wait a year or six months to receive the documents – the decision of the commission will be known 3 months after the application is submitte.
Comoros Islands
Forex trading is indeed legal in Comoros, even though locally based, reputable, and regulated Forex Brokers are few and far between. Comorian traders can make their choice of Broker from a long list of Globally regulated Brokerage Firms that accept local traders. This offshore forex license is pretty popular.
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Services
Mauritius offshore forex license
- Full Service Dealer (Including Underwriting) with a minimum paid-up capital of 215 000 EUR can provide the following services:
– to trade in securities as principal with the intention of reselling these securities to the public,
– to underwrite or distribute securities on behalf of an issuer or a holder,
– to give investment advice which is ancillary to the normal course of its business activities,
– to manage portfolio of clients. - Full Service Dealer (Excluding Underwriting) with a minimum paid-up capital of 21 500 EUR as opposed to the Full Service Dealer Including underwriting, this category of license does not allow the licensee to underwrite or distribute securities on behalf of an issuer or a holder. The licensee is also requested to have a Professional Indemnity cover.
- Investment Dealer – Broker with a minimum paid-up capital of 15 000 EUR can provide the following services:
– to execute orders for its clients,
to manage portfolio of clients,
– to give advice on securities transactions to its clients. - Investment Dealer
– Discount Broker with a minimum paid-up capital of 13 000 EUR is authorized to execute orders for clients without giving advice. - Investment Dealer (Commodity Derivatives Segment) is authorised to act as broker in Commodity Derivatives only. Minimum unimpaired stated capital of 21 500 EUR.
- Investment Dealer (Currency Derivatives Segment) is authorized to act as broker in Currency Derivatives only. Minimum unimpaired stated capital of 21 500 EUR.
Cyprus
- A Cyprus Investment Firm (CIF) with a minimum paid-up capital of EUR 50,000 can provide the following services:- Order acceptance and transfer;
– Order execution on behalf of clients. - A Cyprus Investment Firm (CIF) holding assets and/or financial instruments of customers (minimum paid-up capital is EUR 125,000) can provide the following services:
– Order acceptance and transfer;
– Order execution on behalf of clients
– Asset management;
– Investment advice;
– Placement of financial instruments without firm commitments (subject to restrictions). - A Cyprus Investment Firm (CIF) with a minimum paid-up capital of EUR 730,000 can additionally provide the following services:
– Underwriting;
– Placement of financial instruments with firm commitments;
– Placement of financial instruments without firm commitments (without restrictions).
Seychelles
Permitted Activities with the offshore forex license:
– Securities Market Making;
– Securities Brokerage;
– Securities Dealing;
– Investment Advisory;
– Portfolio Management. Permitted Securities:
– Primary Equities;
– Primary Debt Instruments;
– Derivative Instruments (futures, options, forwards, contracts, CFDs and Swaps), on any of the following;
– underlying assets; Equities, bonds, metals, commodities, currencies including cryptocurrency.
This definition also includes a person who holds a restricted securities dealer license.
Comoros Islands offshore forex license
– Securities Brokerage
– Financial Advisory
– Asset Management
– Fund Management
– Custody Services
– Transaction Clearing
– Payment Processing Currency Trading (FOREX)
– Issuance of Securities
– Underwriting of Securities crypto exchanges.
– Securities Market Making;
– Securities Brokerage;
– Securities Dealing;
– Investment Advisory;
– Portfolio Management. Permitted Securities:
– Primary Equities;
– Primary Debt Instruments;
– Derivative Instruments (futures, options, forwards, contracts, CFDs and Swaps), on any of the following;
– underlying assets; Equities, bonds, metals, commodities, currencies including cryptocurrency.
This definition also includes a person who holds a restricted securities dealer license.
Comoros Islands offshore forex license
– Securities Brokerage
– Financial Advisory
– Asset Management
– Fund Management
– Custody Services
– Transaction Clearing
– Payment Processing Currency Trading (FOREX)
– Issuance of Securities
– Underwriting of Securities crypto exchanges.
Comoros Islands
– Securities Brokerage
– Financial Advisory
– Asset Management
– Fund Management
– Custody Services
– Transaction Clearing
– Payment Processing Currency Trading (FOREX)
– Issuance of Securities
– Underwriting of Securities crypto exchanges.
Requirements for UBO and directors
Mauritius
Minimum of Two local Directors and one executive Director from any jurisdiction. Minimum of one shareholder from any jurisdiction.
Other staff: Auditor (Compulsory in Mauritius), Money Laundering and Reporting Officer, Deputy Money Laundering and Reporting Officer, Authorised Representetive / Dealer, Company Secretary.
Other staff: Auditor (Compulsory in Mauritius), Money Laundering and Reporting Officer, Deputy Money Laundering and Reporting Officer, Authorised Representetive / Dealer, Company Secretary.
Cyprus
Two executive directors (residents of Cyprus with experience and qualifications in line with the broker company’s business model)
Two independent non-executive directors (one being a Cyprus resident)
Other staff: AML and Compliance officer, internal auditor, accountant, secretary, etc.
Two independent non-executive directors (one being a Cyprus resident)
Other staff: AML and Compliance officer, internal auditor, accountant, secretary, etc.
Seychelles offshore forex license
The licensee will need at least 2 (two) natural person Directors of any jurisdiction who will Satisfy the Securities Authority that they are fit and proper persons to be licensed as a dealer.
The licensee will need at least 2 shareholders and a corporate shareholding is allowed.
The licensee will need at least 2 shareholders and a corporate shareholding is allowed.
Comoros Islands
The licensee will need at least 1 (One) natural person Fit and Proper Directors of any jurisdiction.
The investment dealer will need at least one shareholder. Corporate shareholding is allowed and 100% foreign ownership is permitted
The Licensee must establish and maintain an appropriate and effective compliance function within the firm which operates independently of all operational and business line functions and senior or supervisory management.
The investment dealer will need at least one shareholder. Corporate shareholding is allowed and 100% foreign ownership is permitted
The Licensee must establish and maintain an appropriate and effective compliance function within the firm which operates independently of all operational and business line functions and senior or supervisory management.
Authorized capital
- 215 000 EUR (Full Service Dealer (Including Underwriting);
- 21 500 EUR (Full Service Dealer (Excluding Underwriting);
- 15 000 EUR (Investment Dealer – Broker);
- 13 000 EUR (Investment Dealer – Discount Broker);
- 21 500 EUR (Investment Dealer (Commodity Derivatives Segment);
- 21 500 EUR (Investment Dealer (Currency Derivatives Segment).
Mauritius
- 215 000 EUR (Full Service Dealer (Including Underwriting);
- 21 500 EUR (Full Service Dealer (Excluding Underwriting);
- 15 000 EUR (Investment Dealer – Broker);
- 13 000 EUR (Investment Dealer – Discount Broker);
- 21 500 EUR (Investment Dealer (Commodity Derivatives Segment);
- 21 500 EUR (Investment Dealer (Currency Derivatives Segment).
Cyprus
- 50000 EUR;
- 125000 EUR (STP broker);
- 730000 EUR (Market maker broker).
Seychelles
The current prescribed minimum issued and paid up capital required is 50,000 US under the offshore forex license.
Comoros Islands
The IBC applying for a license should have a minimum capital of EUR 250.000. This capital requirement can be satisfied with a financial guarantee.
Taxes
Mauritius
15 % Corporate tax in Mauritius
Cyprus
12,5 % Corporate tax in Cyprus
Seychelles
The rate of tax payable by a licensee shall be 1.5% (one and a half percent) of assessable (gross) income.
Comoros Islands
0%
Time
Mauritius
6-7 months
Cyprus
From 10 month
Seychelles
Approximately 5-6 months
Comoros Islands
2-3 month
Why do you need a Forex license?
Companies that provide activity in the forex exchange brokerage area are required to have a forex broker license. Forex license is required to provide activity in the legal field and it will help the company to get corporate bank accounts.
What are the regulatory requirements and documents for a Forex license?
Regulatory requirements for a fx license a different in each jurisdiction and depends on the activities that the company plans to provide. However, there are general requirements that forex-licensed companies should fit with paid-up capital requirements, professional staff, and AML & CFT policies conduction. During the application process, it will be required for the director, shareholders, and responsible staff to provide the regulator with ID documents, proof of address, proof of funds documentation, police certificates, and Academic and Professional certification. Also, during licensing process corporate documents should be provided, business plan, website, and agreements with the liquidity provider. In each stage of the process, the regulator in the right to demand additional documentation if needed.
As in other high-risk businesses, the regulator’s requirements for the company, its structure, participants and possible partners and clients are very high. First of all, in order to comply with local and international laws against money laundering, terrorist financing, etc.
Therefore, companies need to be well prepared for regulatory scrutiny even before submitting an application. In addition, it is worth knowing at the outset what supporting documentation the regulator will require for each director and shareholder of the company.
How is the Forex market regulated and who regulates it?
The Forex market is an important part of the world financial system, and governments made all actions to regulate the forex market, in order to give all companies equal rules of activity and protect customer’s rights.
Main regulations of the forex markets are provided by responsible financial or securities market authorities, for example,
FCA (Financial Conduct Authority) in the United Kingdom,
CySEC (Cyprus Securities and Exchange Commission),
MAS (Monetary Authority of Singapore) and
CFTC (Commodities Futures Trading Commission of the USA).
FAQ
What are the taxes for the Forex trading license?
Obtaining a license for brokerage and trading activities is worth considering the peculiarities of taxation in each land. The conditions will be different everywhere. However, in most countries, brokers pay taxes on personal income and corporate taxes if they are registered as legal entities. Contact us in a convenient way for you, and we will advise you in detail about the peculiarities of the tax regime in the selected territory.
What documents are needed to apply for a Forex trading license?
In almost any country, for registration, you will need to provide information about the company (certificates, office address, and website). You also need to confirm the education, work experience, and reputation of the top officials. All licensors are required to develop customer verification and asset protection policies to protect against abuse.
What are the fees for trading permits?
The forex broker license cost and procedure of acquiring depend on the selected country. The most expensive and reputable authorizes are in Switzerland (certified capital – 10 million Swiss francs) and the USA (capital – 20 million dollars).
Countries with category B forex licenses include the United Kingdom and Australia. The minimum capital amount is EUR 125 thousand (excluding customer funds), and the period for acquiring a license usually is about 12 months and will cost from $22,000 to $50,000. For example, the capital amount of forex licenses in the UK is 125,000 EUR.
You can also obtain it in Hong Kong, Singapore, Panama, Latvia, Czech Republic, Estonia, Ireland, Bulgaria, Gibraltar, Mauritius, and many other countries. Such countries as Nevis and Seychelles may be suitable for novice brokers.
How long does it take to get a forex license?
To get an fx license you will need from 3 months to 1 year or more. It depends mostly on the country you are obtaining a forex broker license from. The more prestigious the jurisdiction for obtaining a licence, the more stringent the regulator’s checks will be, and therefore the licence will take longer to obtain proportionately
How much does it cost to get a forex license?
A forex license cost in each individual jurisdiction will be completely differently. In fact, it is worth starting with the fact that paying licence fees to the regulator is by no means a major cost. In addition, the company must have significant authorised capital, a legal entity and employees. In addition, it is worth including the cost of legal services to support the project.
Thus the project will depend directly on the chosen jurisdiction and form of licence. If you are interested in a particular licence, we will be happy to advise you on the cost of the licence.
How to Get a Forex Broker's License
For this purpose, it is necessary to decide on the jurisdiction, establish a legal entity, create special legal documentation, fulfil other requirements of the regulator and submit an application to the regulator of the selected country.
Once approved by the regulator, the company is granted a licence.
Reviews
I recommend Fintecharbor to anyone who wants to start working as a licensed forex trader. They advised in detail on all issues. Nothing superfluous, the answers to the questions are in essence.
Lawyers accompanied us on the issue of obtaining a brokerage license in Cyprus to work in the European market. Highly recommend! The service was above our expectations.
Obtain forex license now
*Your contact information will be used for our inner purposes and only with the aim to provide you with the best business solutions.
