The high profitability and favorable outcomes of Forex business are increasingly drawing people day by day. If you are thinking of starting your very own Forex business, you need to consider getting a Forex license.
Forex license is required to have the permission to arrange and deal in currencies under the Forex regulations.
Bear in mind that acquiring a license requires loads of paperwork and numerous meetings with the proper authorities. It also requires time, resources, and dedication. There will be a hefty amount of fees required for both application and licensing. It is a lengthy and tedious process.
However, this constant effort and is worth the lucrative return of investment.
This article intends to provide a guideline that makes it less intimidating to obtain a Forex license.
- Choose a Jurisdiction
The Forex rules and regulations vary location-wise, especially regarding the required deposits and leverage.
As you begin forming your own Forex company, you need to choose a country in which you will incorporate your business. You should keep in mind that the licensing process will be affected by the location of incorporation.
The most widely known jurisdictions of Forex brokerage are usually in locations with the leading economies like –
A. United Kingdom
B. France
C. Australia
D. Hong Kong
E. Japan
F. New ZealandThese leading economies usually provide SCA or FCA licenses. They are usually strict and require a number of administrative procedures.
There are also alternative licenses that are more reasonably priced and require much less paperwork, comparatively. They are usually in offshore locations such as –
A. Cyprus
B. Saint Vincent and the Grenadines
C. St Lucia
D. Vanuatu
E. Marshall Islands
F. SeychellesConsider Settling for Offshore License
The jurisdiction fees and other administrative fees under these leading economies are quite expensive and beyond the financial capabilities of new Forex brokers.
Most newcomers obtain offshore licenses as it is more affordable and easier to get. Acquiring licenses under offshore jurisdictions are commendable as they are also reputable and much more affordable alternatives.
People mostly prefer offshore licenses under the following jurisdictions :
A. Cyprus
More people are inclined to set up their brokerage in Cyprus as it has one of the lowest corporate taxes and lets brokers trade with the residents of all EU countries.B. Saint Vincent and the Grenadines
This jurisdiction maintains an advanced level of confidentiality and also requires low capital.C. St Lucia
Besides being incredibly economic, St. Lucia offers extraordinary property and privacy protection.D. Vanuatu
Acquiring a license under this jurisdiction is flexible and takes considerably lesser time than others.E. Marshall Islands
Obtaining a license in the Marshall Islands doesn’t require filing bank statements or completing yearly returns.F. Seychelles
The jurisdiction has relaxed requirements. Seychelles’ license has a low application fee and requires less capital. - Research, Research, and Research!
Whether you obtain a Forex license under a leading economy or an offshore jurisdiction, you need to research the different rules and regulations of various jurisdictions.
Read about the different classes of jurisdictions and the countries falling under each level. Get to know about the minimum requirements, the essential paperwork, the cost of the administrative fees, etc.
For most of the cases you should have the following documents – (It’s not mandatory to gather up all the documents listed below. Requirements may vary country to country)
· Company incorporation certificate.
· Company Share Certificate.
· Certificate of good standing.
· Company Address Proof.
· Company memorandum & article of association.
· Company Bank Statement.
· Valid ID of Company Directors.
· Residence Proof of company directors.
· Bank statement of company directors.Educate yourself about the necessary procedures and paperwork needed for the license you want to obtain.
Basically, do your research and make an informed decision. Making an informed decision will minimize any mishaps or prospective losses.
- Opt for Turnkey Solutions
Going for turnkey solutions will ease out the whole process for you. Look for turnkey solution providers who are experienced in the Forex business and provide useful ready-to-go solutions.
Such companies offer services that carry out all the necessary groundwork for you, minimizing the pressure exerted on you. The services will save your resources and time.
Opting for such solutions will help you set your Forex business in a short period of time, and you can delegate the required hassle to your solution provider.
Hopefully, this article gave you useful pointers and encouraged you to set up your own Forex brokerage. Happy trading!