Forex Brokerage Licensing & Incorporation: What You Must Know - PowerPoint PPT Presentation

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Forex Brokerage Licensing & Incorporation: What You Must Know


What is the Best Jurisdiction to Incorporate a New Forex Broker? Choosing a suitable jurisdiction for considering regulation and getting brokerage licence. – PowerPoint PPT presentation

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Title: Forex Brokerage Licensing & Incorporation: What You Must Know

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  • The Forex brokerage industry today is very
    tightly governed and regulated by countries
    across the globe.
  • Regulatory requirements are becoming stringent
    making it difficult for forex brokerages to enter
    new regions. That being said, we would like to
    mention that there still are some regions where
    you can enter easily.
  • But if you want to enter those regions, how you
    present yourself is the most important part of
    any FX brokerage plan.

  • Company Incorporation is the first step to get
    your forex brokerage going. This confirms that
    your brokerage is a legal firm and is authorized
    to carry out monetary transactions.In order to
    do this, the first thing to consider is the
    jurisdiction(s) in which you will be operating.
    Each jurisdiction has its own regulatory bodies,
    cost and time of obtaining a license, and
    different levels of clientele.An important
    factor to consider when choosing a jurisdiction
    is the model of your trading. Since the type of
    brokerage, you determine the regulations that you
    will have to follow.However, please understand
    that your place of incorporation doesnt have to
    be your base of operations as well.

  • Here are some jurisdiction categories, along with
    information on the regulatory requirements.

Category 1
  • USA (regulated by NFA) Japan (regulated by FSA)
  • This is a jurisdiction that a lot of people avoid
    due to the high cost and strict reporting
  • To obtain a forex brokerage license in either of
    these countries, you will have to prove that you
    have 20 million of freely accessible capital,
    excluding client funds

Category 2
  • Great Britain (regulated by the FCA) Australia
    (overseen by ASIC)
  • Compared to the previous category, this one costs
    less and has less stringent reporting
    requirements. Acquiring a forex brokerage license
    can cost anywhere between 35,000 and 50,000
  • A capital of 100,000 (excluding client deposits)
    should be enough to get you going
  • However, physical office space is an additional
    requirement in these jurisdictions. Also,
    obtaining a license will take an average of 3 to
    4 months upon submission of all necessary

Category 3
  • Cyprus (regulated by CySec), Malta (overseen by
    MFSA), New Zealand (governed by FSP) Bulgaria
    (overseen by BFSC)
  • These countries offer a decent level of
    protection for forex brokerage clients. However,
    a local office is a must. The reporting
    stringency levels are lower even than category 2
    and the taxes are quite reasonable as well.
  • The cost of the license is again anywhere between
    35,000 and 50,000 which will vary based on the
    type of license. The average time for a license
    to be issued is around 2 to 3 months. However,
    legal services and take sometimes about six
    months upon submission of the required documents
    which might cause an additional 2 to 3 months

Category 3
  • Cyprus (regulated by CySec), Malta (overseen by
    MFSA), New Zealand (governed by FSP) Bulgaria
    (overseen by BFSC)
  • In Bulgaria, Cyprus and Malta you will also need
    to deposit an average of 125,000 in your
    corporate account. Opening a bank account is
    relatively easy and in some cases can be done
    from outside the country. The fact that most of
    the countries in this category are in Europe
    offers greater credibility than some other

Category 4
  • Belize (overseen by IFS), Vanuatu (regulated by
    VFSC), and British Virgin Islands (regulated by
    BVI FSC)
  • These countries have basic regulations and
    require a license to operate, putting your
    customers at more ease than an unlicensed or
    unregulated jurisdiction. The incorporation can
    be done in a matter of days and license obtain in
    about 4 months upon submission of all necessary
  • The entire process will cost you around 30,000
    and you will need to deposit a minimum of
    125,000 in your corporate account. Though there
    might be banks in this region where you can open
    a corporate account without a license, obtaining
    your brokerage license first will definitely make
    the process easier and open up doors to more

Category 5
  • Others
  • Any country in the rest of the world where forex
    trading and brokerages are possible will fit into
    this category
  • Countries such as Seychelles and St. Vincent will
    fall in this category. In these two countries,
    with 2000 in your hands, you can register a
    forex company in around a week or two without
    having to worry about a license.
  • Though this option is cheap and fast, there are
    several reasons to not start a brokerage without
    a license of which the foremost one is the lack
    of credibility.

Category 5
  • Additionally, banks will shun away from offering
    corporate accounts to unlicensed forex firms as
    they will be putting themselves in a position of
    risk by allowing unregulated transactions to go
    through their entity
  • That being said, we should also mention that
    there still are a few banks that might allow you
    to open an account based on how you approach them
    and present yourself as a business


Heres how Sanfrix can help you on this journey...
From company incorporation to setting up the
right bank accounts, and getting you licensed in
the perfect jurisdictions based on your business
model, we will handle everything for you.

Our services are not limited to that. From
offering white label solutions to setting up a
custom CRM, we can do anything you can imagine
getting done in the forex industry.
  • Sanfrix has initiated several exchanges and
    brokerages from various jurisdictions and can
    help you too, making the entire set up
  • We offer deep liquidity with customised pricing
    and execution analytics to make sure all your
    liquidity needs are met.
  • Continued strategic partnership, free
    consultation support and 24/6 customer support
    from our Chief Success Officer.
  • CRM
  • Sturdy CRM customised for Forex brokerages with
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  • We offer advanced trading platforms, payment
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    need at an affordable cost.

Contact Us
  • Sanfrix can help you with all your forex needs
    and has helped several forex brokerages double
    their profits by simply implementing the right
  • Question is
  • Will yours be one of them?

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