Forex Brokerage Licensing & Incorporation: What You Must Know

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(No Transcript)
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Introduction

• 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.

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• 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.

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

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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
  requirements
• 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

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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
  documentation

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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
  delay.

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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
  regions.

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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
  documents.
• 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
  banks.

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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.

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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

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• OVERWHELMED WITH ALL THE POSSIBILITIES...?
• DONT WORRY!

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Heres how Sanfrix can help you on this journey...
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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.
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• Sanfrix has initiated several exchanges and
  brokerages from various jurisdictions and can
  help you too, making the entire set up
  hassle-free.

• 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.

• COMPANY INCORPORATION

• TECHNOLOGY

• LIQUIDITY

• CRM
• BACK-OFFICE

• STRATEGIC PARTNERSHIP

• Sturdy CRM customised for Forex brokerages with
  unified communications, KYC, customer journeys,
  insightful reporting and more.

• We offer advanced trading platforms, payment
  integration services and all the technology you
  need at an affordable cost.

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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
  tools.
• Question is
• Will yours be one of them?

65 9860 7215
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