In which areas is it best to get a broker’s license?
The financial world is extremely complex but provides many opportunities for income. Forex is one of the most important areas in which a huge number of brokers operate. For their activities to be legal, they need to obtain a forex license. Today, there are a large number of jurisdictions that deal with licensing, but we have selected a few of the most popular.
How does a broker start?
First, people need to select the country where the firm plans to conduct this activity and undergo registration. When choosing, you should consider the company’s financial capabilities so that a mistake does not lead to unplanned financial losses.
Let’s consider the aspects that people need to pay attention to before applying the regulator:
- amount of capital to start a business;
- registration period, which can vary from several weeks to a year;
- taxation system;
- the chosen area must support transparent and reliable business practices and have a stable economy.
All of the above aspects should suit entirely your vision of financial activity in the Forex market.
Which states are best for permitting?
Let’s briefly overview the areas that offer the best opportunity to operate in such a market.
The regulatory body FSA licenses and supervises the activities of brokers. Let us list the main advantages of this jurisdiction:
- there is only one corporate tax of 1.5% (no others);
- state duty is only 6300 USD;
- the registration period is up to three months;
- transparent policy for foreign companies;
- starting capital from 50,000 USD;
- licensing cost is approximately 40,000 USD.
Once approved, your company can conduct securities-related activities (trading and executing transactions), portfolio management, and provide brokerage services. This state strictly maintains confidentiality. Also, an essential factor is providing access to the SWIFT system.
It is worth noting that there are no permitting conditions for brokers in this country. The FCA does not regulate IBC firms, but the regulator warns of the risks. A stable economic policy and loyal laws will contribute to the company’s development. The financial benefit will be in the form of small taxes and expenses in the organization’s registration and operation process. The main benefits of this state include the following points:
- from the moment of getting a permit, the company is exempt from taxes for 25 years;
- there are no requirements for the size of the authorized capital;
- company registration takes several days;
- there is no need to provide financial statements;
- the possibility of remote control is provided.
Provided that the entire package of required papers is delivered, permitting in SVG will be fine.
This country attracts with its stable policies and reliable financial sector. It has transparent and precise requirements and actively supports licensed brokerage organizations. Let us list the essential points characterizing Mauritius:
- a high level of confidentiality is ensured at the legislative level;
- no taxes for forex brokers from other countries;
- for offshore organizations, corporate tax is 3%
- no currency regulation;
- authorized capital from 18,000 USD;
- the cost of obtaining a permit will be no more than 25,000 USD;
- the company can be managed remotely.
In addition, the state uses innovative technologies that make doing business comfortable, and permitting can be completed in three months.
This country is desirable due to its many benefits. The state has a favorable commercial atmosphere, competitive taxes, and a simplified legal framework. The Central Bank regulates such a market.
An organization must confirm financial stability and have the appropriate technologies if it plans to be licensed in a given state. It is essential to provide for the introduction of AML and KYC policies into the company’s program of activities. It has requirements for authorized capital – from 50,000 USD. Permitting will cost approximately 40,000 USD, and the receipt period will last one month.
Considering their economic stability, transparent legislation, terms, and licensing costs, we looked at the most favorable states for getting permits.
In the end
If you do not have a legal background, it is challenging to understand all aspects. We advise you to seek help from specialists who will tell you which jurisdictions are suitable for you, taking into account your company’s activities, what documents need to be prepared and what to pay attention to first.