How To Set Up A Forex Brokerage Business
What is Forex?
Forex brokerage trading market is the largest, most liquid market in the world. With an average traded value that exceeds 1.9 trillion dollars per day including all world currencies. Foreign Exchange is also known as ‘FOREX’, ‘FX’ or ‘the currency market’ is the market in which all world currencies are traded.
The forex brokerage trading market is “decentralized”. This means as an international network with no fixed, physical location; it is an over-the-counter (OTC) market where brokers and dealers (‘intermediaries’) negotiate directly with one another.
Would you like to start your own Forex brokerage business?
Valsen Fiduciaries works with large companies and expertise to provide competitive Retail Forex brokerage business worldwide. Coupling popular MetaTrader4 Platform, our extensive partner network, and innovative technology gets organizations going with the right foundation to succeed in retail forex trading.
If your organization is looking to diversify company assets, there is no better time than now to begin looking at the forex market. Becoming your own brokerage house and starting relationships with liquidity providers, you will be able to lower operational costs with associated activities.
The following are jurisdictions to choose when looking to set up a forex brokerage business:
Level A Forex Jurisdictions
The USA and Japan fall into this category.
- To secure a license, proof of $20 million of freely accessible capital, separate from client deposits.
- Extremely strict reporting requirements and customer complaints to regulatory agencies may result in a strong reaction from regulators.
Reuter’s news agency reported on May 20th, 2015 that banks were fined nearly $6 billion in Forex probes.
Level B Forex Jurisdictions
This includes Great Britain (regulated by FCA) and Australia (overseen by ASIC). They have less stringent reporting requirements and less capital needed to launch the enterprise.
- Obtaining a license costs $35,000-$50,000.
- A physical office is required.
- $100,000 capital separate from client deposits.
- If Forex transactions are completed in-house, $1 million liquid cash is required.
- If a third party is used for transactions, $100,000 is required.
Level C Forex Jurisdictions
These countries have regulators that offer a fair amount of protection for Forex trading clients. These include Cyprus (regulated by CySec), Malta (overseen by MFSA) and New Zealand (watched over by FSP). http://offshore-companiesonline.com/about-cyprus
- A local office is required.
- There is a low level of reporting and the taxes are quite reasonable.
- Initially, only $30,000 is needed, which varies by license type.
- $35,000-50,000 for legal services
- 6 months to obtain the license once all the documentation is provided to the government
When registering in these countries and interacting with EU clients, opening a bank account is easier than some of the jurisdictions below.
Level D Forex Jurisdictions
Jurisdictions include Belize and BVI. Between the two, we have seen Belize http://offshore-companiesonline.com/about-belize as the most favourable. These countries do have regulations and license requirements you will have a license to show prospective clients.
- Post on your website to give clients a level of comfort; speed is imperative.
- Incorporation process takes a few days.
- licensing process takes 3-4 months (on average, once all of the required documentation is submitted)
- The whole process typically under $30,000.
- Minimum deposit of $125,000 in your corporate account is required; this is not an expense, there is accessibility to the money.
- Once licensed, it is easier to open a corporate bank account.
Without a license, there are few banks that will open a bank account for a Forex brokerage business.
Level E Forex Jurisdictions
Let’s place the rest of the world’s most popular Forex brokerage jurisdictions in this category. In the following jurisdictions, a Forex license is not required. Nevis, Seychelles and St. Vincent falls into this group. http://offshore-companiesonline.com/about-seychelles
- In about a week and with a few thousand dollars you are the proud owner of a new Forex company.
- The benefits are speed and low cost.
However, without a license, it limits the number of banks that will open an account for your Forex business. The reason is if a client you are offering Forex services is a bad guy whose money is moving through that bank, the bank could be penalized by regulators. Resulting in loss of their license, ability to transmit funds in US dollars or Euros, face huge fines, etc. Few banks are willing to take this risk for one account.
The good news is that there are banks that will open accounts for an unlicensed forex company, especially if the company engages in other types of business other than just forex. Boasting that you are in the Forex business or having the word “Forex” in the company name is not advisable. While still using full disclosure, emphasizing the other business purposes such as “international diversification” or “to expand internationally” could be in your favour. With our guidance, we have successfully obtained bank accounts for offshore forex brokerage business.
In this category, we can place Latvia, and to lesser degrees, Estonia and Lithuania.
- Company registration process takes two to three months.
- Opening a bank account is fairly easy, and may, or may not, require travel to the region.
Latvia is part of the European Union and has a greater degree of credibility than some jurisdictions. Latvian registration is common among new brokers because it is easier to acquire clients from Europe and Russia.
Need credibility, get a license. If you do not have the resources available to get a license and want to get into the Forex brokerage business, Valsen will provide assistance with registering forex brokerages, by facilitating payment processing solutions as well as bank accounts. In addition, we offer nominee officers and/or directors for personal privacy and protection, as well as virtual office services with mail forwarding and telephone answering services.
Want to enjoy the earnings from a Forex brokerage business Valsen will give you hand to hand support until you achieve your dreams. Should you require assistance in any of these areas, don’t hesitate to contact us.
WhatsApp (+248) 252 5217
What do we offer?
Whether you would like to set up your first forex broker license or would like to expand into new regions, Valsen is adequately prepared to offer industry guidance and expertise.
Due to the rapidly changing nature of regulation in the FX industry, it’s important to work with a firm that is up-to-date with changing trends surrounding forex broker licenses and incorporation. Unlike many license/company formation providers, we always explain the conditions and limitations before taking your money. Furthermore, we offer one-on-one guidance and support to each of our clients as we understand the importance of getting your license set up properly on the first attempt.
We offer the following range of solutions that are customized to meet your business’ needs:
- FX Broker Company Formation and Licensing
- FX Broker Banking Solutions
- FX Broker Payment Solutions and Merchant Accounts
- FX Broker Trading Platform Solutions
- FX Broker Dedicated CRM Solutions
- FX Broker Risk Management and Liquidity Solutions
- FX Broker Website Development and IT Integration Solutions
- FX Broker AML and Compliance Solutions
- FX Broker Virtual Office Solutions
- FX Broker Director Services
- FX Broker Company Secretarial and Administration Services
- FX Broker Company Mergers and Acquisition