Obtaining a Forex Broker License

When starting a business in the sphere of Forex, one of the primary tasks that should be resolved by the company is licensing. It will not only legitimize the activities of a legal entity, but also significantly simplify all areas of corporate management (starting from formal communication with the authorities and tax reporting to opening corporate bank accounts and doing business with other legal entities), having a license will be a confirmation of the legality of the business for your clients, as well as a guarantee of the protection of the funds entrusted to you.
Taking into account these factors, considering legal side of the case as well as corporate planning, the issue of obtaining a license should be first to be resolved for a new business project.

Selection of the suitable jurisdiction

In the modern world, there is a significant number of jurisdictions that allow you to obtain the necessary license, so choosing a suitable country is a basic issue that should be considered when planning a business.

To determine the optimal jurisdiction, it is recommended to take into account:

The target audience of the project, its geographic location, and the key markets of the company.
Citizenship, residency, education and work experience of the beneficial owners and prospective directors of the company, in order to exclude possible inconsistency of legal requirements with the actual structure of the company, and to optimize taxation scheme when distributing income.
The need to hire additional employees for key positions in the company to comply with legal requirements, as well as the possibility of opening a bank account.
Determine the planned budget of the project, since often, the financial requirements for the company's capital, as well as the funds needed to obtain a license (including fees paid to the regulator and related legal and corporate expenses for organizing and running the project) can vary significantly depending on the jurisdiction.

Having taken this information into account and having determined the appropriate jurisdiction for obtaining a license, you can begin the project. If you have difficulties analyzing information about specific jurisdictions available in open sources, the lawyers of Law&Trust International will provide the necessary advisory assistance in choosing a suitable country, as well as optimizing the company's taxation scheme, opening a bank account, and other related areas.

Company registration

Upon making the final decision to start the project, the first task will be to register the company. At this stage, it is already necessary to remember the specific requirements put forward by the regulator of the chosen jurisdiction to the applicant for a Forex license, which will require:

Compliance with the required company structure that meets relevant legislative requirements, and employment of persons with the necessary education and experience in the financial sector.
Indication of the amount of capital required by the regulator.
Selection and rental of premises for the company's activities.

Documents required for registration

Typically, to apply for company registration, as well as for the subsequent procedure of obtaining a license, the following documents are required for the directors and shareholders of the company:

Identification information, including copies of a passport, ID card or other identity document.
Certificate of no criminal record.
A document confirming the place of residence.
A document confirming the availability of the necessary funds and their origin.
CV.

Upon registration of a legal entity, the next step is to open a corporate bank account to deposit the authorized capital of your company. It should be noted that the possibility of opening a bank account may depend on the structure of the company, which also requires separate analysis when planning the structure.

After opening a bank account, the process of applying for a license and bringing the company, its structure, internal documentation, policies and procedures into compliance with the legal requirements of the country is started.

Requirements for the company's personnel

Often, in addition to the requirement to have resident director with a certain level of education and experience in the financial sector, regulators also put forward requirements for the presence of additional employees, for example:

risk manager;
AML officer;
auditor, who has the appropriate license in the jurisdiction;
legal consultant, also licensed in the required country;

Internal documentation and company policies

In addition to the specified personnel requirements, strict compliance with the company's policies and procedures, as well as the development of internal documentation is also required. As a rule, the standard documents required when applying for a license are:

business plan;
financial forecast for a certain period (usually for 3 years);
AML/CFT procedures;
privacy policy and rules for processing personal data;
sample agreement for the provision of services.

It should be taken into account that the above lists of documents and requirements are averaged and may vary significantly depending on the chosen jurisdiction.