Many scammers on the FX market strive to make money on newcomer traders. In this case, it’s vital to have a Forex Brokerage license — unregistered brokers risk falling under sanctions and may arouse suspicion of newer players.
When it comes to the Forex regulations, there are about 20 jurisdictions where trading operations are banned. In other countries, business founders need to found a company and obtain a Forex license. There are different demands and possible pitfalls, so it’s better to check all possible options and choose the best-matching regulation.
All countries are roughly divided into three types:
- Jurisdictions with weak FX requirements.
- Jurisdictions with medium FX requirements.
- Jurisdictions with strict FX requirements.
Let’s learn the demands of regulatory bodies in these countries.
Jurisdictions with Weak FX Requirements
These countries are a perfect option for newcomers who don’t have enough time and money. Further, they have a small set of demands, so that beginner brokerages can promptly get a Forex trading license. Here are the most in-demand jurisdictions:
1) Belize
Financial Authority: International Financial Services Commission.
Equity Capital: $500,000;
Terms of Registration: from 1 to 3 months;
License Expenses: $1,000;
Annual Fee: $25,000 per year;
How to obtain a Forex broker license?
- Found a brokerage company with minimal registered capital of $500,000.
- Create a virtual office.
- Hire a Belizean-based manager.
- Apply to the IFSC.
Particular Demands: Companies with a Belizean registration aren’t allowed to operate with Belizean clients.
2) Seychelles
Financial Authority: Financial Services Authority Seychelles.
Equity Capital: $50,000;
Terms of Registration: Maximum of 3 months;
License Expenses: $1,000;
Annual Fees: $2,200 per year;
How to get an FX license?
- Create a company with a minimal capital of $50,000.
- Open a corporate account in one of the local banks and deposit the registered capital.
- Prepare specific documentation.
- Apply to FSA Seychelles.
3) Saint Vincent and the Grenadines
Financial Authority: Financial Services Authority of St. Vincent and the Grenadines.
Equity Capital: No limitations;
Terms of Registration: Maximum of 6 months;
License Expenses: $1,000;
Annual Fee: $500 per year;
How to start a Forex business there?
- Found a legal entity in Saint Vincent and the Grenadines.
- Rent a physical office in any city there.
- Collect a set of documents.
- Apply to the regulatory body.
Particular Demands: New brokerage businesses are free from corporate taxation for 25 years.
4) Vanuatu
Financial Authority: Vanuatu Financial Services Commission (VFSC).
Equity Capital: $50,000;
Terms of Registration: Maximum of 3 months;
License Expenses: $20,000;
Annual Fee: $12,000 per year;
How to start a brokerage business in the country?
- Found a brokerage company in Vanuatu.
- Collect all mandatory documentation.
- Apply to the VFSC.
Jurisdictions with medium FX requirements
Countries that relate to this category have stricter demands, but their licenses are more reliable and allow operating worldwide with some exceptions. Let’s learn how to get Forex license in the most popular countries.
1) Cyprus
Financial Authority: Cyprus Securities and Exchange Commission.
Equity Capital: From €200.000 to €1,000,000;
Terms of Registration: From 2 to 3 months;
License Expenses: from €125,000 to €730,000;
Annual Fee: €4000 per year;
How to obtain a Cypriot FX license?
- Found a company with minimal registered capital of €200.000.
- Hire at least 13 employees, including the CEO, 2 top managers and 2 traders with proper certification. The member of a governors board must have Cypriot citizenship.
- Run a physical office in any city of Cyprus.
- Prepare a set of documentation.
- Apply to CySEC.
Particular Demands: The Cyprus-based company can serve traders and investors throughout the European Union.
2) Estonia
Financial Authority: The Estonian Financial Supervisory Authority.
Equity Capital: From €50,000 to €730,000;
Terms of Registration: From 3 to 6 months;
License Expenses: €10,000;
Annual Fee: €1,000;
How to get licensed in this country?
- Create a legal entity with at least 2 certified managers with a proper background.
- Open a corporate account in one of the local banks and deposit the registered capital.
- Collect all mandatory documents.
- Apply to the Estonian FSA.
Particular Demands: The Estonia-based company can serve traders and investors throughout the European Union.
3) Malta
Financial Authority: Malta Financial Services Authority.
Equity Capital: from €125,000 (for a 2nd category license) to €730,000 (for a 3rd license);
Terms of Registration: Minimum of 6 months;
License Expenses: From €2,600 to €10,000;
Annual Fee: From €4000 per year + €250 for every €250,000 of net income;
What are the main requirements?
- Create a legal entity with a registered capital from €125,000 to €730,000 (depending on the scope of services).
- Open a corporate bank account in one of the local banks and deposit the equity capital.
- Prepare all mandatory documentation.
- Apply to MFSA.
- Get a specific certificate after the initial examination (up to 2 months).
Particular Demands: The Malta-based company can serve traders and investors throughout the European Union
Jurisdictions with strict FX requirements
If the broker has a White Label Forex solution and is ready to conquer the global market, the most trustworthy licenses are required. However, companies need to follow the broader list of demands. Let’s take a look at the most stringent regulations for Forex prime brokers.
1) Australia
Financial Authority: The Australian Securities and Investments Commission.
Equity Capital: Minimum of $635,000;
Terms of Registration: From 6 to 12 months;
License Expenses: Minimum of $35,000;
Annual Fee: $1,086 per year;
How to obtain an Australian Forex license?
- Found a company with 2 Australian citizens as top managers.
- At least 1 member of the governing board must have a background in an Australia-based brokerage company.
- Run a fully functional office in any Australian city.
- Open a corporate bank account.
- Collect all mandatory documentation.
- Apply to ASIC.
Particular Demands: Australia-based brokerages are not allowed to operate in the United States.
2) United Kingdom
Financial Authority: Financial Conduct Authority;
Equity Capital: £100,000 – £125,000 (for STP companies) and £730,000 – £1,000,000 (for market makers);
Terms of Registration: From 1 to 2 years;
License Expenses: from $22,000 to $50,000;
Annual Fee: From $6,000 per year;
How to obtain a UK Forex license?
- Create an FX company with at least 1 managing officer and 1 Compliance Officer.
- Open a corporate account in a UK bank (accounts in the European institution are also valid) and deposit an equity capital.
- Prepare the required set of documents.
- Apply to FCA UK.
3) United States
Financial Authorities: Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), Securities Investor Protection Corporation (SIPC), Commodities Futures Trade Commission (CFTC);
Equity Capital: $250,000;
Terms of Registration: From 12 to 18 months;
License Expenses: Maximum of $1,000,000 and $25,000 of the specific FINRA deposit;
Annual Fee: Minimum of $10,000;
How to start a White Label FX business there?
- Register a legal entity in the United States.
- Choose the preferred category of license.
- Pass the General Securities Representative Exam and an extra examination for managing employees.
- Open a corporate bank account in the USA and deposit an equity capital.
- Collect the mandatory documentation.
- Apply to the regulatory body.
Particular Demands: The maximum leverage is 50:1. Further, each state has specific demands for margin trading.
Every jurisdiction pays great attention to the Forex trading license legitimacy. Meanwhile, jurisdictions with strict FX requirements provide more benefits for newer brokerages.
If you still have trouble getting a Forex license, apply to a successful company. B2Broker offers top-notch solutions and help from high-level FX experts. They will pave the path to the success of your White Label trading platform.
