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The following is a guest article by Jonathan Baumgart, CEO of Atomiq Consulting:
With a multitude of offshore and continental jurisdictions to select from, it can be challenging for brokers to determine the best region for establishing a forex broker license.
27 October, 2019 - Regulations in the online foreign exchange industry are rapidly changing; what was once the norm only a few years back might no longer be relevant today. As just one of many examples, consider the recent decision by the Belize IFSC to raise capital requirements to $500,000. Due to these rapid changes, selecting the best license jurisdiction for your brokerage can often be overwhelming.
As experts in the realm of forex broker licensing and regulation, our goal is to assist our clients in determining the best jurisdictions, whether continental or offshore, to obtain a forex broker license. Consider the following breakdown of jurisdictions which we believe you should strongly consider when applying for a forex broker license.
#5. MAURITIUS
Although not as easy to obtain as a license in Seychelles or Vanuatu, forex brokers shouldn’t rule out Mauritius when choosing an offshore jurisdiction. Mauritius has recently grown in popularity, making it a highly desirable region to obtain a forex broker license. This is mainly due to the multitude of banking options available once the license has been granted and relatively low operational costs needed to maintain the license.
#4. CYPRUS (CYSEC)
Cyprus is the most recognized jurisdiction for establishing a license in the European Union (EU). Similar to all EU member states, capital requirements are €125,000 for STP brokers and €730,000 for market makers. Due to the speed in obtaining the license and recognition across all of Europe, Cyprus should be the top choice for brokers interested in obtaining a license in the European Union. As a final consideration, we also have several CySec licensed brokers on sale. Should your broker wish to obtain a forex license in Cyprus more quickly, acquiring an existing CySec licensed brokerage is also worth considering.
#3. SEYCHELLES FOREX LICENSE (FSA)
Brokers have many jurisdictions to select from when it comes to offshore forex licenses. From our experience, a license in Seychelles should be at the top of the list of considerations. Not only can a license be obtained more quickly than in comparable jurisdictions, the capital requirements of roughly $50,000 are one of the lowest as far as offshore licensing goes. Finally, Seychelles licensed brokers have access to more banking options than other offshore regions, which is another key advantage.
#2. VANUATU (VFSC) FOREX LICENSE
Vanuatu has become a hotspot for broker licensing, especially in the past few years. Initially, capital requirements were only $2,000, however, in a landmark decision the VFSC raised capital requirements up to $50,000 in late 2017. Despite the increase in capital, Vanuatu is still a consideration due to the ease in obtaining the license. Although capital is now set at $50,000, it still represents one of the more cost effective regions to establish a forex broker license.
#1. LABUAN, MALAYSIA
Of all the jurisdictions to select from, we find Labuan, Malaysia to be the best fit for both new and established brokers alike. Major advantages are relatively low capital requirements, speedy set up time, and access to top banking facilities in Malaysia. Due to the rapid growth of the forex industry in Asia, Malaysia is also an excellent jurisdiction to consider for brokers looking to expand into other parts of the world. Because the other regulatory options in Asia are far more involved in terms of both time and capital, Malaysia is an ideal choice for any broker looking to establish a presence in Asia.
Atomiq Consulting – Your Forex Broker Licensing Partner
The overview we’ve provided only scratches the surface in terms of license options available to your brokerage, which is why you should contact us if you are seriously interested in applying for a forex broker license.
In addition to forex license consultation, we also are able to assist your broker in buying / acquiring an existing licensed forex broker. To learn more about our licensing services or discuss any of the jurisdictions we’ve covered in today’s post, don’t hesitate to contact us today!
