Customized Legal Solutions for Acquiring Offshore Forex License

Licensing: registration and regulation

Forex, along with other currency trading and investment businesses, is a regulated activity in some offshore jurisdictions. This means that a broker cannot legally run their Forex business without obtaining a license first. Dealing with finances online is a responsible business and trying to run it unlicensed might turn into walking on thin ice.

However, we do not advise looking at it as a burden: in fact, an offshore license brings a Forex platform multiple benefits, including an increased trustworthiness rate from banks and potential clients alike. Besides, if you are concerned that a prolonged licensing procedure might postpone the launch of your Forex business, assistance from qualified professionals, such as LegalBison, will facilitate each of the obligatory steps.

The legality of Forex companies offshore

A Forex company that operates in an offshore jurisdiction does it in compliance with the laws and regulations enforced by an independent country. All offshore jurisdictions that allow Forex trading activities on a governmental level license such businesses according to all the legal criteria. As a result, there are no Forex companies that are considered shady in any of the offshore countries as long as they have a relevant local license.

On top of it, some of the offshore jurisdictions are members of the Commonwealth or other supranational bodies: therefore, the legality of Forex businesses licensed offshore cannot be questioned either by legal authorities, banks, or customers.

Registration: usual requirements

On the flip side, every offshore Forex license comes with a list of mandatory requirements. While these criteria might be changed or modified slightly depending on the jurisdiction, the general scope of documents remains the same. Here is what a broker usually needs to register a new Forex company offshore:

• Documents concerning the beneficiaries and their identities, including valid passports and certificates of non-criminal record, as well as proof of residence;
• A drafter business plan that will outline the form of a business and the services provided;
• Financial guarantees, such as the company’s starting capital and proof of source of funds;
• Sometimes, a list of terms, conditions, and policies that will apply to the offered services.

Benefits of an offshore Forex license

Having an offshore Forex license is beneficial in many regards. Since the sector has grown exponentially over the past years, there are more and more fledgling brokers aspiring to create and register a Forex platform that will work following all legal terms. As the competition grows, inventive brokers look out for more ways to boost their businesses while still adhering to the law. An offshore Forex license is a surefire way to do so.

Lower regulatory barriers

First things first, within an offshore jurisdiction, it is possible to provide Forex brokerage services or trading services without making a multi-million investment from the beginning. For example, the Comoros Forex license. On the other hand, “onshore”, jurisdictions, like the USA or the UK, not only impose way more rigorous licensing criteria but also require a way higher starting budget for running your firm.

Resorting to an offshore license automatically means registering a Forex brokerage under more lenient conditions but still meeting all the legal and regulatory requirements, which should be a principal goal of any beginning broker. As practice shows, Forex trading platforms registered within offshore jurisdictions show no less trustworthiness than the ones regulated by the United States or the United Kingdom.

Comprehensive framework

It is within the interests of every authority to license a Forex business quickly and effectively, ensuring the full transparency of any activities that have something to do with finance. Henceforth, all the requirements and the licensing process are usually known from the start, leaving no room for possible bad surprises for the broker.

Even before picking an offshore jurisdiction to license a company in, a broker can see clearly outlined requirements put forward by each country. The procedure itself is also crystal-clear and involves no pitfalls or grey areas that the owner of a Forex platform might be concerned about.

Competitive fees

Another significant benefit of registering a Forex business offshore is competitive licensing fees. A wide range of Forex companies in the sector are already operating offshore, enjoying comparatively lower costs that give them a competitive edge. If they pay less for a license, it means that they have a higher budget to spend on improving the platform’s design, usability, and overall performance.

What does it mean for a novice broker? Licensing a Forex brokerage within an offshore jurisdiction is an instant business boost to take advantage of. Operating offshore guarantees lower licensing fees without compromising on the included services.

Beneficial taxation

Apart from milder fees, offshore jurisdictions offer a beneficial tax environment, which is one of the main reasons why brokers choose these licenses for their Forex platforms. Once a Forex company is registered in an offshore country, it is considered domestic and, therefore, subject to local taxes. As a result, it is impossible to avoid taxation completely. However, the territorial taxes of offshore jurisdictions remain considerably lower than the taxation rates of most onshore countries.

Remote operation

Even though some offshore Forex licenses have economic substance requirements, such as having a local office, a local team, or a director of the country’s origin, all of them allow for the remote operation of a company. Essentially, this means that the CEO is not bound by an obligatory physical presence within the licenser’s country and can conduct and manage the company’s services from anywhere.