Many companies seek to enter the Forex market because this direction is incredibly effective today and can bring huge profits. Obtaining a Forex license is a mandatory process for brokers to operate legally. Today we want to discuss how the licensing process works, what problems you may encounter, and give advice on how to solve them.
Choice of jurisdiction
Today, several jurisdictions issue permits for the Forex market, so making a choice can take time and effort. First of all, you need to pay attention to such points:
- Requirements for applicants;
- Cost of the license;
- For how long it is provided;
- How long does it take to obtain a permit;
- What opportunities does it give;
- Level of taxes and much more.
To begin with, you need to assess in which jurisdictions your main competitors have received permission and then study the conditions in them. If you need something else, you can seek the help of experts who will examine your company’s activities and suggest which country is ideal for you.
Collection of documents
To obtain a work permit, you must collect a large package of documents. This process can take quite a lot of time and effort due to the high level of bureaucracy. In addition, it can be challenging for a person without a legal education to select a list of documents and check the correctness of their filing. To avoid problems due to incorrect filing of papers, you should seek help from specialized lawyers. They will help to collect a package of documents and check how correctly they are filled out.
Registration of a company in the chosen jurisdiction
All licensing countries require that your organization be registered in the jurisdiction of your choice. As a rule, if you collect a package of documents in advance, these problems will not arise. However, some countries require you to visit the country in person. If, for some reason, you cannot do this, you can ask your authorized representative to do this.
Search for qualified employees
Most countries require employees with an impeccable reputation, at least 1 year of work experience, and specialized higher education in critical positions in your company. Finding such highly qualified specialists is challenging (especially if there is a requirement for the location or citizenship of employees). We advise you to start looking for such specialists in advance, and you can attend thematic events, chat with your colleagues, or contact a recruiting agency.
Also, for a more successful search for qualified specialists, you should study the labor market, determine the optimal level of wages and decide what additional options you can present to your employees to lure them away from competitors.
Opening an account at a local bank
Before launching your company, you must open a bank account and fully deposit the authorized capital here. At first glance, this step should be fine, but this is not always the practice case. The fact is that not all banks are ready to cooperate with Forex companies because they consider such a business to be too risky.
So, find out in advance which banks are willing to cooperate, and also think about what evidence you can provide that you are ready to work honestly, openly, and for the long term. It would be best if you prepared a very thoughtful business plan describing how you can ensure the successful operation of your company for 2 to 3 years.
Compliance with AML/KYC policy
To be approved, your company must comply with KYC/AML requirements. It means you must create a system for verifying customers and tracking unusual activity from your company’s employees and customers. So, you need to change your software, hire a qualified AML officer to oversee this process, and provide reports to regulatory authorities.
The difficulty lies in correctly deciphering the requirements that your jurisdiction exposes. Before starting licensing, we advise you to contact independent experts who will check how your company meets the needs of the chosen jurisdiction and give recommendations on how to make changes.
In the end
As you can see, it isn’t easy to get a work permit on your own because here, you need to be well-versed in the peculiarities of the legislation of different countries. Gofaizen&Sherle is a company that specializes in licensing assistance. They can obtain a turnkey license or provide you with advice and help resolve individual issues. Regardless of the licensing stage, you can contact the specialists of this company and get qualified assistance.