One of the most important decisions you have to take before beginning your career as a FX broker is where to establish your new business. Potential brokers usually opt for registering the company in locations that require a low amount of initial capital from the brokerage company and the taxes are lower, e.g. Cyprus. How to set up your business in these countries? Below you’ll find some tips that will help you to do it.
Setting up FX brokerage company in Cyprus, which is a preferable location due to the fact that the amount of initial capital you need to have is a lot lower than in other countries (from €40,000) and the corporate tax is only 12.5%, requires the submission of the application for Cyprus Investment Firm Licence, which costs €3,000 and takes about 6-8 months. However, there is an extra fee collected, but it is individually calculated on the basis of services that are to be provided by the broker.
The British Virgin Islands are even more popular among Forex brokers because there’s no profit tax or corporate tax, which makes the country “the tax heaven”. Therefore, according to statistical data, more than every second FX brokerage company is established there. In order to do the same, you have to apply for BVI Financial Services Commission License which costs about $1,500, the same amount as the renewal fee, and the initial capital has to be $30,000. Obtaining the license may take about 4 months.
Another popular location for setting up a forex brokerage is Belize. Here, again there’s no corporate tax, and it takes only 6 weeks to get a license. The fee for an application to the regulatory agency is $1000, but annual license fee is quite expensive and costs $25,000.The minimum initial capital the broker needs to have is $500,000.