Forex (FX) is short for foreign currency exchange, the process of exchanging currencies for commerce or trading or other personal purposes.
The foreign exchange market is not a centralized one; rather it is performed by traders around the world. Where these licensed traders may open a company can largely depend on the jurisdiction’s taxation principles.
|What is a forex trading license?||A forex trading license is a legal permission granted by a regulatory authority that allows an individual or a company to engage in foreign exchange trading activities.|
Steps for obtaining forex trading license in Seychelles
The main steps involved in a forex trading license application in Seychelles include:
– registering a company in Seychelles with at least two shareholders, two managers, and a minimum share capital of $50,000;
– applying for a forex broker license with the Seychelles Financial Services Authority;
– setting up a corporate bank account and depositing the minimum share capital.
Application process for forex trading licensing in Seychelles
– submit the application,
– provide audited financial statements for the company and controlling owners,
– fill out a questionnaire issued by the Securities Authority,
– provide complete information about the company and its directors, shareholders, and beneficial owners
|Regulations||The Securities Act in Seychelles is the law governing the regulation of financial markets and securities trading in Seychelles.|
|Documents provided by the company when applying for a securities dealer license||
– audited financial statements for the past 2 years,
– audited financial statements for controlling owners,
– completed questionnaire issued by the Securities Authority,
– information on the company, including name, registered office, place of incorporation
|Documents provided by investors when applying for a securities dealer license||
To obtain a securities dealer license, investors must prepare additional documents, including:
– passports of company shareholders, directors, and representatives;
– information on the residency;
– articles of association, memorandum, and certificate of incorporation.
|Special License Company (CSL) in Seychelles||
To engage in forex trading in Seychelles, a company must first register as a Special License Company (CSL).
With a CSL status, a Seychelles company can offer advice on stock, securities, and forex investments to foreign clients.
|Approval time (approx.) for obtaining forex trading license in Seychelles||
8 – 12 weeks
Forex trading companies in Seychelles must submit their audited accounts to the Securities Authority within 4 months after the end of each financial year.
|Display of securities dealer license||It is mandatory for all license holders to exhibit their license at their business premises.|
|Can you renew forex license in Seychelles? (YES/NO)||
|How to change information from license||
The information provided in the license can be modified by notifying the Securities Authority in accordance with proper procedures.
|Forex trading in Seychelles IBC||
A Seychelles IBC can be used as a corporate structure for companies engaging in forex trading activities.
|Exemptions from obtaining a Seychelles forex trading license||
To be exempted from obtaining a Seychelles securities dealer license, an applicant must:
– be a member of a recognized foreign stock exchange and the Seychelles stock exchange,
– have a stable financial position, hold a valid license or permit for operations.
|Why choose Seychelles for incorporating a forex trading company||
Seychelles offers a range of corporate structures that can be tailored to suit the needs of a forex trading company.
A Seychelles offshore company also offers the Securities Dealers License, which allows buying, selling, trading securities, investment portfolios, and tax-free profits for Forex Brokers and CFD Brokers.
The forex trading license is normally used by brokers and companies which activate in the business of trading foreign currencies. Because the foreign exchange market registers fluctuations on a daily basis, this can represent a profitable occasion for offshore companies in Seychelles toexpand their assets.
Obtaining the forex trading license involves a simplified process, a matter where our specialists in company formation in Seychelles can provide information. The same team of advisors can help foreign business persons establish offshores in Seychelles.
What are the main steps for company formation in Seychelles?
Investors who want to open a company in Seychellesand to apply for a forex trading license will have to complete a set of steps, in a certain order. Our consultants have prepared a short description of the main steps one should follow in this sense:
- prepare the documents for the incorporation of the company;
- file de documents for the registration of the company;
- set up a corporate bank account at a bank in Seychelles;
- prepare the documents for the license application procedure;
- submit the application for the forex trading license;
- register for taxation and register with any other institution involved in the process;
- start developing the business activity and submit documents with the local authorities, as required by the law.
How the Forex trading license is used in Seychelles
To perform operations on the foreign exchange market, a forex trading license is necessary under certain conditions. For instance, if a company is registered in Seychelles and has brokerage business activities in the insular state, then such license is mandatory.
If all operations are outside Seychelles even if the company is registered in this country, then there is no need for a license in this matter, especially if the operations are in a state where a forex trading license is not imposed.
Please consider that the following matters are the main steps involved in a forex trading license application:
- register a company in Seychelles with at least 2 shareholders, 2 managers and a minimum share capital of $50,000;
- apply with the Seychelles Financial Services Authorityfor a forex broker license;
- set up a corporate bank account and deposit the minimum share capital.
We remind that the company registration process in Seychelles is subject to a fast incorporation regardless of the home country of the business person interested in this jurisdiction.
Regulations for forex trading company licensing in Seychelles
The Securities Act in Seychelles contains a broad range of services to which Forex trading can be assimilated. Included here are financial instruments like shares, bonds, debt instruments, futures. The Forex trading company can trade in Forex futures and in this case the provisions of the Act will apply.
When applying for a license for obtaining a securities license, these issues need to be taken into consideration by investors who set up a company in Seychelles:
- the application – the application for is to be filled in accordingly and any additional documents provided as per the specifications;
- information change – the data included in the application can be changed following a proper notification to the Securities Authority;
- renewal – an investor who opens an offshore company in Seychelles and applies for a securities license can renew it provided that the annual fee is paid;
- display – all license holders are required to display their license at their place of business in Seychelles.
When the company representative submits an application for a securities dealer license, the following documents are to be submitted:
- accounting statements – the audited financial statements of the company for the last 2 years and an exception is made when the company was incorporate din the last 12 months;
- statements for the controlling owners – the most recent audited financial statements for the controlling owners of the company that is applying, when applicable;
- questionnaire – as issued by the Securities Authority, filled in by the company directors, shareholders and beneficial owners.
- information – complete information on the company, the name, registered office, place of incorporation, complete address, etc.
In some cases, information about the prior information about the director’s activities is requested.
Below, we invite you to watch a short video on how to obtain a forex trading license in Seychelles:
For example, the Securities Authority may ask if the director has been licensed in any other jurisdiction where the law requires such securities business registration before he has decided to open an offshore company in Seychelles.
Another issue is if the director has a license suspended, canceled or revoked. Upon offering the information, the applicant also signs a declaration that the information is complete and accurate, to the best of his knowledge and belief.
Below, our agents who specialize in company formation in Seychelleslist a number of business conduct matters included in the Securities Act:
- independence – the licensee needs to be independent and impartial when providing services to clients;
- material interest – the licensee should inform the client if he has any material interest in a certain transaction;
- communication – when communicating with the client, the licensee shall do this is a fair and clear manner;
- risk understanding – the licensee shall make reasonable efforts to inform the client of the risks involved in a certain transaction;
- transparency – the company offering the trading services shall be transparent about its identity, business status or address.
When applying for a securities dealer’s license, the company representatives should be well aware of all the requirements and all the conditions for the future conduct of the business, as some of them have been outlined above.
One of our agents specialized in company formation in Seychelles can give you more information about the timeframe for obtaining the license or licenses and about other requirements, such as being allowed to offer the FX service on a platform (such as a website).
Besides the documents presented above, investors have to prepare other documents for the issuance of the securities dealer license. In the following section, you can discover such documents:
- the identity documents (passports) of the company’s shareholders, directors and representatives;
- information regarding the residency of the above mentioned persons;
- the articles of association, memorandum and certificate of incorporation of the legal entity;
- the certificate of good standing, the list of members and beneficial owners.
For the persons representing the company – the shareholders, directors, representative, further information will be needed.
The FSA is entitled to conduct Know Your Customer operations, and this means that the institution is allowed to request details concerning all the applicants with regards to their experience and expertise in this industry.
For this purpose, the shareholders, directors, representatives and any other important applicants will have to provide the next documents:
- the educational background and the qualifications obtained;
- latest CV experience;
- bank reports presenting the financial situation of the applicants;
- a proof of membership in various organizations (related to their professions and fields of expertise);
- tax clearance documentation.
The Special License Company (CSL) in Seychelles
The Seychelles Financial Services Authority oversees the financial sector in the insular state, including the brokerage activities for which a forex trading license is necessary.
In this sense, one should, first of all, register a Special License Company (CSL),a necessary status to perform businesses in the financial sector under a forex trading license.
Moreover, a company in Seychelles which obtained the CSL can offer advice to foreigners interested in the stock, securities, and forex investments.
Investments in Seychelles
The following presents some of the statistics regarding investments in Seychelles:
- foreign direct investments in Seychelles increased by approximately US$ 3.7 million in Q2 2018.
- according to the Seychelles Investment Board, the 2018 forecast was around US$ 139.2 million and this amount was surpassed by 14%, to an actual foreign direct investments inflow of 158.5%.
Investors can easily open an offshore company in Seychelles and engage in forex trading, provided that they present all of the documents for company registration and that the business functions in accordance with the local requirements.
The time required to open the company will be shorter than that required to obtain the license. We recommend that investors get in touch with our agents as soon as they have decided to incorporate in this jurisdiction.
What are the top Forex currency pairs?
Trading can occur in multiple currencies and, in most cases, the trading operations will be carried out in the top currencies used at a global level. Currency pairs (or Forex pairs) define 2 currencies which are commonly traded together.
The most popular Forex pairs refer to the currencies which are traded based on their importance/value. The 1st currency represents the base currency, and the 2nd one represents the currency that is quoted in relation to the other.
Currently, the most popular Forex pairs are the ones mentioned below:
- EUR/USD (Euro and the US Dollar);
- GBP/USD (the British Pound and the US Dollar);
- USD/JPY (the US Dollar and the Japanese Yen);
- USD/CHF (the US Dollar and the Swiss Franc).
Most of the transactions completed at a global level involve the 1st pair – the Euro and the US Dollar. It is estimated that a staggering 70% of all the transactions are completed in these 2 currencies.
The next level of pairs involve transactions with the currencies presented above, mixed with the following: 1) Australian Dollar, 2) New Zealand Dollar and 3) Canadian Dollar.
In trading, other currencies have become increasingly important, but they are still considered transactions that have a high financial risk: 1) the Brazilian Real, 2) the Russian Ruble, 3) the Mexican Peso.
Please mind that Forex markets usually operate everyday, throughout the entire year. However, each financial center has its own opening and closing hours. For instance the New York center will open at 13:00 GMT and will close at 22:00 GMT, while London opens at 08:00 GMT and closes at 17:00 GMT.
In matters related to forex trading license and offshore registration in Seychelles, we suggest you contact our team of company incorporation consultants in Seychelles for comprehensive assistance and support.
Please mind that the registration process for a Seychelles offshore company requires you to set up a corporate bank account, as presented above. Regardless of the type of company you will register, or the business activity of preference, when opening the account, you will have to deposit a capital.
The minimum capital requirement in Seychelles is of $10,000 and the balance must be kept at this value.
For other matters concerning the registration of a company, including the registration of a Seychelles IBC, you are invited to contact our consultants.
The IBC needs a minimum capital of $10,000, but investors will benefit from many tax exemptions once the company becomes operational (0% tax on dividends, interest, royalties and for other types of incomes generated outside the country).