More and more new brokers are choosing to establish their brokerages in St. Vincent and the Grenadines, an island in the Caribbean. This jurisdiction has become very popular due to its favorable regulatory regime for brokers, and is a cost and time effective solution for new brokers, or regulated brokers who are looking to establish an offshore entity for certain parts of their business or flow. This blog post will examine the requirements for establishing a broker in St. Vincent, and the pros and cons for establishing a legal entity in St. Vincent for managing your brokerage business.
Brokerages looking to establish themselves in St. Vincent in the Grenadine typically setup what is called an International Business Company (IBC.) which is a type of legal entity created by the Financial Service Authority (FSA) in St. Vincent. IBCs are used for a variety of purposes, and are popular with many different types of businesses aside from Forex Brokerages. While many brokerages based in St. Vincent hold themselves out as being regulated by the St. Vincent FSA, this is not technically correct. St. Vincent IBCs are authorized for investment activities by the FSA, so to remain in compliance brokerages should hold themselves out as “authorized” rather then “regulated.” This is a small distinction though, and will not impact most clients perceptions about the regulatory status of the brokerage business.
Establishing a St. Vincent IBC is a quick process. The paperwork requirements for getting the brokerage up and running are minimal. To get started, the owners and directors of the proposed new entity most compile notarized copies of their passport, proof of residency (POR) as well as a reference letter from a financial institution or advisor testifying that the applicant for the IBC is in good standing.
Once the required documentation has been compiled, the application will be submitted by a lawyer in St. Vincent. Pending document approval, the IBC should be issued in less then five business days! Most delays in getting the IBC setup normally occur during the document collect process. Once the IBC is created, the broker can use the IBC entity to apply for Payment Service Provider accounts to process payments for their new brokerage! If you are interested in obtaining a quote for registering a St. Vincent IBC, please reach out to us today!