One of the first questions people ask when they decide to start a forex broker is, where do I base my company? The offshore regulatory landscape is constantly changing, with jurisdictions going in and out of fashion as rules and regulations change. Currently one of the most popular jurisdiction to base a FX broker is the island nation of Vanuatu.
Vanuatu is a small archipelago island nation in the southwest Pacific Ocean, roughly 1,100 miles northeast of Australia. Vanuatu was first colonized by the Spanish, and eventually jointly managed by the British and the French until the nation gained its independence in 1980. Vanuatu is an attractive offshore financial services center, with no income tax, withholding tax, capital gains tax, inheritance tax, or capital controls. It is popular jurisdiction for shipping companies, and for asset management firms.
Vanuatu has a very user friendly Securities Dealers Act, which allows individuals or companies to apply for a Securities Dealers License. The Securities Dealers Licenses allows the licensed individual or company to act as a broker or dealer on behalf of your clients regarding trading in equities, foreign exchange, bonds, commodities, as well as Contracts-For-Difference(CFDs.) Additionally, holders of the license are permissioned to act as portfolio managers, or provider portfolio management services for and on behalf of the license holder’s clients. The wide scope of investment activities permissioned for under the act, combined with Vanuatu’s attractive taxation laws, make registering for a Securities Dealers License an attractive proposition for both start-up and existing foreign exchange brokers.
Additionally, the Securities Dealers License may be issued on behalf of an international company – rather than a domestic company – with relatively few restrictions and relatively low cost. This is an attractive option for brokers who wish to obtain the license but do not wish to domicile an entity directly in Vanuatu. Whether the entity is domiciled domestically or offshore, there are no financial reporting requirements, and no taxation on the entity.
Most importantly, the cost for obtaining the Vanuatu Securities Dealer License is quite low. The capital requirement to obtain the license is only $2,000, which is extremely low compared to other offshore jurisdictions.
Securities Dealer Licenses can be issued in as little as two months, although that is dependent on the speed of the document collection phase of the Securities Dealer License setup. For more information about obtaining your Vanuatu Securities Dealer license, reach out to us today.