Registration of an Unregulated
The NewBroker team has conducted a survey among registrar companies to find out which jurisdictions are in demand for “unregulated Forex” and whether the practice of registration in the offshore is relevant at the moment or not.
Popular jurisdictions for Forex-brokers
In the survey, we established the most popular offshore jurisdiction with Forex companies without a license, which is Saint Vincent and the Grenadines.
This popularity is due to the fact that in the offshore zone, there is low or zero taxation offered and various benefits are provided. In addition, unregulated brokers are not required to go through certain activities and engage in those activities that regulated brokers should go through on a regular basis. For example, regulatory authorities often organise inspections of licensed companies, but no one will knock on the door of unregulated brokers to check their documents and accounting.
However, to work in this jurisdiction brokers will need professional knowledge and experience in the Forex market. As a rule, start-up companies, for which obtaining a license is not always important and necessary, are registered here. Often, having a license is more of a matter of marketing and it enhances the status in the eyes of the trader. As for a beginner broker, they can distribute the money saved on a license more efficiently. For example, in the Russian market, Forex brokers attract their customers with various bonuses, gifts, low spreads and profitable affiliate programs.
Offshore zone + Europe: pros and cons
A special demand among brokers is a combination of companies from SVG + Europe. In this scheme, two companies are created, one of them is registered in the “offshore” zone, and the other - in the European one. As a rule, the second one is registered either in Estonia or the UK. Then, an agency contract is concluded between the two companies, and the company in the European zone acts as a payment agent of the offshore one. This registration method allows the broker to work with international payment systems and electronic banks, such as Paysera or E-payments.
The average registration price of the SVG + Europe combination is 3600 euros. Such a low cost is another reason for the popularity of this combination.
The time required to register a company could be seen as a disadvantage since the total term depends on a number of factors, but on average the process lasts from 2 weeks up to one month
Another drawback is that it is becoming increasingly difficult for a European company to open an account in a physical bank at the moment. This is due to the fact that Visa and Mastercard have become more demanding to the combination of European + SVG companies. Moreover, the UK’s FCA has recently been very aggressive towards such companies because “unregulated” brokers use the UK company as a “broker” for promotion, deliberately misleading customers via the Internet. Therefore, many registrars, including NewBroker, open accounts for unregulated Forex in electronic banks (Paysera) or EMR.
There is also a widespread belief among traders that trading with unregulated Forex brokers may pose a certain risk. But often, such fears are unjustified. Many offshore companies can provide highly professional services and reliable trading products.
In general, offshore registration can have its pros and cons. One of the main advantages that attracts brokers precisely to unregulated jurisdictions is the tax system. Minimal taxes or their absence can significantly reduce the company's operating expenses. In other words, the best unregulated Forex brokers can benefit from the lack of a license by saving the money and using it for more important purposes. For instance, for marketing purposes.
Help with registering a company
NewBroker offers registration services for an unlicensed Forex company and a European payment agent, as well as assistance in opening a bank account for them. By this moment we have helped to open more than 70 brokerage companies that are working successfully through offshore organizations.
The full registration package of an offshore company includes opening of a Forex company in an unregulated jurisdiction - Saint Vincent and the Grenadines, as well as remote opening of an account in one of the European banks. As part of the package we create a modern website with financial services and a version for smartphones, connect a payment system to receive funds via Visa/Mastercard on favorable terms. Also, the cost of the service includes a software package from UTIP, which in its turn includes one of the best Forex platforms, Trader’s Room and a CRM system.
If you have any questions concerning registration of an offshore company or you need to open an account for an unlicensed company in a European bank using the SVG + Europe combination, then call us by phone.
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