High-risk activities: reducing business risks

Many people still consider Forex to be a high-risk business. Problems are being predicted for both traders and brokers. Traders are frightened by “kitchens” and fraudulent companies, brokers – by problems with the law in the countries where they work. Before we consider the various risky activities, let’s look at what “high risk” is.

What is high-risk business?

High-risk activities can be characterized as onу word – difficulties. They arise because high-risk merchants are being projects, whose work is associated with high risks. Once approved by a bank or other financial institution, these projects cannot qualify for traditional processing agreements. In order to be able to accept card payments from the customers within the specified area, a company needs to go through a complex process, with many “pitfalls”, features and nuances.

Each transaction of a high-risk business is considered by acquirers separately in each specific case. But there is a general list of signs of high-risk activity:

• a large percentage of refunds on payments
• sale of goods or services in countries with high risks of financial loss and fraud in this area (Afghanistan, American Samoa, Bahamas, Botswana, North Korea, Ethiopia, Ghana, Guam, Iran, Iraq, Libya, Nigeria, Pakistan, Panama, Puerto Rico, Samoa, Saudi Arabia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, Virgin Islands and Yemen)
• no credit history or negative credit history
• monthly sales of over 20,000 US dollars
• the size of each credit card transaction from 500 US dollars
• trading and accepting transactions in several foreign currencies

Betting

Betting is the conclusion of a bet on the outcome of a sports or other event. Each outcome has its own coefficient-it is set by the bookmaker, depending on how predictable the result is.

Every day, thousands of competitions in various sports take place in the world. There are also non-sports events for which forecasts are also accepted: politics, cinema, shows, natural phenomena.

Previously, bets were accepted in special clubs personally or through intermediaries. Now the betting process has become much easier: most bookmakers offer their services on the Internet, so a bettor (a person who makes sports bets) can bet without leaving home.

One of the types of betting – sports betting – is often referred to as gambling, but betting has big differences from casinos or slot machine halls. If in playing roulette you need only luck, and nothing depends on the player, then betting requires knowledge of statistics, the ability to analyze and experience. There are many factors to consider: the fitness of the players, the line-ups and even the weather during the match.

Gambling: the will of chance

The term gambling, as a more general one, has several meanings, but they all have one thing in common – this is a game of chance. If you look from the point of view of the financial market, the term will sound like this: gambling is a type of financial activity in the foreign exchange market, in which income depends entirely or mainly not on the experience and knowledge of the trader, but on the case.

Casinos and other gambling games have always attracted passionate gamblers. But they began to gain the greatest popularity with the spread of the Internet. The audience of virtual gambling games is very wide, they are available to users in almost any country, regardless of whether they bring profit to the budget or are illegal. Analysts predict the annual growth of global online gambling, so the trend towards its spread will only strengthen.

The main types of entertainment offered by gambling sites are: poker, casino, bingo, lotteries.

How to reduce risks

To stay afloat, a high-risk company must structure and expand its business on time. For this purpose, holdings or operating intermediary companies are usually created. They are used to trade on behalf of foreign companies in different jurisdictions and to receive dividends. In short, they act as an agent of a high-risk company.

The business manager distributes the work and risks of the companies, assessing possible legal and financial difficulties. As a result, when one or more merchant accounts of payment systems are closed or when legal problems arise, the company will be able to continue working almost in the usual mode.

For example, if a digital business owner provides services over the Internet and makes a profit through payment systems, he should have several accounts in different systems. This way, he will be able to control and distribute money traffic. This allows you to keep the level of funds returned to the buyer at a minimum and at the same time keep the distributed funds in such an amount that will be invisible to the tax control authorities.

Proper structuring should not be considered as a way to avoid taxes or hide capital, but as a necessary way to plan the future activities of a company in difficult conditions. Without this, it just won’t be able to function. In this case, we are talking about the following components of any high-risk segment:

• company structure – the right choice of jurisdictions;
• competent drafting of contracts in the chain of companies;
• ensuring smooth acceptance of funds from clients – connecting several payment systems.

However, there is no ready-made template that will fit in any situation. In each case, you first need to understand how the business structure operates, what its composition is, what tasks are set by the business owners. It is difficult for the owner of the company to take into account all the nuances and collect all the necessary documents on his own. For this work, it is better to contact professional intermediaries.

NewBroker will help you choose the right jurisdiction and properly structure your business. You can ask questions to our specialists or order a service by phone +7 (495) 108-07-97, by e-mail info@newbroker.org. You can also submit a request on the website http://www.newbroker.org/contact/.