Registration of an unregulated Forex company

In order to find out which jurisdictions are in greatest demand for unregulated Forex firms, and whether the practice of registering in an offshore remains relevant today, a survey was conducted among registrar companies


Jurisdictions popular for Forex Brokers

The survey identified offshore jurisdiction that is most popular among unlicensed companies. It turned out to be Saint Vincent and the Grenadines. The Marshall Islands and Dominica are also very popular, which are not inferior to the SVG in terms of conditions.

The popularity of this jurisdiction is because the offshore zone offers low or zero taxation, and some very beneficial benefits. In addition, unregulated brokers are not required to comply with certain specific activities. They are also not required to engage in activities that regulated brokers do on a regular basis. For example, regulatory authorities often visit licensed companies; however, no one will come to unregulated brokers in order to check their reports and documents.

Yet, in order to work in this jurisdiction, brokers will need experience in the Forex market and considerable professional knowledge. Most companies register here that are just starting their activities – those for which obtaining a license is not so important. Oftentimes, being licensed is part of a good marketing strategy and is a great way to raise your profile in the eyes of a trader. For a novice broker, the money saved on licenses will be useful for other more useful and necessary activities.

Offshore + European jurisdiction: advantages and disadvantages

One of the special ways brokers use is the company – Offshore + Europe link. This scheme involves the creation of two companies, one of which is registered in the European zone, and the other – in the “offshore”. The first is usually registered either in the UK or in Estonia. After that, an agency agreement is concluded between these companies, and the company registered in the European zone takes on the role of the payment agent of the offshore company. Using this method, the broker is able to work with electronic banks and payment systems operating internationally, such as E-payments and Paysera.

Of the shortcomings, one can single out the time that will need to be spent on registering a company. On average, the process takes 2-4 weeks, but the total time depends on many factors. Another disadvantage is that it is becoming increasingly difficult for a European firm to open an account in a physical banking institution. This is because Mastercard and Visa have become more demanding for such a bundle. In addition, the UK FCA is also more aggressive towards Offshore + Europe, as unregulated brokers use a UK broker company to promote, deliberately misleading consumers.

In addition, many traders are convinced that there are risks involved in trading with unregulated Forex brokers. However, as a rule, these fears are unfounded and not justified. Many offshore companies provide highly professional services and reliable products.

Thus, registration in an offshore jurisdiction has its pros and cons. The main advantage attracting brokers to such unregulated areas is tax privileges, in particular minimum or zero tax rates, which helps to reduce operating costs significantly. To put it another way, unregulated Forex brokers who have chosen the best strategy can make the most of the lack of an official license, saving money and channeling it towards activities that are more important.