Forex License in Vanuatu - YB Case 2024

Forex License in Vanuatu

Forex License in Vanuatu

Forex License in Vanuatu

For entrepreneurs who plan to work in brokerage, Vanuatu is one of the best jurisdiction. Vanuatu provides an optimal regulatory environment for companies wishing to engage in forex brokerage and trading. We devoted this material to the analysis of the peculiarities of the regulation of the activities of securities dealers in Vanuatu.

Brokerage in Vanuatu: Pros

Brokerage in Vanuatu provides numerous advantages that make this country attractive for financial brokers and entrepreneurs. Below, we have listed the common benefits of obtaining a forex license in Vanuatu:

Loyal tax policy:
Vanuatu has one of the most favorable tax systems in the world. Under certain conditions, companies can be exempt from taxes for 20 years.
Easy License Procedure:
Obtaining a forex license in Vanuatu is considered easier than in some other countries, such as Cyprus or the UK. This allows companies to start their activities quickly and with fewer administrative barriers.
No Leverage Limits:
There are no leverage limits for brokers of financial products in Vanuatu. This means that brokers can offer clients products with higher leverage, which can be attractive to investors.
Opportunity to act as a market maker or STP:
Brokers with a VFSC license can choose which business model they want to implement. This can be a market maker or straight-through processing (STP). This approach provides flexibility in the management of brokerage activities.
Authorization for PAMM/MAM Accounts:
The VFSC permits the use of PAMM/MAM accounts, which allows for the provision of wealth management services, which can be important in attracting clients.

Financial activity in Vanuatu: Features of the legislative field

If you want to start financial activities in Vanuatu, you need to obtain a forex license in Vanuatu to trade in the securities market. Foreign companies must go through the authorization procedure and comply with the requirements of regulators.

The main regulator that issues licenses and controls the financial industry in the country is the Financial Services Commission (VFSC). The VFSC also maintains a register of companies in the country and oversees licensees.

You can also partner with the Financial Centers Association (FCA). You do not need to become a member of this organization to start trading forex. However, it is an empowered representative body that helps representatives of the insurance, banking, and financial sectors work closely with legislators, regulators, politicians, and the government. Although the FCA is a non-profit organization with no regulatory powers, it plays an important role in promoting the country as an attractive location for international financial companies. Its mission is to support the legal and regulatory environment for entrepreneurs.

The Financial Markets Association (FMA) is another specialized organization that has been established for financial dealer license holders in Vanuatu. Membership is also optional. This self-regulatory organization (SRO) works to improve the regulation of forex brokers in Vanuatu and promote the development of the industry.

It is important! Amendments to the Vanuatu Securities Dealers Act.
From October 16, 2021, all dealers of companies licensed in Vanuatu must comply with the relevant rules and regulations of the countries in which they trade in securities. Licensees can now obtain perpetual licenses. For companies that had licenses before 2021, there is a transition period.

Here's a concise action plan for obtaining a forex license in Vanuatu:

  • Entity Formation:
    • Establish a legal entity in Vanuatu for your forex brokerage.
  • Minimum Capital:
    • Ensure your company meets the VFSC's minimum capital requirements.
  • Physical Presence:
    • Set up a physical office and local staff in Vanuatu.
  • Key Personnel:
    • Appoint qualified individuals for key roles in your brokerage.
  • Compliance Procedures:
    • Develop robust compliance procedures, including AML and KYC policies.
  • Financial Statements:
    • Prepare and submit audited financial statements as required.
  • Risk Management:
    • Implement comprehensive risk management policies.
  • Technology Infrastructure:
    • Ensure a reliable technology infrastructure for your trading platform.
  • Application Submission:
    • Prepare a detailed application and submit it to the VFSC.
  • Approval Process:
    • Await VFSC's review and due diligence.
  • License Fee:
    • Pay the applicable license fees.
  • Ongoing Compliance:
    • Maintain compliance with regulatory obligations and reporting.
Remember that regulations can change, so always consult the VFSC or legal professionals for the most up-to-date guidance.

Here's a concise list of documents for preparing and submitting your forex license application in Vanuatu:

  1. Application Form: Complete the official VFSC application form.
  2. Corporate Documents:
    • Certificate of Incorporation
    • Memorandum and Articles of Association
    • Shareholder Register
  3. Organizational Structure: Provide an organizational chart of key personnel.
  4. Fit and Proper Test: Conduct background checks for directors and key employees.
  5. Financial Documents:
    • Audited Financial Statements
    • Bank Reference Letter
  6. Compliance Documents:
    • AML and KYC Policies
    • Risk Management Framework
  7. Technology Infrastructure: Describe your trading platform's technology.
  8. Marketing Materials: If applicable, provide samples complying with VFSC regulations.
  9. Regulatory Documents: Include licenses from other jurisdictions if applicable.
  10. Declaration of Assets and Liabilities: Provide your company's financial statement.
  11. License Fees: Pay VFSC application and license fees.
  12. Insurance Policies: Provide evidence of required insurance coverage.
  13. AML Compliance Officer: Appoint and provide details of your AML compliance officer.
  14. Criminal Record Checks: Submit checks for directors and key employees.
  15. Client Agreement: Draft a comprehensive client agreement.
Ensure your application is complete and compliant with current VFSC regulations.
For the most current and detailed information regarding obtaining a Forex license in Vanuatu, it is advisable to contact our experts who can provide guidance and support to entrepreneurs. We can assist you in navigating the regulatory landscape and ensure compliance with the latest legal requirements, making the licensing process smoother and more efficient.
Service order form
The field must be filled
How can we contact you?*
Please enter a valid e-mail
Please enter a valid phone number
Your comment