Obtaining a Forex licence in Georgia

04.04.2024

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Introduction

Registering for a Forex licence in Georgia offers entry into a jurisdiction characterized by streamlined bureaucratic procedures, rendering it a favourable locale for commercial ventures. Georgia's appeal to investors stems from its minimal corruption, comparatively low tax rates, and liberal economic policies. The nation fosters a legal framework marked by transparency and receptivity to international commerce, expediting the licensing process. Regulatory authorities actively cultivate conducive environments for financial enterprises, including those seeking a Forex licence. Notably, Georgia's economy exhibits sustained growth, buoyed by investments across diverse sectors, particularly financial services.

The jurisdiction's allure for financial entities is further augmented by specialized tax regimes for international corporations, mitigating tax burdens under specific conditions. Moreover, Georgia offers robust investor safeguards and effective financial sector regulation, collectively fostering an environment conducive to Forex licence operations.

Hence, securing a Forex licence in Georgia strategically positions financial firms to expand their European and global footprint. The nation's legal and economic milieu facilitates seamless integration for foreign financial institutions, furnishing a stable foundation for growth and advancement.

Basic requirements and process for obtaining a licence

Possible types of legal entities for obtaining a forex licence in Georgia

Type of Legal Entity	Characteristics
LLC	Requires at least one founder (maybe a legal entity or individual) Management overseen by founders or an appointed director Suited for small to medium enterprises
JSC	Capable of issuing shares and soliciting investments through their sale Management conducted by shareholders via general meetings and board of directors Suited for large enterprises with investment potential
Branch	No need to establish a separate legal entity in Georgia Authorized to conduct all activities sanctioned by the parent company Appointment of a company representative in Georgia mandatory Ideal for foreign firms seeking expansion into Georgia

The procedure for acquiring a Forex licence in Georgia entails furnishing pertinent documentation to regulatory bodies, including the National Bank of Georgia, and ensuring adherence to criteria concerning minimum authorized capital and organizational structure. Selection of the business's legal form hinges on factors such as scale of operations, investment approaches, and strategic objectives within the Georgian market.

Procedure for registering a forex company and obtaining a licence

Acquiring a brokerage licence in Georgia entails a meticulous process that demands strict compliance with national legislation.

Step 1:

Determination of legal organization form

Initially, selecting a legal structure for the enterprise, typically involving the establishment of either an LLC or a JSC.

Step 2:

Company registration in Georgia

Subsequently, liaising with the National Agency for State Registration to formally register the company, paying heed to aspects such as nomenclature, essential documentation, and details of directors and shareholders.

Step 3:

Establishment of corporate account in Georgian bank

Facilitating financial transactions and substantiating the company's financial stability necessitates opening a business account with a local bank.

Step 4:

Submission of documents for licence acquisition

A pivotal stage involves compiling and submitting requisite documentation, including a business blueprint, evidence of authorized capital meeting statutory requisites, and credentials validating the proficiency of managerial and operational personnel.

Step 5:

Compliance verification with National Bank of Georgia standards

The denouement encompasses evaluation by the National Bank of Georgia to ascertain conformity with established standards and regulations governing forex brokers.

Step 6:

Licence acquisition and commencement of operations

Upon successful completion of all assessments and approval of the application, the company is conferred with a licence to conduct forex transactions in Georgia, paving the way for operational commencement.

Securing a brokerage licence in Georgia mandates thorough preparation and comprehension of legal intricacies. Attaining a licence unlocks expansive avenues for international market engagement.

Required documentation for licensing

Obtaining a forex licence in Georgia necessitates meticulous preparation and provision of a requisite document set. This phase entails collating documentation substantiating the organization's alignment with extant criteria and regulations.

Completed licence application conforming to National Bank of Georgia criteria.
Foundational enterprise documents, including the company's charter.
Certificate of company registration in Georgia, affirming legality of operations within the nation.
Documentation validating the presence of authorized capital meeting stipulated minimum requirements.
Business strategy, delineating the company's Forex market trajectory.
Profiles of managerial and pivotal personnel, comprising resumes and copies of educational certifications.
Internal control and risk management policies, alongside ancillary documents reflecting the company's anti-money laundering and anti-criminal financing policies.

The application for a Forex licence in Georgia mandates a conscientious approach to document preparation. Emphasis lies not solely on assembling a comprehensive dossier, but also on strict adherence to guidelines and regulatory statutes. Prudent execution and submission of requisite documents expedite licence acquisition procedures, facilitating seamless entry into the Forex market.

Authorized capital requirements

Securing a forex licence in Georgia mandates consideration of minimum authorized capital, ranging between 150K to 500K Georgian laris. This quantum is stipulated to fortify financial stability, bolster company reliability, and safeguard client interests.

Role and qualifications of managers and personnel

The process of applying for a Forex licence in Georgia is intricately entwined with the competencies of the company's managerial cadre and staff. Proficiency in this realm assumes paramount importance in gauging an organization's preparedness to meet Georgian regulatory benchmarks. The proficiency and professionalism of executives and staff constitute pivotal determinants for sustainable and prosperous operation as a Forex broker in the financial landscape.

In the context of Forex licence procurement in Georgia, considerable emphasis is placed on the managerial cohort's acumen and educational credentials. Principal figures, inclusive of the CEO and board members, are expected to possess substantive expertise and experience in finance, economics, or banking. This necessitates possession of specialized tertiary qualifications and a tenure of service within the financial domain, validated by pertinent documentation and endorsements.

Furthermore, attaining a Forex licence in Georgia mandates scrutiny of the qualifications and training of personnel directly engaged in financial activities. Regulatory bodies stipulate requisite knowledge and aptitude in trading, market analysis, and risk mitigation. Compliance with this mandate ensures delivery of premium services to clientele and effective management of investment hazards.

Beyond demonstrating professional aptitude, managers, and personnel partaking in the licensing process must exhibit integrity and probity, devoid of any criminal or financial malfeasance. This ethos underpins the cultivation of a transparent and accountable financial milieu, indispensable for fostering client and regulatory trust.

Thus, requisites for managerial and personnel qualifications constitute foundational pillars in the Forex licence acquisition process in Georgia, underscoring the significance of professionalism, experience, and integrity in navigating the financial landscape.

Taxation system for brokerage companies in Georgia

Securing a broker's licence in Georgia necessitates meeting regulatory prerequisites and comprehending the intricacies of the country's taxation regime, applicable to financial enterprises. Georgia distinguishes itself with a transparent and relatively straightforward tax framework, offering conducive conditions for commercial operations, including brokerage firms. However, while considering standard tax rates sans special allowances, understanding the primary tax types is imperative.

CIT, levied at 15% for companies, including those engaged in brokerage activities, pertains to net profits derived from economic endeavours. For brokers operating within the financial market, precision in comprehending and applying this rate is paramount for optimizing tax obligations.

VAT, standing at 18% in Georgia, constitutes a pivotal tax affecting corporate operations. This levy extends to various goods and services, encompassing certain categories of financial services. Brokerage entities must exercise caution regarding transactions subject to VAT to ensure accurate calculation and remittance of this tax.

The pursuit of a broker's licence in Georgia mandates a profound grasp of the local tax framework and ensuing state obligations. Proficient comprehension and application of standard tax rates enable companies to strategically plan operations, mitigate tax burdens, and streamline financial processes, thereby fostering sustainable market development.

Practical aspects of activity after obtaining a licence

Operations and services permitted by licence

In the trajectory of securing a brokerage licence in Georgia, firms gain authorization to provide an extensive array of financial transactions and services. These encompass diverse facets of forex trading and financial intermediation, furnishing clients with holistic international foreign exchange trading and investment solutions.

Type of service	Description
Consulting	Provision of expert advice and guidance on Forex trading and asset management.
Financial research	Conducting market analysis, forecasting, and research on financial instruments to support clients.
Investment management assessment	Devising and executing investment strategies, managing portfolios of securities, and other financial assets.
Processing of client orders	Facilitating purchase and sale transactions of currency, securities, and other financial instruments on behalf of clients.
Storage and accounting	Providing services for the storage of securities and other assets, including transaction recording and security assurance.
Lending and margin trading	Offering clients loans for conducting Forex trading operations in Georgia, utilizing margin trading.
Currency operations	Conducting transactions involving foreign currency, including exchange transactions and currency derivatives transactions.

Holding a brokerage licence in Georgia confers official authorization for the provision of the aforementioned services, constituting the linchpin for successful engagement in the Forex market. Licensure attests to the company's adherence to rigorous regulatory standards and reliability, thereby bolstering trust among customers and partners.

Bookkeeping and reporting

Obtaining a Georgian Forex licence marks a significant milestone for companies venturing into the international foreign exchange market. However, a pivotal facet of post-licensure operations in Georgia involves adherence to accounting and reporting requirements. Georgian legislation mandates stringent financial reporting and accounting standards for brokerage firms, aimed at ensuring transaction transparency and investor protection.

Within the purview of accounting and reporting, companies holding a Georgian Forex licence must maintain meticulous records of all financial transactions. This encompasses transactions involving currency trading, derivatives, and other financial instruments. Accounting practices must accurately reflect transactions in real-time and comply with international financial reporting standards.

Moreover, periodic submission of financial statements to pertinent regulatory authorities is obligatory. This includes quarterly and annual financial statements, as well as profit and loss statements, capital statements, cash flow statements, and other salient financial metrics. Such reports facilitate regulatory oversight of a company's financial health and adherence to established norms.

In addition to routine reporting, brokerage companies with Georgian Forex licences are subject to periodic audits. Audit processes, conducted by accredited audit firms, serve as an additional layer of verification, affirming the reliability of financial data. Audits engender customer and investor confidence by corroborating operational transparency and reliability.

In summation, accounting, and reporting requisites constitute integral components of the Georgian Forex licence acquisition and maintenance process. They foster an environment conducive to transparent and efficient company operations in the financial market, safeguarding the interests of all stakeholders.

Our organization's experts stand poised to furnish comprehensive support and requisite information indispensable for securing a Forex licence in Georgia. We offer comprehensive assistance at each stage of the process. To initiate collaboration, please select the most convenient communication method listed in the “Contacts” section on our website.