BVI Forex License

The British Virgin Islands are a British overseas territory in the eastern Caribbean Sea. Besides the main 4 islands, the country comprises 32 smaller islands, which have gained respect as one of the most highly regulated yet internationally white-listed financial services jurisdictions in the world. Today, it’s gaining recognition as a preferred destination for those looking to enter the forex market by obtaining a forex license governed by an accessible but robust and reputable regulatory framework.

Advantages of the BVI Forex License

The BVI legal system is based upon English common law, offering businesses and investors alike a familiar and sound legal environment. The country has a relatively stable legal and political environment and enjoys a very well-developed economy, driven chiefly by its financial services industry, which is highly regulated and thus very highly regarded on the international scene. Summary Businesses can enjoy modern infrastructure such as reliable telecommunications, internet connectivity, transportation, and banking services.

Compared to other jurisdictions friendly to forex, the BVI boast a relatively easy and smooth process of licensing. This decreases the barrier to entry both for new and already operating forex businesses, thus making it more accessible for a wide circle of operators. At the same time, it offers the robust regulatory environment that is so much needed for gaining credibility with clients and partners in all parts of the world. Thanks to good standing worldwide, performing activities from the BVI allows you to provide services for a wide range of clients from Asia to Europe and the Americas and beyond.

The biggest positive aspect of having a BVI Forex license is that it opens up avenues to take advantage of favorable BVI’s tax regime that could substantially increase the profitability and cash flow of a company. There is no Corporate Income Tax on company profits, Capital Gains Tax on the sale of assets or investments, and Withholding Tax on dividends, interest, royalties, or any other payments made to non-residents. Furthermore, no VAT is levied on products and services sold within the BVI. On the whole, the country has simplified and streamlined its taxation procedures; thus, for businesses, it is not at all difficult to fulfill all the tax-related compliance matters.

The BVI does not have any currency exchange controls, which generally imply restrictions or regulations against the conversion of local currency into foreign currency or vice-versa. Where there are no controls, businesses and individuals can easily transact internationally without lengthy approvals or paperwork. This has made it easier for companies in the BVI to enjoy greater flexibility with respect to handling their money. They can, therefore, easily transfer cash between the different currencies with a view to optimize cash flow, minimize risk, and capitalize on international business opportunities.

Advantages

Forex Regulations in the BVI

The BVI Financial Services Commission is the regulatory authority of the BVI responsible for oversight over the operation of financial services within the jurisdiction. The authority takes responsibility for licensing forex, ongoing supervision of license holders, reduction of financial crime, and prevention of market abuse. On a global basis, the authority is in very particular good standing when it comes to one of the best and most transparent regulatory frameworks. A BVI license for forex services acts as proof to clients and partners that the company operates in a highly regulated environment, thus commanding trust and respect.

The following legal acts and regulations are applicable to the BVI forex businesses:

• The BVI Financial Services Commission Act of 2001 (FS Act of 2001)
• Securities and Investment Business Act of 2010 (SIBA of 2010)
• Anti-Money Laundering Regulations of 2008 (AML Regulations of 2008)
• Foreign Exchange (Control of Exchange Rate Movements) Regulations of 1974 (FER of 1974)
• Consumer Protection Act of 2010 (CPA of 2010)
• BVI Business Companies Act of 2004
• The BVI Business Companies (Amendment) Act of 2022 (the BC Amendments of 2022)
• The BVI Business Companies (Amendment) Regulations of 2022 (the BC Regulations of 2022)
• The Financial Services (Prudential and Statistical Returns) Regulations of 2008

The FS Act of 2001 establishes the legal framework through which the BVI FSC is constituted as the regulatory body for financial services, including foreign exchange trading, within the jurisdiction of the BVI. It prescribes the conditions and procedures under which the relevant licensees and registrants, including foreign exchange brokers, are licensed and registered, and it lays out the terms upon which a license is granted or withdrawn. The act also addresses the provision related to confidentiality and information sharing; that is, under what circumstances and how the BVI FSC shall share information with other regulatory authorities and companies in and outside the BVI. Importantly, the AML/CFT framework also has its basis under the FS Act of 2001. It enables the BVI FSC to determine AML/CFT regulations and directives and ensures that financial institutions implement appropriate AML/CFT measures.

The SIBA of 2010 provides the basic regulatory framework for conducting securities and investment business in the BVI, including providing investment advice and dealing in forex contracts. It prescribes, among other things, the principles concerning licensing of forex brokers and investment firms and its relevant regulatory regime. The Act minimum capital requirements from licensable businesses ensure that a business has sufficient financial resources to enable the conduction of business safely. It also mandates that corporate applicants for licenses meet the fit and proper criteria, being competent, of integrity, and financially sound enough to carry on securities and investments business activities. SIBA addresses cross-border activities of licensees and prescribes mechanisms for cooperation with foreign regulatory authorities so as to promote consistency in international regulation.

Types of the BVI Forex Licenses

The BVI FSC issues several categories and subcategories of forex licenses for companies willing to conduct forex activities in or from within the BVI. Each of them has its own purpose and affordances, and you may choose a BVI forex license depending on the nature of the forex services you intend to offer. If you are not sure which of the following licenses will fit your business goals and scope best, please feel free to request our attorneys’ personalized advice here at Regulated United Europe so that you start off on the right foot.

Non-exhaustive list of BVI license categories:

The BVI FSC usually issues a forex license for one year, though tenures can be different based on the type. Processes for renewal also differ with the type of license granted, but in general, forex license holders should apply for the renewal prior to the date when it expires and show compliance with the requirements set by the regulator and meet the financial obligations.

British Virgin Islands (BVI)

Capital	Population	Currency	GDP
Road Town	30,030	USD	$34,200

Requirements for Applicants of the BVI Forex License

To that effect, you would need to establish a company in the BVI to apply for a BVI forex license, such as the BVI Business Company, International Business Company, LLC, or any other proper form of corporate structure. The kind of legal business structure would depend on various aspects, including but not limited to size, complexity, operational structure, and ownership of the business. We would be glad to support you regarding the incorporation process if you wish to make a fully informed decision.

Other requirements for BVI forex license applicants are as follows:

• The minimum capital is considered on an individual basis, and thus it can vary between 50,000 USD and 1 mill. USD (approximately 47,000 – 931,000 EUR) for a BVI forex company.
• Initial license fee – from 1,200 to 10,000 depending on license type.
• Applicants and key personnel who should be directly involved in the forex business need to be at least fit and proper, thus proving their competence, integrity, and good financial standing.
• It is very important to have an internal AML/CFT policy and procedure in order to prevent money laundering and terrorist financing; therefore, due diligence for client onboarding must be implemented.
• The applicant must have an appropriate internal technology infrastructure that includes a trading platform, cybersecurity measures, and disaster recovery plans. The applicant will need to have in place an appropriate risk management framework that covers policies on managing market risks, credit risks, and operational risks. The applicant shall be required to comply with relevant regulatory capital adequacy ratios and the necessary capital buffers laid down by the BVI FSC. It shall maintain necessary internal systems for maintaining proper records and reporting to the authority.
• Full familiarity with and preparedness to obey all the applicable BVI financial services laws and regulations, including those particular to forex trading.

Documents needed in support of an application for a forex license in the BVI:

• Certificate of Incorporation.
• Articles of Association.
• Memorandum of Association.
• Application form officially provided by the BVI FSC.
• A comprehensive business plan relating to the objectives of the forex business, strategies, and risk management procedures, and compliance measures.
• Documentary evidence that you maintain adequate professional indemnity insurance and other insurances that would be relevant to provide cover for clients and mitigate risk appropriately.
• CVs of the shareholders and key personnel involved in the forex business.
• Copies of passports of the shareholders and key personnel involved in the forex business.
• Proof of residential address of each shareholder and key member of staff.
• Financial statements and projections of the business include profit and loss forecasts which are to reflect financial stability and viability.
• Bank references, proof of sufficient capital.
• Detailed description of the technology infrastructure: trading platforms, cybersecurity measures, disaster recovery plans.
• Documentation of internal AML/CFT procedures and policies, including KYC processes.
• Compliance manuals indicating how the forex business will observe the relevant financial services laws and regulations regarding its application.
• A documented risk management framework, showing the manner in which the business will manage the market risks, credit risks, and operational risks.
• A Business Continuity Plan that reflects the way the business will ensure business continuity in the event of sudden or unplanned incidents that may cause a disaster.
• Proof of paid application fees.
• Statements of how the company will implement its record-keeping and reporting procedures, including how it will keep records on behalf of and report back to the BVI FSC.

BVI Forex license

How to Establish a Forex Company in the BVI

As discussed above, based on the specific specifics of your proposed forex business operations, various alternative structures are legally available to you. The majority of forex business owners incorporate a BVI Business Company BC, due in large part to that type of formation offering flexibility in structuring, being generally quite easy to form and providing a tax haven for your business. Such a BVI BC can conduct any kind of activity, including forex trading, and can be used for full-scale forex brokerages, advisory firms, or any other kind of forex-related service. In practice, such a company can be incorporated in as little as 2 working days, assuming that all the documents required for incorporation can be prepared well in advance, which itself takes a week or more.

The main requirements for a BVI BC are as follows:

• At least one shareholder.
• At least one director – the minimum may vary depending on the type of forex license.
• A registered office in the BVI.
• A registered agent in the BVI that will accept legal and official documents on behalf of your BVI BC.

On the other hand, BVI BCs are not obliged to hold shareholder’s or director’s meetings in the BVI, and an Annual General Meeting is not required either. Meetings may be held by telephone or other electronic means, and directors and shareholders may vote by proxy. BVI BCs are not typically required to prepare and file audited financial statements, although they must maintain such records as are sufficient to show and explain the company’s transactions and to disclose with reasonable accuracy the company’s financial position.

To incorporate a company in the BVI, you may wish to do the following:

• Selection and reservation of a special, compliant, and distinguishable name for the company.
• Selection of a registered agent in BVI.
• Selection of an office in the BVI.
• Preparation of all the necessary documents with their certified translation and notarization.
• Paying the required incorporation fees and other forwarded expenses.
• File presentation of all necessary documents with your registered agent to be capable of registering your company with the BVI Registry of Corporate Affairs.
• Open a corporate bank account for business transactions and for managing your funds.
• Where your forex company plans to hire non-resident employees in the BVI, such a company should seek work permits from the BVI Labour Department.
• It will also be enrolled with the BVI Social Security Board for purposes of paying social security.

The following documents are usually required for the incorporation of a forex company in the BVI:

• A Memorandum of Association.
• Articles of Association.
• Proof of having a registered agent.
• An application form, which is provided by the registered agent.
• Proof of registered address in the BVI.
• A certificate showing your reserved business name.
• Copies of passports of all directors, shareholders, and beneficial owners.
• Proof of residential addresses of all directors, shareholders, and beneficial owners.
• Professional references and/or letters of reference.
• Completed due diligence forms, provided by the registered agent.
• Share capital structure: number, classes of shares, and their par value, if any.
• Proof of payment of the governmental incorporation fee: 450 – 1,200 USD (approximately 420 – 1,100 EUR), depending on the number of shares.
• Fully executed consent letters of directors and shareholders, expressing their acceptance for being appointed as directors/shareholders in the company.
• Power of attorney, in the case if you appoint any person to act as your attorney and to complete the process on your behalf.

Best Forex Brokers in British Virgin Islands