A Forex broker licence in Gibraltar is required for companies that will engage in specific activities related to Forex Futures.
Company formation in Gibraltar is a straightforward process and entrepreneurs can choose to structure their legal entities here in order to be able to engage in trading activities.
Our team can help investors apply for the relevant Forex broker licence in Gibraltar, as well as assist throughout the company formation process, for those investors who wisht to start a business here.
Understanding the trading requirements, as well as any specific licensing conditions, is advisable even before starting the incorporation process and most necessary before engaging in trading.
Our team answers some questions below and assists investors who wish to apply for the Forex broker licence in Gibraltar.
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What is the Forex license?
Forex or FX is the foreign exchange market, and the regulations and licenses concern one’s ability to engage in this global marketplace for exchanging national currencies.
Operating a licensed activity is required by law and those interested in entering the foreign exchange field do need to observe the requirements for licensing, control and brokerage activities.
In Gibraltar, licensing is required for companies that trade on the foreign exchange market, however, part of these activities do not fall under the scope of the regulator, as briefly described below by our agents.
What is the Forex broker?
The Forex broker in Gibraltar is a financial services company that provides the services needed for the buyers and sellers of currencies.
Such a company in Gibraltar will provide solutions for Gibraltarian traders, as well as other clients, and will be incorporated as per the company formation rules in Gibraltar.
A Gibraltar company providing these services and acting as a Forex broker (with a Forex broker license), will observe the taxation and reporting rules in Gibraltar.
How is licensing performed for Forex activities?
The trading of Forex futures is licensable under the Financial Services Act, however, trading spot FX is not a regulated activity and it is not licensable by the Gibraltar Financial Services Commission.
This means that the need to obtain a Forex broker licence in Gibraltar will depend on the activities in which the company will engage in.
Our company formation agents in Gibraltar list the most important differences between trading currency futures and spot FX below:
- a futures contract is concluded for the exchange of currencies at a future date and with a fixed price;
- the spot FX contract is concluded for the delivery of the underlying currencies following the settlement date;
- the main difference lies in the fact that the physical exchange of the currency pair takes place at different times; for the spot FX, the exchange of the currency takes place at the point of trade or within a short period after;
- currency futures are usually used by global companies and their aim is to have protection against movements in foreign exchange rates.
The FX market is the largest in the world, even when compared to the stock market. We present a set of data below, according to a comprehensive survey on the global FX and OTC markets:
- in 2019, trading in FX markets reached $6.6 trillion per day;
- this was a $5.1 trillion growth compared to 2016;
- the US dollar was the dominant currency, on one side of 88% of the trades; the euro was the second most traded currency.
Entrepreneurs who wish to open a company in Gibraltar that will provide Forex broker services can reach out to our team of experts for complete assistance during incorporation.
Our team offers complete services, including those related to accounting.
We can also help entrepreneurs open a branch in Gibraltar.
Contact us for more information about our solutions and the services we provide.