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Vanuatu is a great place for forex brokers. Getting a forex license there comes with many benefits, such as friendly rules, no taxes on profits, and low minimum capital requirements. This makes it a good choice for both new and established forex companies.

Vanuatu is not only a beautiful Mediterranean island but also an important financial and business hub in Europe. The Vanuatu Securities and Exchange Commission (CySEC) gives out Forex Licenses, which follow European standards to control financial market activities. Only companies that meet certain rules can offer brokerage services, manage investments, give financial advice, and handle other financial tasks.

For brokers wanting to work in financial markets, obtaining a forex license in Vanuatu is crucial. It allows for legal financial transactions, including forex trading and securities trading. Without a license, forex trading is illegal in Vanuatu.

Brokers must meet some simple requirements to get a license, which proves they operate legally. This builds trust with customers and investors, improving the company's reputation. A forex license from Vanuatu is also recognized internationally, helping brokers attract clients from other countries.

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Types of Forex Licenses in Vanuatu

Before late 2021, there were two main types of forex licenses that required yearly renewal. Now, due to changes in local laws, these licenses are perpetual, but the regulator can revoke them if rules are broken. Currently, there are four types of licenses, depending on your business needs:

A: For trading foreign exchange instruments.

B: For trading shares, precious metals, etc.

C: For companies dealing with CFDs (Contracts for Difference).

D: For virtual assets, but only after getting A, B, and C. If you want to work with digital assets in Vanuatu, you need a class D license. This requires a company to have a risk management system, $500,000 in capital, a local office, and a local employee.

In Vanuatu, there are three main types of licenses for businesses that want to trade in forex. These licenses are given by the Securities and Exchange Commission (CySEC) under Law 87(Ι)/2017.

Each license offers different levels of responsibility and what a company can do, like managing client money and following rules. Here is a simple guide to the available licenses:

Basic License: This license requires at least €50,000 in capital. It is good for companies that want to offer advice on investments or manage portfolios but do not hold clients' money or investments directly.

Standard License: With a minimum capital of €125,000, this license allows companies to process client trades directly through a system without holding the money or orders themselves. It carries some risk due to changes in liquidity and spreads.

Full License: This license requires at least €730,000 in capital. It allows companies to handle client trades and act as a counterparty, giving better liquidity and protection from market changes. The company is also allowed to hold client money and financial assets.

To choose the right license and understand the rules, it's best to get expert advice. Alparanjo can help explain the requirements and assist you in selecting the right license for your business.

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Vanuatu Forex license

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Advantages of a Vanuatu Forex License

  • Easy rules for applicants

  • Low minimum capital of $50,000

  • Full ownership by one person allowed

  • Popular choice, increasing customer interest

  • Fast processing time

  • Low application fees ($2,000)

  • No taxes on income earned outside the country

  • Opportunities to open bank accounts

Requirements for a Vanuatu
Forex License

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  • A local office
  • Proof of the founders' good reputation and economic education
  • Evidence of the source of capital and a clean financial record
  • Minimum share capital of $50,000
  • Verified documents for directors and proof of address
  • A realistic three-year business plan
  • Compliance with anti-money laundering policies
  • Record-keeping in Vanuatu
  • A risk management strategy
  • An independent auditor for financial reports
  • Procedures for handling customer complaints

Process to Get a Forex License in Vanuatu

1. Company Registration

  • Registration: First, register your company with the local registry. You need a local office and must follow regulations. Registration can be done online without being physically present.

  • Bank Account: You also need to open a corporate bank account to deposit the $50,000 share capital needed for the license and business operations.

  • Documentation: Gather the required documents, including:

    • Certified identity documents

    • Proof of address (like a utility bill)

    • Bank statement

    • CV of the applicant

    • Proof of no criminal record and bankruptcy

    • A three-year business and financial plan

    • A recommendation letter from a law firm

    • Proof of local office rental

  • Application: Complete the application form and pay the $2,000 state fee along with your documents.

    You might be denied a license if:

    • You provide false information or forged documents.

    • Your business plan is unrealistic.

    • Company directors have criminal records.

    • You haven’t transferred the share capital.

    • You miss government fee payments.

  • License: If everything is in order, the Vanuatu Financial Services Commission (VFSC) will issue the forex license, typically within 2-3 months. If more documents are needed, it may take longer.

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Taxation and Regulation of Forex License in Vanuatu

In Vanuatu, international companies set up by foreign investors, including forex brokers, can enjoy some tax exemptions, which means they pay 0% tax on:

  • Dividends

  • Royalties

  • Corporate earnings

  • Financial transaction fees

  • Inheritance

These companies also do not pay capital gains or export taxes, and many types of businesses are exempt from VAT (Value Added Tax).

If you plan to register a forex company, here are some financial details to consider:

  • Vanuatu has a low duty rate of 2%, making it very competitive in the region.

  • A 5% tax applies to real estate transactions, such as renting or buying office space.

  • You must pay 6% of your employee's salary to the National Reserve Fund for social security and pensions.

  • Currently, there is no double taxation due to 14 international agreements.

  • The authorities are discussing the possibility of introducing a personal income tax.

The main regulator for forex companies in Vanuatu is the Vanuatu Financial Services Commission (VFSC). The VFSC, created by the Vanuatu Financial Services Commission Act No. 35 of 1993, oversees the financial services industry, issues forex broker licenses, supervises companies, protects investors, and enforces anti-money laundering rules. The VFSC aims to maintain a fair and transparent forex market and to enhance Vanuatu’s reputation as a financial hub.

The VFSC operates under various laws:

  • Vanuatu Financial Services Commission Act No 35 of 1993: This law sets out the powers and responsibilities of the VFSC and promotes a favorable investment climate.

  • Counter Terrorist Financing Act No 13 of 2014: Aims to prevent misuse of the financial system with strict controls on transactions, requiring detailed customer checks and reporting of suspicious activity. Non-compliance can lead to fines or loss of license.

  • Regulation against Money Laundering and Terrorist Financing: This outlines procedures for financial institutions to ensure they comply with anti-money laundering standards.

  • Global Corporations Act [CAP.222]: Protects investors’ rights and ensures adherence to international standards.

  • Companies Act No. 25 of 2012: Governs all aspects of joint stock companies, focusing on shareholder rights.

  • International Limited Liability Partnerships Act No 39 of 2009: Provides a framework for managing partnerships and protecting members' rights.

  • Commercial Names Registration Act [CAP 211]: Ensures business names are unique and not misleading.

  • Stock Exchange Regulations: Protects investors and ensures the fair operation of the exchange market.

  • Digital Transactions Act No 24 of 2000: Supports e-commerce by creating a legal framework for online transactions.

  • Financial Intermediaries Regulation Act [CAP 70]: Sets standards for licensing and supervising financial intermediaries, ensuring professionalism in the sector, including forex brokers.

  • Licensing Norms for Financial Agents: Ensures transparency and accountability in the licensing process for financial intermediaries.

Any Questions

Frequently Asked Questions

Yes, forex is legal in Vanuatu if you have the right license. To trade in the forex market, you must get a license from the Vanuatu Financial Services Commission (VFSC).
Getting a Forex license in Vanuatu is very important because it lets you operate legally. It helps build trust with clients, protects investors, and can prevent legal issues and damage to your reputation.
The VFSC usually takes about 3 to 5 months to process a Forex license application if you provide all the needed documents. You should also allow extra time to prepare and submit everything required by the regulator.
If you break the rules, you can be fined up to 10 million VUV (about 80,000 USD). You might also lose your license, and it can cost a lot to get it back.
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