A Forex broker licence in Cayman Islands is required for legal persons that will be involved in and provide services related to foreign exchange, the buying and selling of foreign currencies. Investors who are interested in setting up a Cayman Islands company that will require a FOREX license after its incorporation can reach out to our team for information on the registration steps. The process is not a complicated one, however, foreign investors can benefit from working with a local team of specialists, such as our own, if they cannot be present in the Islands.
|Forex broker obligation in Cayman Islands||Subject to control and licensing by the local authorities|
Forex broker licence in Cayman Islands for foreign brokers (Yes/No)
Forex broker licence in Cayman Islands issuing authority
The Cayman Islands Monetary Authority (CIMA)
|Relevant laws governing brokerage||The Securities Investment Business Act (SIBA) and other CIMA regulations|
|Special license for brokers||
Securities Investment Business Licence
|Laws to be observed for licensing||
Compliance with the SIBA and anti-money laundering regulations
|Conditions for licensing||
– relevant skills and knowledge to conduct the business,
– appropriate facilities and records
Fit and proper test for individuals occupying management and senior positions
|On-site inspection for licensing||
A brief inspection is possible and at the discretion of the authority.
– filled-in application form,
– proof of fee payment,
– supporting documentation
|Broker dealer application fee||
|First grant fee for a broker dealer in Cayman Islands||
|Annual broker dealer renewal fee||
|Forex broker licence issue time (approx.)||
|Reasons to apply for a Forex broker licence in Cayman Islands||
– the Cayman Islands is one of the most popular offshore centers,
– business-friendly regulations,
– transparent requirements,
– full foreign ownership in case of company formation,
– easy offshore company set-up
Our Cayman company formation agents describe the main requirements for licensing as well as the licensing process. Please note that the regulatory authorities examine each application by means of a formal review that takes into account numerous factors.
Upon request, our team that is specialiazed in opening a company in Cayman Islands can assist with the incorporation of a corporation that will be subject to licensing, and follow through with the licensing process and requirements as part of the overall incorporation package.
You can reach out to us if you need specialized assistance with company incorporation in the Cayman Islands.
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Company formation in Cayman Islands
Company formation is the first step handled by investors who then wish to engage in and provide financial services activities, such as trading in foreign currencies on the foreign exchange (forex) market.
Before the company can apply for a Forex broker licence in Cayman Islands, it needs to be registered in the jurisdiction.
According to law, the following legal entities can engage in securities investment businesses:
- Companies incorporated under the Companies Law;
- General partnerships and limited partnerships registered under the Partnership Law;
- Exempted limited partnerships;
- Foreign companies;
- Limited liability companies incorporated and registered under the Limited Liability Companies Law.
Our agents specializing in company formation assist foreign investors who wish to open a company in the Cayman Islands.
Upon request, our team can handle the incorporation phase and prepare the needed documentation to follow through with the licensing for the purpose of conducting Forex trading activities.
As needed, our team also offers virtual office packages, which can be used by Forex broker companies. The advantages of the virtual office can be described in more detail by one of our team members.
How to obtain a Forex broker license
To obtain a Forex broker license in the Cayman Islands, you will need to apply to the Cayman Islands Monetary Authority (CIMA). CIMA is the regulatory body responsible for issuing licenses to financial service providers, including forex brokers.
To apply for a license, you will need to submit a detailed application to CIMA, including information about your Cayman Islands Company, your financial resources, and your compliance with anti-money laundering and counter-terrorism financing regulations. You will also need to provide evidence of your financial stability, such as audited financial statements and proof of insurance.
In addition to the application process, you will also need to meet certain operational requirements to obtain a Forex broker license in the Cayman Islands. These requirements may include: maintaining adequate capital, establishing and maintaining policies and procedures to ensure compliance with regulations, and conducting ongoing training for employees.
Conditions for obtaining the Forex broker licence in Cayman Islands
As part of the licensing process, the applicant will need to comply with several conditions set forth by the Cayman Islands Monetary Authority. Our team briefly lists these below:
- Comply with the provisions of the Securities Investment Business Law, and its subsequent amendments and additions;
- Comply with the requirements of the Anti-Money Laundering Regulations (the 2020 Revision);
- Not perform activities that are against the public interest;
- Have employees with the relevant skills, knowledge and experience;
- Have senior officers and managers that are considered fit and proper.
The advantages of obtaining a Forex broker license in Cayman Islands
In order to find out if the advantages of obtaining a Forex broker license in the Cayman Islands are beneficial for you, it is advisable to consult with a legal expert in order to obtain legal advice. We mention a few of the benefits of obtaining a Forex broker license:
- Regulated environment: The Cayman Islands Monetary Authority (CIMA), the official institution that deals with the financial industry in the Cayman Islands, is known for being respectable and regulated.
- Tax benefits: A major cost-saving advantage is that the Cayman Islands demands no personal or corporate income taxes
- Access to the international market: The Cayman Islands is considered a respected international financial center. Having a license there can open up access to a universal client base and raise profit.
- Legal System: The legal system of the Cayman Islands is based on English Common Law, being thus safer and more predictable than other legal systems.
- Cost-effective: The initial investment is lower when starting a brokerage in the Cayman Islands
- Confidentiality: The confidentiality laws in the Cayman Islands offer a higher degree of confidentiality and safety.
What are the steps to obtain a forex broker license in the Cayman Islands?
Obtaining a forex broker license in the Cayman Islands can sometimes be a complicated process and it requires more steps. Each stage of the process can be different according to each situation and type of business involved. In general, most businesses might go through the next steps:
- Start your business: The first step refers to the process of company registration with the local authorities. It can be done as a limited liability company or an exempted company.
- Appoint a compliance representant: Your company will need to hire a compliance representative that will have to deal with all the local regulations and laws.
- Fill in your application/Submit it: The next step will require you to fill in an official application and submit it to the Cayman Islands Monetary Authority. It has to contain detailed information about the company’s domain of activity as well as the complete financial situation. This process involves certain submission fees that need to be taken into account.
- Result of the application: Cayman Islands Monetary Authority will decide if your application is complete and valid. Take into account that this process might take some time, up to several months. It is advisable thus to submit your application in advance, as soon as possible.
- Respect policies and procedures: The final step refers to the terms and conditions that need to be met in order to obtain and keep the license. The great number of advantages requires certain responsibilities as well.
Altogether the process can be complex and requires more stages. This being said, it is advisable to contact one of our experts for more information and to begin the application process.
Part of the documents that are submitted with the application includes the following:
- Application form;
- Paid prescribed application fees;
- Details of qualification for key personnel;
- Copies of the company’s Articles of Association and Memorandum;
- Business plan;
- Information about the corporate shareholders;
- Other documents such as the auditor’s letter of consent and details concerning the manner in which the safety of the client will be ensured.
Please keep in mind that this is a brief list of the application requirements.
Applicants can consult with one of our Cayman Islands company formation specialists before they apply for licensing with CIMA.
The formal review of the application for a Forex broker licence in Cayman Islands is a process that takes into account multiple factors, as briefly described above.
Along with the aforementioned application requirements, the following fees are in place:
- Broker dealer application fee: CI$ 500;
- Broker dealer fee payable on the first grant: CI$ 8,000;
- Broker dealer annual renewal fee: CI$8,000;
- Broker member application fee: CI$250.
When working with our team, you can make sure that the application is submitted as directed by the authorities, thus increasing your chances of obtaining favorable approval.
Contact our Cayman Islands company formation agents for more information about how we can assist you in applying for a Forex broker licence in Cayman Islands.
You can also reach out to us for matters concerning residency or immigration to the Islands.