Submit your application and receive an offer!
Dear reader, if you are considering expanding your own business or creating a new one focused on the global Forex markets, and you have enough capital to open your own brokerage company (Forex) in Cyprus, the UK, Switzerland, our company, among other services, can offer to buy an existing brokerage company in Cyprus, the UK, China, or another prestigious jurisdiction. In this article, we will also discuss how to open your own brokerage company and highlight key points that must be observed and considered when buying or opening a brokerage company in Cyprus. In the second part of this article, you will find an offer to purchase a ready-made brokerage company in Cyprus with an exchange broker license.
Typically, our clients come from: Ukraine, Russia, Kazakhstan, Moldova, Armenia, Belarus, and other CIS countries, but we also frequently receive inquiries from representatives of the USA, Canada, UAE, and EU countries.
So, the first thing to pay attention to
What will your company be doing? To determine this, you need to provide us with a detailed description of the activity and specify which markets you plan to operate in. Additionally, it is important to note that if you do not have clients from Europe, an optimal choice is a Cypriot license. The UK, in such a case, is unlikely to grant a license, and the first question to the owner will be: “Why do you need a brokerage company in the UK if you do not have clients in Europe?” You can, of course, draft a client acquisition plan as part of your business plan, but you will have to adhere to and implement it, otherwise, you will face problems with the regulator in future operations.
Based on your answers, we will analyze the legislation (we won’t send you all the regulations on brokerage companies in Cyprus) and provide a proposal with specific questions and options to get a more precise offer, in which we will be able to specify:
Note the following
Brokerage companies may or may not hold or manage their clients’ funds. Based on this, different norms of Cypriot legislation apply, which are overseen by CySEC – the Cyprus Securities and Exchange Commission. Therefore, the brokerage company must have regulatory capital, which, for serious company operations, is quite large. For example, a company that trades in European markets, holds, and manages client accounts, must have a regulatory capital of 730 thousand euros. According to Cypriot legislation, this capital must be kept in the company’s accounts and cannot be exposed to risks. This means that this money will be “frozen” in one or another bank account of your company. However, there is a possibility to utilize these funds in some way, as even passive income from such capital can bring good annual interest. To find out the possibility of making the company’s regulatory capital profitable, you need to negotiate with the bank on how interest would be accrued on these 730k even when they are not in a deposit account, or whether the account can be an investment-savings account with the possibility of transaction activity or something similar.
For us to start negotiations with banks on this matter, we need a concrete and as complete as possible case to avoid appearing unserious to bankers. After your answers to the questions that will be below in this publication, we will have a full and clear case for us, you, and banks to work with and accurately determine the possibility of earning interest on the regulatory capital, in this case, on EUR 730k.
We want to emphasize that, in our opinion, the best option for a client (the future owner) of a brokerage company is to purchase an already established brokerage company because:
The only thing to note is that the purchase option is more expensive than starting from scratch. Personally, if I were in the client’s place, after receiving our final proposal on registration and purchasing a ready-made company, I would consider which option is more advantageous. Specifically, knowing the time lost in registration and the gain from purchasing an existing company, it is essential to calculate how much your brokerage company could earn in that time. If more than the difference between buying a ready-made company and starting a new one, the choice is obvious, and vice versa.
So, let’s review some possible activities for a brokerage company that we have developed based on Cypriot legislation for one of our clients who operates in the CIS and wishes to expand their successful business.
At this stage, we can say that the features of a licensed company will largely depend on the activities you wish to undertake with this license.
It is essential to pay attention and answer these questions:
Additionally, CySEC considers each case depending on whether:
If you choose option (a), the company must have a minimum paid-up capital of 125,000 euros, and you can provide the following services:
If you choose option (b), although it can offer the same services as (a) above, the minimum paid-up capital must be 50,000 euros.
In addition to the above services, you can offer the following as main services:
In this case, the minimum paid-up capital of the company will be 730,000 euros.
A CySEC license, if approved, can also allow the licensed company to offer the following as ancillary services, in combination with one of the main services or activities:
We want to point out that the features of a licensed company and its final cost will largely depend on the activities you wish to undertake with this license.
Our fees for this matter can be provided once you describe the activities (from the list) your company will undertake, the types of services the company will offer, etc.
Brokers use trading platforms MetaTrader 4 and MetaTrader 5 (MT4 or MT5), each with its own types of licenses. These licenses are not related to the CySEC license, which includes rights to provide specific services (a list of services is available on the CySEC website).
Registering a brokerage company with account opening, capital deposit, and document preparation takes about 3 months or more. The processing time for CySEC to review a new company’s Forex license application is 6-7 months. However, CySEC may ask questions about the provided information or request additional documents, as may the banks where accounts need to be opened. The time required to prepare responses or documents for CySEC should be added to these 6-7 months. For example, if it takes us 2 weeks to provide a response or prepare a document for CySEC, these 2 weeks should be added to the 6 months.
If our client is firmly decided: “I want to buy a brokerage company”, as of today (15.12.2019), we offer a ready-made Cypriot company with a full CySEC license. The current main business of this existing company is Forex. This ready-made company has permission to provide brokerage services to the public (Europe and third countries).
This offer is valid as of the publication date of this article, specifically: 15.12.2019. We would also like to note that we offer a service called “sale of a brokerage company,” meaning we always have ready-made brokerage companies in various jurisdictions. This company is far from the only one regarding Cyprus. If, at the time of your inquiry, this company is sold, we will offer you another one, based on your goals.
If you want to trade on the American stock exchange (i.e., CME, NYMEX, Nasdaq), this is possible after purchasing this Cypriot company and expanding the license through new agreements with prime brokers and obtaining prime access.
Along with obtaining direct membership on specific necessary exchanges (CME, NYMEX, etc.), a Cypriot broker can provide services to clients from Europe and third countries. Within the European Union, the so-called Single Passport is used. This ready-made company has permission to operate in the following third countries (Ukraine, Belarus, Kazakhstan, Belize, and several others).
If you are looking for a ready-made company with all necessary licenses, exchange memberships, and clearing, finding such a company will be nearly impossible. It is better to take a good company with a license and adapt it for your specific tasks and goals. The offered option as a basis for your future project will be a very good investment.
The CySEC license of this ready-made company includes:
The company can work with any financial instruments permitted by CySEC.
To provide services from CME, NYMEX, Nasdaq – additional agreements with brokerage companies will be required. If you need to obtain membership on each separate exchange, then it is necessary to analyze the admission conditions for trading on each exchange. The proposed company does not have such access for sales, but broker access can be obtained relatively quickly.
In general, if you want to work with CME, NYMEX, Nasdaq, you will need to work with each exchange on an individual basis, as each exchange has its own requirements for participants, as well as its own capital requirements for the company.
For example, to expand the CySEC license to the US stock market through Nasdaq, the Cypriot company must opt for a dual listing. That is, despite the fact that the shares of the Cypriot company will be listed in the European stock market register, American Depositary Shares (ADS) will be listed in the Nasdaq register. ADS will not be considered shares; they will actually represent beneficial ownership of shares of the issuer listed on the EU market and can be freely transferred between American investors. They can also be used as a payment method for acquisitions of other companies in the US, so the user does not have to pay in cash. Options programs can also be provided for interested and related parties. However, we must inform you that this requires obtaining an IPO (Initial Public Offering) to offer shares of a private corporation to the public, which is a costly and lengthy process. According to information from our US partners, the official process takes a minimum of three months but can practically take around a year.
We would like to inform you that this ready-made brokerage company does not have access to accepting funds in exchange accounts. Currently, the company operates only in the Forex market. To obtain and submit applications directly to the exchange, brokerage accounts can be opened, and the process of obtaining Exchange Member status can be worked on simultaneously. Also, participation in clearing houses.
The current capital of this company is 1,041,000 euros. The minimum capital for this type of license is 730,000 euros. Any amount above 730,000 euros can be used for shareholder purposes if the company is in good standing with sufficient capital.
The company’s current expenses are 45,000 euros per month.
The cost of this ready-made brokerage company is:
EUR 385k + the company’s own funds (1.04 million euros).
The price includes the selection of directors, re-registration, and transaction management.
The price does not include structural changes and reorganization.
Note. Expanding the license with CySEC will take approximately 6 months. However, there is less bureaucracy, fewer questions, and the procedure is simpler compared to the initial registration.
We can provide a quote for expansion once the client specifies the company’s activities and the types of services it will offer, etc.
Before purchasing or registering a ready-made brokerage company, it is necessary to get the buyer’s candidate approved by CySEC.
To pass the approval process, the buyer must provide:
Please note that the proposed candidate may be asked to attend a personal interview with CySEC, and CySEC may also require them to complete a preliminary certification seminar on financial instruments, financial activities, etc., within 6 months from the date of approval.
As you can see, the process of registering a new brokerage company, obtaining its license, and opening accounts is considerably slower compared to buying an already established company with an existing brokerage license. Yes, it is more expensive and, most likely, the license of the operating brokerage company will need to be expanded based on the client’s tasks. However, purchasing a ready-made brokerage company will allow the client to operate immediately after re-registration, though possibly not in all desired markets and not with the full range of services. Nonetheless, such a company will be profitable, and the invested capital will generate income since you can start earning while the license expansion process is ongoing.
If the CySEC brokerage license does not suit you, we recommend reading this overview article on other jurisdictions where brokerage companies can operate on a global level.
We will be happy to answer your questions.
INVESTMAKLER
expertise quality reliability
United Kingdom: E14 5NR, England, Canary Wharf, London, Level 18, Bank str. 40
Germany: 50 Mainzer Landstrasse, Frankfurt am Main
Hong Kong: Wan Chai, Gloucester Road 160, Overseas Trust Bank Building, 6th floor, office A13
Russia: 127055, Moscow, Novoslobodskaya st. 20, 3rd floor, office 33
Ukraine: 20 Mykhailivska Street, Zhytomyr
https://t.me/invest_makler (Telegram Channel)
info@investmakler.com
https://investmakler.com