People looking at opening an FX/CFD business have, over the past decade, often gone to start a forex broker in St Vincent and the Grenadines.
The reason people want to start a forex broker in St Vincent and the Grenadines is primarily because of the low start up costs, you don’t pay any corporate tax and the regulatory burden is low.
However, we think that people looking to start a forex broker in St Vincent and the Grenadines should be careful and seriously consider choosing another jurisdiction.
There are multiple reasons for that, which we look at towards the end of this article. If you are interested in those points then it’s worth scrolling down first. Otherwise read on and we’ll explain how to start a forex broker in St Vincent and the Grenadines and why companies do it.
Why have so many people gone to start a forex broker in St Vincent and the Grenadines?
1. The cost is low
It costs very little to start a forex broker in St Vincent and the Grenadines. As we’ll see, this includes basically everything, whether it’s the cost of registering a business or capital requirements.
The result is that, even brokers using a third-party service may only end up paying a few thousand dollars to start a broker in St Vincent and the Grenadines.
When you consider that other regions which are considered ‘low cost’, like the Seychelles, have capital requirements alone of $50,000, this is extremely ‘cheap’.
2. No corporate tax
Brokers in St Vincent and the Grenadines do not pay corporate tax on revenues generated outside the country. Given that most brokers won’t target clients in the country, this effectively means any profits your company makes aren’t taxed. By comparison, companies in the UK pay a corporate tax rate of 25%.
3. No regulations
St Vincent and the Grenadines does not regulate CFDs, which is the derivative product forex brokers offer – even if they do confusingly call themselves ‘forex’ brokers.
This has obvious benefits as it means you are far less restricted than providers based in regions which have things like risk warnings or marketing restrictions.
However, there are serious downsides to this as well, which we look at in more detail later on in this article.
4. Anonymity
St Vincent and the Grenadines offers a high level of anonymity to brokers setting up in the region. Again, there are positives and negatives to this, but if you want to shield your ownership of a corporate entity, it is going to be a strength.
Overview of FX/CFD license in St Vincent and the Grenadines
| FX/CFD license in St Vincent and the Grenadines overview | |
| Time to launch | Approximately 1 month |
| Company registration and licencing costs | $125 + any agent fees |
| Company annual operational cost | $125 + any agent fees |
| Tax | 0% |
| Accounts filing | Not required |
| Physical presence | Not required |
| Capital requirement | Not required |
| Anonymity | Yes |
| CFD regulations | CFDs are not regulated in St Vincent and the Grenadines |
Steps to start a forex broker in St Vincent and the Grenadines
- Collect documents needed, such as IDs and bank statements
- Register LLC in St Vincent and the Grenadines
- Set up payment methods for the corporate entity
How long does it take to start a forex broker in St Vincent and the Grenadines?
We have seen claims that it can take as little as two weeks to start a forex broker in St Vincent and the Grenadines. That includes everything, so literally being up and running, offering brokerage services to clients.
We believe that two weeks would be a tight timeframe to start a forex broker but is potentially doable. However, it is worth reiterating that point – this would be a tight timeframe and the whole process, including getting all your documents ready, may take longer.
Nonetheless, the primary reason for this shorter timeframe is the fact CFDs are not regulated in St Vincent and the Grenadines.
Lengthy waiting periods in other jurisdictions are nearly always due to regulators. That is because you have to do a lot of work prior to submitting an application. Once you submit an application, you often have to wait a long time for it to be reviewed and processed.
St Vincent and the Grenadines does not regulate CFDs and so there is no licensing process, you are effectively just registering your company and getting it set up to handle payments.
Forex brokers in St Vincent and the Grenadines operate as limited liability companies (LLCs). By government regulation, it is possible to set up one of these companies in 24 hours from the time you submit your application.
The bigger problem is getting access to banking and payments services. This can take much longer and may not even be possible.
How much does it cost to start a forex broker in St Vincent and the Grenadines?
We estimate that you could start a forex broker in St Vincent and the Grenadines for as little as $2,000 to $3,000.
To start a forex broker in St Vincent and the Grenadines you will have to register as an LLC and have the following:
Notarised copies of…
- Your passport
- A driving license or national ID
- Utility bill or similar
- Reference from a lawyer, accountant, bank or similar
Costs will vary for these but the likelihood is it should only be a few hundred dollars, depending on where you are in the world.
Then you will need to register an LLC. We have seen companies offering this service for below $1,000 in total.
This is not a particularly high price when you consider that the government registration fee is $125 and you have to pay a local, registered agent to file the application for you.
The final cost is getting a bank account. This is going to be the hardest part of the process, although we have seen services on offer for less than $500 to get set up, without factoring in the cost of a minimum deposit.
What are the capital requirements for forex brokers in St Vincent and the Grenadines?
There are a couple of points to note here.
Firstly, forex broker is an annoying term that has become widely adopted but does not actually capture what brokers are offering. Companies that call themselves forex brokers actually offer CFDs on forex and other asset classes, like indices and commodities.
That means the product you are offering is a CFD, not forex.
This leads to our second point.
In St Vincent and the Grenadines, CFDs are not regulated. This means there are no capital requirements for companies offering them.
What are the yearly costs when you start a forex broker in St Vincent and the Grenadines?
When you register as an LLC in St Vincent and the Grenadines, you must pay a yearly registration fee.
The actual charge that the local authorities make is $125.
However, as with the company formation, this must be done through a local registered agent.
The cost is thus likely to be higher and could end up being upwards of $1,000 per year.
Do you need a physical presence in St Vincent and the Grenadines if you open a forex broker there?
No – forex brokers in St Vincent and the Grenadines are set up as LLCs.
LLCs do not require you to be in the country or to have a physical presence there.
Are FX/CFDs regulated in St Vincent and the Grenadines?
CFDs are not regulated in St Vincent and the Grenadines.
However, as we will see in the section below, this is not the whole story and you need to think very carefully about offering them in the country.
Why you should not start a forex broker in St Vincent and the Grenadines in 2024
Despite everything written in this article holding true, it is still a huge risk to start a forex broker in St Vincent and the Grenadines today.
The reason for this is that in early 2023, the financial regulator in St Vincent and the Grenadines stated that companies offering ‘forex’ services would have to provide proof that they are regulated in every country they do business in.
This is simply not feasible for most companies to do, as they are often active in multiple jurisdictions and pick up clients on a non-solicited basis, meaning they are ‘active’ where they are not regulated but not actually breaking any regulations in doing so.
Moreover, authorities in St Vincent and the Grenadines also require explicit consent in countries where CFDs are not regulated, which is effectively impossible.
What is the result of this?
At an absolute minimum if you start a forex broker in St Vincent and the Grenadines you will have a huge amount of uncertainty hanging over you. You will constantly feel as though you are on the cusp of being shut down.
And indeed, you may be shut down! The local authorities have said they will consider doing this to companies which they believe are breaching the rules.
That is not a guarantee it will happen but the point is that it could.
The next factor to consider is payments. It is now extremely difficult for LLCs to access banking services. This is going to make running your business a nightmare.
Taking these two points into consideration, we do not recommend starting a forex broker in St Vincent and the Grenadines.
If cost is the primary factor for you, we recommend looking at our article on the cheapest country to start a forex broker.
Starting a forex broker in St Vincent and the Grenadines – positives
1. It’s cheap
Setting up a forex broker in St Vincent and the Grenadines is very cheap compared to almost all other jurisdictions.
2. It’s fast
Depending on how long it takes to get your documents notarised and approved, you may be able to start a forex broker in about two weeks in St Vincent and the Grenadines.
3. You don’t pay corporate tax
Corporate tax is not imposed on revenues from outside St Vincent and the Grenadines, which is likely to encompass all of a broker’s income. This means paying no corporate tax.
Starting a forex broker in St Vincent and the Grenadines – negatives
1. Huge uncertainty
CFDs are not regulated in St Vincent and the Grenadines but the local regulator’s request that you prove you are regulated in all the regions you are active is close to impossible and there is almost no clarity on how the rule is actual implemented in practice.
It is for this reason that we strongly recommend that you do not start a forex broker in St Vincent and the Grenadines.
2. Payments and banking
The payments and banking options available to you as a St Vincent and the Grenadines broker are extremely poor and this will be a huge headache for you.