Eternity Law International — News — Foreх broker licensе in Bulgariа

Foreх broker licensе in Bulgariа

Published:
January 3, 2023

Gone are the days when only multinational companies with an almost unlimited budget could apply for and obtain a financial licensе in a respected jurisdiction (eg EU, US, Canada, etc.). Today, an increasing number of conventional companies are obtaining financial licensеs, armed with a well-thought-out concept and a sustainable business model. While obtaining financial licensеs still involves significant costs and obligations, the process has become much cheaper and easier. As a result, the number of foreх licensеs issued worldwide has increased dramatically in recent years.

Foreх brokers wishing to obtain a licensе in the European Union are increasingly turning their attention to Bulgariа. While a foreх broker licensе in Bulgariа can be obtained from any of the 28 participating countries, some offer a faster and easier application process. And Bulgariа is one of them.

Bulgariа is an ideal option for those who want to work in Europe, but are not yet ready to pay for the costly maintenance of a Cypriot or Maltese company. All financial licensеs issued in the EU are subject to the MiFID II directive, which was issued by the European Commission in order to harmonize the provision of financial services in the European Union. Thanks to this directive, having received a licensе in one of the EU member states, you can work in all the others.

For example, those who have a Bulgariаn foreх licensе and want to open another branch in Germany or the UK simply need to notify the authorities of the chosen country. Although the notification process is more than just sending a letter and will require corporate documentation and proof of permits, it is still much easier than obtaining a licensе in each individual state.

Benefits of obtaining a foreх licensе Bulgariа

Here are just some of the reasons why Bulgariа is attractive to foreх brokers:

  • Bulgariа demonstrates stable economic growth and has the lowest corporate tax in the EU – only 10%.
  • Profits, interest, dividends, capital gains and any other income can be freely transferred abroad without restrictions.
  • The average salary in Bulgariа is lower than in other EU countries. This means that labor costs will be lower.
  • There are two types of licensеs to choose from.
  • The minimum capital requirement is 250 thousand Bulgariаn leva (about 128 thousand euros).
  • Only 25% of the minimum capital needs to be paid before applying. The balance (75%) can be paid within 14 days after the licensе is issued.
  • Bulgariа’s strategic location provides convenient access to the entire EU and the markets of Central and Eastern Europe.
  • The cost of registering and maintaining a company, including accounting, is lower than in other European jurisdictions.

The main attractiveness of Bulgariа as a country for obtaining a foreх licensе Bulgariа lies in a convenient tax climate and an inexpensive “standard of living”, that is, in relatively low costs for maintaining a company and labor. Not everyone can open and maintain a full-fledged office with 6-7 employees in most European financial hubs, but in Bulgariа it is possible, and the office will be located next to the same hubs.

How to get an FX licensе in Bulgariа?

When requesting permission for foreх activities, in addition to the documents of shareholders and directors, a detailed business plan for the next 3 years will be required, indicating the expected income.

Here is how the process how to obtain a Bulgariаn foreх licensе looks like step by step:

  • First, we will evaluate your brokerage activity in order to prepare an application.
  • After the assessment, we will provide a list of required documents.
  • The next step is choosing a name and registering a local company in Bulgariа.
  • After successful registration, the licensе application process will begin.
  • When applying, we take over communication with the regulatory body and will let you know if additional documents are requested.
  • After the licensе is issued, we will open bank accounts necessary for doing business.

Important facts about the FX licensе in Bulgariа.

When you want to Foreх licensе for sale in Bulgariа, you could have some questions, one of them could be “Does Bulgariа require a foreх licensе”, and there is the answer:

  • The pure agency model (A-book) requires a capital of €125,000.
  • The market creation model requires a capital of €750,000.
  • A local office in Bulgariа is a strict requirement, a physical office, and local directors must also be appointed.
  • The total time for obtaining a licensе varies from 6 to 8 months.

Legislative regulations of the foreх regulation

The Markets in Financial Instruments Act is the main instrument of the country’s government, thanks to which it controls economic services, as well as the movement of funds in online markets. The regulation lists several basic requirements that all licensеes must comply with:

  1. Permissible activities: transactions with securities, participation in mutual funds, trading in options, futures, contracts, debt obligations and other material indicators, as well as transactions in the foreign exchange market involving any type of currency pairs.
  2. Representation: when establishing a new broker, the main office of his company must be located within the boundaries of the jurisdiction. It is not necessary to choose the largest cities.
  3. Management: at least two directors are required, both must be residents of EU countries. Before being appointed, the applicant must confirm the qualifications of the directorate, the level of education of each manager, their work experience and qualifications.
  4. Audit: Hiring an accountant is a must. Bulgariа requires constant submission of financial statements, so the services of a specialist are justified. Each year, the founder will hire an independent auditor to undergo a full audit.
  5. Share capital: in the jurisdiction there are two types of licensеs for different types of companies. First – STP requires depositing 125 thousand euros into the bank account, the account balance does not decrease. The second – Market Maker – has a large set of functions and allows you to do business using almost all known financial instruments.This factor increases the size of the authorized capital to 740 thousand euros.

The authorized capital is contributed by the shareholder in installments. These funds must be obtained in an honest way, so additional data on their origin and extended information about the beneficiary may be required. It takes about 5 months from the date of application by the applicant to review all documents and study the business plan.

Can you trade foreх in Bulgariа?

Foreх trading in Bulgariа is legal. This is regulated by the Financial Conduct Authority (FSC). Foreх Brokers in Bulgariа who want to offer services in the country only need to be registered in any EU country to obtain authorization.

How much does a Bulgariа foreх licensе cost?

The authorized capital cannot be used in economic activities and will be frozen in a Bulgariаn bank account. State licensе fees are much lower than in Cyprus. For example, for the consideration of documents for a stp licensе, the commission will take approximately 2200 euros.

How do you get a foreх trader licensе in Bulgariа?

Here is how the process of obtaining a Bulgariаn foreх licensе looks like step by step:
1. First, we will evaluate your brokerage activity in order to prepare an application.
2. After the assessment, we will provide a list of required documents.
3. The next step is choosing a name and registering a local company in Bulgariа.
4. After successful registration, the licensе application process will begin.
5. When applying, we take over communication with the regulatory body and will let you know if additional documents are requested.
6. After the licensе is issued, we will open bank accounts necessary for doing business.

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