The fact that a forex broker has a license to carry out professional activities is a key criterion in choosing a forex broker for traders. Licenses show which regulator controls the activities and quality of the company.
Estonia is an excellent choice when choosing a jurisdiction to obtain a forex license due to the fact that Estonia is a respected jurisdiction in the EU. Also, Estonian state authorities are loyal to this type of activity if all legal procedures and requirements are followed.
According to Estonian law, forex broker services are classified as “investment services”. Legal entities operating as a Forex broker need to obtain a special EFSA license, which is regulated by the Estonian Securities Market Act, as well as within the EU – MIFID – EU Directive on Financial Instruments in the EU Markets.
EFSA license – forex broker license in Estonia
EFSA is the licensing authority for legal entities registered in Estonia, with a registered office in Estonia and operating in Estonia.
The activity that is subject to licensing is trading in securities, as well as other services that are related to securities; Forex broker services, as well as electronic money services, require an investment license. When obtaining an EFSA license, you do not need to additionally obtain a FIU certificate.
In accordance with the Estonian Securities Market Act, securities include:
To qualify for a license, a legal entity must be registered as a Limited Liability Company in Estonia.
The heads of any regulated legal entity must meet certain criteria – have proper higher education and work experience in this area (you must provide a resume, diplomas of education), including the need to have an appropriate reputation (no bankruptcy cases, revocation of licenses, convictions, etc.) and so on.
Founders, who have a significant part in the management of the company, must also have an appropriate business reputation and not have criminal offenses. Also, EFSA will review the financial position of shareholders.
In accordance with the Estonian Securities Market Law, there are the following requirements for the authorized capital for obtaining a forex broker license:
To obtain an STP license, you need to contribute a share capital of 125,000 euros, for a Market Maker license – 730,000 euros.
After obtaining a forex broker license, a legal entity has the right to carry out certification of its activities in any country in the Eurozone.
To do this, you must submit the appropriate set of documents to the Supervision Authority, which includes: the name of the state in which the legal entity is going to operate, a business plan with a detailed description of the activities and services with the translation of the necessary documents certified by a sworn translator.
General organizational requirements for personnel – Forex broker license in Estonia
The employees involved must have sufficient skills, experience and competence to perform professional or official duties.
According to the legislation, the person concerned is:
Forex broker company managers – Estonian forex broker license
The cost of our company’s services for the preparation and submission of a complete set of documents, including applications, internal rules, policies, other documents that are previously agreed to obtain a license, participation in the collection of all necessary documents is from 20,000 Euro.
In case of additional work, such as lengthy discussions on the compatibility of the business with the Estonian regulation, additional proceedings with EFSA (preparation of responses to their additional inquiries, participation in meetings), an additional fee will be charged based on hourly work.
Eternity Law International employees have huge experience in obtaining forex licenses, as well as other financial licenses in various jurisdictions.
If you need help in choosing a license, please contact our specialists by calling us at the phone numbers listed on the site, or by submitting the form located at the bottom of the site page.