Capital Requirements for a Forex Broker License in Vanuatu – Understanding the Vanuatu Bond
Consultants incorrectly refer to the $50,000 needed to obtain a forex broker license in Vanuatu as capital, or paid up capital. As we’ll outline in today’s post, this is actually a misleading statement.
When it comes to forex broker licensing, each regulatory body has a unique set of requirements which in most cases is unique to that specific jurisdiction. The paid up capital requirement of $50,000 in Vanuatu (officially a bond) is a perfect example of this phenomenon.
In today’s column, we’ll explore this requirement in greater detail. It will become clear that the $50,000 bond needed for license approval in Vanuatu is quite unique when compared to other offshore forex license jurisdictions.
The Vanuatu $50,000 Bond Is Not Paid Up Capital
Consultants often incorrectly refer to the $50,000 needed to obtain a forex broker license in Vanuatu as capital, or paid up capital. This is actually a misleading statement. The $50,000 required required by the Vanuatu Financial Services Commission (VFSC) for license approval is actually a government bond.
Vanuatu differs from offshore forex license jurisdictions like Mauritius or Seychelles, where the paid up capital can be recovered upon the dissolution of the license and company. Should a forex broker wish to dissolve their license in Vanuatu, they would then need to appeal directly to the VFSC for the recovery of these funds. It should be clear that this is a more time consuming process than the simple withdrawal of money from a corporate bank account. We estimate it could take several months.
An Alternative to Recovering the $50,000 Paid Up Capital in Vanuatu
Should a forex broker licensed in Vanuatu wish to dissolve their license, what is the best way then to recover the $50,000 government bond? Our suggestion is to consider selling the license to another forex broker. It is quite common to build the $50,000 into the sale price of the license so that the funds are indirectly recouped via a successful sale. This path often saves time as the selling party can quickly walk away with their funds rather than wait for the VFSC to release them.
Atomiq Consulting – Consultation Regarding Obtaining a Forex Broker License in Vanuatu
When it comes to offshore forex broker licensing, it’s important to partner with a consulting firm that understands the process from start to finish. As just one example, the VFSC recently amended their physical office and director requirements, a decision our team anticipated would happen and properly informed our clients about.
As outlined above, a concept as simple as paid up capital can actually be more nuanced than one might imagine. This is why it is vital to partner with a consulting firm that understands the ins and outs of forex broker licensing.
To learn more about applying for a forex broker license in Vanuatu, don’t hesitate to contact one of our specialists today!
