Setting up a forex company: the order that works

A forex business needs four things: a company, a licence, bank and client-money accounts, and a way to take client payments. Each provider in that chain reviews the step before it. Set them up in that order, and every application can show the next reviewer what it needs to see.

The four parts of a forex set-up

Whatever the country, a business that offers forex trading to clients is built from the same parts:

1. The company: the legal entity that holds the licence, signs the client agreements and owns the accounts.
2. The licence: the authorisation to offer trading services to clients, granted by the regulator of the country you apply in.
3. Bank and client-money accounts: an operating account for the company's own money, and accounts that keep client money separate from it.
4. Payments: payment service providers that let clients deposit and withdraw by card, bank transfer or other methods.

The order is not a formality. Each part depends on the one before it.

Step 1: the company

A regulator licenses a company, not a project. Before it can assess an application, it needs to know which entity is applying, who owns it, who runs it and where it is based.

That makes the company a decision about the licence, not only about tax or convenience. Some regulators expect the applicant to be incorporated in their country, or to have directors, staff or an office there. A company formed in the wrong place, or with the wrong structure, may have to be formed again.

So we plan the company with the licence in view: the country, the type of entity, the shareholders, the directors and the people who will hold key roles. We compare the options against your business plan before anything is registered.

Step 2: the licence

With the company in place, or at least decided, the licence application can be prepared. Regulators usually look at:

• The owners and managers: their identity, background, experience and good standing.
• The capital: the amount the licence requires, and evidence of where it comes from.
• The business plan: the services, the clients, the markets and the financial projections.
• Policies and controls: compliance, risk management, anti-money-laundering procedures and how client money is protected.
• Substance: the staff, the systems and, where the country requires one, the office.

The detail differs by country, and requirements change. The forex licence page lists the regulators brokers choose between, with the capital and fees each publishes and the date we last checked them; we confirm the current position in the consultation. The regulator alone decides whether to grant the licence.

Step 3: bank and client-money accounts

A bank or electronic money institution (EMI) asked to open accounts for a forex business will usually want to see the licence, or at least the application, before it decides. It reviews the same ground as the regulator, from its own point of view: who owns the company, what it does, where its clients are and how money will move.

A forex business usually needs two kinds of account:

• An operating account for the company's own money: its capital, revenue and expenses.
• Client-money accounts that hold client funds apart from the company's own, in the way the licence requires.

Not every bank or EMI accepts forex businesses, and each sets its own criteria. Applying to the wrong ones costs time and leaves refusals on the record. We shortlist providers whose criteria fit your licence, your countries and your clients.

Step 4: payments

Clients need to fund their trading accounts and withdraw from them. That takes payment service providers (PSPs) that accept forex businesses: card acquirers, bank-transfer providers and alternative payment methods.

Payment providers review the licence, the accounts that will receive the settlements, the website and its terms, and the expected volumes. Without the licence and the accounts, there is little for them to assess. It also makes sense to plan for more than one provider, so that client payments do not depend on a single relationship.

Why the order matters

Each reviewer asks for the step before it:

• The regulator asks about the company and its owners.
• The bank asks for the licence.
• The payment provider asks for the licence and the accounts.

Working out of order leads to familiar problems. A company formed before the licence country is chosen may not meet that regulator's requirements. A bank approached before the licence application is ready has little to review, and may decline. A payment provider approached without accounts in place has nowhere to settle funds. And each refusal is something later providers may ask about.

Order does not mean waiting for each step to finish before the next one starts. The steps overlap. While the regulator reviews the licence application, the account and payment applications can be prepared, ready to submit as soon as the providers can assess them. What matters is that every application tells the same story: the same owners, the same business plan, the same figures.

Starting from where you are

Not every business starts at step one. If you already have a company, we check whether it can hold the licence you need. If you already hold a licence, we start with the accounts and payments. If you are adding a country, we look at what your existing set-up can carry over, and what it cannot.

How Apexum can help

We plan the company, the licence, the accounts and the payments together, so each provider sees a complete and consistent set-up. We prepare the applications with you and coordinate with the regulator, the banks and the payment providers. The regulator grants the licence, and the banks, EMIs and payment providers open the accounts. See the full route on the forex industry page, and the detail on forex licence, bank accounts and PSP.