Advantages of a forex licence:
- Licence fees are relatively affordable
- Inexpensive ownership and operating costs
- Can operate worldwide
- Relatively affordable capital contribution
It should be clear by now that if you’re preparing to embark on a new forex business journey, one of the first steps you’ll have to take is obtaining a forex licence, which is mandatory for regulatory purposes. Prior to starting the application process, you usually have to either establish a Limited Liability Company (UAB) or open a branch office in Lithuania. Furthermore, you’ve got to make sure that your business reputation is intact and transparent and there are no negative records about the company’s operational activities (e. g. bankruptcy or convictions).
The subjects of the licence requirements are divided into the following categories: licence holder, company shareholders, and office with staff in Lithuania. Company in Lithuania UAB will be pleased to provide a detailed personalised consultation, if you wish to find out more about the specific requirements, start taking action and ultimately grow your forex business.
A forex licence holder is entitled to provide the following services:
- Acceptance and transmission of orders
- Execution of orders on behalf of clients
- Conclusion of transactions on own account
- Management of financial instruments portfolio
- Provision of investment recommendations
- Signing and/or distribution of financial instruments with an obligation to distribute them
- Distribution of financial instruments
- Administration of the multilateral trading system
- Administration of an organised trading facility
Before submitting an application for the issuance of a licence for a forex company, it is necessary to pay a state fee for the issuance of a licence to the account of the State Tax Inspectorate, which is currently 947 EUR.
Forex Licence Application Requirements for Companies
The Bank of Lithuania requests that detailed documents be provided when submitting the application. The duration of the evaluation of the application depends on the specifics of planned activities and the business plan.
The following key elements must be taken into consideration before deciding to apply for a forex licence in Lithuania:
- The submitted documents must comply with the requirements established by the legal acts regulating the activities of the financial brokerage company and its supervision, all correct data established by the legal acts or additionally required must be submitted.
- Meeting the minimum capital requirement of a financial brokerage company – standard authorised capital for such a company is 150,000 EUR, but the amount may vary depending on specific activities, detailed in the aforementioned local legal act.
- Persons holding a qualified share of the authorised capital and/or voting rights of the financial brokerage company must be able to ensure sound and prudent management of it, demonstrate excellent reputation and financial reliability.
- The company’s managers must be of impeccable reputation, have qualifications and experience that allow them to perform their duties properly.
- The business plan must be in line with the capacity of the founders of the financial brokerage company (holders of shares and/or voting rights) to implement it, and the company must be ready to provide financial services safely and reliably at the time of licensing.
In order to ensure reliable and prudent management of forex companies, it’s necessary to have comprehensive arrangements, appropriate to the nature, scale and complexity of the financial activities, including an organisational structure that ensures separation of functions as well as clearly defined vertical and horizontal responsibilities. Moreover, it’s imperative to design a well functioning system for identifying and controlling the risks that may arise, including reliable administrative arrangements and an accounting system.
Company in Lithuania UAB will be pleased to support you in obtaining a forex, or a financial brokerage, licence in Lithuania. With dedicated legal advisors, tax experts and financial accountants at your side, you will find the application process easy, simple and transparent.