If you are planning to set up your forex business, you need to understand that not only is it important to choose the right jurisdiction for the establishment of your business and registration of forex companies, but also the customized professional guidance to attain relevant forex license. Analysis of company planning, such as banking options, liquidity providers, offshore payment processors, trading platforms and solutions, and business continuity plans, is crucial. Tetra Consultants’ team of professional experts is experienced in securing a Georgia forex license and ensuring the smooth onboarding of your business in the country.
Georgia is becoming a more appealing country in order to start a global financial brokerage service. If you plan to do forex exchange business in Georgia, the attraction for businesses in this sector dramatically increases, especially given the tax optimization potential. Tetra Consultants understands how important it is to attain any offshore financial licenses for entities contemplating business expansion in countries like Georgia. This article elaborates on 7 important things to know about a forex license Georgia.
7 Things to know about forex license Georgia
The legal regime governing forex business in Georgia:
Until relatively recently, no license was required for carrying out activities in the Georgian Forex market. However, due to the increasing cases of abuse and violation, as well as to ensure the protection of the rights of clients of brokerage companies, the Georgian government in early 2018 obliged all participants in the forex market to undergo compulsory licensing at the National Bank of Georgia. And from April 11, 2018, companies can not attract customers, or advertise their services without having obtained a valid forex license in the nation.
Today, this market is regulated by the following regulatory acts of Georgia:
- Law “On the Securities Market”,
- Law “On Licenses and Permits”,
- The Tax Code,
- The order of the NBG “Procedure for licensing a brokerage company”,
- As well as other orders and laws as and when passed.
- So, if you have decided to establish a brokerage company and want to get a forex license in Georgia, the first thing you need to pay attention to is the Law on Licenses and Permissions.
- Accordingly, the types of activities that require licensing in Georgia, in particular, are:
- Dealing in securities;
- Depository services;
- Brokerage activity;
- Stock exchange;
- Asset management.
This means that if you are planning to provide brokerage services it is necessary not only to register company in Georgia but also to obtain an appropriate license.
Activities allowed under a forex license:
Regarding the range of capacities that a company with a forex license provides, all of them are described in detail under the law “On the securities market.” Hence, having the relevant authorization in the form of a forex license, a legal entity can carry out operations with respect to:
- Shares in capital;
- Securities;
- Currency.
Furthermore, the activities can include but are not limited to:
- Provide consultations to potential investors;
- Conduct market research;
- Consult the issuers on the issue of securities and market operations;
- Carry out operations with securities on its own behalf or on behalf of customers, including guaranteed and non-guaranteed placement of securities;
- Manage the investment portfolio of clients, including pension funds.
Regulating authority:
Entities intending to do forex business in Georgia are regulated and supervised by the National bank of Georgia. The main aim of the Georgian regulatory body is to monitor the forex market, issue licenses to legitimate brokerage firms and investment companies, control them, and protect the interests of consumers and investors in those countries.
Requirements:
- Companies that meet the following conditions can obtain a forex license in Georgia:
- Formation of an entity in the form of Georgia LLC
- Open a corporate bank account with the National bank of Georgia
- At least one resident director/local representative with 4 years of post-qualification experience in the finance industry
- Local physical office in Georgia
- Lack of criminal convictions record among the company’s management that is the resident director: over the past 10 years – for economic crimes, over the past 5 years- for violation of Georgian legislation in the field of securities, as well as an especially serious crime
- The requirement for authorized capital is in the amount of GEL 500,000 (about US$200,000)
Documents required for license application:
To get the Georgia forex license the interested party should fill in the registration form and provide all the required documents to the NBG. The documents include but are not limited to:
- Extract from Registry of Entrepreneurs and Non-Entrepreneurial (Non-Commercial) Legal Entities that the company is registered in Georgia.
- A detailed business plan of the company
- All the information about the company including personal data of the partners, distribution of shares, etc. It is important to note that the management of the company’s personal experience and professional background has a significant impact. The managers are assessed on an individual basis depending on their backgrounds
- List of the activities the firm is going to carry out
- Proof of minimum capital competence. Also, the company is required to provide the source of the capital
- Proof of paying the registration fee
- Information about the business model, and the strategic plan of the applicant
Timeline to obtain a forex license:
Tetra Consultants’ team of licensing experts as well as incorporation specialists will ensure continuous support throughout the engagement process. We expect to complete the steps to register a Georgian LLC in a week as well as the corporate bank account opening within 4 weeks.
Moving further, the steps to prepare for submission of the license application include the appointment of a qualified resident director and lease agreement, capital injection, and drafting of important documents and policies for AML/CFT. All in all Tetra Consultants expect to secure the forex license for your entity within 6 months.
Revoking a Forex License in Georgia:
The grounds for revoking a forex license are the following:
- The company’s written concept of revoking the license
- The documents applied for the license are fraudulent, incomplete, or not in accordance with the requirements
- The broker’s activities do not correspond with Georgian legislation
- In the case of the liquidation of a brokerage company.
The decision on revoking the license is made by the National Bank of Georgia within 30 days.
Conclusion
With robust financial markets, Georgia has one of the fastest-expanding economies in Eastern Europe. For foreign business owners, the concept of having a forex license and receiving the certificate of an international financial organization is growing more and more alluring.
Nevertheless, offering services based on financial instruments carries a significant level of risk and necessitates specialized training and experience. Even if Georgia is one of the easiest places to conduct business, you will still need a detail-oriented guide to increase the effectiveness of your company, especially given how unclear the law is.
Tetra Consultants’ team of licensing experts is here to make your goal of business expansion easy to achieve. We will ensure to navigate you through the legal jargon and requirements of securing a forex license in Georgia. We have years of experience with securing various offshore financial licenses to accurately advise you through the process.
Contact us now to know more about how to obtain a Georgia forex license. Our team of experts will revert within the next 24 hours.
