Belize Forex License

Belize Forex License

Tetra Consultants assists our international clients in securing a Belize Forex License. Generally, if you wish to provide international financial services in or from Belize, you will be required to apply for a license from the International Financial Services Commission (IFSC).

Introduction to Belize Forex License

• The International Financial Services Commission (IFSC) is the authority in charge of issuing financial licenses to companies in Belize. Established in 1999, the IFSC ensures that financial companies in Belize comply with global standards and are sufficiently regulated to ensure integrity, accountability and transparency.

• In 2019, the Economic Substance Act was implemented in Belize, requiring companies in Belize to prove that their main business activity takes place within Belize. As such, companies holding a Belize Forex License are now required to have its core income generating activities within Belize.

• In addition to the Economic Substance Act 2019, all Belize Forex License holders must also comply with the Accounting Records (Maintenance Act) 2013, Mutual Administrative Assistance in Tax Matters Act 2014 and the Income and Business Tax Act.

• In addition, licensed companies must comply with the Money Laundering and Terrorism (Prevention) Act, Chapter 104.

When will you require a Belize Forex License from the IFSC?

• All Belize companies that provide the following services in or from Belize are required to apply for a license from the IFSC:

• • Incorporating or governing IBCs or other offshore businesses

• • Incorporating or governing offshore trusts and offering trustee services

• • Money brokering

• • Money exchange

• • Money pawning and lending

• • Governing and protecting multinational assets

• • Money transmission services

• • Payment processing services

• • Trading in securities such as derivative instruments based on commodities and financial instruments

• • Trading in foreign exchange

• • Safe custody services

• • Accounting services

• • Brokerage, consultancy or advisory services with regards to the above services

Mandatory requirements

Minimum capital requirement

• The minimum capital requirement to procure a Belize Forex License is US$500,000 and it must be kept in the applying company’s bank account at all times.

• In addition, companies will have to pay an application fee of US$1,000 and an annual licensing fee of US$25,000.

Economic substance in Belize

• All Belize companies must ensure that economic substance is maintained in Belize. This means that an adequate amount of business activities must be conducted within or from Belize.

• This can be proven by showing that:

• • An adequate number of meetings of Board meetings are conducted in Belize and all records and meeting minutes are kept in Belize offices.

• • An adequate number of qualified employees are physically present in Belize to carry out the intended forex activity.

• • The operating expenditure incurred in Belize is of an adequate amount.

• • The company has at least one physical office in Belize.

• • There are sufficient facilities and office space in Belize for the company to conduct its main business activities.

Obligations to customers

• A company that holds a Belize Forex License must segregate customer funds into different accounts and maintain physical possession or control of fully paid and excess margin securities carried for customers.

• Every month, the company must provide all its customers with monthly statements specifying the amount due to the customer and the fact that these funds are payable on demand.

• The company is prohibited from encouraging excessive trading in a customer’s account for the sole purpose of increasing revenue.

• The company cannot execute any transaction on the customer’s behalf without the customer’s written authorization.

• It must fully disclose the charges for services provided to customers with regards to the trading of securities.

• It must ensure that the mandated customer due diligence information is collected for each customer.

Reporting requirements

• The company must report to the IFSC within five working days in the following situations:

• • The company receives a customer complaint which involves allegations of manipulation, deception, fraud, forgery, theft and misappropriation of funds or securities. The company’s course of action with regards to the aforementioned complaint must also be reported.

• • The company, or its employee or agents is named a defendant or respondent in any criminal or regulatory proceeding or any civil proceeding exceeding US$25,000.

• The company must arrange for a physical or a remote meeting with the IFSC at least once a year to review its performance in the previous year and its business prospect in the upcoming year. This must be done annually unless a special waiver has been granted to the company.

• The company must submit monthly compliance reports to the IFSC which include details with regards to the volume of trades.

Knowledge and Expertise

• Directors of the company must be equipped with the proper knowledge, experience and skills required to direct the company’s business activities.

Advantages of a Belize Forex License

No requirement for a resident director

• There is no nationality or residency requirement for a director in a Belize IBC.

• As such, a Belize company with a Forex License can be wholly foreign owned.

Low taxes

• IBC or offshore companies in Belize do not have to pay corporate income taxes as long as they do not provide services to Belize residents. This is because companies in Belize are taxed only on Belize-sourced income. There is no corporate income tax incurred for profits derived outside of Belize.

• The general corporate income tax in Belize is 25% for profits incurred within Belize.

Minimal period to issue a license

• Typically, it takes around 1-3 months for the IFSC to issue a Forex License to a Belize company.

• This is relatively shorter compared to most other jurisdictions which usually take at least 3 months and sometimes even longer.

High levels of confidentiality

• There is no requirement to file information about beneficial owners, shareholders and directors on a public record. In accordance with the privacy policy, the only information available to the public are the Memorandum and Articles of Association, as well as information about the company’s resident agent.

• Hence, owners can set up a Belize company with complete anonymity.

How long to secure Belize Forex License?

• Generally, you can expect your application to take around 1-3 months, depending on whether it is approved on the first submission. Each application will be reviewed individually, and the IFSC may revert asking for additional supporting documents or information.

• For example, a Notice of Abeyance may be issued if the information previously provided is missing, incomplete, or inconsistent. Upon receiving a Notice of Abeyance, you will have 15 days to clarify the issue(s) raised by the IFSC. You may request for a further extension of 15 days to 45 days if you pay an administrative fee and provide sufficient reasoning.

How to apply for a Belize Forex License?

Step 1: Belize company registration

• Before applying for a Belize Forex License, Tetra Consultants will assist in the incorporation of your Belize company. You will be asked to provide a list of necessary KYC documents, including the names of directors, company’s resolution and identification proof.

• Based on the documents provided, Tetra Consultants will draft and notarize the Memorandum and Articles of Association, business plan and other incorporation documents.

• After preparing the relevant documents, Tetra Consultants will register your company with the Belize Companies and Corporate Affairs Registry.

• Tetra Consultants will also register your company’s Business Tax (TIN) with the Belize Tax Service.

Step 2: Corporate bank account opening

• Tetra Consultants will assist in consolidating the necessary corporate documents and opening a corporate bank account with a reputable bank that provides the relevant services such as multi-currency accounts.

• Typically, directors and shareholders are not required to travel to Belize to open corporate bank accounts. However, if travel is needed, we will have a representative accompany you to the bank meeting. Alternatively, our team will negotiate with the banks to conduct a conference call instead or to request for a waiver.

• Once the bank account has been successfully opened, Tetra Consultants will courier the internet banking token and access codes to your preferred address.

Step 3: Forex License application

• Before proceeding with applying for the Forex License, Tetra Consultants will conduct proper due diligence of your company and its key personnel such as the directors, shareholders, beneficial owners and senior officers.

• Tetra Consultants will then assist with the preparation of the application with the IFSC. You will need the following documents:

• • Cover letter from the company director: The cover letter must indicate the type(s) of license the company is applying for (i.e. Belize Forex License), the validation period and whether the license fee is to be paid immediately or on an annual basis.

• • Payment of the application fee.

• • A complete certified application form.

• • Know Your Customer (KYC) documents for each key personnel.

• • A letter from the company director attesting to his/her awareness that a licensee cannot offer services to residents of a country that requires its own financial license and of the conditions required for a Belize Forex license.

• • Business documents such as business plan, complaints handling procedures, manual of operating procedures and money laundering prevention controls manual.

• • Corporate documents such as Certificate of Incorporation, Memorandum and Articles of Association, Register of Directors and Shareholders, share certificates, Declaration of Beneficial Ownership and Certificate of Good Standing.

• The IFSC will verify the completeness of the application within 2 working days. After receiving the complete submission, the authorities will then assess it and decide whether to issue a license to the applicant.

• If the IFSC approves, it will issue a formal approval letter and an invoice for the license fees.

• Tetra Consultants will assist in making the necessary amendments if the information provided in the application is insufficient or incomplete.

Step 4: Annual accounting and tax obligations

• Tetra Consultants’ team of Chartered Accountants will ensure that your newly established company continues to meet regulatory laws set by the Belize Tax Service. This includes providing you with monthly bookkeeping, preparation of financial statements and annual tax return filings.

Need a Belize Forex License?

• Contact us to find out more about how to secure Belize Forex License to provide foreign exchange brokerage services, or if you are planning to register company in Belize without any hassle. Our team of experts will revert within the next 24 hours.

FAQ

Is a company with a Belize Forex License regarded to be less reliable?

What is a Forex license?

Does Forex trading require a license?

Is forex trading legal in Belize?

How do I renew the Belize Forex License?

Are there fees charged during reporting to the IFSC?