Vanuatu Regulation Increasingly Popular Among Binary Options and FX Brokers
- Low costs and fast registration processes have long been attractive for Binary Options and Forex brokers interested in becoming regulated.
This article was written by Adv. Nir Porat. He is the Co-Managing Partner at Ben Basat, Porat & Co., and is also responsible for leading the Corporate and International Law departments in the firm.
Adv. Nir Porat, Co-Managing Partner, Ben Basat, Porat & Co.
Lately, a new and very attractive jurisdiction has been offered to business owners in the industry looking for a license: a Binary options license or Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term license from the small Pacific Island of Vanuatu, under the regulating and supervising body for all financial licenses in Vanuatu - the Vanuatu Financial Services Commission, established in 1993 (“VFSC”).
Vanuatu (formerly known as the New Hebrides Islands) might not be as well-known as some of the other tropical paradises in the Pacific Ocean, but it has plenty to offer business owners, especially those active in the finance industry. As such, Vanuatu offers a variety of tax benefits, as the nation has no income tax, no capital gains tax nor inheritance tax. It is therefore no surprise that Forex and Binary Options companies are not the only ones drawn to this specific jurisdiction. Many international ship-management companies are known to sail their ships under the flag of the nation as well as several well-known file-sharing services, such as KaZaA and WinMX which are incorporated in Vanuatu too in order to avoid the legal challenges they would have faced if incorporated in other jurisdictions.
While being regulated anywhere, including in Vanuatu, is a great advantage for both Forex and Binary Options companies worldwide as it increases trust among traders and improves their reputation, Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term can also assist with a number of additional issues, such as: opening bank accounts internationally, acceptance to payment processors, usage of a Vanuatu license as a part of a corporate structure together with another broker license, such as an EU one, where the Vanuatu licensed company is able to serve as a 'market maker' for an EU licensed brokerage.
Low costs and fast registration
In addition to the above, perhaps the two main reasons for the quick increase in popularity for Vanuatu licenses are:
(a) The fact that this is the fastest available Forex/Binary Options regulation out there (it is possible to be granted a license in only 2 to 3 months); and
(b) Very low capital requirements, even compared to other known licensing jurisdictions, such as Mauritius and Belize for example. Currently, the capital requirements for brokers looking to be regulated in Vanuatu are only $2000 USD!
There are, naturally, some additional expenses in connection with the regulation process, such as incorporation and administration of a Vanuatu financial company, annual registered office and secretarial services fees, application for trading in financial and commodity-based derivative instruments and other securities from VFSC, including VFSC regulatory application fees, governmental fees, agents consulting fees, legal fees, etc. However, these expenses are still smaller compared with other regulating jurisdictions.
This article was written by Adv. Nir Porat. He is the Co-Managing Partner at Ben Basat, Porat & Co., and is also responsible for leading the Corporate and International Law departments in the firm.
Adv. Nir Porat, Co-Managing Partner, Ben Basat, Porat & Co.
Lately, a new and very attractive jurisdiction has been offered to business owners in the industry looking for a license: a Binary options license or Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term license from the small Pacific Island of Vanuatu, under the regulating and supervising body for all financial licenses in Vanuatu - the Vanuatu Financial Services Commission, established in 1993 (“VFSC”).
Vanuatu (formerly known as the New Hebrides Islands) might not be as well-known as some of the other tropical paradises in the Pacific Ocean, but it has plenty to offer business owners, especially those active in the finance industry. As such, Vanuatu offers a variety of tax benefits, as the nation has no income tax, no capital gains tax nor inheritance tax. It is therefore no surprise that Forex and Binary Options companies are not the only ones drawn to this specific jurisdiction. Many international ship-management companies are known to sail their ships under the flag of the nation as well as several well-known file-sharing services, such as KaZaA and WinMX which are incorporated in Vanuatu too in order to avoid the legal challenges they would have faced if incorporated in other jurisdictions.
While being regulated anywhere, including in Vanuatu, is a great advantage for both Forex and Binary Options companies worldwide as it increases trust among traders and improves their reputation, Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term can also assist with a number of additional issues, such as: opening bank accounts internationally, acceptance to payment processors, usage of a Vanuatu license as a part of a corporate structure together with another broker license, such as an EU one, where the Vanuatu licensed company is able to serve as a 'market maker' for an EU licensed brokerage.
Low costs and fast registration
In addition to the above, perhaps the two main reasons for the quick increase in popularity for Vanuatu licenses are:
(a) The fact that this is the fastest available Forex/Binary Options regulation out there (it is possible to be granted a license in only 2 to 3 months); and
(b) Very low capital requirements, even compared to other known licensing jurisdictions, such as Mauritius and Belize for example. Currently, the capital requirements for brokers looking to be regulated in Vanuatu are only $2000 USD!
There are, naturally, some additional expenses in connection with the regulation process, such as incorporation and administration of a Vanuatu financial company, annual registered office and secretarial services fees, application for trading in financial and commodity-based derivative instruments and other securities from VFSC, including VFSC regulatory application fees, governmental fees, agents consulting fees, legal fees, etc. However, these expenses are still smaller compared with other regulating jurisdictions.