Forex is a big business, which involves a lot of money. Because of this, rules and regulations have been put into place to ensure that the market is not full of ‘cowboys’. Of course what this does mean is that people looking to get into the industry will have a tough time. Why? Well, the expenses associated with setting up in the industry are fairly extreme. But where does it all start?
Well, after registering a company, the owner needs to obtain the correct license. Now for most other industries, a license wouldn’t set you back to much, maybe EUR 500, or in some cases maybe even EUR 1,000. Getting yourself a Forex Trading company license is a whole different kettle of fish though! If you want to do it properly then you’ll need to contact the CYSEC and they will charge a upfront fee of EUR 27,000 for the license.
So is that it, you are ready to go? Unfortunately, it doesn’t stop there after paying for the Forex Trading company license. The CYSEC incur a lot of fees and charges which will generally range between EUR 5,000 and EUR 10,000. So before you even become legal you will have forked out anything between EUR 32,000 and EUR 37,000.
As mentioned before, this is a big industry. In fact, you should be glad that setting up in the industry and buying a Forex Trading company license costs so much. It allows the market to remain competitive but not quite flooded, so there is plenty of scope for expansion on a daily basis. Even a small slice of such a big market could potentially make you a millionaire if you play your cards right.
The problem is, there is a lot more to it than simply purchasing a license. The related authorities require a decent commitment and one that needs to be paid in full before trading. If your company is looking to offer advice or simply the transmission of orders, then you’re in luck as you’ll only have to produce a share capital of EUR 80,000.
On the other hand, if you are looking to do anything else you could be charged an upfront share capital of EUR 200,000. In fact, in the most extreme cases the related authorities will actually require a share capital of EUR 1,000,000. Of course this is out of most peoples reach, but is one of the reasons that there is still plenty of money to be made in the Forex market!Making a decision before you proceed is definitely a wise choice. Ensure that you know exactly what your company will be doing as this could save you a lot of cash when producing share capital. Remember if you need to upgrade to a higher licensing agreement then this can be done as and when you need to. There is no need to invest a higher amount of share capital if you don’t need to! This money could be used to develop your business, rather than be wasted as share capital.