Forex license in Seychelles

Disadvantages and Considerations

While attractive in many ways, the Seychelles license has some limitations:

• Perceived regulatory strength: Some global partners view offshore licenses as less prestigious than e.g. UK, EU or US licenses. Seychelles does not have a top-tier reputation like a CySEC or FCA. Consequently, some banks or liquidity providers may be cautious, and certain markets (like the US, UK, France, etc.) are off-limits for direct targeting.
• Enhanced compliance requirements: In recent years, Seychelles has tightened oversight to meet international AML/CFT standards. Firms should be prepared for due diligence and substance checks similar to onshore regimes. Annual fees and mandatory audits mean ongoing costs exist (though still lower than many alternatives). Compliance also demands a qualified local director and strict reporting – this is not a “license you can forget”.
• Limited brand recognition: While the Seychelles brand is known, it is not as well-known as some EU or Caribbean regulators in the financial media. Brokers may need to work harder to market globally under a Seychelles license. Building trust at scale in restricted markets can require additional effort (e.g. superior customer service, proven track record).

Types of Licenses

Seychelles issues two primary related license types for foreign brokers:

• Securities Dealer License (SDL): This is the main license for a brokerage company (an IBC) to conduct Forex and securities dealing business. It is granted to the company entity itself.
• Securities Dealer’s Representative License: This is a personal license for an individual who serves as the local representative or managing director of the SDL company. By law, the appointed Representative (often a director or senior manager) must hold this license too. The application for the Representative license is submitted together with the application for the Company’s SDL.

No separate license is required for different asset classes – one SDL covers all allowed activities. (Other financial licenses exist in Seychelles – e.g. for funds or insurance brokers – but they are outside the scope of a forex/brokerage license.)

Requirements for Obtaining the License

Applicants must satisfy several criteria to obtain the Securities Dealer License. Key requirements include:

• Local Company (IBC) Setup: Form a Seychelles International Business Company with minimum authorized capital of USD 50,000. The capital must be deposited into the company’s Seychelles bank account before licensing. Documents (memorandum, articles, registers) must be prepared and filed with the Seychelles Registrar of Companies.
• Minimum Personnel: At least two directors and two shareholders (they can overlap). A single person can hold multiple roles, but generally two directors are required. Directors must demonstrate at least 4 years of professional securities experience or education. One director is typically the “Seychelles representative”.
• Local Representative: A qualified person (often one of the directors) must be licensed as the Securities Dealer’s Representative. This individual must have a higher education in business/finance and at least 4 years’ securities experience. This license application is filed at the same time as the company’s application.
• Compliance Officer: A dedicated compliance officer (can be consultant) must reside in Seychelles and have sufficient compliance experience. This person handles AML/KYC procedures and interacts with the FSA on an ongoing basis.
• Office & Local Presence: A physical office address in Seychelles is mandatory. All company records must be kept on-site and accessible to regulators. (Virtual offices are not allowed for licensees.)
• Insurance: Professional indemnity (liability) insurance covering directors and shareholders is required. The policy minimum is approximately USD 3,000, providing cover for errors/negligence in financial services.
• Fit & Proper Test: Background checks (police clearance, financial statements, bank references) for all key persons are mandatory. Applicants need notarized passports, proofs of address (recent bills), CVs, and other personal documentation. Any national sanctions or AML concerns would likely trigger review.
• Business Plan & Policies: A detailed business plan (with 3-year financial projections) and comprehensive internal policies must be submitted. Required manuals include: Internal Operations Manual, AML/KYC Manual, Compliance Manual, Conflict of Interest Policy, Client Service Agreement, Complaints & Business Continuity plans, etc.

Costs and Taxes

Key costs associated with obtaining and maintaining the license include:

• State (Regulator) Fees: As of mid-2022, FSA fees are roughly USD 1,500 for the initial Securities Dealer license application and USD 500 for the Representative license. Annual renewal fees are about USD 3,000 and USD 750 respectively. (These official fees cover the one-year license term.)
• Professional & Setup Fees: Legal and consulting fees vary by firm. A turnkey service (company formation, documentation, application support) typically ranges from USD 10,000 to USD 20,000. In addition, registered office rental and local agent fees may apply. Banks also charge account opening fees.
• Minimum Capital Contribution: USD 50,000 must be paid into the Seychelles company’s bank account. This is not a fee (it remains company capital) but it is a required cash deposit to demonstrate minimum capital.
• Ongoing Taxes: The license itself is not subject to significant taxation. Corporate income tax is 1.5% on gross licensee profits. Because licensed revenue is considered foreign-sourced, local business or VAT taxes generally do not apply to offshore income. In effect, most Seychelles brokers keep the vast majority of net profit. (For small local sales, a 15–25% business tax on profits may apply above certain thresholds, but this is moot for fully international operations.)
• Other Government Fees: There are small annual registry fees and compliance levies. For example, the first-year government duty (for both licenses) may total around USD 3,850 (annual license fee) as per SBSB estimates. These are modest compared to Western regulators.

Step-by-Step Licensing Process

The standard procedure to obtain the Seychelles Forex license involves several stages. In practice, each step is usually handled in parallel (legal setup, bank account, and license docs at once), but the main phases are:

1. Company Formation: Register a Seychelles International Business Company. Prepare and file all incorporation documents (MOA, AOA, etc.). Open a corporate bank account to deposit the authorized capital. SBSB can handle these steps. (This usually takes 1–2 months.)
2. Documentation Preparation: Assemble the full licensing package: certified passports, proofs of address, CVs for directors/shareholders, police certificates, bank reference letters, etc. Simultaneously, draft the business plan and compliance manuals (AML/KYC policy, client agreement, etc.). Coordinate obtaining the insurance policy quote. Gather documents for the nominee compliance officer and broker representative.
3. Application Submission & Review: File the completed application with the FSA (including both the Securities Dealer license form and the Dealer’s Representative form). Submit all required documents and pay the application fee. The FSA will review the package and may ask additional questions or clarifications.
4. Regulatory Review (Pre-Approval): If the application is satisfactory, the FSA will issue a “provisional approval” (often within ~2–3 months after submission). This means only the final local requirements remain (office lease, local director contract, capital deposit proof, insurance payment).
5. Final Compliance Steps: Once provisional approval is granted, implement the remaining conditions promptly. This includes signing an office lease in Seychelles, formally appointing the licensed representative and compliance officer, depositing the USD 50,000 capital, and paying for the insurance policy. Provide the FSA with evidence of these steps within the time frame (typically 60 days).
6. License Issuance: After all conditions are met, the FSA will issue the official Securities Dealer License and the Representative License. The company then pays the first-year license fee and can commence regulated operations.