Launching a Broker Company: Step-by-Step Route Map
Establishing one’s own broker company is a great business opportunity but launching a Forex broker requires preparation and understanding of all the details and requirements. There are two basic methods to create a broker company: set up a new company or use the White Label. This article offers a detailed review of both options to help you choose the most suitable one.
Opening a broker company
First of all, one needs to register a company and open an account for the company. This is when the company incorporation jurisdiction should be decided on. This decision largely depends on the location where the company will operate.
The company’s jurisdiction will also be considered when it applies for an account as not every bank would agree to open an account for a broker company in any jurisdiction. This is a very important item in the broker company starting agenda since it is impossible to send or receive payments without a bank account. Do keep in mind that launching a Forex broker from scratch demands a lot of time, effort and a solid seed capital.
We have made a step-by-step route map for launching a broker company:
1. Identify the target audience
The first thing to do is identify the target market. You should find the perfect jurisdiction for Forex broker registration and licensing. There are many jurisdictions with different requirements and rules governing the broker company launching.
One needs to remember about the initial capital which varies depending on the jurisdiction. We have talked about this in our previous article.
2. Select payment processing solutions
You need to find a reliable payment service provider to be able to offer transaction options to your clients.
3. Set up broker transactions
This step involves creation of the Forex broker website, selection of the trading platform you will use and extra services you would like to integrate.
4. Testing and full-fledged launch
In this stage you will need to test the trading platform, payment processing systems and mobile apps, and address other technical issues before the fully-featured broker company launch. After that a marketing campaign can be started.
Becoming a Forex broker with White Label
There is an even simpler way of creating a broker company. Multiple major brokers currently propose the Forex White Label solution, meaning that all trade transactions are performed by a major broker.
Forex White Label involves smaller operating costs and has no start-up capital requirements because you will not be processing trading transactions. You should keep in mind that launching a Forex broker with the help of White Label is not free of charge. The broker usually requires White Label partners to cover the fees. Licensing requirements vary depending on the jurisdiction.
Compared to the White Label, own broker company has undeniable advantages: full business control and undivided profits (without the obligation to pay fees).
Our advice for a successful and prompt broker company launch is to refer to those well-versed in the matter. SBSB lawyers know how the Forex market works in various jurisdictions and will be happy to help. We provide comprehensive legal services for Forex companies on a turnkey basis. SBSB lawyers offer customized solutions, taking into account the legislative framework, budget, residency and other peculiarities. And we also have a Telegram chat where you can get a free online consultation from our FinTech lawyers.