Preface: If you’re considering starting a brokerage business and are seeking the right jurisdiction, look no further than Bulgaria. In recent years, Bulgaria has become a popular choice for obtaining a Forex license, offering numerous advantages for aspiring brokers. In this article, we’ll explore the benefits, broker license requirements, and the role of Fiozna Consulting as your trusted service provider.
Why Choose Bulgaria for Your Forex License?
Bulgaria offers several compelling reasons to establish your Forex brokerage:
- Regulatory Alignment: Bulgaria’s broker licenses adhere to EU standards, providing a regulatory framework similar to other European countries.
- Favorable Taxation: Bulgaria boasts advantageous tax treatment, including a low corporate tax rate of 10%, a modest 5% dividend tax, and a standard VAT rate of 20%.
- Cost-Effective Operations: Operating costs in Bulgaria are notably lower than in many other European jurisdictions. Monthly office rental rates start as low as EUR 300, and staff salaries typically range from EUR 1,000 to EUR 2,000 per month, making it a cost-effective choice.
- Market Opportunities: Bulgaria’s regulatory environment, governed by the Markets in Financial Instruments Act (MiFIA) Law, offers Market Maker and STP (Straight Through Processing) licenses, allowing a broad range of investment services.
- Access to EU Market: As an EU member state, Bulgaria provides access to the entire European Union market, making it easier to expand your brokerage across Europe.
Big business opportunity for investors in Bulgaria because of its strategic location which enables them to access entire EU and the markets of central and eastern Europe
Different tax rate systems in Bulgaria are:
- Corporate and Individual Tax: 10%
- Dividend Tax: 5%
- VAT: 20%
License Options in Bulgaria
Bulgaria offers two primary license types:
1. Market Maker License (Full License): This license permits the broker to provide a comprehensive range of investment services, including trading for its own account, portfolio management, investment advice, and more. To obtain this license, an authorized capital of BGN 1,500,000 (approximately EUR 766,000) is required.
2. STP (Straight Through Processing) License: With this license, brokers can offer a more limited set of investment services, including accepting and sending instructions, fulfilling client orders, portfolio management, and investment advice. The authorized capital requirement for this license is BGN 250,000 (about EUR 128,000).
Key Requirements for Obtaining a Forex License in Bulgaria
To qualify for a Forex license in Bulgaria, certain requirements must be met:
- The company must be either a joint-stock company or a limited liability company.
- The company’s registered office and location must be in Bulgaria.
- Shareholders and directors (at least two) should possess financial expertise, higher education, an impeccable reputation, and a clean criminal record. Bulgarian residency is advantageous.
- A comprehensive business plan must be submitted to the Financial Supervision Commission.
- The company must demonstrate its ability to meet authorized capital and safeguard customer funds.
- Internationally recognized online trading software and a website are essential.
- Deadlines for obtaining a broker license typically range from 5 to 8 months.
- Notarized Passport Copy: A copy of the client’s passport, which has been certified by a notary public. This ensures the authenticity of the document.
- Last 3-Months Utility Bill: Proof of the client’s residential address, usually in the form of utility bills from the last three months.
- Director(s) or Shareholder(s) Letter with Bank Account Statement: A letter from the director(s) or shareholder(s) of the business entity, along with a bank account statement. This may be required for financial transactions and establishing financial connections.
- Lawyer’s Reference Letter: A letter from a lawyer that serves as a reference or recommendation. This could be for legal representation or to vouch for the client’s credibility.
- Director/Shareholder’s CV: Curriculum vitae or resume of the director(s) or shareholder(s). This provides information about their qualifications and background.
- Copy of Educational Degree Certificate: A copy of the client’s educational degree certificate. This could be relevant for demonstrating qualifications or credentials.
- Note: All of the above documents should be in English or accompanied by certified translations into English. Additionally, you should provide three original copies of each document.
RELATED TO THE PROCESS:
- Application of FSC, Bulgaria: This is likely the application form for the Financial Supervision Commission (FSC) in Bulgaria, which may be necessary for regulatory approval or compliance.
- Statutory Declarations: Legal declarations or statements that affirm certain facts. These are often required for various legal processes.
- Bank Application Forms: Forms required by a bank for opening accounts or conducting financial transactions. These forms may include personal and business information.
- AML Procedures: Anti-Money Laundering (AML) procedures are policies and protocols to prevent money laundering activities. Documentation related to AML compliance is crucial in financial transactions.
- Business Plan: A detailed plan outlining the objectives, strategies, and financial projections of the business. This is often required for business establishment or financial transactions.
- Financial Forecast: Projections of the company’s financial performance in the future. This is often part of the business plan.
- Balance Sheet with Forecast Description: A financial statement that shows the company’s assets, liabilities, and equity at a specific point in time, along with a description of how these figures are expected to change in the future.
The work process for obtaining a license or permit
1. Name Availability Check: In this initial step, you check whether the desired name for your business or entity is available and can be legally used.
2. Document Gathering & Preparation: Collect and prepare all the necessary documents required for the application process, as listed in your previous request.
3. Document Submission: Submit the prepared documents to the relevant authorities or regulatory bodies as part of your application.
4. Fulfilling Capital Requirements: Ensure that you meet any financial capital requirements or minimum investment thresholds set by the regulatory body. This may involve depositing a specific amount of capital into a bank account.
5. Interview with Regulator: Depending on the nature of the license or permit, you may need to have an interview or meeting with a regulatory official or board to discuss your application and business plan.
6. Approval of License: After a review of your application and compliance with regulatory requirements, the regulatory authority will make a decision regarding the approval of your license or permit.
7. Delivery of License: If your application is approved, you will receive the official license or permit document from the regulatory authority.
8. Bank Account: Open a bank account for your business entity, which is often required for financial transactions and compliance purposes.
Local Presence: Our offices are strategically located just minutes away from all financial institutions in Bulgaria, ensuring a seamless application process.
Cost-Effective Solutions: Our services are competitively priced, providing you with cost savings compared to international agents.
Expertise: With years of experience in Bulgarian financial regulations, our team possesses the expertise needed to facilitate a faster application process.
Bulgaria stands out as an excellent choice for obtaining a Forex license within the EU. Its regulatory alignment, favorable taxation, and cost-effective operations make it a compelling option for aspiring brokers. Partner with Fiozna Consulting to streamline your path to success in the Bulgarian market and beyond. Contact us today for a free consultation.