- Eugene Steiner
- Updated: May 8, 2025
Want to set up a forex broker in 2025? You’re not alone — many entrepreneurs are eager to enter the lucrative world of forex trading by launching their own brokerage. But how do you actually start a forex broker that’s compliant, cost-effective, and competitive? In this guide, we’ll walk you through everything you need to know to set up a forex broker from scratch. Some parts of this article are based on real-life projects we’ve helped build in Europe and the Caribbean.
Are You Starting Your Forex Broker? Where to Begin?
Typically, the first steps involve conducting thorough research, estimating ongoing costs, and creating cash flow projections. In this guide, we’ll primarily focus on the research phase. Get ready – there’s a lot to learn.
Offshore or Onshore?
The first crucial decision when you set up a forex broker is choosing where to base it — offshore or onshore. We’ve had experience setting up brokerages in both contexts. This article, however, will lay out a roadmap for setting up an offshore broker.
Offshore jurisdictions often provide more flexibility in setting up and managing your forex firm, but they can also present certain challenges. For example, you may struggle to find a bank willing to take you on as a client (more on that later). Be prepared for this and be aware that the banks that do accept you as a client may charge significantly higher fees for their services.
While there were once many appealing offshore jurisdictions, only a few remain today. But before you decide on any of them, it’s essential to research which best suits your needs.
Onshore
If you plan to start a broker in an onshore jurisdiction, be prepared for significant financial and regulatory commitments. However, onshore jurisdictions offer benefits that offshore counterparts don’t.
The onshore option is generally more suitable for high-net-worth investors with ample resources. In 2025, it may be challenging to opt for this choice without sufficient funding. It’s also a viable option for investors already operating a successful offshore business, as integrating an EU entity into your structure can be a logical next step.
Offshore
Most offshore (as well as onshore) jurisdictions require forex companies to obtain a special license to offer their services to clients. There are a few jurisdictions where your company doesn’t need to be licensed, but that’s a topic for another time. The table below compares some of the most common offshore jurisdictions for those looking to set up a forex broker or crypto exchange in 2025.
Offshore Jurisdictions for Forex Brokers and Crypto Exchanges
| Jurisdiction | Capital Requirements | Pros | Cons |
|---|---|---|---|
| Saint Vincent & the Grenadines (SVG) | None |
- Quick and cost-effective setup - Minimal regulatory oversight |
- Lack of formal licensing may affect credibility - Limited investor protection mechanisms |
| Seychelles | $50,000 |
- Favorable tax regime - Recognized for business-friendly environment |
- Moderate regulatory oversight - May face challenges with banking relationships |
| Belize | $500,000 |
- Balanced regulation and operational freedom - Attractive for brokers seeking a middle ground |
- Higher capital requirements - Increased scrutiny from international regulators |
| Vanuatu | $50,000 |
- Quick licensing process - High leverage options available |
- Perceived as less credible due to lax regulations - Potential difficulties with banking and payment processing |
| Mauritius | $250,000 |
- Well-regulated financial sector - Political and economic stability |
- Higher setup and maintenance costs - Longer licensing process compared to other offshore jurisdictions |
| British Virgin Islands (BVI) | $100,000 |
- Clear, crypto-friendly regulations - No income, inheritance, or capital gains taxes |
- Regulatory changes may impact operations - Higher operational costs compared to some other offshore jurisdictions |
| Cayman Islands | Varies |
- Comprehensive regulatory framework for digital assets - No corporate or capital gains taxes |
- High setup and compliance costs - Increased international regulatory scrutiny |
| St. Kitts and Nevis | None |
- No capital gains or income taxes on cryptocurrency transactions - Emphasis on investor privacy |
- Limited regulatory infrastructure for crypto businesses - Potential challenges with international banking relationships |
| Anjouan (Comoros) | Low |
- Emerging as a haven for crypto-related financial activities - Licenses recognized by some banking institutions |
- Less established legal framework - Potential credibility issues with partners and clients |
Key Considerations
When you start a forex broker, choosing the right jurisdiction matters just as much as your business model or tech stack.
- Offshore jurisdictions often have more lenient regulatory environments, which can expedite the setup but may impact credibility and investor trust.
- Many offshore jurisdictions offer favorable tax regimes, including no capital gains or income taxes, which can be advantageous for businesses.
- Setup and maintenance costs vary; jurisdictions with minimal requirements often have lower costs, but this may come at the expense of regulatory robustness.
- Operating in well-regarded jurisdictions can enhance trust among clients and partners, while lesser-known jurisdictions may raise concerns.
- Some jurisdictions prioritize investor privacy, which can be a significant advantage, but may also attract increased scrutiny from international regulators.
Selecting the appropriate jurisdiction depends on your specific business goals, target markets, and regulatory preferences. It’s advisable to consult with legal and financial experts to navigate the complexities of international regulations and ensure compliance.
Research Phase
If your goal is to make broker infrastructure from scratch, this research phase is your foundation. Before you register anything, know your region and audience. During the research phase, you’ll also need to identify your target market – which region or country, which age group, etc. Remember, money is a finite resource that can run out quickly, so you have a limited (or perhaps not so limited) window of opportunity to make your business successful. Consistently attracting new clients is an integral part of that. Once you’ve identified your target region, it’s time to locate a few good IBs within that area. Try to negotiate a deal with them before going live. Alternatively, you can start by seeking out IBs, and the question of the target region may resolve itself.
What Happens Once You Find an Offshore Country for Starting Your Forex Broker?
You can select the name for your company and register your legal entity. You can do this yourself or hire a professional service for a fee, which can be relatively small to considerable, depending on where you set up your operations and which company you choose to work with. So, if you’re keen on saving some money, you can tackle the entire process on your own. It might be a challenging endeavor, but it is certainly achievable.
Alternatively, you can purchase a ready-made, shelf company (an existing, mature legal entity with or without prior operational history) in the jurisdiction of your choice. You may also buy an operating company depending on your budget and timeline. However, should you decide to purchase an existing business, proceeding with extreme caution and conducting thorough due diligence is crucial.
Securing Your License
Having registered your company, the next step is to secure your license. This is one of the most technical steps when you set up a forex broker, but also one of the most critical. By this stage, you should have completed your research on the licensing procedure, the license’s timeframe, and the associated requirements. Typically, this process takes three to six months, but depending on your specific circumstances, it could be quicker or slower.
Regulatory authorities often describe the information they require in your application package. While there might be some country-specific differences, the core of your application usually includes the following:
- A standardized application form for you to complete.
- A comprehensive business plan.
- KYC for all directors and shareholders includes their CVs, police certificates from their residing countries, proof of address documents (such as utility bills or bank account statements), and copies of identity documents. Professional references may also be requested.
These requirements are fairly standard across jurisdictions, although details may vary.
License Types
Different businesses often require different licenses. If you wish to internalize risk (an elegant way of saying that you want to take the opposing side of your clients’ trades), you’ll need an “extended” license, often referred to as a market maker license.
This type of license provides a lot of flexibility regarding how you interact with your clients (e.g., pure B-book, a combination of A- and B-book). While costly, it’s usually worth the investment in the long run.
For instance, previously in Belize, the capital requirement for a license was $100k. Not that long ago, Belize’s IFSC increased capital requirements for investment dealer licenses to $500k, reflecting tightening regulatory standards aimed at improving investor protection (source).
The regulatory authority will require you to deposit these funds with a local bank and maintain them there for as long as you hold the license. These funds will not be available for use. Additionally, you’ll need to pay an annual “renewal fee.” Considering these points when planning your project funding and ongoing operational costs is essential.
Upon submission of your application package, the regulatory authority will review it. This usually takes about three months. If your application is satisfactory, you will receive your license. If not, they will provide feedback on the corrections to your paperwork. And the procedure starts all over again.
Need Help Getting Started?
We don’t just help register and license financial companies — we actively run them. With hands-on experience across every stage of the brokerage business, from setup to day-to-day operations, we understand the real-world challenges and what it takes to succeed.
Whether you’re looking to establish an offshore forex brokerage or set up in a European jurisdiction, we’d be happy to assist. BOOK A CONSULTATION today and take the first step toward launching your own regulated financial firm.
