What are the advantages of trading in a forex broker regulated in Seychelles? What's so special about offshore jurisdiction? And what are the options?

All financial and brokerage firms, including Forex, CFDs, and Derivatives businesses are a highly regulated industry. If a company wish to offer their Forex Brokerage services to its clients (either Corporate or Personal), the company must own a Forex Broker License. Furthermore, it is less likely for banks to accept an account opening application from unlicensed companies unless the company or the individual is limiting their trade to only personal funds.

The requirement and regulation to acquire this License differ for each country. Once acquired, this License can be useful for Brokerage, mutual, or hedge funds firms that may have clients wishing to invest their funds safely.

 

 

Why Offshore Jurisdiction?

While traders are now more used to offshore forex brokers, renowned regulators are making it impossible for people outside Australia, New Zealand, and the US to trade spot FX. As an example, in June 2019, IC Markets stopped serving its clients outside Australia. The same action is being enforced by CySEC as well. Brokers are being forced to get a compliance opinion from every country they accept clients from. Otherwise, they face the possibility of receiving a hefty fine.

See also: CySEC Regulated Forex Brokers

Even worse, local regulators are seen pushing their regulated brokerage more than ever, imposing client and Brokerage firms, mutual or hedge funds with the obligation to comply with onerous and costly compliance of their resident jurisdiction. Thankfully, the client's investments nowadays can be done through an entity incorporated in an offshore jurisdiction, licensed to carry on the Securities dealing business, bypassing these constraints legally.

All jurisdictions, both onshore and offshore, can grant a Forex Broker License to qualified applicants. Generally, onshore jurisdictions do impose much higher capital requirements on applicants so the costs of setting up a brokerage in those jurisdictions are very high when compared to some of the offshore financial centers. Offshore jurisdictions offer many interesting possibilities because many countries will allow a Forex Brokerage to operate free of tax on profits. Consequently, the price and trading fees that thy offer to retail traders and investors are much lower and attractive.

 

Which Offshore Jurisdiction?

No single country can be defined as the best country to set up a new Forex brokerage. Here are some of the most popular offshore jurisdictions for Forex Brokerage:

  • Belize;
  • Mauritius;
  • Saint Vincent and the Grenadines;
  • Marshall Islands;
  • British Virgin Islands;
  • Cayman Islands;
  • the Seychelles;
  • Vanuatu

The cheapest offshore jurisdiction to set up a Forex Brokerage nowadays is in the country of Vanuatu. To set up a new brokerage in Vanuatu, a broker only needs to prepare funds as low as $2,000 as the local capital requirement and $1,000 up to $3,000 for the corporate service provider.

offshore forex broker jurisdiction

Every country sets different capital requirements, intending to ensure that corporate founders are financially solid. Some example of capital requirements from various jurisdiction is as follows:

  • Belize: capital requirement for new Forex brokerage is $500,000
  • Cayman Islands: capital requirement for new Forex brokerage is $100,000
  • Seychelles: capital requirement for new Forex brokerage is $50,000
  • Vanuatu: capital requirement for new Forex brokerage is $2,000

But, cheap is rarely a good option when it comes to choosing a forex broker based on the country it's located. For example, if you end up trading in a broker headquartered at this tiny Pacific Ocean island country, there is practically no sound regulation that guarantee your fund's safety and other clients' interests. You have to do a proper an in-depth analysis of the jurisdiction before you decide to go ahead and register in an offshore forex broker.

In our opinion, the best jurisdiction today to incorporate a reasonable cost combined with reasonable capital deposit requirements is in Seychelles. This is very understandable because the nation has more flexible trading controls, less strict rules, and simpler requirements. Regulations in Seychelles are overseen by the Seychelles Financial Services Authority (FSA). High leverage and ease of registration are the most prominent characteristics of FSA-regulated forex brokers. Seychelles also offers low registration costs and a rapid approval process. It is no surprise that the Seychelles regulation has become so popular among Forex Brokers.

 

Seychelles Forex Broker License Requirements

Seychelles has become increasingly popular among Forex Brokers and CFD Brokers. The basic requirements to set up a Forex Broker in Seychelles are as follows:

 

  • Domestic Company formation in Seychelles

To obtain the license, there needs to be an incorporation of a Domestic company in Seychelles with a share capital of $50,000. The company must have at least two (2) shareholders and two (2) directors. A person can act both as a shareholder and director of the company. The incorporation takes around 2 weeks.

  • Office

The company also needs a fully furnished office fit for FSA approval – as the FSA needs to see that the company has an operating presence in Seychelles. The office includes the following services: Rent, electricity, water, active phone number, cleaning, and basic internet. Do note that the FSA will visit your office for inspection.

  • Compliance officer

The company needs to appoint a compliance officer who will help the correspondence with FSA and record keeping.

  • Security Dealer License Representative

The company needs to appoint a qualified director as the Securities Dealers License Representative.

  • Legal advisor

The legal advisor will liaise with FSA and ensure the company has a proper legal system to support business operations.

  • Professional Indemnity Cover

It is mandatory to have professional indemnity coverage. The company can either arrange it or get it arranged by an insurance broker.

 

Required Documents

To qualify, all the following documents are required from all Directors/Officers, Shareholders, and Beneficial Owners. The document must not be older than 3 months:

  1. Police Clearance Certificate – Certificate to ensure stakeholders don't have any criminal records
  2. Declaration of No history of bankruptcy
  3. Certified Copy of Passport
  4. Original or Certified Copy of Bank Reference Letter
  5. 2 Certified copies of Professional Reference Letters
  6. Original or Certified Copy of utility bills
  7. Resume/CV outlining experience in Forex Brokerage Activities and Qualifications warranting issuance of a license

 

An Overview of Seychelles Regulated Forex Brokers

As mentioned previously, Seychelles regulation allows brokerages to provide more flexible trading conditions. Therefore, you can trade with high leverage up to 1:1000 (or sometimes more) in Seychelles regulated forex brokers. Also, with the relatively low cost to open a brokerage service, forex brokers in Seychelles enable their clients to open accounts with a deposit as low as $10 and trade with small trading volumes.

Here are the most prominent examples of Seychelles regulated forex brokers:

1. easyMarkets

easyMarkets Specifications

🌐 Website
easymarkets.com
Leverage
1:400
💼 Regulation
💲 Min Deposit
$25
Year Established
2001

Interest rate on funds
Bonus offers
Trading contests
Free education
Personal manager
Trading by telephone
PAMM accounts
MAM accounts
Segregated accounts
Affiliate program
Islamic accounts available
FasaPay
Neteller
Skrill
WebMoney
Wire transfer

Since 2001, easyMarkets have been writing their stories in financial markets. Simple, Honest, and Transparent, become three values that are carried on easyMarkets. The company has tried to make the process of trading as simple as possible.

They rebranded from easy-forex to easyMarkets in 2016. Over the years, easyMarkets expanded their CFD offerings to include global indices, options, metals, forex, commodities, and cryptocurrencies. The company is licensed by CySEC and ASIC.

Another privilege when trading in easyMarkets is its own platform. easyMarkets platform is simple and versatile. Based on reviews from traders, it's friendly to new clients and hosts a lot of features for experienced traders. Clients also receive free guaranteed stop loss, no slippage, fixed spreads, and no funding or withdrawal fees from easyMarkets.

There are three uniques features in the platform. Firstly, dealCancellation gives traders the ability to "undo" their trade. easyMarkets is the only broker that offers a way to close trade before it reaches 60 minutes duration only with a small fee.

Furthermore, traders can enjoy the Inside Viewer. This tool gives traders a deeper understanding of market sentiment by showing them percentage of buying and selling executed in the platform. The third unique feature is Freeze Rate. traders can pause a rate and place their trade at the "frozen" rate using this tool.

easyMarkets also includes financial calendar, market news, trading charts, and trading signals as the platform's perks. They also offer the technology on the mobile interface via iOS and Android devices. Traders can access markets anywhere and at any time.

MetaTrader 4 is also provided by easyMarkets. When using this popular trading platform, traders will get negative balance protection and fixed spreads. Besides that, Vanilla Options is available in this broker.

Because of those innovations, easyMarkets is an award-winning broker, receiving Forex Broker 2019 by The Forex Expo-Dubai, Most Innovative Broker 2018 by World Finance Markets Awards, Best APAC Region Broker 2018 by ADVFN International Financial Awards, Most Transparent Broker 2017 by Forex-Awards, Best Forex Service Provider 2017 by FXWord China, and many more over the years.

Moreover, easyMarkets offers three account types, such as VIP Accounts, Premium Accounts, and Standard Accounts. All of them can be accessed by the Web/App and MT4 platform. easyMarkets provide maximum leverage at 1:200 when using easyMarkets Web/App platform, and maximum leverage of 1:400 when using MT4.

Fixed spreads start from 1.0 pips in forex trading. Traders can become easyMarkets VIP clients with some benefits, such as trading via telephone, access to the tightest fixed spreads, personal analyst, and real-time market updates via SMS.

Traders do not need to pay additional fees whethere it is for commission, account fees, or deposit withdrawal. Account currencies are available in 18 options including EUR, CAD, CZK, JPY, NZD, USD, SGD, and many more. The company offers multiple ways to deposit and withdraw funds, some of them are credit/debit cards, bank transfers, and a ion of eWallets like Neteller, Skrill, and Fasapay.

For any questions or assistance, traders can contact the company directly at one of their local offices or at their headquarters in the Marshall Islands. Besides, traders can chat with their customer service by email, Facebook, WhatsApp, Viber, and Live Chat.

Based on the review above, easyMarkets provides easy-to-use platforms with some unique tools and it can be accessed by traders anytime and anywhere. Besides, traders do not need to pay extra fees for trading commission and deposit/withdrawal fees. Traders who register in easyMarkets can enjoy low spreads in EUR/USD pairs from 0.9 in the MT4 platform.

 

2. BDSwiss

BDSwiss Specifications

🌐 Website
www.bdswiss.com
Leverage
1:400
💼 Regulation
💲 Min Deposit
$100
Year Established
2012

Bonus offers
Trading contests
Free education
Personal manager
PAMM accounts
LAMM accounts
MAM accounts
Segregated accounts
Managed accounts
Affiliate program
Islamic accounts available
US traders are welcome
Neteller
Skrill
Wire transfer

 

3. HotForex

 

To compare them better, here is the side-by-side view of the three brokers above:

Compare easyMarkets BDSwiss
General Rating 4.33/5
3.67/5
Trustpilot 3.3/5

rated by 138 users
💼 Regulation
⌛ Established 2001 2012
💲 Min Deposit $25 $100
⚖ Max Leverage 1:400 1:400
🔢 Spread Fixed Variable
💸 Commissions
💡 Min Position 0.01 lot 0.01 lot
💳 Payment AstroPay, Crypto, Crypto Cash, BPAY, Credit/debit cards, Ethereum, FasaPay, giropay, iDEAL, Litecoin, Neteller, Skrill, SOFORT, Tether (USDT), UnionPay, WebMoney and Wire transfer Credit/debit cards, giropay, iDEAL, Neteller, paysafecard, Skrill, SOFORT and Wire transfer
🏢 Office(s) AustraliaCyprusSeychellesbritish virgin islands GermanyUnited StatesCyprusSeychellesMauritius
🧩 Forex Demo Account
📁 Segregated Account
🕋 Islamic Account
👨‍💻 PAMM Account
📈 Managed Account
💱 Hedging
🇺🇸 US traders are welcome
🕛 Swaps
🏆 Trading contests
⚡ Automated trading
💹 Interest rate on funds
💰 Bonus offers
📖 Free education
📱 Mobile trading
💻 Browser-based platform
1️⃣ One-click trading
⏱ Trailing stop
⏳ Pending orders
ForexForex
cfdCFD
IndexesIndexes
Spread BettingSpread Betting
Gold & SilverGold & Silver
CryptocurrenciesCryptocurrencies
stocksStocks
oilOil
MetalsMetals
EnergiesEnergies
FuturesFutures
etfETF
OptionsOptions
AgricultureAgriculture
BondsBonds
Binary OptionsBinary Options
IndicesIndices
CommoditiesCommodities
SharesShares
Physical StockPhysical Stock
Stock CFDStock CFD
🗣 Website Languages Arabic, Chinese, English, French, German, Polish, Russian, Spanish, Vietnamese Arabic, Czech, Danish, English, German, Hindi, Italian, Korean, Norwegian, Polish, Romanian, Russian, Spanish, Thai, Vietnamese
🚪 Open Account Open easyMarkets Open BDSwiss


 

Of course, other than those brokers, there are many other brokers that choose to be regulated in Seychelles. For more options, you can find them in the List of Forex Brokers in Seychelles.

 

Beware the Risks of Trading with an Offshore Forex Broker

As a trader, you need to do proper research about your offshore broker. Otherwise, you run a big risk of losing your money to a possible scam. This does not mean that all of the offshore forex brokers are bad. Some of these brokers chose to establish an offshore branch to allow higher leverage or accept clients from more countries.

If you do end up registering with a shady offshore broker, you should prioritize your main concern on these issues:

  1. The broker can just disappear.
  2. Unlicensed brokers can your trading account.
  3. Your earnings can be nullified by your broker, and you might lose all your profit.
  4. You may lose your deposit.

If you have been a victim of an offshore broker scam, you might be able to recover your deposit. A lot of companies do provide Forex-related service, such as fighting against forex broker scams. These companies might be able to assist you. Otherwise, you could always learn how to protect yourself from forex broker scams since the beginning.