Forex License in Estonia
It is essential to obtain a forex license when performing a business activity in Estonia. Licenses are issued by the Estonian Financial Supervision Authority (EFSA).
The company’s activities may include the following:
Establishing a joint-stock company
Opening a representative office
Opening a branch
The following must be undertaken to establish a joint-stock company:
- Appointing an auditor
- Document preparation
- Opening a bank account
- Registration at a notary
- Capital — 25,000 EUR
- Registration in the Securities Centre
After completing the steps, the following documents should be submitted to EFSA:
- Charter / notarial constituent documents
- Information about shareholders, stockholding
- Information about founders, members of board/council
- Information on the companies in which the petitioning company participates by more than 20%
- Information about auditors of internal control authorities
- Balance, profit and loss statement, the annual report (for active company)
- Business development plan for the next three years
- Document confirming an obligation to make payment to a pledge fund upon receipt of the license – single time, 1,300 EUR
- and other documents (the specialist will define)
To receive a license, it is necessary to have an authorized capital in the sufficient amount:
- Operations with securities, including in the name of a customer/at the expense of a customer — 50,000 EUR
- Emission and securities portfolio management — 125,000 EUR
- Underwriting, storage, securities management, trading at own expense — 730,000 EUR
It usually takes up to 4 months to obtain a forex license in Estonia.
The representative office of the company must provide the following to be approved by the authority and operate legally:
- a certificate proving the license availability in the country where the head office functions
- an activity plan of the representative office
- a power of attorney issued by the head company
- a certificate or an extract on the head structural unit registration
- articles of association
- address of the representative office
Opening a branch
The branch of the company must provide the following to obtain an operating license in Estonia:
- name and address of a branch
- information about the head of the structural unit
- business plan
- if the parent company does not operate inside of the EU, it is also required to receive: permission to establish the branch
- confirmation of legal operation of the company
- certificate that the parent structure has the license
- financial report on the head company’s activity
Wisor Group OÜ can help obtain a forex license for your business activity. Please request a consultation.
|Legal Services for Your Forex Project
|from 1,500 EUR
FREQUENTLY ASKED QUESTIONS
The process of obtaining a forex license in Estonia involves several steps, including company formation, collection of required documents, application and evaluation. Applicants must also fully align with specific requirements set by the Estonian Financial Supervision Authority (EFSA).
The most important requirements for obtaining a forex license in Estonia include:
- Minimum Capital. Applicants must demonstrate sufficient capital to operate a forex brokerage in Estonia. The exact amount varies depending on the type of license.
- Financial Stability. Applicants and their key personnel must have a clean financial track record and be able to demonstrate their stability and reliability.
- Business Plan. A detailed report on intended business activities, target market, risk management procedures and compliance measures is a key requirement.
- Fit and Proper Requirements. All key personnel, including directors and shareholders, must meet the “fit and proper” criteria that involve their competence, experience, and integrity.
- Registered Office and Local Presence. The company must have a physical registered office in Estonia and maintain a local presence for regulatory and administrative purposes.
The main steps in the application process for a Forex license in Estonia include:
- Formation of a legal entity in Estonia, typically in the form of a private limited company (OÜ).
- Submission of required documentation including the business plan, information on key personnel, financial statements, and compliance policies.
- Thorough review and evaluation by the EFSA. During this process, additional information may be requested.
- Due diligence procedures aimed at ensuring that company founders, directors and shareholders they meet the “fit and proper” requirements.
- Compliance check on business activities.
- Final decision by the EFSA.
Yes, applicants must establish a company in Estonia before applying for a Forex license.
The forex license in Estonia allows its holders to offer brokerage and trading services in foreign exchange, facilitate trading on forex markets, offer investment advice, and execute orders on behalf of clients.
Yes, having a bank account is a crucial requirement for obtaining a Forex license in Estonia. The company must have a dedicated bank account to conduct its business operations and manage client funds.
The specific documents required may vary depending on business activities and license type. However, the typical documentation needed to obtain a Forex license in Estonia includes:
- Certificate of company incorporation in Estonia.
- Shareholder and director information and background checks.
- Notarized passport copies and proof of address for key personnel and shareholders.
- Business plan with intended activities, risk management reports and compliance measures.
- Financial statements and evidence of sufficient capitalization.
- A description of the company’s organizational structure and internal controls.
Some of the main advantages include
- Thanks to EU passporting rights, a company with an Estonian forex license may offer forex services in all EU countries.
- Transparent and reliable regulatory environment.
- Low corporate tax rate.
- Well-developed digital Infrastructure.
Estonia offers two main tiers of forex licenses:
- Investment firm license allows the holder to provide a wide range of investment and brokerage services, including forex trading.
- Small payment institution license allows the holder to offer limited payment services, which can be relevant for certain forex brokerage activities.
The process of establishing a company in Estonia involves:
- Choosing a unique company name that complies with Estonian naming regulations.
- Appointing a management board.
- Depositing the minimum share capital required for the chosen company type into a bank account.
- Preparing and submitting incorporation documents.
- Paying the registration fee.
To establish a company in Estonia, applicants need to gather and submit:
- Articles of association (a legally binding document detailing the company’s structure, objectives, and internal rules).
- Formal application for company registration with the Estonian Commercial Register.
- Passport copies and proof of address for all company shareholders and directors.
- Evidence of the deposited share capital.
The application process involves submitting the required documents to the Estonian Commercial Register. Once the documentation is processed, the company will be officially registered (given that it meets all the requirements), and a registration number will be issued.