Bulgaria has proven to be the perfect jurisdiction for incorporating and running FX companies. This is due to its attractive tax regime, their EU Member Status, its implementation of Markets in Financial Instruments Directive (MiFid), and a strong regulatory regime.
According to the Bulgarian legislation, only licensed and registered investment intermediaries can provide FX trading/investing services. This requires direct approval of the Financial Security Commission (FSC) in accordance with Markets in Financial Instruments Act. A few of these requirements are minimal capital investment as well as personal and professional guidelines in regards to the firm’s director.
Every FX brokerage firm licensed by the FSC falls under MiFID, the regulatory organizations for investment services across the 30 European Economic Area member-countries. As such, the ensuing license is valid across the EU, and allows FX brokerage firms to offer investment services, establish representative offices, and create fully-operational branches in any desired location within the European Union.
Minimum Capital Requirements
The follow initial capital requirements are configured for general investment intermediaries:
- € 50 000 – Limited Investment Services: reception and transmission of orders in relation to one or more financial instruments, intermediating the conclusion of transactions in relation to financial instruments, and the provision of investment advice to clients. The investment intermediary can not hold clients’ money or/and clients’ financial instruments.
- € 125 000 – Moderate Investment Services: All of the previous abilities with the addition of executing orders on behalf of clients, portfolio management, and holding clients’ money or/and client’s financial instruments.
- € 750 000 – Full Scope of Investment Services: This includes the above-mentioned as well as dealing in financial instruments on a company’s own account and the operation of a multilateral trading facility.
A Bulgaria Licensed FX company must be managed and represented jointly by at least two persons meeting specific requirements. Some of them are:
- Having the higher education and professional experience necessary for management of an investment intermediary, in accordance with the designator level of services and activities
- Having no convictions for a premeditated offence at public law
- Having no effective disqualification from occupying a position of property accountability
General Conditions to grant a license:
Some of the conditions are:
- The Memorandum of the Company must have specific clauses regarding the nature of this business
- The applicant company must fulfill the minimum capital requirements as set out above
- The company has a physical office space in Bulgaria
- The suitability of the shareholders. As with the directors, the shareholders pass a fit and proper test, especially a background check whereby FSC is satisfied that they have a clean criminal record as well as experience in the business
Application Procedure – General Outline:
- Registration of a firm and preparation of the full set of documents necessary to obtain the license
- Filling the license application before the FSC
- Examination of the application by the commission and issuing a decision
- Issuing a license
FSC Application Fees:
Depending on the case, there is an initial administrative cost for applying for a license, and the fees range from € 2150 to € 5100.
Do not hesitate to book an appointment with our professional consultants – send us an email.