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New Legal Framework for Forex Brokers in Saint Vincent and the Grenadines

Jul 15, 2020

Saint Vincent and the Grenadines is not major country that comes to mind when somebody talks about foreign exchanges, but there appears to be a growing trend where a number of companies are being established for the purpose of carrying out the business of forex Trading and Brokerage and other related activities in SVG, therefore, in SVG might be some big changes coming in terms of regulation.

In recent months, rumors have been growing that the FSA will be implementing new set of regulations. At this point SVG jurisdiction is similar to the situation in the Marshall Islands, and brokers are not regulated in these countries. Lack of regulation has seen a number of bad businessmen set up business in SVG and damage the reputation of SVG, which has prompted the government to act.

In recognition of the problem being caused by companies which engage in forex and related activities, the FSA has over the years publicly issued advisories and warnings via its website advising the public that any forex business undertaken by SVG company is unregulated by the FSA and that clients should be aware of this and exercise caution when doing such business.

Recently, FSA announced that it is planning on establishing its own financial license, which companies wanting to offer financial services from SVG will need to secure before starting their operations in the country. Therefore, with the introduction of the license, companies operating within the country without authorization will no longer be permitted. Currently, it is not clear when this regulation will be implemented, but it is expected to occur later this year.

Also, Financial Service Authority recently announced that SVG is moving to a territorial tax system in exchange for economic substance for all relevant entities so that the jurisdiction remains off any listing by the OECD / EU while at the same time remaining competitive from a tax perspective. The FSA is aiming to have such legislation in place before the end of 2020.

SVG is not considered as a forex hub but the new regulations could be positive for the industry, as it will discourage scammers from using SVG as a base, as well as improve standards for the industry and perhaps, attract more legitimate companies.

By introducing new regulatory framework, FSA ensures that SVG continues to be vigilant in providing that international standards and best practices govern its international financial services and is committed to promoting safe and sound practices, as far as possible, by entities incorporated in SVG.

Despite the fact that SVG could be a good destination for forex business activities, there are still countries in the world where you can provide forex services without obligation to obtain special license. We would gladly help our clients to establish forex related business in countries like Marshall Island where no special license is necessary to conduct your forex business.

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