Set up a Forex and Brokerage Company in South Africa

To set up a forex and brokerage company in South Africa, investors follow the general company formation process, followed by the mandatory license application. Our South African lawyers offer complete business incorporation solutions and, moreover, assistance for licensing and business permit applications in regulated industries such as the financial sector.

How to open a forex and brokerage company in South Africa

Starting a new business is subject to several key steps, regardless of the sector in which the company will operate. Local and foreign investors in South Africa are all required to register their companies.

Below, our team summarizes the main steps for company formation in South Africa:

1. Choose the business form: the private company (with standard or custom Memorandum of Incorporation) and the public company are popular choices for those who will set up a forex and brokerage company in South Africa. There is also an option to register a foreign company;
2. Reserve the company name: all companies must have a unique name, as available and reserved beforehand;
3. Prepare the documents: companies that use a custom Memorandum of Incorporation will draft it accordingly. Other documents required for company creation include those referring to the founders, application forms, and others;
4. Register the company: business registration in South Africa takes place with the Companies and Intellectual Property Commission. Our lawyers in South Africa can assist with the mandatory submissions.

For investors who set up a forex and brokerage company in South Africa, the following costs related to company creation should be taken into account:

• R75 for the company name reservation;
• R30 if the business owners must extend the name reservation;
• R175 or R475 for the notice of incorporation.

Our team wishes to highlight the fact that the costs above are not the only ones required to open a company in South Africa. Legal fees, business-specific and rental costs, as well as others, are also in place.

Key regulatory requirements for South African brokerage and forex companies

Licensing is mandatory when setting up a forex and brokerage company in South Africa and the authority that issues the business license is the Financial Sector Conduct Authority, or the FSCA.

The main legal resource that governs foreign exchange and brokerage is the Financial Advisory and Intermediary Services Act 37 of 2002; however, other relevant laws and regulations can apply. The Act 37 regulates the provision of certain financial advisory services to clients and provides further information for those who offer intermediary financial services to customers.

Those who set up a forex and brokerage company in South Africa are required to meet the fit and proper conditions set forth by the FSCA for those who apply for a Financial Service Provider License. The experts at our law firm list some of the criteria that apply to those who submit a request for a financial advisory and intermediary services license:

• Have adequate competencies (such as minimum experience, minimum qualifications and meet the regulatory examinations, along with having sufficient training in their class of business);
• Meet the requirements for honesty, integrity, and good standing;
• Follow continuous professional development;
• Maintain financial soundness and operational ability.

The fit and proper test must be passed by key individuals and representatives in the forex company or brokerage firm.

There is no requirement for foreign nationals who wish to offer brokerage services to obtain residency in South Africa. However, those interested in relocating here can ask our team for more details on their options.

Contact our law firm in South Africa if you want to know more about how to set up a forex and brokerage company in South Africa.