An offshore trading license for financial and commodity based derivatives can be obtained from a number of offshore jurisdictions. Using such a license an individual or corporation can trade in futures, options, interest rates, foreign exchange, stocks, and more. Government application and total setup cost for such a license will typically run about $27,000. Important issues start with picking the most appropriate and cost effective jurisdiction for your or your corporation’s needs. It is important to choose a trusted advisor when setting up a financial and commodity based derivatives business. Not all jurisdictions are equally tax advantaged and not all are equally protective of your privacy.
The day when one could only do business in or from one’s home country are long gone. More and more individuals and corporations are choosing to bank offshore, start businesses offshore, trade offshore, and set up foundations to protect their assets and their privacy. As this trend continues more and more international business opportunities present themselves. The ability to obtain a license for trading financial and commodity based derivatives from an offshore location is a good example of the opportunities available today.
Better a Broker than a Trader
Although all traders and investors look to profit from their financial expertise by picking winners in the various trading markets the best and most secure money is typically in acting as a broker. Brokers make their commission when the trade goes up and when it goes down. The ability to trade offshore is a plus to many who are moving their assets to offshore foundations, corporations, and bank accounts. Obtaining a license to provide trading opportunities in stocks, futures, commodities, and options can be very lucrative in this increasingly international world.
Setting Up, Getting a License, and What it Will Cost
The first and most important part of setting up a financial and commodity derivatives brokerage is pick the jurisdiction. You will want to consider tax advantages as well as personal and asset privacy matters. Depending upon the jurisdiction the license may allow you to do more or less with your business. Make sure what the license entails for each jurisdiction you consider.
The application will entail providing personal and financial matters for all officers, shareholders, and directors of the business. If any or all of the individuals involved wish it is possible to use nominees. This is a matter to discuss with your counsel in setting up the business.
While typical setup cost will run about $27,000 the annual expenses will be around $12,500.
In short it is entirely possible to provide brokerage services in a number of offshore locations. Being clear about your business plans is where to start. Then you will want to find a trusted advisor when setting up in the right jurisdiction and doing it in such a way as to maximize tax advantage and profit potential.
When you set up your offshore brokerage don’t forget that even from offshore you can outsource your back office work offshore to the most cost effective locations. Everything from getting the right software to run your business to helping set up an effective webs site to attract customers will fall into your range of concerns. Starting with the right advisor may well be the most important step.