Dozens of forex brokers spring up every day in all parts of the world.

However, it is important to know what to do since the forex market, while not regulated as much as the stock market, is closely monitored by independent national bodies.

If you open a fx broker you need to be aware that users will entrust the company with part of their savings, and as a result you need to operate with professionalism, transparency and integrity.

Committing fraudulent acts, can lead to national and/or international ban of the forex broker, the withdrawal or suspension of your forex license, millions of USD in fines, and even jail time in the most severe cases.

We at InvestinGoal do not provide consulting on the opening of an investing or forex business, however we can provide you with some preliminary information and steps on opening your own licensed forex broker.

So, if you want to start a forex brokerage you should take a look at the following information:

  • Choosing a jurisdiction
  • Opening a registered office
  • Developing a technology
  • Signing agreements with liquidity providers
Table of Content

How to choose the right forex broker license for your forex company

If you’re looking for the best forex broker license for your fx business, these are the FCA, the ESMA-compliant jurisdictions or the CFTC in the USA.

However, all these jurisdictions cost a large amount of money to maintain, they are quite hard to obtain for any new currency trading broker, and they require the brokers to follow strict rules. This is the reason why young forex brokerages choose an offshore jurisdiction (or Tier 3 forex licenses) such as the Vanuatu FSC which requires only $50000 to be obtained.

However, you must also consider the fact that there are more prestigious regulations than others, so, all things being equal, if you attract users with regulations that are considered unreliable, they may choose another forex brokerage firm.

Below you will be able to find a list of regulations, their tier of membership (from 1 to 3) and the cost required to obtain them.

Forex regulations Tier Licensing costs
CFTC (USA) 1 Over 20’000’000 USD
FCA (UK) 1 From 125’000 EUR
MAS (Singapore) 1 Up to 5’000’000 SGD
CySEC (Cyprus) 2 From 125’000 EUR
MFSA (Malta) 2 From 125’000 EUR
BVI (British Virgin Islands) 3 From 100’000 USD
SCB (Bahamas) 3 From 300’000 USD
SFSA (Seychelles) 3 From 50’000 USD
IFSC (Belize) 3 From 50’000 USD

Of course, if you decide to invest your money in an existing forex broker, you will retain their regulation.

You should also keep in mind that the costs may vary according to your marketing strategies and business plan. In fact, depending on the business model of your brokerage (A-Book or B-Book), you might have to apply for different licenses which may have different costs.

For instance, in order to get an ESMA or FCA approval, you can apply to 3 different licenses with 3 different capital requirements:

Type of license Goal of the license Money requirements
Dealer license For becoming a market maker 730’000 EUR
Intermediary license For becoming a NDD firm 125’000 EUR
Introducing broker license For conducting sales and marketing, but without retaining clients’ funds 50’000 EUR

Registered office

If you want to start a successful forex brokerage, the office registration is important as it allows users to have a physical location to refer to, and more importantly it allows regulators to finalize the licensing process in order to attract new clients.

The choice of an office location for your forex business must not be random, but must follow certain rules depending on the relevant regulatory body.

Most regulations, in fact, require that the office be located in the same country that the financial watchdog is monitoring.

In other words, if you want to get CySEC regulation in order to trade in the European Union, CySEC will require you to have a physical legal entity in Cyprus. Same thing if you want to operate in the United States: you will be required to open an office in the United States.

If you do not have large amounts to invest, there are some offshore jurisdictions that do not have physical presence requirements. This is the full list:

Offshore license list Country
IFSC (Belize) Belize
BVI British Virgin Islands
CIMA Cayman Islands
SFSA Seychelles


The “infrastructure and technology” factor is extremely important for any forex brokerage firm, but both are very expensive to implement and maintain financially.

When we talk about a broker’s infrastructure and technology, we refer to:

  • The forex trading platform
  • The servers used for executing clients’ orders
  • The broker’s servers
  • The algorithms used to monitor clients’ performances
  • The risk management algorithms
  • The forex brokerage website

If you want to start a forex brokerage business, then you will be able to find these services integrated in a White Label solution. White Label fx brokers are brokers who, under monthly or annual fees, allow third parties to leverage their technology and brand it to their liking.

Although a white label solution is not totally cost-efficient, it is generally the most popular among newborn forex brokers because the research, development, and production costs would be extremely high if the goal is to produce everything from scratch.

With a white-label service, on the other hand, it is possible to both reduce the production timeline, but more importantly, to accede to proven and reliable technologies from a forex brokerage who has years of experience in the foreign exchange market.

Research and production costs, in fact, can exceed half a million USD during the first year. In fact, to give a practical example, it is possible for a forex brokerage to purchase a MetaTrader license so that they can offer their trading platform to their clients.

MetaTrader, however, can come to cost over 100000 USD per year between license activation, maintenance cost, and activation of essential services such as order routing and server management.

In addition, some trading platforms (as is the case with the cTrader trading platform), place a maximum limit on the trading accounts that can be created. To increase this limit, the license package must be expanded, which results in additional costs.

Get liquidity providers for your forex brokerage firm

A liquidity provider allows a FX brokerage business to offer low spreads to existing clients, while at the same time ensuring proper and efficient execution of trading orders.

However, in order to access the largest and most established forex providers on the international scene (mainly large banks), substantial trading volume orders must be generated.

When a forex brokerage business does not yet have a solid customer base and/or is unable to generate large volumes, it must ask for a hand from so-called liquidity aggregators, i.e., middlemen between smaller brokers and larger liquidity providers.

filippo ucchino

About The Author

Filippo Ucchino
Co-Founder - CEO - Broker Expert
Filippo is the co-founder and CEO of He has 15 years of experience in the financial sector and forex in particular. He started his career as a forex trader in 2005 and then became interested in the whole fintech and crypto sector.
Over this time, he has developed an almost scientific approach to the analysis of brokers, their services, and offerings. In addition, he is an expert in Compliance and Security Policies for consumers protection in this sector.
With InvestinGoal, Filippo’s goal is to bring as much clarity as possible to help users navigate the world of online trading, forex, and cryptocurrencies.

Trading CFDs, FX, and cryptocurrencies involves a high degree of risk. All providers have a percentage of retail investor accounts that lose money when trading CFDs with their company. You should consider whether you can afford to take the high risk of losing your money and whether you understand how CFDs, FX, and cryptocurrencies work. Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Your capital is at risk. The present page is intended for teaching purposes only. It shall not be intended as operational advice for investments, nor as an invitation to public savings raising. Any real or simulated result shall represent no warranty as to possible future performances. The speculative activity in forex market, as well as in other markets, implies considerable economic risks; anyone who carries out speculative activity does it on its own responsibility.
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