Vanuatu

Dealer in Securities License.

overview

Vanuatu

The Republic of Vanuatu is an archipelago in the Southern Pacific Ocean, comprising 83 relatively small islands, to the East of Australia and North of New Zealand.

Among tax efficient destinations, Vanuatu ranks among those with the most relaxed legal framework, offering great confidentiality just like those in the Caribbean.

A Vanuatu company is not subject to corporate income taxes, capital gains taxes and restrictions on employment policies, provided it does not conduct business locally in Vanuatu.

There are no exchange controls in Vanuatu.

As only local companies are allowed to establish a forex brokerage, the first step is to incorporate a company in Vanuatu.

Vanuatu offers high level of confidentiality for beneficiary owners, shareholders and officers.

A newly incorporated company is exempted from Corporate Income Tax, Capital Gain Tax and Stamp Duty for 20 years.

Financial services in Vanuatu are regulated by Vanuatu Financial Services Commission (VFSC).

Vanuatu is a great location for forex brokers with limited resources because there is no requirement for minimum capital, only a relatively affordable Government Bond of USD 50,000 is required.

Application for a Principal’s license or a Representative’s license is not expensive and basically just requires a set of basic information.

The applicant must provide information on previous or existing activities related to financial service, including negative records. This is part of the mechanism to ensure a that duties are performed properly.

Every brokerage should appoint an Anti-Money Laundering (AML) Officer who is registered with the Financial Intelligence Unit of Vanuatu. This AML officer cannot hold a Directorship or any other position in the company. Another person must be appointed as Alternate AML Officer.

Licensees are permitted to manage the portfolio, and to trade securities on behalf of clients.

Under the amendments to the Financial Dealers Licensing Act in 2019, the Principal’s License is categorised into 3 classes, namely A, B and C.

Class A Principal’s License: dealing in any of the following securities:
  • Debenture stocks,
  • Loan stock, bonds,
  • Certificate of deposit,
  • Foreign Exchange

Class B Principal’s License: dealing in any of the following securities:
  • Future contracts,
  • Derivative products,
  • Options

Class C Principal’s License: dealing in any of the following securities:
  • Shares of a corporation,
  • Precious metals,
  • Commodities,
  • A right to subscribe for shares or debt securities,
  • A right under depository receipt,
  • An option to acquire or dispose of any security,
  • A right under a contract for the acquisition of securities.
 
  • Time frame: Approximately 4 – 6 Months
  • Taxation: 0%
  • License: Dealer in Securities License
For each Director, Shareholder and Ultimate Beneficial Owner:
  • Notarised / Certified True Copy of Passport
  • Notarized / Certified True Copy of second ID (for example National ID Card)
  • Notarised / Certified True Copy of Proof of Address
  • Notarised / Certified True Copy of Bank Statement to prove source of funds
  • Bank Reference Letter
  • CV of the director / shareholder dated and signed, showing at least 5 years on related experience in fund management securities and investment
  • Independent references confirming CV and showing at least 5 years on related experience in fund management securities and investment (x2)
  • Notarized Criminal Record from the native country of the applicant
  • Notarized copies of university Diplomas in English, Certified transcripts
  • 2 Character Reference Letters issued by professionals

For each Corporate Shareholders of the company:
  • Certificate of Incorporation
  • Memorandum of Association
  • Articles of associations
  • Articles of Incorporation
  • Register of Directors
  • Register of Shareholdings
  • Certificate of Good Standing (if the company is over a year old)

Other Required Documents:
  • Liquidity Provider Agreement
  • Proof of Source of Wealth
  • Detailed business plan.

For the AML Officer:
  • Notarized / Certified True Copy of Passport
  • Notarized / Certified True Copy of second ID (for example National ID Card)
  • Notarized / Certified True Copy of Proof of Address
  • CV dated and signed
  • Notarized Criminal Record from the native country of the applicant
  • Professional / Bank Reference Letter
  • Notarized copies of university Diplomas in English
Company structure:
  • Minimum one shareholder (natural or legal person, no restriction on nationality or residence)
  • Minimum one director (natural person, no restriction on nationality or residence)
  • AML Officer
  • Alternative AML Officer

Requirements for Director(s) and Manager(s):
  • Must be only natural persons(s)
  • Shall normally reside for 6 months in Vanuatu every year
  • At least 5 years’ experience dealing in securities, and is competent to meet the obligation of a licensee as required by VFSC

Confidentiality:
  • Beneficial owners’ details – Not part of public record
  • Shareholders’ details – Not part of public record
  • Directors’ details – Not part of public record

Capital Requirement:
  • No requirement for minimum capital, only a relatively affordable Government Bond of USD 50,000 is required.

Taxation:
  • 0% (Vanuatu Forex brokerage companies are exempt from the Vanuatu local taxes on income derived outside of Vanuatu for 20 years.)

Accounting requirements:
  • Audited Financial Statements must be submitted annually

Others:
  • Registered Agent – Required
  • Physical premise – Required

The company must operate from a premise in Vanuatu, which maintains the following:
  • A filing systems;
  • A management and accounting system;
  • A business continuity system;
  • A software system and server

(Since offshore / international companies are not allowed to sell products or services within Vanuatu, this means your Brokerage must incorporate as an onshore company)
  • Professional Indemnity (PI) Insurance Cover  – Required

A license must have adequate insurance cover, including Professional Indemnity (PI) Insurance for partners and employees, former partners and employees, and consultants, to serve as a protection for the investor’s funds in the event of suffering any loss. Professional Indemnity Cover is a general professional insurance protecting the company from complaints against your service. 

The minimum insurance cover for each licensee is VT 5,000,000 for each claim with an aggregate cover of not less than VT 50,000,000 and a maximum deductible amount of VT 500,000.
  • Legal Framework: Financial Dealers Licensing Act
  • Regulatory Authority: Vanuatu Financial Service Commission (VFSC)
  • Capital Requirement: No requirement for minimum capital, only a relatively affordable Government Bond of USD 50,000 is required.

Permitted Activities:
  • As outlined in the Financial Dealers Licensing Act of Vanuatu, licensees are allowed to engage in forex trading and trading of derivative instruments (securities, futures, options, contract for differences etc).
  1. Compilation and preparation of all of the documents, including due diligence documents.

  2. Prepare USD 50,000 for Government Bond and a reasonable amount of funds as capital.

  3. Preparation of Business Plan and Anti-Money Laundering (AML) Procedures by Offshore Tech & Intermediary Services.

  4. Due diligence documents and other related documents will be submitted by Offshore Tech & Intermediary Services to the VFSC.

  5. Assistance with depositing funds at a local bank account in order to satisfy capital requirements for the VFSC.

  6. We will deliver all relevant to you once the license is issued by VFSC.

  7. Opening of bank accounts for operational purposes.
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