Obtain Vanuatu Dealer’s in Securities License

Vanuatu Dealer's in Securities License

Securities Dealer's License
Vanuatu is a great place for launching forex brokerage company due to its low capital requirements and variety of tax benefits.
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Incorporation & obtaining license: 4-6 months

Minimum paid up capital: No minimum capital requirement.  Instead, government bond of approx. USD 50 000 is used.


Overview

Vanuatu, officially the Republic of Vanuatu, is an archipelago in the South Pacific Ocean, east of Australia west of Fiji and North of New Zealand, consisting of a chain of 13 principals and many smaller islands.

To obtain a license it is required to incorporate a company. This process is comparatively fast.
Vanuatu offers high level of confidentiality for beneficiary owners, shareholders and officers. Furthermore, the company is exempted from capital gains, tax on profits and stamp duty after incorporation 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 amount of resources because capital (or bond) requirements are relatively small.

Application for a Principal’s license or a Representative’s license is not expensive and basically requires to provide a set of basic information for the applicant. Also, it requires to confirm and to provide information of previous or existing activities related to financial services and additional information regarding any negative experience or records linked to the applicant. It enables to hold the applicant liable in case of any submitted false information or for activities that will be performed and overall, it regulates the issuance of Vanuatu forex license.

The forex brokerage license can be obtained based on Dealer's in Securities (Licensing) Act [CAP 70]. An application can be made for a Dealers in Securities License under this act by a Vanuatu international company or by an individual, who is a Director / Officer of the company. Moreover, the clients can benefit from this license because it permits the holder to manage the portfolio of investments and to operate with securities (sell and buy) for the client or even on his behalf.

The Company should have a responsible Anti-Money Laundering officer, who is registered with the Financial Intelligence Unit in Vanuatu. This AML officer cannot be the director or take any other position within the Company. Alternate Anti-Money Laundering officer must be appointed as well.

As of 8 January 2019, Amendments of Financial Dealers Licensing Act came in force, dividing Principal’s license into Class A, Class B or Class C Principal’s License.

Class A Principal’s License: means to carry on or purport to carry on the business of dealing in any of the following securities:

  • debenture stocks; or
  • loan stock, bonds; or
  • certificate of deposit; or
  • proceeds of Foreign Exchange

Class B Principal’s License: means to carry on or purport to carry on the business of dealing in future contracts and derivative products but not limited to futures and options.

Class C Principal’s License: means to carry on or purport to carry on the business of dealing in any of the following securities:

  • shares in share capital of a corporation; or
  • proceeds of precious metals; or
  • proceeds of commodities; or
  • a right despite whether or not conferred by warrant, subscribe for shares or debt securities; or
  • a right under depository receipt;
  • an option to acquire or dispose of any security falling within any other provision of the Act; or
  • a right under a contract for the acquisition of securities.
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Licensing Criteria and Procedures for Applying for Vanuatu Dealer’s in Securities License

Notable features
Procedure
Documents Required

General information

Company structure

  • Only one shareholder (can also be a legal person, no nationality restriction or residency restrictions)
  • Only one director (only natural person, no nationality or residency restrictions)
  • AML Officer
  • Alternative AML officer

Requirements for Manager/-s or director/-s 

Must meet the following provisions:

  • Must be only natural person/-s
  • Shall normally reside for 6 months within each year in Vanuatu
  • Must have 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

Taxation

  • 0% - For 20 years Vanuatu Forex brokerage companies are exempt from the Vanuatu local taxes on income derived outside of Vanuatu

Accounting and Audit requirements 

Financial statement must be prepared by an independent auditor and submitted 3 months after the anniversary date in accordance with the International Accounting Standard or other standard in agreement with the Commissioner.

The licensee must obtain the approval of the Commissioner prior to engaging an independent auditor.

The Commissioner may object to any engagement of an independent auditor if the Commissioner is satisfied that the proposed auditor is not suitable having regards to:

  • The nature of the business carried on by the licensee; and
  • The qualification, competence and integrity of the auditor

A licensee shall submit to the Commissioner a quarterly and annual reports outlining updated details which must include:

  • Number of investors and amount of funds invested
  • Number of products offered to investors detailing the number of each product offered
  • Details on what jurisdiction the product was offered
  • Details of vetting process of investors and criteria used
  • Number of refusals and reasons for refusal
  • Updated information on registered agent and office details
  • Updated information on shareholders and beneficial owners
  • Report of any complaints received from investors

Registered Agent - Required

Physical premise 

The company must operate from a physical premise located in Vanuatu, which maintains the following systems:

  • A filing systems;
  • A management and accounting system;
  • A business continuity system;
  • A software system and server*

*As a kind reminder, this does not allow the Licensees incorporated as an International Company to operate activities in Vanuatu. An International company cannot sale any products or services within Vanuatu.

Insurance / Professional indemnity cover 

A license must have adequate insurance cover, including professional indemnity insurance indemnity for partners and employees, former partners and employees, and consultants, to serve as a protection for the investor’s funds in the event of financial loss. Professional Indemnity Cover is a general professional insurance linked to the activity of the company and covering the company. Professional Indemnity cover is a separate document that must be produced. 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.

Company name

  • Language: Any
  • Letters: Any
  • Company name must end with such sufixes or their abbreviations: Limited, Corporation, Incorporated, Societe Anonyme, Sociedad Anonima, Sendirian Berhad, Societe a Responsabilite Limitee, Besloten Vennootschap, Gesellschaft mit beschrankter Haftung. An International Company may utilise a broad range of internationally accepted abbreviated words as suffixes to denote their limited liability
  • Names Requiring Consent or a Licence: Bank, buildings society, insurance, assurance, reinsurance, fund management, investment fund, trust, trustees, finance

N.B.

  • Restricted connections for company name: name of state, national or local government
  • Any name that implies illegal activity or implies royal or government patronage is restricted
  • Registrar may reject any name which it considers undesirable or contrary to the public interest
  • Company name is restricted to be identical or similar that of an existing company
  • In case when foreign language is used for company name the translation must be provided to Registrar which will ensure conformity to above listed restrictions

In order to obtain a license, the following steps will be carried out:

  • Registration of a Vanuatu company
  • Preparation of all necessary documents for VFSC and submission of the documents
  • Drafting of Anti-money laundering procedures and Business Plan for the Company
  • Finalizing the steps with the VFSC for the receipt of license
  • Account opening for operational purposes

In order to obtain license, Offshorelicense will fill all necessary application forms and also acquire apostilled corporate documents. 

For that reason, please provide us with the following documents.

For bank

(Each beneficial owner, shareholder, director, authorised signatory and secretary must provide)

  • A notarized copy of valid passport
  • A copy of proof of residential address (ex. utility bill that is not older than 3 months)
  • Bank statement for the last 3 months
  • A notarized copy of Letter of Reference form Bank, Attorney or Accountant

For local regulatory authority

(Each beneficial owner, shareholder, director, authorised signatory and secretary must provide)

  • CV of the director / shareholder dated and signed, showing at least 5 years on related experience in fund management securities and investment

  •  A notarized copy of valid passport (an English translation of the certification)

  •  A notarized copy of proof of residential address (ex. utility bill that is not older than 3 months) (an English translation of the certification)

  • Independent references confirming CV and showing at least 5 years on related experience in fund management securities and investment (x2)

  • Criminal record from the native country of the applicant and notarized translation of it into English (if needed)

  • Notarized copies of university Diplomas in English, certified transcripts

  • A second ID of the shareholder(s) / director(s)

  • Professional letter / bank reference on director / shareholder (x2)

  • Bank statement proving the source of funds

For AML Officer

  • CV of the director / shareholder dated and signed
  • Notarized / certified copy of passport (an English translation of the certification)
  • Notarized / certified utility bill in English
  • Professional letter / bank reference on director / shareholder (x2)
  • Notarized copy of a University Diploma in English
  • Criminal record from the native country of the applicant and notarized translation of it into English (if needed)
  • A second ID of the shareholder(s) / director(s)

N.B.

  • If documents are not in English language or language of particular country, then they must be accompanied by a notarized translation.
  • Please ensure that notarization is in English language if not then please provide with notarized English translation.

Additional documents may be requested by the regulatory authority or local Bank at any point to certify specific information.