Bulgaria forex broker license

A forex broker license in Bulgaria is a great alternative to a Cyprus license as it is also valid throughout the EU and is a full European license. The advantage will be the fact that it is easier to obtain and cheaper to maintain than a company with a forex broker license in Cyprus.

Forex companies in Bulgaria are considered investment companies and operate on the basis of a license to provide investment services

The Investment Services License (ISL) contains a description of the services that the company can provide, as well as in relation to which financial instruments.

In accordance with the legislation of Bulgaria, forex trading is considered a type of investment activity, which is prohibited to carry out without a license issued by the Financial Supervision Commission.

This means that the activities of investment brokers related to the Forex market are subject to licensing.

The Financial Supervision Commission is the central regulator of the securities market, financial and investment services. The Commission is a member of the European Securities and Markets Authority (ESMA).
The forex market in Bulgaria is developed practically on a par with other countries of the European Union.

The corporate tax in Bulgaria is 10%, VAT is 20%, while the corporate tax in Cyprus is 12.5% ​​and VAT is 19%.

Bulgaria has sufficient experience in issuing brokerage licenses. In the Commission (Financial Supervision Commission), specialized departments have been created, highly qualified specialists work, as in Cyprus. Thus, in Bulgaria, issuing brokerage licenses is not a new practice, which is extremely important.

In Bulgaria, an investment company is regulated according to the same European regulatory documents as in Cyprus and in other EU countries. Accordingly, the requirements for the authorized capital of the company are similar. The authorized capital cannot be used in business activities, and it will be frozen in the account of a Bulgarian bank.

State fees for issuing a license are significantly lower than in Cyprus. For example, for consideration of documents under a stp license, the commission will take approximately 2,200 euros.

Legal services to support the entire process will be at least twice as cheap as in Cyprus.

The costs of maintaining an office in Cyprus, including office rent, employee salaries and other expenses, range from 170,000 to 210,000 EUR per year in the modest variant. In Bulgaria, the costs will be twice cheaper! You can save even more by renting an office not in Sofia, but in a smaller city.

To work in other EU countries, after obtaining a Bulgarian license, the license holder undergoes the certification procedure in each of the EU member states. When submitting the application form to the commission, the applicant is required to pay only 25% of the authorized capital. And only after the commission approves the issuance of a brokerage license, the applicant deposits the remaining 75% into the account.

The contribution to the investment compensation fund is significantly less than in Cyprus. The exact size is calculated depending on the selected license type.

The main regulatory legal act governing activities in the securities market, financial and investment services is the Law of the Republic of Bulgaria “On Markets in Financial Instruments Act (MiFIA)”.

Какие виды деятельности лицензируются?

According to Bulgarian legislation, working with the following financial instruments requires a license:

  • securities;
  • financial instruments other than securities;
  • money market instruments;
  • shares of collective investment schemes;
  • options, futures, swaps, forwards and other derivative contracts on securities, currency, interest or other derivative instruments, indices or financial indicators that can be issued in physical form or in cash;
  • contracts for difference and other financial instruments.

Requirements for the applicant:

The presence of a forex company office is required. The main office of the company must be located in Bulgaria.

The company must be managed by at least 2 directors, who are recommended to be EU residents. Managing directors must have significant knowledge and experience in the financial sector, which must be documented by the applicant (certificates of education, work book, certificates, etc.).

The company must also hire an accountant and submit financial statements. In addition, the license holder company is required to undergo annual audits.

What is the authorized capital requirement?

Since the Bulgarian investment company is subject to the general European regulations described in MiFID2004 / 39 / EC (as well as the Bulgarian law MFIA), the requirements for the share capital will be identical to those of Cyprus and Malta.

– stp license € 125,000 (BGN 250,000)

– market maker license € 740,000 (BGN 1,500,000)

The amount of the authorized capital will be deposited into the account of the applicant’s Bulgarian bank and will be blocked for the duration of the license.

The huge advantage of Bulgaria and the difference from Cyprus is that when submitting the application form to the commission, the applicant is required to pay only 25% of the amount of the authorized capital. And only after the commission approves the issuance of a brokerage license, the applicant deposits the remaining 75% into the account.

In addition, as in Cyprus, Bulgaria has the concept of an Investment Compensation Fund. In Bulgaria it is insignificant and depends on the type of license chosen (€ 2,000-5,000).

The commission pays close attention to the source and purity of the origin of the shareholder’s funds. The money, including that goes to replenish the authorized capital, must be earned by the shareholder in a legal, clean way.

The terms for obtaining a forex license in Bulgaria are 5 months from the date of submission of documents to the Commission.

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