Offshore financial license

Why did your plan to launch a successful financial empire fail?

The modern world has moved into a new dimension. The financial sector is becoming more and more regulated. It is not easy for financial market participants to comply with the new rules of the game. Many countries introduce mandatory licensing for any type of activity that includes at least a hint of a financial component, whether it is fundraising, storing, exchanging, investing, insurance, and even more so forex trading. Despite strict restrictions and increasing legislative barriers, business interest in financial projects is growing.

Quite a natural desire for any businessman is the desire to save money and launch the project as soon as possible. In pursuit of this, many decide to launch through offshore jurisdictions, where the requirements for obtaining and maintaining financial licenses are much simpler than in the EU and the USA. But is the game worth the candle? Next, we will talk in detail about whether it is worth getting financial licenses in offshore companies today and related problems.

Who needs to think about getting a financial license?

Financial services imply the provision of a huge range of services for money transfer, investment, financial management, lending, depositing, issuing payment cards and any activity related to banking, etc.

Financial market institutions are not only banks, but also other institutions that, for example, manage the assets of third parties or their own well-being. There are companies that receive licenses not for the management of third-party funds, but for internal purposes. As a rule, these are large holdings that establish management companies to effectively protect their capital. Such companies are not actual providers of financial services, since all assets belong not to third parties, but to the company itself.

If you are thinking about conducting banking or other related financial activities, then you should definitely think about licensing.

Why does it make no sense to obtain a financial license in an offshore company today?

The main difficulty of licensing financial activities is that each country is unique in its legislative regulation and the specifics of the procedure for obtaining permits. Many jurisdictions have multi-stage regulation and a huge number of regulatory barriers. Such difficulties do not suit businessmen, and they, in turn, are looking for simpler and cheaper licensing options for themselves.

The easiest way is to obtain financial licenses in traditional offshore jurisdictions, for example, Vanuatu, Panama or Belize. In a number of jurisdictions, for example, in Guernsey or the British Virgin Islands, a license to issue loans is not required, but the company must register as an "Unregulated Financial Services Provider" (Non-Regulated Financial Services Business). With regard to banking, Dominica offers attractive prices and fast deadlines.

On the Internet you can see a huge number of similar offers for obtaining a financial license in an offshore company. However, times are changing, and the understanding of the offshore world and its possibilities, as it was five years ago, has changed a lot. Offshore jurisdictions have tightened the rules of the game and now they can compete even with Europe itself on licensing issues in the financial sector.

What black holes are hidden behind the process of obtaining a license offshore?

The very first and weighty argument not in favor of offshore companies is a significant tightening of legislative norms affecting the licensing process. Offshore companies often become a kind of legislative trap – after many businessmen register in a country with minimal regulation, the legislation there is changed and tightened. Many offshore zones have introduced mandatory conditions for the presence of a financial company in the country of registration. As an example, you can pay attention to Dominica and the BVI. Now, in order to obtain and maintain a financial license, a company must have its own physical representative office, as well as a local authorized agent.

The second negative fact for choosing an offshore company as a licensing jurisdiction is the confidentiality of information about beneficiaries, which often becomes a decisive factor when making a decision. It would seem that it would be easier to get a license in a closed and protected offshore zone and quietly conduct business. But even here you can face disappointment. Unfortunately for businessmen, most of the classic offshore companies are in the process of creating public registers of beneficiaries. Anguilla, Bermuda, and the Caymans are just a few offshore companies that will become public and disclose information about their owners.

The cherry on the cake when choosing a country to register a financial company is the price of the issue, namely the cost of services provided by international legal companies to support obtaining a license. And here the cheapness of offshore offers, which the Internet is full of, solves everything.

But, think about it, aren't you taking a pig in a poke?

It would seem that you really get an offer at a bargain price and now you imagine that you have a license in your pocket. But not everything is so simple. In addition to paying for the services of lawyers, you will need to contribute the authorized capital, as well as pay various state duties and regulatory fees, which contractors most often do not warn about. It is often required to hire local staff and pay them monthly salaries. And this is not a small additional cost.

Another huge disadvantage of offshore companies is the impossibility of a normal structured and consistent operation of an offshore company with a license. State bodies and municipalities do not work on a regular schedule, and letters to them reach them only by pigeon mail. It will not be possible to solve the issue quickly and effectively.

Clients often turn to us with a request to open a bank account for financial companies. Unfortunately, in most cases it is even impossible, and if a miracle happens, the process takes a huge amount of time. The work of offshore banks themselves is antediluvian: there is no well-established electronic payment system, a convenient bank — client and it is not at all possible to solve the issue of unblocking funds online.

These are not all the pitfalls that you may encounter when obtaining a financial license in an offshore company.

The team of Antwort Law specialists is ready to find the perfect working solution for your project. We know where and how to get the appropriate license quickly and without problems. Unfortunately, there is no single tablet, license that will suit everyone. Depending on the type of project and license, we prefer different countries: in one case, Cyprus, in other cases it may be Bulgaria or Estonia. And for some, the ideal jurisdiction would be the United Kingdom. When it comes to licensing funds, the popularity of offshore companies cannot be written off here, but this is a topic for a separate article:-)

Initially, it is important to analyze the client's request correctly. Antwort Law is always on the same wavelength with its clients. We value your time and work for the result.

If you dream of entering new financial markets, stable and structured work, then you have come to the right place. Antwort Law will make your dreams of a large financial empire a reality. Antwort always has the right answer and a great success strategy for your business!

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