Professional companies are ready to help you with first-class assistance in obtaining your license, which allows you to provide investment services in Bulgaria in the MiFID II mode. Because Bulgaria has an EU membership, the regulations give you the opportunity to offer your services within the whole EU through the passport scheme and in all other countries of the world. Unlike those brokers who operate within offshore jurisdictions, you will be provided with hassle-free, simple, and free access to certain banking solutions for processing payment transactions, and the professional team of Eternity Law International will assist you with obtaining of Bulgarian forex license.
Forex firms in the Bulgarian jurisdiction are listed as investment organizations. They operate on the basis of a license permit that allows them to provide investment services. This ISL is an Investment Services License by which the services permitted by the firm and the financial instruments of the company are determined.
In accordance with the legal framework in Bulgaria, trading in the foreign exchange market is considered one of these types of investment activities, not without a license issued by the Commission exercising financial supervision. This regulatory body acts as the central regulator of the market for valuable services, as well as the field of investment and financial services. The Commission is a member of the European Securities and Markets Authority (ESMA).
Types of Licenses
The Bulgarian jurisdiction offers 3 types of licenses, which reflect the provisions set out in the MiFID II Directive.
This license is suitable for investment firms that do not have and do not own clients' funds or their financial instruments and do not provide services at their own expense.
This type of license is most suitable for FX/CFDs and is intended for use by investment firms that do not trade at their own expense, however, own financial instruments and money of their clients, as well as providing portfolio management and order execution services.
To work with this license, you will need execution venues or liquidity providers. Our specialists can introduce you to several liquidity providers, in particular in Israel, who set extremely competitive prices in case you enter into an agreement with them through our intermediary.
This license is the highest level of this document, which is required by investment firms that trade on their own account and act as liquidity providers, and have access to virtually unlimited trading rights.
For each of the licenses, there is a requirement that only 25% of the capital must be deposited before the application is filed. After approval, the remainder is paid within two weeks. Each type of license requires a local office, three employees, and one local director.
A Bulgarian investment organization must follow the common European standards, which are described in MiFID2004/39/EC, which implies the same capital requirements as in Malta and Cyprus.
- STP license 125 thousand euros (250,000 leva)
- Market maker license 740 thousand euros (BGN 1,500,000)
The Commission pays quite careful and close attention to the source and clarity of the share capital. Money and funds for replenishment of the authorized capital must be earned in a legal and honest way.
Activities Subject to Licensing
• Financial instruments that are not funds.
• Shares held by collective investment schemes.
• Instruments used by the money market.
• Swaps, options, futures, forwards, and other contracts of this type, currencies, indices, interest rates, financial indicators, and much more.
• Other financial instruments and CFDs.
Advantages of Owning a Forex License in Bulgaria
• The corporate tax rate established in the Bulgarian jurisdiction is 10%, VAT is 20%.
• Bulgaria has quite extensive experience in issuing and obtaining brokerage licenses. The Financial Supervision Commission has many different specialized departments and works with highly qualified specialists, which means that this practice is not new in Bulgaria.
• Regulation of investment companies in the Bulgarian jurisdiction is carried out through the same regulatory documents that are used in other EU member states.
• Low government fees for licensing. The legal services required to accompany the entire process are also quite low.
• The cost of maintaining an office in Bulgaria will be several times less than in other countries. In addition, the office can be rented not in Sofia itself, but in a small town.
• With regard to the payment of the authorized capital, only 25% is required when submitting an application. The remaining 75% is payable upon approval of the issuance of the license.
• Less contribution to the investment compensation fund.
• Multilingual jurisdiction, where Russian, Bulgarian, and English are spoken.
• Stable partnerships with Turkey and other Balkan states. In addition, Bulgaria closely cooperates in trade with Germany, Belgium, the Netherlands, and many other countries.
The main regulatory legal act governing activities in the securities market, investment, and financial services is the Law on the Financial Instruments Market - MiFIA.
The company must be managed by at least two resident directors of the European Union. The directors who will manage the company must necessarily have significant knowledge and experience in the financial sector, which could be documented.
In addition, the organization must hire an accountant and submit financial statements on time, and be audited every year.
Terms of Obtaining a License
The term for obtaining a license is about 5-7 months from the moment the documents were submitted to the Commission.
Help and Support of Eternity Law International
Our experts provide legal advice on choosing the best and most suitable option for each specific situation and assess the feasibility of this idea. We are physically located in Bulgaria, which distinguishes us from other suppliers operating outside the territory of the Bulgarian jurisdiction.
We will provide you with comprehensive assistance in filing an application and in the appropriate filling and preparation of the necessary documentation. We will not only submit your application, but we will also provide you with full support in maintaining regular contacts with the Commission regulating financial services in Bulgaria. This will help ensure that your situation is resolved quickly and efficiently.
While the regulatory body is reviewing your application, Eternity Law International will assist you in setting up an operational office within Bulgaria, in particular with all security measures. In addition, we can comprehensively monitor you regarding issues related to personnel that is required in Bulgaria.
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