Wondering how to start a Forex brokerage? This is a very exciting business opportunity. But before Starting a Forex company, there are a lot of significant decisions from where to register a forex broker to how you will attract new customers (for example, by offering them high-quality copy trading service). There are two methods to start a forex trading business: open a company from scratch or use a white label solution.
How to open a forex company from scratch
Starting a forex brokerage from scratch requires solid start-up capital and a lot more time and effort. You will need to incorporate this business and comply with all the legal requirements, negotiate with banks, build an attractive website, etc. The benefit of choosing this road is that the entrepreneur keeps 100% of profit and has full control over your business. We have outlined 8 important steps to follow to open a forex company.
1. Research the target market
To target a region it is a very good idea to define (or target regions) first. Knowing where the customers will be coming from will help you select the best jurisdiction to register a brokerage. In this business, licensing requirements vary greatly from one country to another, and it is often easier to start own forex brokerage in a place different from your origin. For example, a lot of companies that serve worldwide traders are based in Cyprus for tax and legal purposes. Compare the legal requirements of several jurisdictions before making a decision.
2. Create a forex brokerage business plan
Although a detailed business plan may seem not necessary, creating and promoting a new financial company is a long journey, and having a forex brokerage business plan helps streamline this process. A good business plan consists of a description of target markets and buyer personas, start-up capital, projected profits and expenses, marketing and social strategy, competitor research, etc.
3. Gather initial capital
Capital requirements are usually set by the jurisdiction, so check with the financial regulator in your jurisdiction what is the minimum initial capital size. But regardless of their requirements, the cost of setting up a forex brokerage is quite high, as you will need to have enough money to cover operating expenses during at least the first 6 months to 1 year period.
4. Choose the right partners
First of all, brokerage needs reliable payment services providers. There is no way to compete in this market without having a stable payment processing system. Consider negotiating with more than one system, so you have a reserve option in case of the primary payment processor’s software failure. It is important to have different deposit and withdrawal options, which are convenient for your potential clients.
If you are planning to offer leverage (and who doesn’t?), you will also need to negotiate a line of credit with a bank. The banks tend to have complicated verification and approval procedures, so plan and allow enough time for this process.
5. Set up your online presence
This includes creating a website, deciding on the trading platform or platforms (will you offer a standard MT4 or have additional services, such as an app or your own branded web trader?), what additional services to integrate. Building a high-quality website is a slow process, so it makes sense to take care of this early.
6. Set up an office
As a minimum, a brokerage needs IT-personnel, financial personnel, customer support team, marketing and sales teams, compliance officer. In the beginning when there is low trading volume some of these roles may be executed by managing partners and one employee may combine several roles, given that he or she has enough qualifications. Most likely you will need to set up a physical office location, although in the startup culture this step can be replaced with a virtual office.
Allow enough time to test everything before your brokerage goes live. The platform, payment processing systems, the terminal, the app (if you have one) – everything needs to be tested several times, preferably by professional testers as well as by focus group of your potential customers. During this time you may also choose to train your personnel, especially the customer service department.
8. Going live
Once you are ready with the first seven stages, comes the exciting moment of going live. It is important to support the launch with a well-developed marketing campaign.
If you are considering to a start a Forex Brokerage Company and forex white label. We provide a complete setup of White Label solution and broker tools to arrive in the Forex market through our White Label Program.
To discuss more about White Label solutions. Our support team will be available 24/5.
For more details about our services; Contact us on “firstname.lastname@example.org”