Setting up a Foreign Exchange Trading Company in Singapore
Updated: Jul 17
Here are the steps on how to set up a foreign exchange trading company in Singapore:
Incorporate a company. You will need to incorporate a company in Singapore in order to legally trade foreign exchange. The minimum share capital requirement for a forex trading company is SGD 1,000,000.
Obtain a forex license. The Monetary Authority of Singapore (MAS) regulates the forex trading industry in Singapore. In order to obtain a forex license, you will need to meet the MAS's requirements, which include having a sound business plan, adequate financial resources, and qualified personnel.
Obtain a payment gateway. In order to accept payments from your clients, you will need to obtain a payment gateway. There are a number of payment gateways that are specifically designed for forex trading companies.
Set up a trading platform. You will need to set up a trading platform in order to trade foreign exchange. There are a number of different trading platforms available, so you will need to choose one that meets your needs.
Market your business. Once you have set up your company, you will need to market your business to potential clients. There are a number of different ways to market your business, such as online advertising, social media marketing, and cold calling.
Here are some additional tips for setting up a foreign exchange trading company in Singapore:
Choose a reputable corporate services provider. There are a number of corporate services providers in Singapore that can help you set up your company and obtain your forex license. Choose a provider that has a good reputation and that can provide you with the services you need.
Do your research. Before you set up your company, it is important to do your research and understand the forex trading industry in Singapore. This includes understanding the MAS's regulations, the different types of trading platforms available, and the best way to market your business.
Get professional advice. If you are not familiar with the forex trading industry, it is a good idea to get professional advice from a lawyer or accountant who specializes in this area. This will help you ensure that you are complying with all of the relevant regulations.
Capital Markets Services Licence in Foreign Exchange Trading
A Capital Markets Services Licence (CMSL) in Foreign Exchange Trading is a licence issued by the Monetary Authority of Singapore (MAS) to allow a company to provide foreign exchange trading services in Singapore.
To obtain a CMSL in Foreign Exchange Trading, a company must meet the following requirements:
It must be incorporated in Singapore.
It must have a paid-up capital of at least SGD 1,000,000.
It must have a board of directors with at least three members.
It must have a management team with experience in the foreign exchange trading industry.
It must have a compliance program that meets the requirements of the MAS.
The application process for a CMSL in Foreign Exchange Trading is as follows:
The company must submit an application to the MAS.
The MAS will review the application and may require the company to provide additional information.
If the application is approved, the MAS will issue the company a CMSL in Foreign Exchange Trading.
The CMSL in Foreign Exchange Trading is valid for a period of five years. To renew the licence, the company must submit an application to the MAS at least three months before the expiry date.
The MAS has a number of requirements that companies must meet in order to maintain their CMSL in Foreign Exchange Trading MAS. These requirements include:
The company must maintain a minimum paid-up capital of SGD 1,000,000.
The company must have a board of directors with at least two members.
The company must have a management team with experience in the foreign exchange trading industry.
The company must have a compliance program that meets the requirements of the MAS.
The MAS also has the power to revoke a CMSL in Foreign Exchange Trading if the company breaches any of the requirements.
If you are interested in obtaining a CMSL in Foreign Exchange Trading, you should contact the MAS for more information.
Here are some of the benefits of obtaining a CMSL in Foreign Exchange Trading:
It allows you to legally provide foreign exchange trading services in Singapore.
It gives you access to the MAS's regulatory framework, which provides you with protection from financial crime.
It gives you the credibility that comes with being a MAS-licensed company.
If you are considering setting up a foreign exchange trading company in Singapore, you should carefully consider whether obtaining a CMSL in Foreign Exchange Trading is the right thing for you. There are a number of factors to consider, such as the cost of obtaining a licence, the requirements of the MAS, and the benefits of being a MAS-licensed company.
Application for a Capital Markets Services Licence
Please provide all the following supporting documents:
(a) business profile for the incorporation of the applicant as filed with the Accounting and Corporate Regulatory Authority (“ACRA”) of Singapore;
(b) scanned copies of the audited financial statements of the applicant and the audited consolidated financial statements of the Group for the past 3 years, where applicable. Where the applicant or the Group has yet to undergo an independent audit, please attach the unaudited financial statements;
(c) organisational chart of the applicant; and
The chart should clearly show the current and proposed staff strength, and reporting lines of all employees to the Chief Executive Officer (“CEO”) and Board of directors, including functional reporting to staff who are located outside Singapore. State whether each director is executive or non-executive, and resident or non-resident in Singapore. The chart should also include the names, job functions and designations of all employees, including those in compliance and internal audit functions where applicable.
(d) shareholding chart of the applicant.
The shareholding chart of the applicant should show the following:
(i) percentage of shareholdings (and voting power if different from shareholdings) held by each of the applicant’s direct or indirect shareholder (including any natural person), grouping together related shareholders, where possible);
(ii) date of incorporation/registration and the place of incorporation/registration of each shareholder which is not a natural person;
(iii) any subsidiary, branch or related corporation of the applicant (where applicable), including date of incorporation/registration and the place of incorporation/registration; and
(iv) name(s) of the exchange(s) on which the shares of any direct or indirect shareholder(s) are listed (where applicable).
(e) transaction or process flow (optional):
Attach a diagram to describe the beginning to end of a typical transaction of the applicant, especially if the applicant’s proposed business involves the use of financial technology (e.g. use or offering of digital tokens, distributed ledger technology) or a different manner of delivering products or services from that commonly seen in the market. The diagram should include the arrangements for customers to pay for or settle the transaction, including the payment of fees to the applicant.
The base capital requirement applicable to the applicant, in respect of the regulated activity is set out below:
Dealing in capital markets products that are spot foreign exchange contracts for the purposes of leveraged foreign exchange trading with or on behalf of —
(a) any customer who is not an accredited investor, an expert investor or an institutional investor - $5,000,000; or
(b) only customers who are accredited investors, expert investors or institutional investors - $1,000,000.
Refer to the First Schedule of the Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licences) Regulations for the applicable base capital requirement.
Directors and CEO
1. The applicant has to appoint at least 2 directors, of whom at least one is an Executive Director involved full time in the day-to-day operations of the applicant and residing in Singapore. If not, explain why the applicant has not, and when the directors will be appointed.
2. The applicant has to appoint a full-time CEO residing in Singapore. If not, explain why the applicant has not, and when the CEO will be appointed.
The applicant has to appoint at least 2 full-time representatives residing in Singapore for the proposed regulated activity.
A non-refundable application fee of $1,000 is payable to the Authority for the submission of this application. The application fee is specified in the Third Schedule of the Regulations. The applicant will be advised on the application fee amount and the manner of payment upon the Authority’s receipt of this application.
How Bestar can help you set up Company and Obtain Forex License in Singapore
Bestar is a corporate services provider in Singapore that can help you set up your company and obtain your forex license. We have a team of experienced professionals who can assist you with all aspects of the process, from incorporating your company to obtaining your license.
Here are some of the services that Bestar can offer you:
Incorporation of company: We can help you incorporate your company in Singapore in accordance with the Companies Act. We will also assist you with the filing of all necessary documents with the Accounting and Corporate Regulatory Authority (ACRA).
Obtaining forex license: We can help you obtain a forex license from the Monetary Authority of Singapore (MAS). We will prepare all necessary documents and applications for you, and we will also represent you in any discussions with the MAS.
We understand that setting up a forex trading company in Singapore can be a complex process. That's why we offer a comprehensive range of services to help you every step of the way. We are committed to providing you with the best possible service, and we will work with you to ensure that your company is compliant with all of the relevant regulations.
Connect with Us
If you are interested in setting up a forex trading company in Singapore, please contact Bestar today. We would be happy to discuss your needs and how we can help you achieve your goals.