SVG IBC (FOREX/BO brokerage) needs a bank account

[George Kim]

Hello everyone,

I am working to estalish a brokerage for FOREX CFD & Binary Option.
My plan is to set 3 subsidiaries where Cyprus (CIF license), Mauritius (FSC license), and Saint Vincent and Grenadines (IBC - no license).
Target countries are most likely around Asia-pacific and South-America (EU, US, Oceania are not in the sales boundary).
I believe the CIF and FSC surely will have a bank account because they are regulated but the problem is SVG IBC.

From not only articles from google but also my consultant told me to setup the bank account in SVG through a bank is not easy due to compliacated compliance-terms by SVG jurisdiction. The consultant recommends me to contact a PSP like Revolut to open an IBAN instead of discussion with a bank in SVG.

My questions are;

1. IBAN is understandable to be equivalent to a bank account? (definition of IBAN seems to imply having a bank account but I'm not sure having IBAN is identical meaning to having a bank account).
2. ANY SUGGESTIONS of offshore bank account? (like recommendable country for a trial, any tips to negotiate with bank,...)

PS: I've searched posts in this forum regarding the issue, sorry in advance if I've missed the similiar.

 

[DGTLOTC]

To be honest even for the licenced entities you’ll struggle,if you think you’ll get C2B you will seriously struggle....you should consider only working on the B2B route for accepting deposits

 

[George Kim]

To be honest even for the licenced entities you’ll struggle,if you think you’ll get C2B you will seriously struggle....you should consider only working on the B2B route for accepting deposits

Can you elaborate B2B? Are you implying sort of white-label?
Because I am a new guy in this industry, I wonder how FX brokerages are selling their product to retails even though they're incorporated in Cyprus, UK, Malta, Mauritius... etc regardless of license accreditation.....

 

[DGTLOTC]

B2B is when the client deposits for the platform are acquired via debit cards instead of bank transfers
C2B is when clients will make a direct bank payment to the fx broker

 

[George Kim]

Thank you EUR99!
I will check it if we can have C2B as well.

 

[Shaoling]

Hello everyone,

I am working to estalish a brokerage for FOREX CFD & Binary Option.
My plan is to set 3 subsidiaries where Cyprus (CIF license), Mauritius (FSC license), and Saint Vincent and Grenadines (IBC - no license).
Target countries are most likely around Asia-pacific and South-America (EU, US, Oceania are not in the sales boundary).
I believe the CIF and FSC surely will have a bank account because they are regulated but the problem is SVG IBC.

From not only articles from google but also my consultant told me to setup the bank account in SVG through a bank is not easy due to compliacated compliance-terms by SVG jurisdiction. The consultant recommends me to contact a PSP like Revolut to open an IBAN instead of discussion with a bank in SVG.

My questions are;

1. IBAN is understandable to be equivalent to a bank account? (definition of IBAN seems to imply having a bank account but I'm not sure having IBAN is identical meaning to having a bank account).
2. ANY SUGGESTIONS of offshore bank account? (like recommendable country for a trial, any tips to negotiate with bank,...)

PS: I've searched posts in this forum regarding the issue, sorry in advance if I've missed the similiar.

You are doing it wrong.. the company you have in svg is to work legally... then in europe, you register another company as payment processor of the svg company. You create with a lawyer an agreement between those 2 companies and then you have IBAN account..

 

[DGTLOTC]

Shaoling is correct this is what most people do now - however the processor will still look at what the transactions are for and that’s where you’ll still struggle tbh

 

[Shaoling]

Shaoling is correct this is what most people do now - however the processor will still look at what the transactions are for and that’s where you’ll still struggle tbh

Some "banks/emi" dont ask you anything when the money comes from an European psp..

 

[DGTLOTC]

ok who are the providers you are referring to for the benefit of the forum etc

 

[JohnLocke]

Some "banks/emi" dont ask you anything when the money comes from an European psp..

As @EUR99 already asked, I would also like to know which processors your referring to?

 

[Shaoling]

As @EUR99 already asked, I would also like to know which processors your referring to?

Bunq + E merchant broker

 

[DGTLOTC]

E merchant broker ? Who is powering their ibans ?
There’s acquirers with a similar name if you mean them ?

 

[DGTLOTC]

Emerchant broker are an acquiring provider from what I can see and not a bank account provider ?

 

[Shaoling]

bunq, is a bank, and e merchant broker a psp. the IBAN comes from bunq.

 

[George Kim]

bunq, is a bank, and e merchant broker a psp. the IBAN comes from bunq.

I will contact with Emerchant whether I can get the IBAN from bunq for SVG. Thanks!

 

[Shaoling]

I will contact with Emerchant whether I can get the IBAN from bunq for SVG. Thanks!

No no, you are not understanding.. you have to register an european company.. english.. Netherlands.. and this company will have an IBAN account with bunq.. then go to a lawyer and make a document on which the european company is the payment processor on behalf of the SVG company...

I only mentioned Emerchant brokers as a payment service provider for a forex broker.

 

[George Kim]

No no, you are not understanding.. you have to register an european company.. english.. Netherlands.. and this company will have an IBAN account with bunq.. then go to a lawyer and make a document on which the european company is the payment processor on behalf of the SVG company...

Sorry, I don't understand clearly your point.

Since we're planning to set the holding LTD in Cyprus, then maybe it can be worked what you're saying. The holding company will certainly have an IBAN with a bank.
However, acting the payment processor on behalf of the SVG Company isn't seemed legal things.
I have already asked whether the holding LTD in Cyprus is able to hold the funds from retail clients then settle the money into each subsidiaries, but a laywer answered in negative because the holding LTD isn't accredited of PI license.

In this situation, are you saying SVG company doesn't need to contract with a PSP if the holding LTD would already have an IBAN from EU bank or PSP?

 

[George Kim]

Having Payment solution for subsidiaries are too complicated for me.

What I thought originally, as a holding company is opened in Cyprus, the holding company would have subsidiaries in Cyprus (CIF), Mauritius (FSC), and Saint Vincent and Granedines (IBC).
These subsidiares are segregated due to the jurisdictions for sales activity - I aware of Binary Option isn't allowed in CIF but IBC in SVG is okay.

The holding company is onwer of a website so that they're acting technical provider to the subsidiaries, however, IBAN and/or merchant account should be opened in each of subsidiairy name.
But according to Shaoling's comment, my idea is wrong - even EUR99 also agrees with Shaoling's idea that most of brokerages in SVG are doing like that.
(Probably it's because I'm not familiar with how the FOREX payment environment is working)

I have talked with SEPAGA, UPayCard, Bilderlings, MerchantAdviceServices and even a Law Firm regarding how I design the payment structure, but they never recommend to an European company acts a payment processor on behalf of SVG or else. It's quite difficult to believe they don't say because they don't know.

If an European company doesn't have a PI License, how they become a payment processor for SVG? Even providing an IBAN for SVG, seems a nonsense....

 

[Willblack]

Having Payment solution for subsidiaries are too complicated for me.

What I thought originally, as a holding company is opened in Cyprus, the holding company would have subsidiaries in Cyprus (CIF), Mauritius (FSC), and Saint Vincent and Granedines (IBC).
These subsidiares are segregated due to the jurisdictions for sales activity - I aware of Binary Option isn't allowed in CIF but IBC in SVG is okay.

The holding company is onwer of a website so that they're acting technical provider to the subsidiaries, however, IBAN and/or merchant account should be opened in each of subsidiairy name.
But according to Shaoling's comment, my idea is wrong - even EUR99 also agrees with Shaoling's idea that most of brokerages in SVG are doing like that.
(Probably it's because I'm not familiar with how the FOREX payment environment is working)

I have talked with SEPAGA, UPayCard, Bilderlings, MerchantAdviceServices and even a Law Firm regarding how I design the payment structure, but they never recommend to an European company acts a payment processor on behalf of SVG or else. It's quite difficult to believe they don't say because they don't know.

If an European company doesn't have a PI License, how they become a payment processor for SVG? Even providing an IBAN for SVG, seems a nonsense....

It's completely legal. Think of the following situation instead (since the principle is the same):
Your company A does say...project management. You have a contract with another company B where it's stated that all expenses are to be paid by company B. So company A hires say...architects, construction workers etc. and then later invoices those expenses to company B in addition the the fee for it's services. Isn't company A technically a payment processor for company B in that case as well? Hint: It practically is, this is perfectly legal and requires no license.

Again, this is just an example of a completely different setup in a different scenario, but I'm just trying to show you another situation which is a lot more common and involves a company technically providing payment processing services.

In your case, you only need the SVG company IMO. Keep in mind that if you go the "payment processing" route, the payment processing company should probably not be a subsidiary.

 

[tevalerie]

Hello everyone,

I am working to estalish a brokerage for FOREX CFD & Binary Option.
My plan is to set 3 subsidiaries where Cyprus (CIF license), Mauritius (FSC license), and Saint Vincent and Grenadines (IBC - no license).
Target countries are most likely around Asia-pacific and South-America (EU, US, Oceania are not in the sales boundary).
I believe the CIF and FSC surely will have a bank account because they are regulated but the problem is SVG IBC.

From not only articles from google but also my consultant told me to setup the bank account in SVG through a bank is not easy due to compliacated compliance-terms by SVG jurisdiction. The consultant recommends me to contact a PSP like Revolut to open an IBAN instead of discussion with a bank in SVG.

My questions are;

1. IBAN is understandable to be equivalent to a bank account? (definition of IBAN seems to imply having a bank account but I'm not sure having IBAN is identical meaning to having a bank account).
2. ANY SUGGESTIONS of offshore bank account? (like recommendable country for a trial, any tips to negotiate with bank,...)

PS: I've searched posts in this forum regarding the issue, sorry in advance if I've missed the similiar.

I am form St Vincent but you could probably use a St. Kitts LLC with a Cook Island Bank that has IBAN