Forex License in Kenya
Online Foreign Exchange Broker License
FOREX license in Kenya is divided into three types:
"Money manager" management of the online foreign exchange portfolio of an individual or entity;
"Dealing online foreign exchange broker" license to operate an online foreign exchange trading business as a principal and market maker.
"Non-dealing online foreign exchange broker" license to operate as a link between the foreign exchange market and the client; this type of license does not give the opportunity to participate in market activities.
1 - The "Money manager" category allows the following:
- To be the Financial Manager of the client;
- Intelligently select and manage investments for clients;
- Develop a suitable investment strategy;
- Take a position in the market to achieve the client's investment objectives;
- Conduct financial analysis and oversee foreign currency portfolio investments on behalf of the client.
2 - The Non-dealing online foreign exchange broker category allows the following:
- Open trading accounts for clients;
- Provide a trading platform;
- Provide access to market information that clients can use when formulating strategies;
- Monitor traders’ positions.
FOREX broker can not offer for trading currency pair, related to the Kenya shilling and work with binary options.
3 - The category "Dealing online foreign exchange broker" allows:
- The license allows you to work as a principal and Market Maker.
FOREX broker can not offer for trading currency pair, related to the Kenyan Shilling and work with binary options.
Requirements for the license applicant:
- Presence of a local LLC type company.
- Availability of a local office, equipment, and personnel.
The company should hire the following specialists:
- A CFO who is a member of ICPAK (Institute of Chartered Accountants of Kenya);
- An experienced dealer (when applying for Dealing online foreign exchange broker license);
- Accredited Compliance officer;
- Internal auditor, who is a member of ICPAK;
- Registered outside legal counsel.
Requirements for company directors:
- The company director must have at least five years of experience in buying, selling, managing, or dealing in foreign exchange and be a member of the company's top management.
Requirements for the board of directors:
- Minimum of 3 directors;
- Minimum of 1 non-executive director;
- At least 1 non-executive director (cannot be a CFO);
- At least 2 other executive directors.
Company shareholder requirements:
- Minimum of 4 shareholders.
Minimum authorized capital requirements:
- Money manager 92,000 USD;
- Dealing online foreign exchange broker 455,000 USD;
- Non-dealing online foreign exchange broker 270 000 USD.
Capital requirements and liquidity:
- FOREX broker - 270 000 USD.
- Financial manager - 45 000 USD.
Or 8% of the total liabilities.
Allowed asset classes to work with:
FOREX, securities, indices, interest or other rates, currencies, futures, commodities, stocks, CFD.
FOREX broker is forbidden to trade: currency pairs, including the Kenyan shilling and binary option.
Taxation:
A non-resident company with a permanent establishment in Kenya is taxed at 37.5%. The tax is calculated on the basis of the company's income less expenses incurred as a whole and exclusively in earning the income.