Brokerage license in Vanuatu: new rules 2022

Brokerage license in Vanuatu: new rules 2022

Vanuatu is on the list of the most popular offshore brokerage jurisdictions. Nevertheless, the rules are getting stricter. Authorities want to work only with proven, reliable companies, so the issuance of a brokerage license in Vanuatu in 2022 has changed.

New rules for 2022

The Vanuatu Financial Services Commission (VFSC) has strengthened requirements for brokerage firms. The times when licensed brokers could work remotely, off-island, are a thing of the past. By October 16, 2022 all companies must not only have a fully-fledged office here, but also make serious investments in Vanuatu.

The new requirements are because the government wants to:

  • increase capital inflows;
  • create new jobs for local people;
  • stimulate economic and educational development;
  • improve the skills of local residents by hiring and training staff locally.

Requirements for a physical office

Brokers should make sure they have at least one employee in the office by the end of 2022. If the company operates digital assets, which were legalized in July 2022, the requirements are stricter:

  • at least 3 employees, one of whom is a CTO, are required to be in the office;
  • the minimum capital is $500 thousand;
  • have a license to place users' capital for safekeeping issued by another jurisdiction;
  • provide the regulator with a track record.

So, one post office box and a few accounting statements will soon not be enough to operate in Vanuatu.

The physical presence exception

Small brokers who hold a limited license may not rent an office, but instead appoint a licensed manager. But keep in mind that the exemption is a temporary solution for small businesses. The indulgence is because the VFSC understands how difficult it is for new players to immediately start complying with all the requirements, so gives time to unwind, the opportunity to reduce costs.

What licenses can now be obtained

A broker can get these types of licenses:

  • Category A: FX delivery and debt instruments;
  • Category B: corporate stocks, precious metals or commodities;
  • Category C: futures contracts and derivative products;
  • Category D: digital assets (not for issuance, but brokerage).

As of the end of October, the specifics of obtaining a brokerage license are changing. Companies can take Category A licenses, as well as combinations such as AB, ABC or ABCD. This means that brokers who need a D license will have to apply for all categories of permits. In addition, in order to obtain a Vanuatu 2022 brokerage license, a deposit of at least $450,000 will be required.

Duration of Vanuatu licenses

The advantage of Vanuatu brokerage licenses will be the fact that they will not have to be renewed. The only thing - if the company has violated the law, the regulator may take away the license.

Transition to transparent work

Although the 2022 rules may discourage brokers from operating in Vanuatu, such measures increase the weight of the license in the eyes of international partners. The regulator wants to work with serious applicants, and is willing to make concessions if the broker complies.

How to work with a Vanuatu broker's license under the new rules

If you want to get a broker's license in Vanuatu and learn more about how to broker in Vanuatu under the new rules, contact IT-OFFSHORE experts.

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