Forex trading is one of the most exciting businesses to do in Dubai. The forex exchange market of the UAE is very active and enormous in regard to everyday trading volume. Investing in such a dynamic market can give you extremely profitable rewards if done perfectly. Getting interested in starting your own forex trading company in Dubai? Here’s everything you need to know to structure your trading company in either a free zone or mainland of Dubai.
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Is Forex Trading Legal in Dubai, UAE?
Countless local and international businesses are functional and booming in the UAE. That is why there is a huge population comprised of ex-pats in the country. This means they frequently send money back to their family and loved ones at home. It is one of the primary reasons why forex authorities are expanding this firm in the entire Emirates.
There should be no doubts regarding the legality of forex trading in Dubai. It is perfectly legal and allowed by the UAE government to conduct forex trading business activities in Dubai and the rest of the country.
Steps to Set Up Forex Trading Company in Dubai, UAE
Structuring a forex trading company in Dubai is not as over-complex and tough as it may look. Follow the following steps to enter into the highly rewarding forex trading industry with ease:
Selecting Economic Zone
You will begin setting up your forex trading company by choosing an economic zone. You have two options: either go for a free zone or opt for the mainland. Both have their own rules, regulations, laws, benefits, and specifications. Choosing one totally depends on your own preference and business needs.
In the free zone, you can set up your company in Dubai International Financial Center (DIFC). It is suitable for foreign investors as it offers independent jurisdiction beneficial for them. Furthermore, your company will not be subjected to corporate, income, capital, or any other form of tax.
When it comes to the mainland, investors can get awesome valuable returns on their investments. In addition to that, it has a variety of lucrative opportunities for businessmen.
Analyzing the Target Market
The next step is to conduct a detailed analysis of the market. Though traders don’t give much attention to market analysis, it is crucial to have an idea of the market before jumping into the trading business. In order to make an informed decision, there should be solid awareness about the risks, benefits, disadvantages, and other relevant factors of this business.
In the modern age of information and technology, you are only one google search away to get armed with the related information and details. You can also get to know about the appropriate knowledge by getting in touch with a professional forex broker. In this way, you will be satisfied that you have understood all the traits and working of forex trading.
Creating a Business Plan
You can skip this step if you are in contact with any business set-up consultants in Dubai. Establishing a completely new brokerage firm may prove to be a tedious and long journey for some entrepreneurs. Therefore, it is best to create a solid business plan before setting up the company. An ideal business plan for a forex trading company consists of the following:
- Target market description
- Description of buyer personas
- Projects capital plus expenses
- Competitor benchmarking
- Market research
- Marketing and social strategy
- Startup capital
Collecting Initial Capital
Forex breakage business demands a large sum of capital no matter what your requirements are. You should have enough financial resources to cover the total cost for at least the first year of business operations. Every jurisdiction has different requirements of capital though. You may connect with any company setup consultants in UAE to learn the capital requirements of the economic zones.
Evaluating Your Requirements
Before establishing your company, you should have a clear list of your business requirements and demands. If you have little to a great experience in this industry, you can conveniently determine your needs. You should have a clear goal, a business plan, and an approximate time period to accomplish it through forex trading.
Newbies can reach out to a professional broker that offers continuous support, expert advice, guidance, educational material, and a straightforward trading platform. If you have prior experience in the stock market, you can head towards Kite by Zerodha or other similar advanced platforms.
Seasonal traders should stick to a broker that informs you about the latest policy changes and provides a dependable trading platform. Whereas, beginners should avoid investing hefty capital into substantial trading activities.
Select a Reliable Broker
Post that, you will be looking for a reliable broker that is legally affiliated with a government body or agency. The government of the UAE has very strict policies regarding fraudulent brokers. In this way, they can weed out dishonest brokers from the industry. Before choosing a broker and opening an account with them, do your homework and conduct in-depth research. You may ask them for a demo account where you don’t have to invest actual capital and can do trades as well. Once you are satisfied with the services of the broker and the platform they offer, you can open your account with them.
The broker and brokerage agency should possess the following qualities:
- The selected brokerage agency should have apparent leverage and margin policies.
- The selected broker should use the ECN (electronic communication network) or should be a market maker.
Select the Right Partners
Forex trading business involves payment processing. And for this purpose, companies always look for reliable service providers because they are dealing with a hefty amount of money. Companies cannot survive in the market if they are unable to process their payments in a safe, secure, and stable way.
Offering multiple cash deposit and withdrawal options is also equally important. Such options are convenient for your company and your potential customers. You may also look for a system to process your remittances. You should have at minimum two systems for this task. It will ensure that there are no hurdles in clearing your payments.
Surely, as a forex trader, you will be thinking of providing leverage. For that, you will be doing negotiations with corporate banks for a business line of credit. There are complicated approval and verification procedures issued by UAE Central Bank. Seek guidance from experts, plan well before time, and gather enough resources for the process.
Getting Forex Trading License
Once you are done with the selection of a broker, you will visit Dubai Financial Service Authority (DFSA) for soliciting the forex trading license. This authoritative body strictly looks after the UAE’s financial trading activities, exchange, international equities, etc, and has its independent legal framework.
DSFA conducts a credibility test with the purpose of checking and verifying the reliability of the company. Once you pass the test, you are all set to obtain the license and operate your brokerage firm in Dubai.
Required Documents: You will need to submit the following list of documents to the authorities along with your application:
- Trade Name options
- Passport Copies of Shareholder
- Visa Copies (Residence/ Entry Stamp / Visit)
- Other relevant documents
Creating Company’s Website
It is not necessary, but in the present times, online presence on the internet is very crucial. Besides setting up online pages, you should also make the pages for additional services you need to integrate and make decisions on some trading platforms. It may consume a huge chunk of your time to create a fast and top-quality website, but it is worth the wait.
Setting Up Office Space
Forex trading companies consist of at least IT personnel, financial personnel, compliance officers, sales or marketing teams, and customer support teams. At the start of your journey, when the trading volume is significantly low, some roles can be handled and carried out by your managing associates or partners. If an employee has the required qualifications, they may be given multiple roles to execute. Nevertheless, a physical location with a considerable amount of office space is needed to set up the company and perform business activities.
You also have the option of virtual office space in place of a classical office. For this reason, you can look into available Flexi-desk options provided by numerous financial centers across Dubai and other cities of the Emirates. During your application process for the forex trading license, you can inquire regarding Flexi-desks options that suit your business needs and legal requirements.
After completing the steps and getting everything ready, you can begin trading with your live-funded account. You can easily trade-in your selected stream with the issued license. If you do the trading business in the right way, you will surely earn skyrocketing profits.
Advantages of Starting Forex Trading Company in Dubai, UAE
We know that Forex trading is a lucrative business to do in Dubai. Some of the other reasons why a financial services company set up like forex trading in the UAE makes good sense are:
- Instead of functioning as a mainland company, you can run the company within a free zone such as the DIFC.
- UAE government is business-friendly.
- Dubai is strategically located with political stability.
- A firm financial sector with a diverse regional economy.
- Tax benefits for businesses.
- Top-level infrastructure for communication, business, and transportation.
- Advantageous regulations and legal framework.
Set Up Your Company with Riz and Mona
Forex trading is a popular form of investment. Starting your own brokerage firm in Dubai is an excellent option for entrepreneurs who are attracted to this industry. For more information related to the process of setting up a forex trading company in the Emirates, don’t hesitate to contact us. Riz and Mona Consultancy are professional business setup consultants in the UAE. We offer consultancy services and business setup services in the Emirates for smoothly establishing your business with no problems whatsoever.