Forex Licensing - New Zealand

About New Zealand

New Zealand has a well-regarded regulatory framework and is devoted to maintaining the financial system’s integrity.

New Zealand seeks to ensure the financial system’s stability, integrity, and resilience, fostering investor confidence, protecting consumers, and facilitating economic growth and development.

New Zealand is a remote, mountainous group of islands off Australia’s southeast coast.

According to Worldometer’s elaboration of the most recent United Nations data, the current population of New Zealand is 4,933,228 as of Saturday, May 6, 2023. According to UN data, the 2020 population of New Zealand is predicted to be 4,822,233 people at the midpoint of the year.

English is the most widely spoken language in the country, spoken by approximately 95% of the population, followed by Mori (4.1%) and New Zealand Sign Language (0.5%).

The legal system in New Zealand is mainly founded on English law and remains comparable in many ways. English law, like that of all common law countries, is organised around the ideas of precedent (like cases should be decided similarly) and stare decisis.

In New Zealand, there is a special form of licence known as Financial Service Provider or FSP. Because New Zealand is considered a well-reputed onshore jurisdiction, it is not banned by any country or foreign financial institution.

Gov. Capital Req. Timing Tax Rate
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1. Excellent Regulatory Framework

The Financial Markets Authority (FMA) oversees New Zealand’s well-regarded regulatory structure. The FMA’s mission is to promote fair and transparent financial markets, protect investors, and ensure the financial system’s integrity. Working in a reputable regulatory environment can boost a forex broker’s credibility and trustworthiness.

2. Access to a Stable and Rising Economy 

New Zealand’s economy is stable and developed, which might provide a favourable business climate for forex brokers. The country has a strong banking sector, a strong legal system, and advanced infrastructure, all of which provide a good platform for financial services.

3. Investor Protection Reputation

New Zealand is well-known for its dedication to investor safety. To protect investor interests, the regulatory framework emphasises measures such as client fund segregation, risk management, and compliance requirements. This reputation for investment safety might assist attract clients and foster market trust.

4. Global Recognition

A New Zealand forex licence may bring global recognition and credibility. It can demonstrate regulatory compliance and potentially promote cooperation with other regulated organisations or worldwide market expansion.

5. Commercial Operations Flexibility

New Zealand provides flexibility in executing forex commercial operations. Subject to regulatory compliance, licenced forex brokers can offer a wide range of financial services, including forex trading, derivatives trading, and investment advice.

6. Access to Skilled Labour

New Zealand boasts a professional and educated population, which can help forex brokers staff their operations and access personnel with financial services industry expertise.

7. Supportive Business Environment

New Zealand is well-known for its welcoming business environment and ease of doing business. The government promotes entrepreneurship and innovation, and numerous business assistance mechanisms are provided, such as access to capital, research and development grants, and business advising services.

License: Financial Service Provider (FSP)
Timeframe for Approval: Within 3 months
Regulator: Financial Markets Authority (FMA)
Authorised Activities: Education, Starting a Business, Renting or Buying, Property, Driving, Banking and Financial Transactions, Healthcare, Recreation and Tourism, Volunteering, and Voting
Corporate Structure: Sole trader, partnership, and company
Corporate Tax Rate: 28.%
Currency: New Zealand Dollar
Capital Requirement: No capital requirement
Paid-up Capital: 1 Million New Zealand Dollar
Economic Support:
  1. Income Support
    1.1 Jobseeker Support
    1.2 Sole Parent Support
    1.3 Supported Living Payment
    1.4 Accommodation Support
  2. Accommodation Supplement
    2.1 Accommodation Supplement
    2.2 Emergency Housing
  3. Family Support
    3.1 Working for Families Tax Credits
  4. Student Support
    4.1 Student Allowance
    4.2 Student Loans
  5. Business Support
    5.1 COVID-19 Business Support
    5.2 Research and Development (R&D) Grants
  6. Tax Credits and Incentives
    6.1 Working for Families Tax Credits
    6.2 KiwiSaver
Local Director/s: At least 1 director (natural persons only, at least one local director or a resident of any enforcement country, who is a director of a company registered in that enforcement country)
Local Shareholder/s: At least 1 shareholder (natural persons and legal entities allowed, no restrictions with regards to citizenship or residence)
Local Registered Officer: Required
Local Staff: Required
Compliance Officer: Required
AML/KYC: Required
Audit: Required
Main Benefits: There are several significant benefits of registering a forex brokerage company under the FSPR:
  • New Zealand is a well-known business jurisdiction.
  • Access to the Asia/Pacific area (APAC)
  • In comparison to Western countries, there is no bureaucracy while applying for FSP regulation.
  • The licencing process is completed in less than three months.
  • There are no capital requirements, certification requirements, or burdensome supervision needs.
  • Low professional licencing fees in comparison to other jurisdictions
  • Despite the late global financial crisis, there is no economic instability

The following actions will be taken in order to receive a licence:

  • Establishment of a local legal entity
  • Application form preparation
  • The procedure of obtaining a licence begins.
  • The FMA has granted conditional permission to the application while it is being processed.
  • Proof of local presence is required.
  • New Zealand Finance Corporation Formation
  • Registration as a Financial Services Provider in New Zealand
  • Membership in the New Zealand Dispute Resolution Service
  • Establishment of a Physical Office in New Zealand with all Regulator-required services provided monthly, including availability for corporate meetings with clients.
  • Appointment of a Company Office Manager in New Zealand to direct and personally handle all regulatory and compliance problems.
  • Assisting with the establishment of a Corporate Bank Account
  • Client may request the appointment of a local resident NZ Director.
  • Ongoing registration and licencing requirements
  • Services in accounting and auditing

Each beneficial owner, shareholder, director, authorised signatory, and secretary must provide the following information:

  • A notarized copy of a current passport
  • Proof of residential address (utility bill or bank statement) notarized
  • Bank recommendation letter
  • Curriculum Vitae (CV)
  • Reference letter from a lawyer or a CPA

For the benefit of directors and shareholders:

  • Certificate of Educational Qualification

For stockholders:

  • Confirmation of bank balance

1. Guidance and Consultation

Initial consultation and guidance from licencing providers may be provided to help you understand the regulatory requirements, check your eligibility, and determine the suitable licence for your forex business.

2. Preparation of a Licence Application

They may help you prepare and submit the essential papers for your licence application, such as application forms, compliance policies, business strategies, risk management frameworks, and other resources.

3. Compliance Assistance

Providers may provide ongoing compliance support to guarantee your forex business meets regulatory requirements. Assistance with anti-money laundering (AML) compliance, client fund segregation, reporting requirements, and compliance assessments may be included.

4. Liaison with Regulatory Authorities

They can serve as a go-between for your forex business and the Financial Markets Authority (FMA), assisting with any enquiries or requests for information from the regulator during the licencing procedure.

5. Legal and Business Services

Additional legal and corporate services, such as company formation, registered office address, director services, and continuous company secretarial support, may be provided by some suppliers.

6. Ongoing Support and Maintenance

Following the acquisition of the forex licence, providers may give continuous assistance to ensure that your business is compliant with regulatory changes and that you meet reporting and operational obligations.

1. Establish international business corporation.
2. Preparation and drafting of shareholder and officer agreements.
3. Preparation and drafting of narrative business plan.
4. Preparation and drafting of current financial statements.
5. Preparation and drafting of 3 years financial projections.
6. Preparation and drafting of personal financial statements for owners.

7. Preparation and submission of application with appropriate regulatory authority
8. Preparation and drafting of responses to regulatory authority
9. Identification and engagement of auditor and forex prime broker.
10. Facilitate opening of bank accounts and payment processors.
11. Preparation and drafting of AML/KYC policies and procedures.
12. Preparation and drafting of client agreements and disclosures.