BVIFSC Forex Brokers & Regulation on the British Virgin Islands

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The British Virgin Islands Financial Services Commission (BVIFSC) is gathering substantial attention from the Forex trading community due to the some of the most amazing benefits offered by the country. BVIFSC regulated brokers enjoy numerous advantages; however, they also face several drawbacks that are usually associated with brokers that are trying to set up in tax havens with the sole intention of reducing operational expenditure and saving on taxes.

Forex Brokers British Virgin Islands enjoy several tax breaks that virtually guarantee a zero tax structure on all corporate as well as personal income. BVI also has no taxes on capital gains, which enables several hedge funds and asset management firms to enjoy 100% profits by setting up a company in the country. Forex brokers are especially attracted to the negligible taxation, which helps them to increase revenue and lower their outflow.

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The Appeal Of Forex Brokers In British Virgin Islands

The small island nation in the Caribbean is home to a huge proportion of offshore companies that flock to the region for enjoying the various tax benefits and for carrying out their financial operations without any significant restrictions. Apart from the common anti-money laundering laws and other aspects of financial dealings that promote terrorism, the BVI has been successful in attracting a large number of entrepreneurs who are looking for a safe and stable economy that is devoid of any personal or corporate taxes.

The BVI also has a relatively easy company incorporation procedure set in place to enable companies to set up their business without any considerable hurdles. Unlike countries such as the US, the UK, and other regions of the EU, The British Virgin Islands is considered as one of the primary investment destinations for both new as well as existing entrepreneurs. Some countries are highly vocal about their displeasure on citizens setting up their companies in BVI, but the country’s strong secrecy and anonymity laws help investors to establish and operate their business in the British Virgin Islands without facing any backlash.

Ever since the early 2000s, Forex brokers also found it immensely beneficial to set up their brokerage in the British Virgin Islands. The country did not have any dedicated regulatory agency, and it was easy for any company to set up their brokerage with virtually no regulatory oversight. However, increasing criticisms from the financial community saw the country slowly moving away from its no regulation policy and introduced the British Virgin Islands Financial Services Commission with the sole intention of regulating and supervising all types of financial firms that operate out of the country.

The BVIFSC was introduced in the year 2010, and have been playing an integral part in regulating BVIFSC Forex brokers to ensure that all financial companies are regulated according to the global standards of regulation. Although regulation is one of the important aspects of enhancing trust among traders, BVIFSC regulated brokers do not carry the same amount of reputation enjoyed by other regulated brokers, especially from the US, the UK, Australia, and other major nations of the EU.

How Is BVIFSC Different From Other Agencies?

The BVIFSC has a comprehensive regulatory framework that stipulates a few terms and conditions that are to be followed by regulated members for ensuring that they continue to hold a valid financial license. However, the BVIFSC regulatory guidelines are pretty straightforward and rudimentary and do not contain any policies that are followed by established regulatory agencies according to the global regulatory initiatives.

BVIFSC Forex brokers are not required to hold any amount of minimum capital, neither do these brokers have to keep client funds in segregated accounts. All financial dealings and transactions are, however, audited by the BVIFSC, but the existing procedure in place prevents the BVIFSC from having control over the liquidation proceedings and protecting client funds in the case of broker insolvency. On the other hand, BVIFSC regulated brokers should follow several other regulatory guidelines such as avoiding insider trading, indulging in financial scams within the BVI, and other aspects that are aimed to protect the BVI economy.

The country enforces its regulatory powers through the Securities and Investment Business Act of 2010, which was created alongside the BVIFSC for streamlining the process of regulation. BVIFSC is also known to be partial to its member brokers, and there are rarely any instances where brokers are penalized for their actions. In fact, most scams and consumer abuse go undetected due to the strict secrecy law and the lack of any consumer protection protocols in place, which enables BVIFSC regulated brokers to have a free reign over their customers without any intervention from the regulator. It is also close to impossible to get in touch with the BVIFSC to report any financial crimes or fraudulent practices, as the BVIFSC does not have any protocol in place to investigate or initiate actions against its member firms. The BVIFSC may at times seem to support its companies in a bid to keep the companies from moving to other tax havens, as the BVI concentrates on generating revenue by attracting companies from all over the world to set up their business in the country.

Is It Possible To Find Authentic BVIFSC Regulated Forex Brokers?

Although the existing regulatory procedure of the BVIFSC is conducive to broker scams and other fraudulent financial activities, the British Virgin Islands is indeed against providing a free environment for companies that have a negative reputation in the industry. Some Forex brokers genuinely operate out of the BVI to enjoy tax breaks and will have its regulatory status from other parts of the world such as the US and the EU to ensure that they provide a safe and reliable trading environment for their clients.

Some of the popular and mainstream Forex brokers are run by larger parent companies that may have their presence in the BVI; therefore, not all BVI regulated brokers should be considered as a scam. Some reliable and authentic brokers concentrate on providing good brokerage services without succumbing to the perils of being associated with BVIFSC regulation.

Factors To Consider Before Choosing A BVIFSC Forex Broker

As an investor, who is considering the services of a BVIFSC regulated broker due to the advantages that it offers, make sure to do your research before investing your money with them. You should browse through different trader testimonials and learn more about the operational history of a company before opting to join them, as most online resources should have detailed information about a broker along with genuine customer reviews.

It would be safe to stay away from new brokers unless they come highly recommended by other traders, or you should test out the services by making a small deposit and ensuring that they are indeed genuine, before investing your entire trading capital with them. It would also be a great strategy to split up your trading capital between different brokers, which will help you to determine the authenticity of a broker and preserve your money against any broker scams.

You can gain a fair idea of the authenticity of a broker by contacting them directly for information related to the core operating principles of a company; since trustworthy and genuine brokers are always transparent in their services. If a broker is willing to provide you any broker information without fail, you may trust the broker; but if the broker sounds shady or does not impart any useful information, you are better off moving to another regulated broker.

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