Gibraltar is the overseas territory of the United Kingdom and is thereby a part of the EU. The charming territory counts only 30,000 people on a densely populated area. The political position if Gibraltar is very interesting given the constant back and forth between Spain and Britain and their efforts to claim the territory. Geographically, Gibraltar is closer to Spain, but it managed to resist falling under its government influence. As part of the British regime, Gibraltar works under similar laws as the United Kingdom, which became known for a great Forex policy. It seems that Gibraltar is following UK’s footsteps regarding the Forex capital market with the largest turnover. The Gibraltar Financial Services Commission (GFSC) has the upper hand when it comes to regulatory issues in Gibraltar. The GFSC has been the official supervisor of the financial services market in Gibraltar since 1991 when it was established.
GFSC Welcomes International Companies
Gibraltar is primarily an offshore financial center where many international companies transferred their official offices. Companies are welcome to open their businesses here, but they have to comply with the regulations and standards of the GFSC. The companies under the purview of GFSC include banks, trustees, funds, intermediaries, insurance companies, auditors, investment firms, companies dealing with e- money, Forex companies, and a few more. Gibraltar is ideal for business companies because taxes are significantly lower than in EU countries. For example, corporation tax is only 10%, while investment income has been tax-exempt since 2010. Gibraltar is also one of the territories which represent a tax haven, and we all know how much that means to large companies, including Forex operators. The national currency is the Gibraltar Pound (GIP), which is very strong against the euro (1EUR = 0.8937 GIP) indicating a stable and healthy economy. The GIP is strongly connected to the GBP and equals it in value.
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GFSC Goals, Mission, and Vision
Just like other EU member states, Gibraltar pursues similar goals and objectives regarding Forex and financial markets management. The GFSC tries to promote Gibraltar as a quality financial center through good business practices and protection of consumers. It aims to improve market conditions, reduce malpractice, and weed out scammers from the market. Fair and healthy competition is also one of the objectives of the hardworking regulator. Further, it promotes market confidence, reduction of systemic risk, a good reputation of Gibraltar, and reduction of financial crime. As a supervisor, its main tasks include allocating a supervisor for every licensee. Licensees are required to submit annual and upon-request reports for revision. The GFSC reviews business conduct, financial situation and the business model of each broker under their control. The work of GFSC can be followed on their detailed website where they publish all information relevant to GFSC registered Forex brokers and other companies.
Painstaking Licensing Process
Gibraltar is a part of the EU which is already an advantage for Forex companies located in Gibraltar. When applying for a license, the companies apply for an internationally acknowledged license, valid in all EU countries. Gibraltar is a well-regulated jurisdiction, and all GFSC licensed Forex brokers have to comply with EU directives and regulations. The MiFD directive is directly related to the protection of the financial and securities market, and all Forex companies must be in line with it. It is the perfect offshore destination for business activities. To apply for a license, companies have to go through a lengthy procedure providing the Memorandum and Articles of Association which specifically indicates that only Forex services are going to be provided, documentation on internal and external operations, and a business plan. Companies also have to prove that they meet the standards and maintain these standards throughout. Business conduct and consumer risks are the major concerns of GSFC. They expect the companies to cover actual and potential risks by providing sufficient start-up capital. It is also advised to hire a consultancy expert in order to deal more efficiently with the complex application procedure.
GFSC Regulated Forex Brokers
GFSC registered brokers are usually brokers from other EU countries that simply run their offices and businesses from there. They do not differ much from other EU Forex brokers given that all of them have to operate under the same legal framework. Basically, if you decide to register with a Gibraltar offshore broker, you will barely notice the difference. Gibraltar has a strong regulation policy in addition to EU legislation, which is a fortunate coincidence for all traders registered with a Gibraltar Forex company. This means that they are better protected offshore than many other traders registered in their home countries. If you want to find some of the best Forex brokers registered in Gibraltar, there are some other features as well to be taken into account.
Qualities of Top Forex Brokers in Gibraltar
As we already said, no legit company can operate on the soil of Gibraltar without a corresponding license. If you are looking for a Gibraltar broker, make sure that the broker company has a valid license. Some prefer brokers with multiple licenses. As brokers open regional offices in other, they have to obtain the national license of that country. Many globally recognized brokers have opened their offices in Gibraltar as well. Perhaps, you should register with one like that, an experienced, professional broker who is known across the world. They will offer you the best conditions, best platforms, and many other features as part of their service package.
Small but Highly Regulated Market
Gibraltar is a very attractive destination for offshore businesses. Many Forex companies recognized the territory’s potential and started their companies in the tax haven with strict regulations. Many offshore destinations, even when making an effort, lack the needed policies and governmental focus to enforce the law. Subsequently, many scamming companies, especially in the Forex market, use these gaps to circumvent fair business conduct. Gibraltar, on the other hand, is the opposite of those offshore countries. The jurisdiction is very strict, perhaps due to ties to the UK, and Forex brokers are under the strict control of the GFSC. Gibraltar is safer for trading than some other EU countries because the number of GFSC registered brokers is still small and easier to control.