Open the website of a mid-sized offshore broker and look for the entity line at the bottom. Very often it names a company registered in Saint Vincent and the Grenadines. The Financial Services Authority there has stated publicly that it does not license or regulate forex trading, and that companies registered as business companies are not supervised for that activity. The registration is real. The supervision is not. Everything downstream flows from that, and the Saint Vincent position is worth reading in full before structuring anything.
The jurisdictions that do license
Cayman is the heavyweight. The Cayman Islands Monetary Authority supervises banking, insurance, fiduciary services, funds and securities investment business, with a licensing and registration framework for persons carrying on securities investment business including dealing as agent or as principal. Cayman applies fitness and propriety tests, audit requirements, local presence expectations and an ongoing supervisory relationship, and it is one of the most recognised offshore centres among institutional counterparties. Our CIMA guide sets out the categories.
The British Virgin Islands Financial Services Commission licenses investment business under its own categories, again distinguishing dealing, arranging and advising, with capital and reporting obligations proportionate to the category. The BVI regime is a common choice for funds and for firms that want a British overseas territory framework.
The Bahamas Securities Commission registers and supervises securities firms, and the country also built a distinct regime for digital asset businesses. Our Bahamas note covers how the registration categories work. Belize's Financial Services Commission licenses securities activity and has long been used by retail FX firms, with capital, audit and compliance officer requirements attached, as the Belize guide describes. Elsewhere, several small jurisdictions register companies without supervising financial services at all, and a few offer gaming or general business permissions that are sometimes presented as if they covered trading.
None of this is legal advice, and the status of individual jurisdictions changes. Verify current licensing categories with local counsel and on the regulator's own register before relying on anything written here.
Why the tier matters at the bank
Correspondent banking is the mechanism. A Caribbean bank clears its dollar business through a correspondent, and correspondents manage exposure to categories they classify as high risk by reducing them. That de-risking is a portfolio decision rather than a judgement on any one firm, and it explains why a properly licensed Cayman entity can still find the banking conversation slow. It also explains why an unsupervised registration finds it impossible: the file cannot answer the first question, which is who supervises this.
Anti-money-laundering standing sits on top. Where a jurisdiction is subject to increased monitoring by the Financial Action Task Force, enhanced due diligence follows automatically at every institution in the chain, and the practical effect is longer onboarding and more declines rather than a formal ban. We wrote about how that mechanism works because it is regularly described as a blacklist, which it is not.
Payments, platforms and distribution
Card acquiring is the next gate. Trading merchants are classified into high risk categories under the card scheme rules, which brings monitoring programmes tied to chargeback and fraud ratios, rolling reserves and stricter underwriting. The file an acquirer opens asks for the regulator, the licence reference, the client geography, the marketing pages and the refund policy. A Cayman or BVI authorisation answers the first question. An unsupervised registration ends the conversation, which is why many Caribbean-structured firms end up on crypto rails and alternative processors, with the settlement and volatility handling that implies.
Liquidity is graded the same way. A prime of prime wants the regulator, audited financial statements, the client money arrangement and the risk policy, and prices the relationship against the weakest of them. Platform vendors ask similar questions before white labelling their technology, because their own name appears on the product.
Distribution catches the rest. The major app stores publish developer requirements for financial trading applications, generally requiring the publisher to be appropriately licensed for the markets the app targets, and ad platforms run financial services certification against regulators' registers in an expanding list of countries. A firm whose only paperwork is an incorporation certificate cannot satisfy either process for a regulated market, which pushes it towards markets where those gates are looser, and that in turn shapes the client book it ends up with.
What the tier costs in practice
Founders usually price a Caribbean structure by the application. The real cost arrives later, in the spread between what a supervised firm pays for its rails and what an unsupervised one pays. Reserves held against future chargebacks tie up working capital for months. A payment provider that agrees to onboard a weak file prices the risk in, and the difference lands on every deposit for the life of the relationship. Account closures force migrations that cost client trust rather than only money, because a broker asking existing clients to send funds somewhere new looks exactly like the thing clients have been warned about.
There is a second cost that is easy to miss. A licence with little supervisory weight limits which markets you can sell into, which limits the client book, which limits the volume, which is what liquidity providers price against. Firms end up in the markets where the gates are loosest, and those are rarely the markets with the best clients.
Reading the tier honestly
Caribbean structures are not automatically illegitimate. Cayman, the BVI and the Bahamas are established financial centres with supervised regimes and real obligations. Belize is a working licence with a compliance burden attached. What causes the damage is the bottom of the range, where an incorporation is presented as a licence, and the founder discovers at the banking stage that the certificate has no supervisory weight. If you are choosing, the useful test is simple: can a third party look up your entity on a regulator's public register and see the permission listed. If not, everyone downstream will treat you as unlicensed, whatever the corporate documents say. That is the same test we describe in checking a broker's licence, applied to your own firm.
"An IBC certificate from Saint Vincent tells a bank you incorporated a company. Some founders show it as if it were a licence, and the compliance officer on the other side has seen that move a hundred times."
— Roman Onta, Executive Director, SINGUARD
Key Takeaways
- Saint Vincent's authority has stated it does not license or regulate forex, so an SVG business company registration is not a licence.
- Cayman, the BVI, the Bahamas and Belize operate supervised regimes with categories, capital, audit and public registers.
- Correspondent banking de-risking and FATF monitoring status drive payment access more than the licence document does.
- If a third party cannot find your permission on a regulator's public register, every counterparty will treat the firm as unlicensed.
Frequently Asked Questions
Is an SVG licence enough to run a forex broker?
The Financial Services Authority of Saint Vincent and the Grenadines has stated publicly that it does not license or regulate forex trading. A business company registered there is incorporated but not supervised for that activity, which is why banks, acquirers and app stores treat such entities as unlicensed.
Which Caribbean regulator is the most respected?
Cayman's Monetary Authority is generally the most recognised among institutional counterparties, with the British Virgin Islands and the Bahamas also operating established supervised regimes. Recognition follows the depth of supervision and the presence of a public register rather than the speed or cost of the application.
Why do Caribbean brokers rely so heavily on crypto payments?
Because card acquiring for trading merchants is underwritten as a high risk category and offshore entities without a strong supervisory regime are frequently declined. Crypto rails avoid that underwriting, but they bring settlement volatility, travel rule obligations for the service providers involved and their own compliance requirements.
About the Author
Roman Onta is an Executive Director at SINGUARD. He builds the Prop Firm CRM, the Broker CRM, Scalegram and CopySignals side by side with his brother Alex Onta, and he helped on the design of eTrader, the division Alex built and leads. His ground is worldwide payment processing, AML compliance and the corporate structures brokers are built on, work the two of them carry together, shaped by executive roles in the UAE and international corporates. He lives and works in Dubai for most of the year. Meet the executive duo leading Singuard's five divisions.