A broker with a solid European book decides to open Brazil. The marketing works immediately, the sign-ups arrive, and then nothing converts, because the deposit page offers cards and international transfers and the client expects Pix. The founders assume this is a payments problem to be fixed with a new provider. It is a structural one. Access to Brazil's instant payment system runs through institutions authorised in Brazil, and that is where the licensing conversation in Latin America usually starts rather than ends.
Brazil: the CVM, the central bank and a closed rail
Brazil's securities regulator, the Comissao de Valores Mobiliarios, supervises the securities market and registers the intermediaries operating in it. The Banco Central do Brasil supervises the banking and payments system, authorises payment institutions and controls the foreign exchange market. Retail leveraged derivatives offered by an entity with no Brazilian registration are not simply outside the rules, they are outside the plumbing, because the local rail, the local currency settlement and the tax reporting all belong to authorised institutions.
The practical consequence is that most foreign brokers reaching Brazilian clients do so through a local payments partner that is itself authorised, taking on all the risk that arrangement carries, while their own entity sits offshore. That is a real model with real exposure, and founders should understand what it is rather than what the sales deck calls it. Our note on Pix and how it changed deposits covers why the rail matters so much.
Mexico, Chile, Colombia and Argentina
Mexico's banking and securities regulator, the Comision Nacional Bancaria y de Valores, supervises credit institutions, brokerage houses and the fintech institutions authorised under the country's financial technology law, with Banco de Mexico governing the payment systems including the domestic instant transfer rail. Argentina's Comision Nacional de Valores supervises the securities market and its registered agents, in an economy where foreign exchange controls have repeatedly been the binding constraint on any product denominated in dollars. Chile's Comision para el Mercado Financiero supervises banks, insurers and securities market participants under an integrated regulator model. Colombia's Superintendencia Financiera supervises the financial system, including the securities intermediaries registered there.
None of these are drop-in equivalents of a European investment firm authorisation. Each supervises the domestic market it is responsible for, with its own registration categories, its own capital rules and its own restrictions on marketing to retail clients. Where a leveraged foreign exchange or contract for difference product is not a domestically licensed retail product, the honest reading is that offering it to residents from abroad carries real regulatory and enforcement exposure, whatever the offshore entity's paperwork says.
This is descriptive, not advice. Latin American regimes differ sharply by country and change often. Take local counsel in every market you intend to serve before making structuring decisions.
The offshore route and what it costs you
Because domestic licensing is hard, a large share of the region is served from offshore entities holding a Caribbean, Seychelles or Vanuatu permission, sometimes with a local marketing company and a local payments partner. We wrote about how offshore registrations actually function because the reality is different from both the marketing and the criticism. They are genuine licences with reporting, audit and fitness requirements attached. They are also graded as higher risk by everyone downstream.
The costs show up in four places. Banking: correspondent banks manage their exposure to leveraged derivatives merchants in weakly supervised jurisdictions by reducing it, which is the de-risking pattern behind most account closures rather than anything a specific firm did. Card acquiring: trading merchants are classified as high risk under the card scheme rules, and monitoring programmes tied to chargeback and fraud ratios bring reserves and higher pricing, as we set out in the high risk merchant account piece. Distribution: the major app stores publish developer rules requiring financial trading apps to come from an appropriately licensed publisher for the markets they target, and ad platforms run financial services certification in a growing list of countries including several in Latin America. Liquidity: a prime of prime asks for the regulator, audited accounts and the client money arrangement, and prices the relationship accordingly.
Language, tax and the local reality
Two operational details decide more Latin American launches than the licence does. The first is tax reporting. In several countries the local partner or the client is responsible for declaring gains, and a firm that gives clients no usable statement creates a problem the client discovers a year later. Producing a statement in the local language, in local currency, with the dates and figures a tax adviser can use, is a retention feature.
The second is currency. Clients deposit in reais, pesos or Colombian pesos and trade an account denominated in dollars, so somebody carries the conversion. Where that conversion happens, at the payment provider or inside your own books, changes both the cost and who bears the exchange rate movement between deposit and settlement. Firms that hide the spread inside the conversion rate rather than showing it as a fee generate disputes, and disputes are what the acquirer measures.
What actually works in the region
Three models hold up. The first is a genuine local licence in one market, usually Mexico or Brazil, with a product designed for what that regulator permits rather than a leveraged offering imported wholesale. That is slow and expensive and it gives you rails, ads, app store access and a bank. The second is an offshore entity with a local payments partner and a clear-eyed view of the risk, keeping marketing conservative, disclosures explicit and refunds generous, because approval rates and dispute ratios are what keep the payment relationship alive. The third is business-to-business: selling technology or liquidity to firms that hold the local licence, which is the position SINGUARD occupies as a software company through SGHK Softwares Limited.
What does not work is pretending an offshore certificate authorises a domestic retail offering. It fails at the ad platform, at the app store, at the acquirer and eventually at the regulator, and by then there is a client book that cannot be moved. Whatever route you take, the onboarding checks, the currency handling and the audit trail have to be built properly from the start, which is the part our Broker CRM is designed to record. The licence remains entirely your responsibility.
"Everyone asks me which Latin American licence to get. The better first question is how the money arrives, because in Brazil and Mexico that answer eliminates half the structures on the table."
— Alex Onta, Executive Director, SINGUARD
Key Takeaways
- In Brazil and Mexico the local instant payment rail is reserved to authorised institutions, so the payment question shapes the structure before the licence does.
- Each Latin American regulator supervises its own domestic market with its own registration categories, and none is a drop-in equivalent of an EU authorisation.
- Offshore entities serving the region are graded as higher risk by banks, acquirers, app stores and ad platforms, and each of those gates has published rules.
- The three workable models are a genuine local licence, an offshore entity with a licensed local payments partner, or selling technology to licensed firms.
Frequently Asked Questions
Can a foreign broker accept Brazilian clients?
Brazil's securities regulator supervises registered intermediaries and its central bank controls the payments system and foreign exchange market, so local currency deposits and the instant payment rail run through authorised institutions. Foreign brokers typically reach Brazilian clients through a licensed local payments partner while their own entity sits offshore, which carries real exposure. Take Brazilian legal advice before designing that structure.
Which Latin American country is easiest to license in?
There is no reliable ranking, because the regimes differ in what they permit rather than only in difficulty. A regulator may register brokerage activity without authorising a retail leveraged product at all, so the useful comparison is which product each regime allows for which client type, not which application is quickest.
Why do card payments decline so often for LatAm trading clients?
Trading is classified as a high risk merchant category under the card scheme rules, issuers apply their own risk scoring on cross-border transactions, and a mismatch between the card's country and the merchant's country raises the decline rate further. Local rails such as instant transfers and vouchers usually convert better than cards in the region.
About the Author
Alex Onta is an Executive Director at SINGUARD. He built eTrader, the terminal, the mobile apps, eTrader Broker, Copytrading, Business and Community, along with the worldwide clustered-server infrastructure it all runs on, with his brother Roman Onta helping on the design, and he leads that division today. Together with Roman he builds the Prop Firm CRM, the Broker CRM, Scalegram and CopySignals, and the two of them carry worldwide compliance, payment processing and international business structuring side by side. He lives and works in Dubai for most of the year. Meet the executive duo leading Singuard's five divisions.