COREDO > Licensing > Financial Licences in the EU > Foreign Exchange Licence and Forex Broker

Foreign Exchange Licence and Forex Broker

What Is a Foreign Exchange Licence

A foreign exchange licence allows companies to legally conduct currency exchange activities and can be structured in different ways depending on the business model. This may include the registration of a currency exchange office serving clients in a local market or an investment licence for providing professional foreign exchange services.

Since 2016, COREDO has been assisting clients with obtaining licences and authorisations for foreign exchange activities, providing full support — from selecting the most suitable regulatory model to liaising with supervisory authorities and launching operations.

Get a Consultation

Cost of the service
from EUR 6,500

Licence Types: What They Permit and Who Needs Them

A currency exchange licence is suitable for companies and entrepreneurs planning to open exchange points — whether in shopping centres, hotels or airports. This is the optimal choice for small and medium-sized businesses operating primarily with individuals in the national market.

A forex broker licence (MiFID II) is required by companies that intend to:

Provide brokerage services on currency markets — accept and execute client orders to buy and sell currency pairs (EUR/USD, GBP/EUR, and others) on exchange and over-the-counter trading venues.

Conduct margin trading and offer leverage — allow clients to use borrowed funds to open positions exceeding their own deposit.

Engage in market-making or dealing operations — quote prices and act as counterparty to client transactions using proprietary capital.

Manage client portfolios with currency assets or provide investment advice related to foreign currencies.

Develop international business through EU passporting — obtain a single MiFID II licence and provide services in all 30 EEA states without going through local authorisation procedures.

Regulatory Framework

Currency Exchange in the Czech Republic

Currency exchange activity in the Czech Republic is governed by Act No. 277/2013 Coll. on currency exchange activity (zákon o směnárenské činnosti). The supervisory authority is Česká národní banka (ČNB).

To open a physical currency exchange point, you need a ČNB licence to operate as a currency exchange operator (povolení k činnosti směnárníka). Each exchange office must then be notified to ČNB at least three working days before it starts operating.

Operational requirements include: compliance with cash transaction limits, client identification for transactions above established thresholds, maintenance of transaction logs, and issuance of receipts showing the exchange rate to clients.

Forex Broker under MiFID II

Forex broker activity in the EU is regulated by Directive MiFID II (2014/65/EU) and the accompanying Regulation MiFIR (600/2014). These acts have applied since 3 January 2018, creating a unified licensing framework for investment firms across the EU.

From 26 June 2021, a special prudential regime was introduced for investment firms: Regulation IFR (Regulation (EU) 2019/2033) and Directive IFD (Directive (EU) 2019/2034), replacing the CRD IV rules as applied to non-bank investment firms. IFR/IFD establish a three-class system of prudential requirements.

Forex broker activity in the area of AML/CFT is governed by Regulation AMLR (Regulation (EU) 2024/1624), applicable from 10 July 2027; until then, the national rules transposing Directive (EU) 2015/849 apply.

Requirements for Obtaining Authorisations

Requirements for a Currency Exchange Licence (Czech Republic)

ČNB requirements for a currency exchange licence:

Legal structure:

a legal entity (e.g. s.r.o. or a.s.) or a natural person with a registered office or business premises in the Czech Republic (Act No. 277/2013 Coll., § 6(1)(a)).

Trustworthiness and qualification:

trustworthiness of the applicant, its managing persons and beneficial owners; the managing persons who actually run the exchange business must have completed secondary education with a school-leaving examination (§ 6(1)(b)–(c)).

AML compliance:

development and implementation of an internal AML/CFT policy, client identification at established transaction thresholds.

Exchange office:

each exchange office is notified to ČNB at least three working days before it starts operating; a purely non-cash online conversion falls outside Act No. 277/2013 Coll.

State fee:

the state fee for the licence application is paid by the client separately and is not part of COREDO’s fee.

Requirements for a Forex Broker (MiFID II)

Requirements for an investment firm under MiFID II / IFR / IFD are significantly more stringent:

Minimum initial capital:

depends on the investment services authorised (IFD, Art. 9):

EUR 75,000 — reception and transmission of orders, execution of orders, portfolio management, investment advice or placing without a firm commitment, where the firm may not hold client money or securities
EUR 150,000 — other cases, e.g. where the firm holds client money or securities
EUR 750,000 — dealing on own account or underwriting/placing on a firm commitment basis

Please note: these amounts are the regulatory initial capital requirements established by Directive IFD, and not the cost of COREDO’s licensing support services.

Management qualification (Fit & Proper):

directors, board members, and key function holders (compliance officer, MLRO, risk manager) must have demonstrated experience in financial markets, an impeccable reputation, and pass the regulator’s assessment.

Corporate structure:

a legal entity registered in the country of authorisation with a genuine physical presence (operational office, not a “mailbox”).

Programme documents:

a detailed business plan describing services, client segments, trading strategies, risk management system, marketing policy, and remuneration structure.

AML/CFT policies:

development and implementation of KYC policies, transaction monitoring, suspicious activity reporting (SAR), and appointment of an MLRO.

IT infrastructure:

reliable trading and accounting systems, compliance with cybersecurity requirements under DORA (Regulation (EU) 2022/2554), and personal data protection under GDPR.

Risk management:

systems for open position limits, stress testing, and capital adequacy monitoring.

Available Jurisdictions and COREDO Service Fees

COREDO supports clients in obtaining these authorisations across several jurisdictions:

Licence Type	Jurisdiction	Regulator	Minimum Capital	COREDO Service Fee	Timeline	Details
Currency Exchange	Czech Republic	ČNB	no statutory minimum	from EUR 6,500 + VAT	1–3 months	Financial Licence in the Czech Republic
Forex Broker (MiFID II)	Czech Republic	ČNB	EUR 75,000 / 150,000 / 750,000 depending on the services (IFD, Art. 9)	on request	decision within 6 months of a complete application (MiFID II, Art. 7(3))	Securities Dealer Licence in the Czech Republic
Forex Broker (MiFID II)	Estonia	Finantsinspektsioon	EUR 75,000 / 150,000 / 750,000 depending on the services (IFD, Art. 9)	on request	decision within 6 months of a complete application (MiFID II, Art. 7(3))	Financial Licence in Estonia
Forex Broker (MiFID II)	Lithuania	Lietuvos bankas	EUR 75,000 / 150,000 / 750,000 depending on the services (IFD, Art. 9)	on request	decision within 6 months of a complete application (MiFID II, Art. 7(3))	Financial Licence in Lithuania
Forex Broker (MiFID II)	Full Package (EU)	competent authority of the chosen EU country	EUR 75,000 / 150,000 / 750,000 depending on the services (IFD, Art. 9)	on request	decision within 6 months of a complete application (MiFID II, Art. 7(3))	Financial Licensing in the European Union
Money Services Business (MSB): foreign exchange dealing	Canada	FINTRAC	no minimum capital for FINTRAC registration	on request	determined individually	Financial Licence in Canada

Note: COREDO service fees include legal support, document preparation, and interaction with the regulator. The company’s minimum capital (regulatory requirement) is a separate cost item and is not included in COREDO service fees.

Global Reach Beyond the EU

Although this page focuses on Czech regulation, COREDO also provides currency exchange and money transfer licensing support beyond the European Union. For clients planning to expand to global markets, we offer consulting in the following jurisdictions:

United Kingdom — A currency exchange office is a money service business under the Money Laundering Regulations 2017 and registers with HMRC for anti-money laundering supervision unless it is already supervised by the Financial Conduct Authority (FCA). Money remittance also requires registration or authorisation with the FCA under the payment services rules.
Canada — Currency exchange and money transfer operations are regulated as “money services business” (MSB) under the supervision of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). Registration with FINTRAC is mandatory for businesses dealing in foreign exchange.
Singapore — Money-changing is a payment service under the Payment Services Act 2019; money-changers need a money-changing licence from the Monetary Authority of Singapore (MAS).
United Arab Emirates and Dubai — Exchange business is licensed and supervised by the Central Bank of the UAE (CBUAE); in the DIFC financial free zone, financial services are regulated by the Dubai Financial Services Authority (DFSA). Specific licences are required depending on location and business model.
Switzerland — Professional currency exchange and money transfer are financial intermediation under the Anti-Money Laundering Act (AMLA, Art. 2(3)(b)–(c)); such intermediaries must join a self-regulatory organisation (SRO) recognised by the Swiss Financial Market Supervisory Authority (FINMA) (AMLA, Art. 14).

COREDO has experience navigating these non-EU regulatory regimes and can help clients identify the optimal global licensing strategy. Our expertise extends beyond Europe to comprehensive support for international expansion of currency exchange activities.

Service Fees for Obtaining a Currency Exchange Licence in the Czech Republic

The service for obtaining a currency exchange licence in the Czech Republic includes full support from initial analysis through to the ČNB licence.

The service includes:

Preliminary due diligence of the applicant (director, beneficial owner)

Consultation on the choice of optimal structure and operating format

Registration or adaptation of a legal entity for currency exchange operations

Review of the documents you submit, with recommendations for corrections where needed

Preparation of the application and all supporting documentation for ČNB

Liaison with ČNB during the review process

Registration of the applicant in the ČNB system and receipt of the licence decision

Timeline: document preparation — 1–2 weeks; ČNB review — 1–3 months. Not included: the state fee, internal AML and management-and-control rules, and translations of documents.

The Process of Obtaining a Forex Broker Licence (MiFID II)

Licensing a forex broker in the EU involves several stages, the duration of which depends on the chosen jurisdiction and the applicant’s level of readiness.

Preliminary screening and jurisdiction selection

COREDO conducts an analysis of the client’s business model, verification of directors and beneficial owners for Fit & Proper compliance, assessment of capital requirement readiness, and recommends the optimal jurisdiction. This stage determines the investment services required and the corresponding minimum initial capital (IFD, Art. 9).

01

Registration of the legal entity

Establishment or adaptation of the corporate structure in the chosen jurisdiction. Opening a bank account, forming the share capital. Appointment of directors, compliance officer, and MLRO.

02

Preparation of the documentation package

Development of the business plan, AML/CFT/KYC policies, risk management procedures, IT documentation (DORA, GDPR compliance), documentation on trading conditions and client agreements. This is the most labour-intensive stage, determining the overall quality of the application.

03

Submission of the application to the regulator

The application with the full documentation package is submitted to the national competent authority: ČNB (Czech Republic), Finantsinspektsioon (Estonia), Lietuvos Bankas (Lithuania). The regulator checks completeness and proceeds to formal review.

04

Regulator review (up to 6 months after a complete application)

During the review process, the regulator may request additional documents and pose questions to directors and key employees. COREDO coordinates communication with the regulator and promptly provides requested materials.

05

Licence issuance and post-authorisation actions

After authorisation, the company is entered into the regulator’s public register and the ESMA list of investment firms. COREDO assists with notifying regulators of the intention to use passporting to operate in other EEA countries. After that, a licensed forex broker must regularly submit reports to the regulator, maintain capital adequacy, update AML policies and undergo periodic inspections.

06

Our Experts

COREDO’s financial licensing team has supported licence applications in the EU and beyond since 2016.

Pavel Kos

Head of Legal. Has been with COREDO since June 2017 and has headed the legal team since July 2020. Possesses extensive experience in supporting financial licensing projects in the Czech Republic and other EU jurisdictions.

Alena Mach

Executive Director

Nikita Veremeev

Founder & NED

Gregory Lutsenko

Head of Compliance

Frequently Asked Questions

What is the difference between a currency exchange licence in the Czech Republic and a forex broker licence?

A ČNB currency exchange licence (povolení k činnosti směnárníka) is a permit to exchange foreign currency in cash directly for clients in the Czech domestic market. The procedure is simpler and less expensive: from EUR 6,500 + VAT and 1–3 months. A forex broker licence (MiFID II) is an authorisation for an investment firm to provide brokerage, dealing, and advisory services on currency markets across the entire EEA. A significantly more complex and capital-intensive procedure: COREDO’s fee is quoted on request, and the regulatory capital comes on top.

Do I need a licence if I plan to open an online currency exchange only for users in the Czech Republic?

It depends on the model. Act No. 277/2013 Coll. covers the exchange of banknotes, coins or cheques of one currency for another and certain exchanges of non-cash funds into cash; this activity requires a ČNB currency exchange licence. A purely non-cash online conversion falls outside this Act and may require a different authorisation, for example under the payment services rules. COREDO will help determine the correct type of authorisation for your business model and guide you through the entire procedure.

Which jurisdictions are best suited for obtaining a forex broker licence?

Among the most popular jurisdictions for EU licensing: the Czech Republic (ČNB, a pragmatic regulator), Estonia (EFSA, relatively fast timelines), Lithuania (Lietuvos Bankas, a fintech-friendly regulatory environment). The choice of jurisdiction depends on the business model, capital level, client geography, and operational requirements. COREDO analyses each client’s business model before recommending a jurisdiction.

Does a MiFID II licence allow operations in all EU countries?

Yes, the MiFID II passporting mechanism allows a company holding a licence obtained in one EEA country to provide services in all 30 EEA states (27 EU countries + Norway, Iceland, Liechtenstein) — either through cross-border provision of services or through the establishment of a branch — without re-licensing in each country.

What documents are needed to obtain a forex broker licence?

The basic documentation package includes: a business plan, legal entity registration documents, director and beneficial owner documents (passport, criminal record certificate, CV, qualification confirmation), constitutional documents, AML/KYC policy, risk management policy, IT documentation, and financial projections. The exact list depends on the jurisdiction. COREDO provides a full checklist and document templates.

How long does it take to obtain a forex broker licence?

Under MiFID II, the regulator must decide within six months of receiving a complete application (Art. 7(3)); the overall timeline also depends on the jurisdiction and on how long it takes to prepare the documentation. Speed is largely determined by the applicant’s readiness and the speed of responses to regulator requests.

Is a forex broker licence needed for a cryptocurrency exchange?

No. Crypto-asset exchange activity is regulated not by MiFID II but by Regulation MiCA (Regulation (EU) 2023/1114). Crypto exchanges require a CASP (Crypto-Asset Service Provider) licence. COREDO supports CASP licensing in the Czech Republic, Estonia, Latvia, Lithuania, Poland and Slovakia.

Get a Consultation

Get a consultation from a COREDO specialist and find out which type of licence is right for your business.

COREDO has been operating since 2016 and supports clients at every stage of financial licensing — from initial analysis to post-authorisation support. Our lawyers have practical experience working with ČNB, EFSA, Lietuvos Bankas, and other regulators in Europe, as well as with regulatory authorities in Canada, Singapore, the United Arab Emirates, and other non-EU jurisdictions. Whether you are planning a local Czech registration or are expanding your currency exchange operations globally, we are prepared to guide you through the process.

Related Services

Obtaining a currency exchange licence or forex broker licence often requires related services:

Financial Licences in the EU

AML Audit

Financial Licensing in the European Union