COREDO > Licensing > 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.

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Cost of the service
from 6 500 EUR

Regulatory Framework

Currency Exchange in the Czech Republic

Currency exchange activity in the Czech Republic is regulated by two acts: Act No. 277/2013 Coll. on payment services (zákon o platebním styku) and Act No. 219/1995 Coll. on foreign exchange (devizový zákon). The supervisory authority is Česká národní banka (ČNB).

To open a physical currency exchange point, it is necessary to obtain the status of a “malá platební instituce” (small payment institution) or register in the special ČNB register as a currency exchange operator. ČNB maintains a public list of registered exchange points that clients are required to verify.

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 entered into force on 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, and the current requirements of the 6th AML Directive (AMLD6).

Who Needs a Licence and Which Type to Choose

Registration as a physical currency exchange is suitable for companies and entrepreneurs planning to open exchange points — whether in shopping centres, hotels, airports, or in the form of online conversion for the domestic market. 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.

Requirements for Obtaining Authorisations

Requirements for Currency Exchange Registration (Czech Republic)

ČNB registration requirements for a currency exchange operator:

Legal structure:

a Czech legal entity (s.r.o. or a.s.) or a self-employed individual (OSVČ).

Impeccable business reputation:

no criminal record for the director and beneficial owner, verification against ČNB registers and EU sanctions list databases.

AML compliance:

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

Physical premises or IT system:

for a physical exchange point — an appropriately equipped premises; for an online exchange — a certified payment system.

State fee:

registration fee payable to ČNB in accordance with the current fee schedule.

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 firm class under IFR/IFD:

Class 3 (lowest risk, no client money handling): from EUR 75,000
Class 2 (moderate risk): from EUR 150,000
Class 1 (high risk, dealing operations, underwriting): from EUR 750,000

Please note: these amounts are the regulatory own funds 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 both types of authorisations across several jurisdictions:

Licence Type	Jurisdiction	COREDO Service Fee	Timeline
Currency Exchange	Czech Republic	from EUR 6,500 + VAT	1–3 months
Forex Broker (MiFID II)	Czech Republic	from EUR 40,000 + VAT	2–4 months
Forex Broker (MiFID II)	Estonia	from EUR 25,000 + VAT	2–4 months
Forex Broker (MiFID II)	Lithuania	from EUR 60,000 + VAT	2–4 months
Forex Broker (MiFID II)	Full Package (EU)	from EUR 70,000 + VAT	3–6 months

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 — Licenses for currency exchange and money remittance fall under the supervision of the Financial Conduct Authority (FCA). The categories of “money remittance” and “currency exchange” require registration with the FCA register.
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). Authorisation is mandatory for entities conducting foreign currency operations.
Singapore — A licence for money-changing is issued by the Monetary Authority of Singapore (MAS) under the Currency Act. MAS authorisation requires compliance with strict security and financial standards.
United Arab Emirates and Dubai — Currency exchange activities are regulated at the emirate level (for example, the Dubai Financial Services Authority — DFSA — for the DIFC free zone, or local central banks for other areas). Specific licences are required depending on location and business model.
Switzerland — Currency exchange and money transfer operations are governed by Swiss banking law (Bundesgesetz über die Banken und Sparkassen, BankG) and supervised by the Swiss Financial Market Supervisory Authority (FINMA). Entities without a banking licence may operate as “currency brokers” on a limited basis.

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 registering a physical currency exchange in the Czech Republic includes full support from initial analysis through to obtaining registration with ČNB.

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

Development of a package of internal documents (AML policy, operational procedures, transaction logs)

Preparation of the application and all supporting documentation for ČNB

Liaison with ČNB during the review process

Obtaining the registration certificate and inclusion in the ČNB public register

Timeline: document preparation — 1–2 weeks; ČNB review — 1–3 months.

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 (1–2 weeks)

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 firm class (IFR Class 1, 2, or 3) and the corresponding minimum capital.

01

Registration of the legal entity (2–4 weeks)

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 (4–8 weeks)

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 (2–4 months)

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 EBA register. COREDO assists with notifying regulators of the intention to use passporting to operate in other EEA countries.

06

Ongoing compliance

A licensed forex broker is required to regularly submit reports to the regulator, maintain capital adequacy, update AML policies, and undergo periodic inspections.

07

Our Experts

COREDO’s financial licensing team has supported licence applications across 23+ jurisdictions since 2016.

Pavel Kos

Head of Legal at COREDO. Specialises in financial licensing, transaction structuring, and working with EU regulators. Has participated in hundreds of EMI, PSP, investment, and forex licence projects.

Basang Ungunov

Lawyer at COREDO. Specialises in corporate law, preparation of legal documentation for financial institutions, and support of applications to EU regulatory authorities.

Frequently Asked Questions

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

A currency exchange registration with ČNB is a permit for exchanging cash and non-cash foreign currency 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: from EUR 25,000 + VAT for COREDO services alone, plus regulatory capital.

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

Yes. Any activity involving the exchange of foreign currency — whether at physical locations or online — requires registration with ČNB under the Foreign Exchange Act. COREDO will help determine the correct type of authorisation for your business model and guide you through the entire procedure.

What is the minimum capital required for a forex broker under MiFID II?

Since 26 June 2021, investment firms in the EU are classified under IFR/IFD. The minimum initial capital is EUR 75,000 for Class 3 firms (lowest risk), EUR 150,000 for Class 2, and EUR 750,000 for Class 1 (dealing operations, proprietary trading). These are regulatory own funds requirements for the company and are not included in COREDO service fees.

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 conducts a free preliminary analysis for each client.

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?

On average, the process takes 2–4 months for more flexible jurisdictions (Czech Republic, Estonia) and up to 4–6 months for other EU countries. Document preparation takes 4–8 weeks; regulator review takes 2–4 months. 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 has extensive CASP licensing experience across 16 jurisdictions.

Can I obtain a currency exchange licence outside the European Union?

Yes. Although this page focuses on regulation in the Czech Republic, COREDO also provides consulting and support for obtaining currency exchange and money transfer licences in other parts of the world. We offer services in Europe and beyond — in Canada (FINTRAC), Singapore (MAS), the United Arab Emirates, Switzerland, and other jurisdictions. The choice of jurisdiction depends on your target client geography, business model, and regulatory preferences. COREDO can help you determine the optimal regulatory strategy for global expansion.

Submit Application

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.