First of all, it is necessary to create a comprehensive business plan. With a comprehensive business plan you will be able to negotiate with contractors, held negotiations with banks on a professional level. The issuing licenses regulator will also request it.
At this stage any bank will require a list of potential contractors, expected turnover of the company. Moreover, during the application process, the regulators will ask project representatives to demonstrate the vision of the project development, the roadmap, including objective financial and economic figures.
Business plan can be adjusted later but fear not to sound ambitious. After all, shoot for the moon, and you will land among the stars.
Step 2. Creating a company
Your business plan need to cover the future legal form of the company. In New Zealand we would recommend to register a legal entity in form of Limited Liability Company .
To register a company you will need to provide a registrator with 2-3 possible names of the company and with the documents of the future director and the shareholder of the company. For private individuals a detailed CV will be needed as well, for legal entities — the detailed structure of the company and its operations. The registration cost starts at 7000 euro. The full cost will depends on the internal structure of the company.
It will take about 2 months to register a company in New Zealand. It means that after 2 months you will receive a full package of corporate documents that could be submitted to any bank (besides the banks in New Zealand). Since the general documents are enough for the government bodies in New Zealand, in these 2 months you could also register a company with the financial regulator.
Step 3. Leasing the office space
The company that plans to obtain a license from the financial regulator should lease the office space. The office space should be appropriate for several employees and be equipped enough for them to be able to perform their professional duties. In general, a simple office for 3 employees costs approximately 12000 euro.
Step 4. Opening a bank account
A company without a bank account is just a pack of documents with fancy stamps and signatures. The bank account is the key business instrument. For a company in New Zealand we would recommend to open a bank account at Westpac or BNZ. Both banks are the industry leaders. Westpac is one of the leading australian banks, the second largest in New Zealand. BNZ (Bank of New Zealand) is one of the oldest established banks in New Zealand. Both banks have A1 Moody’s rating score.
Step 5. Creating job positions
In accordance with local laws, the company should hire at least 3 citizens of New Zealand. One of the hired employees should take up the position of General Manager. The minimum annual salary for such an employee should be from 50000 to 60000 euro.
Of all others the General Manager will be the main contact person for arrangements with financial regulator – FSPR. General Manager will be contacting FSPR, submitting the application documents etc.
So you have registered a legal entity, took a lease for the office and hired employees. Simultaneously, the process of obtaining the license needed for cryptocurrency exchanges in New Zealand should be started. This process could be divided into two stages.
Stage 1. Registering at the Financial Service Providers Register and the Financial Dispute Resolution Service
The Financial Service Providers Register (FSPR) is the government financial regulator in New Zealand. The organization has been established in 2008 and is under the authority of the Ministry of Finance. Its main objective is to register brokers and investment companies, issue licenses, which are compulsory for all financial market participants.
The Financial Dispute Resolution Service has been established in 2014. It is the non-profit non-governmental organization with a main goal to help resolve disputes among companies and their clients. The submission of the application to Financial Dispute Resolution Service is carried out at the same time as the submission of the application to the FSPR.
Please consider the fact that in the process of obtaining the license, you, your employees, control agents will undergo the Criminal History Check at New Zealand Ministry of Justice.
The financial services which will be provide by the company need to be clearly defined as each separate service needs to go through the separate process of registration with FSPR.
The registration process at the FSPR takes approximately 7 months.
After obtaining the registration at the Financial Service Providers Register and the Dispute Resolution Scheme your company will be approved to provide the clients with the following services (depends on which services were defined as to be provided at the time of registration):
1) Financial planning in New Zealand and overseas;
2) Financial and insurance consulting;
3) Funds and investment management in New Zealand;
4) Currency exchange transactions handling;
5) Money transfers conducting on behalf of third parties;
6) Cryptocurrency trading without fiat currency withdrawals.
Apart from that, it is worth highlighting the importance for the company to join the Dispute Resolution Scheme. If a company intents to provide services to common clients (individuals, not accredited investors), it has to join the к Dispute Resolution Scheme. The company can join the Scheme in 10 days from the first registration at the FSPR obtainment. In such a manner, it is not required to wait to submit registration applications. The processes could be optimized if conducted in parallel.
Stage 2. Obtaining the Market Operators License
After the registration with the FSPR you need to obtain license that allows to operate in the financial market – the Market Operators License. Once again the documents preparation and submission could be carried out in New Zealand by the General Manager of the company.
Upon the receipt of the license you will be approved to provide the clients with a broader range of financial services, according to the Financial Markets Conduct Act 2013, the full text of which is available here: http://www.legislation.govt.nz/act/public/2013/0069/latest/whole.html
The legislation in New Zealand assumes as a financial market operator anyone who is conducting operations connected to the financial instruments. The financial product market includes any company, who provides services, which help one to buy, sell, offer to sell and buy, to place offer for any financial product or instrument with similar nature. At the moment this description is the closest to the cryptocurrency exchange activities.
The license is granted by the Minister of Commerce and Consumer Affairs.The regulator is the Financial Market Authority, FMA.
In order to grant the license both the regulator and the Minister will require the following information about your project:
– planning operational activities;
– the expected market size for the financial services;
– the structure of the financial product and the possible transactions with it;
– expected market players (both direct and indirect);
– employed technologies.
The license is granted for the determined financial instruments market but can be granted simultaneously for several financial markets/products.
So, you are the owner of the enterprise which is proudly named the “FSP registered company”.
These companies are known as an optimal corporate structure for providing the financial services worldwide. Setting up such a corporate structure in accordance with all financial regulator rules is quite time-consuming process and takes minimum 8 months. But as a result you will get a company under the well-respected jurisdiction that is compliant with all requirements of currency exchange, financial and banking legislation, that would allow investors to trust the project more, and you to bring to the reality your bravest ambitions and projects.
Anastacia Pichugina – Managing partner of ANP Law