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How to Apply For a Forex Bureau License in Kenya

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How to Apply For a Forex Bureau License in Kenya by Kenyans247(1): Sat Jan 2020 09:31am
Procedure
Apply in Person

To register for a FOrex Bureau license one need to start by doing a name search and reservation of the Forex Bureau's name with the Registrar of Companies#
Book an appropriate name with the Registrar of Companies and write to the Central Bank to seek approval for the name. The name should incorporate the words “Forex Bureau”, “Foreign Exchange Bureau” or “Bureau de Change”.
The name a search and reservation takes one day to complete and a fee of Ksh.1000 is charged for the process.
After the name has been approved by the Central Bank, you should proceeded to the Registrar of Companies and register the company.
To apply for a Forex Bureau License, one has to fully complete and submit the prescribed Application For or Renewal of Licence to Transact Foreign Exchange Business - FORM / CBK /FXD /1 application form. https://www.centralbank.go.ke/images/docs/forms/Licence%20Application%20Form%202011.pdf

Book an appropriate name with the Registrar of Companies and write to the Central Bank to seek approval for the name. The name should incorporate the words “Forex Bureau”, “Foreign Exchange Bureau” or “Bureau de Change”.
This form- Application For or Renewal of Licence to Transact Foreign Exchange Business - FORM / CBK /FXD /1 can be obtained by downloading it from the Central Bank’s Website https://www.centralbank.go.ke/images/docs/forms/Licence%20Application%20Form%202011.pdf https://www.centralbank.go.ke/

After filling the application form you should submit it to the :-
Director,
Bank Supervision Department,
Central Bank of Kenya
You are required to submit the application form with all the required documents and prescribed application fees. These include:-
(i). non-refundable application fee of Ksh. 20,000 for a new licence and Kshs 10,000 for an outlet of an existing forex bureau (fees are in bankers cheque payable to the Central Bank of Kenya);
(ii). a certified copy of a statement of affairs of the applicant;
(iii). a certified copy of the applicant’s memorandum and articles of association;
(iv). a certified copy of the applicant’s certificate of incorporation;
(v). current membership certificate to the Kenya Forex Bureau Association (KFBA)
(vi). a feasibility study including financial projections for three years (balance sheet, profit and loss account and cash flow statements), organizational structure, physical location and postal address;
(vii). evidence of existence of a minimum core capital of not less than US$60,000 or its equivalent in Kenya shillings , which should exist before commencement of operations and maintained at all times
(viii). bank statements of the bureau’s shareholders and directors for a period of six months prior to the date of application;
(ix). duly completed fit and proper forms for the shareholders, directors and principal officers of the bureau;
(x). credit reports from a credit reference bureau for the shareholders, directors and the principal officers of the bureau;
(xi). a declaration by the applicant that none of its directors and/or shareholders has ever been declared bankrupt, participated in the management of a collapsed institution, convicted by any court of competent jurisdiction in Kenya or elsewhere of a criminal offence involving fraud, money laundering, tax evasion, or any other act of dishonesty;
(xii). a declaration by the applicant that none of its directors and/or shareholders holds a similar position or role in any other forex bureau;
(xiii). an undertaking by the applicant to comply with the provisions of the Central Bank of Kenya Act, the Regulations, the Forex Bureau Guidelines and any instructions/ directions issued by the Central Bank of Kenya regarding the establishment and operations of forex bureaus at all times; and
(xiv). any other information as may be required by the Central Bank of Kenya.
The Central Bank’s Inspectors will then carry out an in depth review of the contents of each document submitted for regulatory compliance, relevance and scope.
Book an appropriate name with the Registrar of Companies and write to the Central Bank to seek approval for the name. The name should incorporate the words “Forex Bureau”, “Foreign Exchange Bureau” or “Bureau de Change”.
In general the documents are required to explain, define and illustrate the entire organisation structure, functions, activities and programs.
Book an appropriate name with the Registrar of Companies and write to the Central Bank to seek approval for the name. The name should incorporate the words “Forex Bureau”, “Foreign Exchange Bureau” or “Bureau de Change”.
It is required that they show how the organisation shall comply with the Regulations, and how the terms of approval shall be continually maintained after certification and approval has been granted, i.e. Internal audits and findings corrective action procedures.
The Central Bank shall within 90 days of the date of lodging the application:
(a). request for additional information for purposes of processing the application;
(b). where it is satisfied that all the necessary requirements have been met, issue a letter of intent to the applicant advising the applicant to:-
(i). pay the licence fee of Ksh. 65,000 to the Central Bank of Kenya by banker’s cheque;
(ii). transfer the non-interest bearing deposit of US$30,000 to the Central Bank of Kenya offshore account;
(iii). invite the Central Bank of Kenya to inspect the bureau’s premises prior to commencement of business.
Upon fulfilment of the above requirements or otherwise the Central Bank shall:-
(a). issue a licence to the applicant; or
(b). inform the applicant in writing that the application has been declined and advise the unsuccessful applicant that an appeal to the Central Bank for review of the decision to decline may be lodged within 30 days from the date thereof.
Book an appropriate name with the Registrar of Companies and write to the Central Bank to seek approval for the name. The name should incorporate the words “Forex Bureau”, “Foreign Exchange Bureau” or “Bureau de Change”.
NOTE: A licence issued under this section shall, unless earlier revoked, expire on the 31st December next following the date of issue.

Required Documents

a certified copy of a statement of affairs of the applicant;
a certified copy of the applicant’s memorandum and articles of association;
a certified copy of the applicant’s certificate of incorporation;
a feasibility study including financial projections for three years (balance sheet, profit and loss account and cash flow statements), organizational structure, physical location and postal address;
evidence of existence of a minimum core capital of not less than US$60,000 or its equivalent in Kenya shillings .
bank statements of the bureau’s shareholders and directors for a period of six months prior to the date of application;
duly completed fit and proper forms for the shareholders, directors and principal officers of the bureau;
credit reports from a credit reference bureau for the shareholders, directors and the principal officers of the bureau;
a declaration by the applicant that none of its directors and/or shareholders has ever been declared bankrupt, participated in the management of a collapsed institution, convicted by any court of competent jurisdiction in Kenya or elsewhere of a criminal offence involving fraud, money laundering, tax evasion, or any other act of dishonesty;
a declaration by the applicant that none of its directors and/or shareholders holds a similar position or role in any other forex bureau;
an undertaking by the applicant to comply with the provisions of the Central Bank of Kenya Act, the Regulations, the Forex Bureau Guidelines and any instructions/ directions issued by the Central Bank of Kenya regarding the establishment and operations of forex bureaus at all times; and
any other information as may be required by the Central Bank of Kenya.
Prescribed application fee receipt. (fees are in bankers cheque payable to the Central Bank of Kenya);

Office Locations & Contacts

Central Bank of Kenya
Haile Selassie Avenue
P.O Box 60000 – 00200,
Nairobi, Kenya
Tel / Fax: +254 20 286 0000
Phone: +254 20 286 1000, +254 20 286 3000, +254 709 081 000, +254 709 083 000
Email: comms@centralbank.go.ke
Website:CBK Website https://www.centralbank.go.ke/contact-us/

Eligibility

This application allows a person to transact foreign exchange business in Kenya.
In Kenya no person shall, transact foreign exchange business except an authorized dealer
Forex Bureaus in Kenya were established and first licensed in January 1995 to foster competition in the foreign exchange market and to narrow the exchange rate spread in the market.

Fees

The name a search and reservation fee of Ksh.1000
Application fee is Ksh. 20,000 for a new licence and Ksh. 10,000 for an outlet of an existing forex bureau - non-refundable (fees are in bankers cheque payable to the Central Bank of Kenya);
The licence fee of Ksh. 65,000

Validity

The validity period is one year.
A licence issued under this section shall, unless earlier revoked, expire on the 31st December next following the date of issue

Documents to Use

Application For or Renewal of Licence to Transact Foreign Exchange Business - FORM / CBK /FXD /1 https://www.centralbank.go.ke/images/docs/forms/Licence%20Application%20Form%202011.pdf
Directors’ and Senior Officers’ Fit & Proper Form – FORM/CBK/FXD/2 https://www.centralbank.go.ke/images/docs/forms/Directors%20%20Senior%20Officers%20Fit%20%20Proper%20Form%202011.pdf
Shareholders’ Fit and Proper Form – FORM/CBK/FXD/3 https://www.centralbank.go.ke/images/docs/forms/Shareholders%20Fit%20%20Proper%20Form%202011.pdf
Application to Open an Outlet to Transact Foreign Exchange Business - FORM / CBK /FXD /4 https://www.centralbank.go.ke/images/docs/forms/New%20Outlet%20Application%20Form%202011.pdf

Processing Time

The processing time is 120 days.

Instructions

For purposes of renewal of license, please submit the duly completed form, the appropriate license fee and copies of the following:
(a). certificate of incorporation;
(b). current forex bureau license;
(c). current tax compliance certificate;
(d). current membership certificate to the Kenya Forex Bureau Association (KFBA);
(e). current credit reports of the bureau, shareholders and directors from a licensed credit reference bureau;
For purposes of application for a new license, an applicant is required first to seek approval name from the Central Bank of Kenya and thereafter will be advised on the documents to be submitted together with the duly completed form.
All information provided shall be treated as confidential.

Required Information

Name of bureau
Physical and postal address of head office/ proposed new outlet
Date of incorporation
Certificate of incorporation Number
Details of existing licensed outlets (Name of Outlet, County, City/Town, Street, Building, Date opened)
Particulars of shareholders (Name, Nationality, Date of acquisition, Amount of shareholding, % of shareholding)
Particulars of directors (Name, Nationality, Date of appointment, Level of education)
Particulars of the officers in the order of seniority (Name, Designation, Nationality, Date of appointment)
Declaration

Need for the Document

This license allows the holders to operate a Forex exchange bureau in Kenya.
A person who operates a Forex Bureau without a valid license commits an offence and shall, on conviction be liable to a fine not exceeding five hundred thousand shillings, or to imprisonment for term not exceeding three years, or to both.
Information which might help

Forex Bureaus in Kenya were established and first licensed in January 1995 to foster competition in the foreign exchange market and to narrow the exchange rate spread in the market.
As authorized dealers, forex bureaus conduct business and are regulated under the provisions of the sections 33A to 33(O) of the Central Bank of Kenya Act (Cap 491) and Forex Bureau Guidelines issued thereunder.
Directory of Licensed Foreign Exchange Bureaus https://www.centralbank.go.ke/wp-content/uploads/2019/05/Directory_of_Licenced_Foreign_Exchange_BureausApril-2.pdf
Directory of Licensed Money Remittance Providers MRP’s https://www.centralbank.go.ke/wp-content/uploads/2019/05/Directory_of_Licenced_Money_Remittance_ProvidersApril-3.pdf

External Links

The Central Bank of Kenya Act https://centralbank.go.ke/images/docs/The_Central_Bank_of_Kenya_Act_1st_January_2014.pdf

Source https://www.wikiprocedure.com/index.php?title=Kenya_-_Apply_For_a_Forex_Bureau_License

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