After the announcement of demonetization in 2016, the general public received a jolt of reality. For Indians who had no idea what was about to happen, it was chaos. Ever since demonetization, there has been a rapid growth in online payment systems. Hence, you can start currency exchange business in India as there are several benefits. In this article, you will understand how to start currency exchange business in India and also its scope.
What is Currency Exchange Business?
A Full Fledged Money Changer (FFMC) is an approved organization that may buy foreign currency from non-residents and Indian residents and sell it solely to those going abroad for private and commercial purposes.
Per the Foreign Exchange Management Act (1999), only registered money changers are allowed to conduct money-changing operations and provide required foreign exchange services within India.
Certain enterprises and hotels have also been granted the ability to trade in foreign currency notes, coins, and traveler’s checks in accordance with the directives provided by the RBI on an ongoing basis.
Advantages and scope to start currency exchange business in India
The foreign exchange market is among the most liquid in the world, transacting $6.6 trillion in value daily. However, it is also extremely volatile and has a high degree of risk.
A wide range of financial institutions participates in the currency trading market, including large enterprises, central banks, wealth management firms, hedge funds, and retail forex brokers.
As a result, Forex trading or currency exchange business in India is a legal means of making money and a highly profitable business in India.
You can also earn money through commission while you provide currency exchange services.
Process to start currency exchange business in India
Get Company Registration
Company Registration is the primary step to start currency exchange business in India.
It is legal registration and intimidation to the government that you are starting this business. Company Registration also allows you to decide the liability and the tax structure that you want to avail for your business.
Apply for FFMC Registration
If a corporation wants to engage in money-changing activities, such as forex currency exchange, it must be registered with the Financial Futures and Markets Commission (FFMC).
AMC (Approved Money Changers) are businesses or persons authorized by the RBI under Section 10 (1) of the FEMA Act (Foreign Exchange Management Act), 1999. Full Fledged Money Changers are the AMCs that fall within this category.
Thus, If you want to run a money exchange company or market it, you need an active RBI-issued FFMC license.
As a result, any company that engages in money-changing activities without the consent of the RBI may face fines.
Get Trademark Registration
These days multiple businesses fail because they don’t protect their branding.
Hence, getting a trademark registration to start currency exchange business in India is essential. There are also several other advantages of Trademark Registration such as:
- The trademark confirms the quality of your products and services, making it easy for buyers to place their faith in you.
- An organization’s Intellectual Property (IP) becomes a good investment when a trademark registration is completed. A trademark registration creates a right that can be sold, transferred, licensed, or commercially contracted.
- You have trademarked your wordmark or logo, and no one else may use it.
- Registration of trademarks online may be done for a very minimal cost. Only maintenance and renewal costs are required once the trademark is registered for ten years.
- Your company’s or organization’s uniqueness may be conveyed through its logo. Hence, after having Logo Design, you should also trademark it.
Apply for Shop Establishment Registration
Shop and establishment laws (“Acts”) are enacted by state legislatures. As a general rule, the Act’s provisions are the same in every state. The states’ Labor Departments are in charge of enforcing the Shop and Establishment Act.
All stores and business enterprises in the state are subject to the provisions of the Act. The Act’s registrations are issued by the individual states, and hence the process varies significantly from state to state.
Therefore, Shop Establishment Registration is mandatory for every shop or establishment that is conducting business.
GST(Goods and Service Tax) is an indirect taxation system in India. In India, it is mandatory to have GST Registration if you cross the turnover limit.
GST Registration also assists you in opening a current bank account that you will need to carry out your currency exchange business. Moreover, if you have MSME Registration, you can also avail a business loan easily.
In the article above, you have understood the process to start currency exchange business in India. If you require further guidance in relation to starting currency exchange business or any other business, feel free to contact our business advisors.
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