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Want to Launch a New Financial Firm? Consider These Locations

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And wherever you begin, be ready to do a lot of things outside of your core concentration, says one expert.

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MINYANVILLE ORIGINAL There are plenty of locations to launch a new financial firm. But where should aspiring entrepreneurs begin?

"I think London is a good compromise between regulation and respectability, and particularly in forex they are pretty much the center of the currency trading world," said Andrei Knight, the founder and Senior Currency Strategist at fxKnight.com, whose company is incorporated in London. "London still clears more volume in a day than New York does, for example. So at least for us it was a smart and sensible choice. It might not be for every company."

He cautioned against the Britsh Virgin Islands or Panama. "The problem with those jurisdictions, of course, is also the shady element. That's where the loosest regulations are. Your clients won't trust you if you're based there. And there's a good chance you might lose all your money if you're based there."

Going forward, Knight said that he thinks that the industry's growth depends on regulation. "America could be the capital of financial world if they write smart regulations that allow them to be that," he said, illustrating the challenges of bad regulation in London. "They passed a bunch of new taxes on financial transactions -- the rents went up like crazy. What's happened is, all the big banks moved and now you see a bunch of skyscrapers on the Eastern dock."

The thing to remember is that with financial firms, "we really live in a global market now."

"If you pass unfavorable regulation, people are gonna move and take their money and their business somewhere else," Knight warned. "You gotta protect the consumer but at the same time you've got to be conscious of and competitive with the rest of the world."

Globally, Knight said that Hong Kong and Singapore are "very tempting right now."
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