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How Do Bureau De Changes Make Money?

If you have ever traveled outside the country, you know exchange rates can kill you, but only if the foreign currency is worth more than your home country’s currency. For example, if $1 will only buy £0.70, then you’re without doubt “trading down,” assuming costs for goods and services are relatively equal in both countries.

However, you can leverage these same exchange rates and make a profit, if you own a bureau de change business. Bureau De Change or Foreign exchange trading involves buying and selling foreign currency to make money off an international foreign exchange market.

Since the value of the world’s currencies are steadily changing, the aim of the business is to time the buying and selling of currencies, trading one against another, so that the company profits from currency swings with minimal losses (called “drawdown”).

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Note that with technology easing out the process of handling money internationally, geographical location seems to matter less and less. One convenient option is the Bureau De Change business. In today’s global market place, bureau de change has a very crucial position.

It facilitates easy buying/selling of goods across borders. Also with the rise in international travel, the need to exchange money is growing. Therefore, the presence of an easy bureau de change is beneficial.

A business of exchanging currency involves transfer of money from individual A to individual B in exchange of another currency of equal value. This is what the regular banks and travel companies like Thomas Cook do.

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Also have it in mind that this is significantly different from money transfer companies that are involved in international remittances. You have the option to set up store or conduct business solely online depending on your preferences and opportunities. The criterion for starting a bureau de change business might vary from state to state.

In addition, the starting capital is not enormous. You could start off this business with basic facilities like a spare room, an additional computer, and one internet connection. There are conditions at certain times about the necessity of having a minimum net worth and even providing a surety bond. However, it does not have a limiting role. Instead the scope and the opportunity get the required push backed by these conditions.

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This business is a better fit for individuals who love high-risk businesses. You must be willing to work long hours, be good with numbers, and be willing to learn about and understand various trading algorithms. You should also be passionate about world economies.

Smart Ways a Bureau De Change Makes Money

Bureau de change businesses make money from the rise in currencies they invest in. These money traders hope that the price of the currency they just bought will rise relative to the one they just sold. If you are a broker, you charge clients or other traders a fixed or variable spread commission for trading.

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Some companies act as “pass through” entities for large market-makers, and only charge a fraction of a pip commission so that their traders can pay a thin spread that is only usually offered to very large or institutional investors.

However, if you are brokering for other traders, you can charge between 0 and 4 pips per trade. Since this is a very competitive industry, if you charge higher than the average for brokers, make sure you offer value-added services for traders. Since you are trading currencies, your revenues can fluctuate depending on market conditions, but a Bureau de change with just one trader will more or less earn around $50,000 and $150,000 per year, gross.

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This means a company employing 5 traders can expect to gross up to $750,000 per year. However, very successful traders can earn much more. A broker or market maker may earn between $500,000 and $10 million or more per year.

How to Start a Bureau De Change Business

Even though the starting capital might not be enormous, but it is one business that needs strict adherence to norms and regulations, especially given the huge amount of money involved.

  1. Choose a Suitable Location

Just like every other business, you will have to choose a suitable venue to set up your bureau de change business. You should go for a location that keeps your customers in perspective. Some place that can be accessed easily and never too far from any corner of the town.

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A place that has the potential to attract maximum clients is the best. Also the presence of a potential competitor needs to carefully analyzed. You just have to make sure that you are not competing with too many other bureau de changes.

  1. Acquire all Necessary Licenses & Pay Fees

The bureau de change business requires a series of licenses and regulations. These norms vary from state to state, and from country to country. However, not having the required license is considered to be a criminal violation. Each state has a separate licensing department. Anyone interested in starting this business is expected to apply to these departments. The other associated step is paying up the required fees in this aspect.

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Payment of these fees to the right authorities prevents unfair trade practices and corruption possibilities. It also helps you conduct your business in a peaceful manner without disturbances and interruptions resulting from the sudden check and resultant penalty service.

The basic operating procedure in the United States involves obtaining a Registration of Money Services Business application and submitting it to the Financial Crimes Enforcement Network. This is a standalone agency within the US Treasury Department.

  1. Establish a Merchant Bank Account

Have it in mind that with so much money changing hands, the presence of a bank account is almost the basic requirement. You are expected to create a merchant bank account in any bank of your choice. Note that this account helps you in accepting payment, forwarding advances, and paying your customers as per the needs of your business.

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In addition, a bank account helps in convenient account keeping and the chances of unaccounted for payment are significantly cut down. Note that with a merchant bank account, you can expand the horizon of your business quite easily. The bank allows simple transactions over the net regardless of the time and location. It will help in providing prompt service to your clients and thereby enhancing your service efficiency.

  1. Report Taxes and Record Keeping

You should always remember that the best practices are what help you further your bureau de change firm. In this respect paying of taxes on time is very imperative. The Internal Revenue Service’s department in US mandates individuals engaged in bureau de change business to report their earnings in dollar terms to the Govt. Note that all the reporting needs to be done in a fashion that the Govt gets an exact idea of the earnings outlook.

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Have it in mind that effective tax paying also needs proper record keeping. Maintaining a proper tab of all the cash inflow and outflow will facilitate this for you. Note that this also limits the scope of potential money laundering and business malpractices.

Whether you maintain a daily cash sheet or a monthly statement, it tends to rest on your convenience and the regulations of your reporting state to a large extent. Howbeit, all fee receipts, bank statements, and related records should be maintained for easy examination by the authorities whenever the need arises.

  1. Know the Process

Another key requirement to start a bureau de change business is understanding the business process and its myriad nitty-gritty. To avoid difficulties while operating it, you will benefit a lot by spending time understanding the basis. Bureau de change requires you to be alert and agile to take advantage of the currency fluctuation and maximize your margins.

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You will have to look around and create a niche that helps you to lock in maximum profit while still keeping your customers happy and giving them a favorable rate. Note that this will help you increase the recall factor for your firm. When your customers realize that they are getting a better rate, they will go the extra mile to get their money exchanged from you and also spread the word.


Indeed, the trick to managing an effective money exchange business is making a concrete plan and implementing the business processes in accordance to that. Bureau de change is a very lucrative business opportunity that can yield huge returns if executed with a strong profit motive and a constant eye on future trends.

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Howbeit, do not bother about exchange rates too much. Play it by the ear and take on opportunity as it comes. At the same time always be alert about the events globally and how they could potentially impact your business.