Οffshore Forex Brokers (Pros and Cons)

An offshore Forex Broker is considered a registered company in an offshore jurisdiction that offers online forex trading services (through a website that provides an online trading platform).

Example: A person is living in Belgium. He is opening an individual traders’ account in FBS (a company registered in Belize, licensed by IFSC – Belize) and is trading the AUD/CAD currency pair. This person is not trading using his own currency (Euro), but a currency pair that contains two different currencies through a forex broker that is not set up in Belgium or even in a Eurozone state member.

An offshore Forex Broker may (or may not) hold a License from that jurisdiction. Some of these offshore forex brokers are regulated (such as Fbs.com or TenkoFx.com), while others are not regulated (such as LqdFx.com or Evolve.markets).

 

Few words about offshore companies

Offshore Companies are sometimes ideal to set up an online business.

Although it is 100% legal to own an offshore company, many countries have taken legal actions to fight against tax avoidance.

Tax Evasion: Stealing taxes from the country of your residence. Illegal activity.

Tax Avoidance: Avoidance to pay taxes using “legal” ways. Depending on the method, tax avoidance can be 100% legal, grey zone (something between legal and illegal), or illegal.

It is crucial to understand that an offshore company does not protect you from paying taxes. Taxation can be very tricky and we do suggest asking only specialists about it.

 

Why Forex Brokers incorporate offshore

There are several reasons that forex brokers tend to prefer offshore jurisdictions to set up their forex trading company.

(Not only forex brokers but also online casinos, dropshipping e-commerce websites and other similar types of businesses have moved offshore)

i) Very Low taxation (If any…): Most offshore jurisdictions offer a special 0% taxation on corporate tax and 0% taxation on dividends distributed to the shareholders. That’s why they are called tax heavens.

ii) Cheap, easy and fast set up: Offshore company formation prices vary. However, with a little internet research, anyone can find a reliable service.

With less than 2000$ you can get services like offshore company formation + offshore bank account + nominee shareholder and director to be totally anonymous.

Most offshore companies can be set up in less than a week, while bank account opening may take a bit longer. Of course, you don’t have to visit physically the jurisdiction. Everything can be done online, and the whole package of legal documents will be mailed to you…

Furthermore, most offshore companies can be registered and start working with a minimum capital requirement of 1$.

Shareholders and Directors are not obligated to be local residents.

iii) Low maintenance costs: No accountant needed, no bookkeeping, no need to report corporate income. The obligations for directors and shareholders are less than an EU company, or a US Company.

iv) Easy to get a License: Requirements concerning an offshore license are usually very low, making the whole structure easy to set up (structure = offshore company formation + offshore bank account opening + nominee services (stay anonymous) + Obtain a Forex Brokerage License!

 

Popular Offshore Jurisdictions (Tax Heavens)

1.) Belize

Belize, formerly known as British Honduras, is an English-speaking independent country located in Central America, near Guatemala.

Belize welcomes offshore companies (International Business Companies – IBC) under the Belize International Business Companies Act of 1990 (based on the BVI model).

A forex broker can get a Belize License, throughout IFSC ( International Financial Services Commission). Among other mandates, IFSC provides appropriate supervision and regulation of international financial services, as mentioned on the official IFSC website.

2.) Vanuatu

Vanuatu is an island country located near Australia in the South Pacific Ocean. Although it is a not-so-known offshore jurisdiction, Vanuatu offers great potential to start a forex brokerage company.

Incorporating a Vanuatu International Company (under the Vanuatu International Companies Act) is very easy. After setting a Vanuatu Company, a Forex Broker may (or may not) get a License from Vanuatu Financial Services Commission.

Comparing this License to IFSC (Belize) or SVGFSA (St Vincent and Granadines), Vanuatu is a very competitive Regulation Authority.

• no paid-up capital requirements
• Low costs (2000$)
• fast registration (2 months)

Also note, that some Vanuatu Forex Brokers accept US Traders.

3.) St Vincent and Grenadines

St Vincent and Granadine is an English-speaking small island country located near Venezuela and north of Trinidad and Tobago.

Offshore Company Formation is easy to St Vincent and Grenadines under the International Business Companies Act 1996 (As amended to 2007), also based in the BVI Model.

St Vincent and Granadines is a very popular destination for offshore forex brokers. There are many examples of reputable forex brokers that have incorporated a St Vincent and Granadines offshore company.

St Vincent and Granadines Regulation authority is St Vincent and Grenadines Financial Services Authority (SVGFSA). Among other duties, SVGFSA provides licenses to nonbank financial institutions including online forex trading brokers.

Typical examples of trusted St Vincent and Granadines forex brokers are SimpleFX, PaxForex, etc.

4.) British Virgin Islands (mostly known as BVI)

British Virgin Islands (BVI) is a very famous offshore jurisdiction. BVI is an English-speaking island country located in Caribbean Sea near Puerto Rico.

 

5.) Other offshore jurisdictions

Other offshore jurisdictions to set up an offshore forex broker can be Mauritius, Seychelles, Domenica, the Marshall Islands, Bahamas, Curacao (which is preferred for online casinos), etc.

A typical example of a Seychelles trading broker is PrimeXBT

 

Are Offshore Forex Brokers scams?

That is not a de facto statement!

It is generally true that where there are no strict regulation authorities, there is place for scammy tactics.

Forex Brokers, like any other company in capitalism, are looking to profit!

It depends on the company how they will treat their traders!

After all, a forex broker that is really interested in his reputation will pay extra attention to provide accurate services for fair forex trading.

Thus, there are reliable offshore forex brokers.

 

Offshore Forex Brokers List

Broker	Bonus	Min Deposit	Leverage	Review	Open Account
		200$	Up to 500:1	Review	Visit Broker
		50$	Up to 1:1000	Review	Visit Broker
	No KYC Required	0.0001BTC	Up to 100:1	Review	Visit Broker
				Review	Visit Broker
				Review	Visit Broker
	500$ No Deposit	10€	Up to 1:1200	Review	Visit Broker
	Anonymous Trading	1$	Up to 1:500	Review	Visit Broker
	Derivatives Trading	0.0001 BTC	100x Cryptos	Review	Visit Broker
		10$	Up to 1:3000 (For Non EU Traders)	Review	Visit Broker
	No KYC Required	1$	Up to 1:500	Review	Visit Broker