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IG MarketsVisit IG Markets70% of retail CFD accounts lose money
South Africa, situated at the southern tip of the African continent, is a significant player in the global financial markets.
The country’s currency is the South African Rand, abbreviated as ZAR.
In the realm of retail forex trading, the Financial Sector Conduct Authority (FSCA), previously known as the Financial Services Board (FSB), oversees the operations, ensuring that market practices are transparent, fair, and in the best interests of the South African public. The FSCA’s mandate is to protect consumers from potential misconduct in the financial sector, providing them with the assurance they need to participate confidently in the country’s dynamic forex market.
In this article we have reviewed the best forex brokers in South Africa. We’ve chosen and studied these brokers according to various factors:
- FSCA regulation available;
- If the broker had won an award for its services in Africa;
- Availability of ZAR currency or deposits;
- Minimum deposit for South African traders;
- Number of forex pairs, spreads, and leverage for South African traders;
- If there were any bonuses in place for South African clients with the broker.
What are the best forex brokers in South Africa?
Below is our curated list of the best forex brokers for traders living in South Africa, with details and information about the country laws, the features, and the characteristics.
Is forex trading legal in South Africa?
Forex trading is completely legal in South Africa.
In fact, forex trading in the country is well-regulated by the FSCA (Formerly FSB). Through their experience and good practice in the industry, they have risen to become one of the most respected regulatory bodies in the forex market.
Beyond that, the FSCA regulation provides such a trusted experience that many non-South African traders from around the world also seek out top forex brokers regulated by the FSCA.
This is possible in just the same way it is also possible for South African forex traders to choose forex brokers who are regulated outside the country by other bodies.
How to trade forex in South Africa
The process of forex trading and starting your account with a South African forex broker is not unlike that you may find in another country.
The basic steps you should follow are to choose your broker, provide the documents required by the broker to prove your identity and residence, and finally fund your account.
If you are depositing more than 1 million ZAR ($65,000 approx) you may need a Tax Clearance Certificate (TCC) as most of the top brokers keep their accounts outside South Africa, meaning you would actually be sending money to another country to fund your account. This is not too difficult but does require a tax clearance if you are depositing more than the above amount of money.
If the amount is smaller, then the process of funding is much easier through the Single Discretionary Allowance (SDA). This allows you to move as much as 1 Million ZAR per year abroad without the need for the same documentation. You can find more information on these regulations on the South African Reserve Bank Website.
It is worth noting that these processes are not needed if your broker has a deposit account within South Africa.
What should South African traders look for in a forex broker?
Unlike some other areas or regulatory bodies which can be quite stringent, the FSCA provides a lot of freedom and flexibility to both brokers and traders. Leverage, bonus offers, and account types can all be set at the discretion of the individual broker.
With that in mind then, here are a few key things to look out for when choosing your forex broker in South Africa.
1. Choose well-regulated forex brokers
All of the brokers listed here are well regulated.
2. ZAR Accounts
Look for a broker that offers ZAR currency as a deposit or base currency where possible, as this removes having to pay any kind of conversion fees after you have funded your account. Despite this, only a few of the top forex brokers in South Africa facilitate ZAR deposits and base currencies.
3. Look for a bonus, but be wise
Since forex broker bonuses are available under FSCA regulation, it makes sense that you should search for and consider the brokers with some of the best bonus offers. No deposit bonuses, in particular, may be a great way to get started for new traders if you do not want to have any kind of risk.
With that in mind though, you should always choose your broker first on the features and markets they offer to suit your style, and secondly on their bonus offers.
How to verify if a forex broker is regulated in South Africa
There are a few simple steps you can follow here in order to make sure that the broker you select is regulated within South Africa.
You should first visit the FSCA official website. From there you can search “regulated entities” through the homepage, selecting “FAIS” under the “list of regulated entities and persons” option.
Next you should choose “Financial Service Providers” which should lead you to this page. Finally, check the forex brokers registration number or check the list by the name of your broker. This can usually be completed within just a couple of moments.
Is forex trading taxable in South Africa?
The rate at which you can be taxed will depend on your income. The minimum percentage is 18% though this can stretch to a maximum of 40% capital gains tax depending on the situation.
You will be taxed annually, though you may in some cases be entitled to a tax refund for which you should complete an ITR12 document again on an annual basis.
If you are trading in crypto, you should be aware that since 2014, these have been considered an intangible asset by the South African Revenue Service and as such, all capital gains here also must be declared and are subject to tax.
[Disclaimer: we are not accountants, we have done an internet research. Contact SARS or an Accountant if you don’t know how to manage this aspect]
InvestinGoal.com may receive a monetary compensations from the brokerage companies listed above.
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