At InvestinGoal, we adhere to strict standards to ensure an unbiased review process. We conduct our reviews by examining each broker’s offering and performance across 4 key categories. A final rating is produced for each forex broker based on a total of 187 data points. Learn more about our review process and methodology.

Whether you are new or experienced in forex trading, you may be considering trading with an offshore broker with several among the selection of best forex brokers. At the same time, you may be wondering about the meaning of offshore broker in the first place.

This is where we can help. Here we will look at exactly what an offshore broker is, how they operate, and how you can trade safely through an offshore broker that is still well-regulated.

Let’s get started.

Table of Content

What does offshore broker account mean?

An offshore broker is a broker who is operating from a location such as the Bahamas, Belize, Seychelles, Cayman Islands, Mauritius, or Vanuatu. There are usually three reasons why a broker may be based here:

  • They may be paying fewer taxes when dealing with international customers
  • These countries often offer financial regulations that may not be top tier, but they are recognized by the majority of the world
  • Offshore branches from such locations are not subject to strict financial trading regulations.

When dealing with an offshore broker, it is very likely that they offer a greater range of asset availability alongside higher leverage up to 3000:1 and a good range of bonuses.

Are offshore brokers reliable?

Offshore brokers can be perfectly reliable. With that said, you need to take care to choose the right one as your money will be sent offshore and can be challenging to retrieve if there are any problems.

In that case, it is ideal to choose offshore brokers who also have top-tier regulation in place from some of the following. FCA in the UK, CySEC in Cyprus, or any other European regulation since they all conform to ESMA rules in Europe, ASIC in Australia, the CFTC and SEC in the United States of America, IIROC in Canada, or the FSCA in South Africa.

When it comes to offshore brokers, they will then be regulated not only by local regulators in that country but also have the ability to accept international traders.

Most popular offshore regulators

The reputation of an offshore regulator is extremely important. Trading with an unregulated broker you would have a very high risk of losing your funds. Generally, traders can apply for an offshore account with a broker only if permitted by their local regulator. EU traders, for example, can’t deal with an offshore broker if they are not also regulated in Europe. Some of the most popular offshore regulators are below:

Regulator body Country
IFSC Belize
FSC Mauritius
BVI British Virgin Islands
SCB Bahamas
SVG St. Vincent and the Grenadines
FSA Seychelles
CIMA Cayman Islands
BMA Bermuda

Offshore brokers protection

Offshore regulators are regarded as Tier 3. This means they could be considered by some as quite lenient or not overly safe in the protections they provide. The use of segregated accounts and negative balance protection for example is not mandatory though they are still usually offered.

The leverage on offer under these offshore regulations also tends to be extremely high as it is often not limited by the regulator.

Difference between offshore and major regulatory bodies

There are a few key differences to note between offshore and major regulators. These are outlined in the table below and it is still always suggested to choose a regulated broker and try out a no-risk demo account first which many brokers will offer.

Features Offshore regulation Major regulation
Money protections Dpends on the broker Mandatory segregated accounts and negative balance protection
Leverage Higher amount set by the broker Generally capped at 1:30
Bonus Yes No
Services offered More flexible More restricted
Taxes Established on tax haven countries Subject to capital gain tax
Privacy Strict rules Transparent
Trading risks Higher Lower

Offshore broker pros and cons


  • These brokers are not subject to major regulatory bodies’ limitations
  • Access to international markets can be offered
  • They can often benefit from lenient tax laws
  • Your assets remain well protected with offshore brokers
  • They follow strict regulations in regard to keeping client privacy


  • The costs can still be high depending on each broker
  • Trading risks can be high with extensive leverage offered
  • Some tax laws in these regions can be complex to navigate

filippo ucchino

About The Author

Filippo Ucchino
Co-Founder - CEO - Broker Expert
Filippo is the co-founder and CEO of He has 15 years of experience in the financial sector and forex in particular. He started his career as a forex trader in 2005 and then became interested in the whole fintech and crypto sector.
Over this time, he has developed an almost scientific approach to the analysis of brokers, their services, and offerings. In addition, he is an expert in Compliance and Security Policies for consumers protection in this sector.
With InvestinGoal, Filippo’s goal is to bring as much clarity as possible to help users navigate the world of online trading, forex, and cryptocurrencies.

Trading CFDs, FX, and cryptocurrencies involves a high degree of risk. All providers have a percentage of retail investor accounts that lose money when trading CFDs with their company. You should consider whether you can afford to take the high risk of losing your money and whether you understand how CFDs, FX, and cryptocurrencies work. Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Your capital is at risk. The present page is intended for teaching purposes only. It shall not be intended as operational advice for investments, nor as an invitation to public savings raising. Any real or simulated result shall represent no warranty as to possible future performances. The speculative activity in forex market, as well as in other markets, implies considerable economic risks; anyone who carries out speculative activity does it on its own responsibility.
ADVERTISER DISCLOSURE: InvestinGoal is completely free to use for all. Though we may receive a commission from brokers we feature, this does not impact the results of our reviews or rankings which are conducted with complete independence and objectivity, following our own impartial methodology. Help us continue to provide the best free broker reviews by opening your account with our links. Please read our Advertiser Disclosure to learn more.
2FC Financial Srl
Via Filippo Argelati, 10,
Milan, Italy

VAT No. IT10004450960
Copyright © 2023 – All rights reserved. / Privacy and Cookie Policy / Basic Terms of Use / Risk Warning / Sitemap