UAE has two major financial regulators, the Securities & Commodities Authority of the UAE (SCA UAE) and the Central Bank of the United Arab Emirates (CBUAE). However, for the Forex industry, the Dubai Financial Services Authority, DFSA, plays a greater role both in the special economic zone of Dubai and in the United Arab Emirates. Since SCAUAE had an extremely restrictive policy on financial sectors, the majority of the Forex brokers in UAE went for DFSA regulations instead.
There are no taxes on Forex earnings in the United Arab Emirates, which is a huge incentive for Forex traders. Rest of the countries in the Middle East including Saudi Arabia and Palestine charge Capital Gains Tax on Forex income. However, since the primary goal of the UAE has been to encourage the growth of the currency market within the region, the government abolished all taxes on Forex earnings.
UAE’s national currency the UAE Dirham cannot be found within the tradable Forex assets on brokers’ platforms. The reason behind it is that AED is pegged to the US dollar which means that AED price will eventually follow the fluctuations of USD price making it a less attractive currency for Forex trading.
There are numerous payment methods available for Forex traders in the United Arab Emirates. The most popular payment solutions include Mastercard and Visa debit/credit card payments, bank wire transfers, and online payment methods notably PayPal.
Choosing the right Forex broker is the main task for UAE residents considering starting Forex trading. The broker can really make you or break you, therefore we always recommend that the beginners give it as much time as possible to make the right choice. Your primary goal is to find a DFSA-regulated Forex broker that suits your trading goals and needs. Who are the top Forex brokers in Dubai? We have prepared the list of the top Forex brokers with authorization from the Dubai Financial Services Authority below.
5$
CySEC, FCA, ASIC
30$, 50%+20%
30:1
2009
MT4, MT5, WebTrader
$100
CySEC, CBI, FSA, FFAJ, BVI FSC, FSCA, FSRA
1:400
2006
MT4, MT5, WebTrader, AvaTradeGO
USD 5,000
FINMA, FCA, ASIC, FSA, MAS, AFM
N/A
1:30
1992
SaxoTraderGo, SaxoTraderPro
$5
SVGFSA, FCA, DFSA, FSCA, FSA
From 30% to 100%
1:1000
2010
MT4, MT5
15
CySEC
30%
1:500
2015
MT4, WebTrader
$250
FSCA
1:200
2012
MT4, WebTrader
100$
FCA
N/A
30:1
2008
Custom
$10
Risk Warning: YOUR CAPITAL MIGHT BE AT RISK
N/A
1:1000
2013
Proprietary
10 USD
FCA, CySEC, FSA
N/A
1:Unlimited
2008
MT4, MT5, WebTerminal
$10
N/A
N/A
1:500
2019
MT4, custom
$10
1:500
MT4
250$
FCA, NFA
N/A
200:1
1999
MT4
$25
ASIC, CySEC, FSA, BVI
50%
1:400
2001
WebTrader, MT4, TradingView
100
FCA, CySEC, DIFC, CIMA
N/A
500:1
1977
MT4, MT5
$100 AUD
ASIC
N/A
500:1
2005
WebTrader, MT4, MT5, IRESS
AUD$200
ASIC, SCB, CMA, CySEC, FCA, BaFin and DFSA
N/A
1:400
2010
MT4, MT5, cTrader, TradingView
$50
N/A
N/A
1:500
2015
MT4
1 USD
ASIC, FCA
10 USD
1:500
2005
MT4, MT5, WebTrader
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
The very first regulatory body in the United Arab Emirates was the Central Bank of the United Arab Emirates (CBUAE). It is a primary bank that oversees the financial market of the country and ensures the smooth operation of the financial landscape. It is responsible for the national currency, monetary and fiscal policies, regulation of the financial institutes including banks, and every regulated Dubai best Forex broker. However, the more recent market regulator is the Securities and Commodities Authority of the United Arab Emirates (SCA UAE), which is in fact, known for its strict policies and regulations. For example, SCA UAE once prohibited a number of trading strategies including short-selling stocks. Therefore, not many international brokerage companies choose to be regulated by SCAUAE and instead go for a more liberal and widely renowned market regulator – the Dubai Financial Services Authority.
In 2004 the government of Dubai created exclusive economic zones for attracting companies that work in the financial sector. DFCI – Dubai International Financial Center has its own regulatory authority DFSA – Dubai Financial Services Authority. Companies can set up external brokerage agencies under the DIFC. They also can have complete ownership of Forex brokerages without having any local representative on the company’s board. Although DFSA has more liberal regulations for the brokerages, it does not mean that DFSA regulated Forex brokers in UAE cannot be trusted as the rules and guidelines the regulatory body imposes on the brokerages are still implemented by the CBUAE and SCA UAE.
Register with DFSA-approved broker XM
Forex trading is not taxed in the United Arab Emirates. UAE has a Capital Gains Tax which is usually payable by individuals on every kind of capital gain. Forex trading is an exclusion from the law. The government and revenue authority of UAE decided to promote a liberal approach to securities and exchanges markets and therefore made Forex trading exempt from tax fees. It means that Forex traders in the United Arab Emirates get to retain all their revenues to themselves. However, the regulatory authorities still impose several financial restrictions on Forex trading that will be discussed in detail later in the article.
The United Arab Emirates dirham is one of the most stable currencies but not available for trading Forex. Despite the dirham being quite a popular and widely used currency, it has been pegged to the United States dollar for quite some time now. The pegged currencies do not make an attractive tradable Forex asset for several characteristics. Mainly, pegged currencies follow the same exact trajectory of price movement as the primary currency to which it is fixed. Therefore, the UAE dirham would be influenced by USD price movements regularly making it a highly undesirable asset in the Forex market.
However, since the UAE dirham and USD have similar fluctuations, most of the UAE traders choose to trade with USD currency pairs. The most common USD Forex pairs available for UAE traders are:
Trade USD currency pairs with XM
The regulatory authorities in the United Arab Emirates have set high minimum margin requirements that are ranging from 2 percent to 5 percent, which results in lowering the leverage to 1:20 – 1:50. The regulation is still more flexible than the restriction in the European Union limiting the leverage up to 1:30. However, often such restrictions become the reason for the brokers to avoid the UAE regulation and instead go for licenses from more liberal authorities. The cap on leverage does not concern every broker in UAE though, as DFSA-regulated brokers do not have to comply with this requirement. You can easily find DFSA-approved brokers that offer high leverages up to 1:1000.
On the other hand, there are several other restrictions that come in force with Forex brokers UAE. Below are a few examples of the UAE regulations:
The traders in the United Arab Emirates can use Visa and Mastercard credit/debit card payments, bank wire transfers, or online payment solutions like Skrill and PayPal for the deposits and withdrawals on the broker’s platform. PayPal is one of the most frequently used payment methods among the UAE Forex traders. It is an attractive option due to service simplicity, attractive interface, low charges, and fast payment processing. Despite the fact that the best Forex broker in UAE will not charge for withdrawals or deposits, the payment systems themselves might charge a small fee on the transactions. In general, the fees apply to instant payment options and they should not exceed 2-3% of the transferred amount. If the trader is willing to wait for 2-7 working days then some of the payment solution providers might offer the service free of charge.
Start trading with XM using PayPal
Both CBUAE and DFSA regulations impose strict audits on the authorized brokers and actively monitor the financial sectors. Therefore, a trader dealing with the brokerage that is on the list of Forex companies in Dubai does not need to worry knowing that his investments are safe from scams and fraud. However, there is still a chance to get yourself in a scam. Dubai offers the opportunity to the investors to set up a business in special economic zones and hence provide their service to a global audience. Therefore it is possible for a broker to be based in Dubai but do not be regulated by DFSA. In this case, investors are not protected by the regulatory laws that are available for DFSA regulated ones. Accordingly, we strongly suggest investors choose only those brokers that are not just Dubai-based but are also regulated by DFSA and CBUAE. This way, you will avoid scams and will be guaranteed to find the top Forex brokers in Dubai.
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