Uganda has no official regulatory body that would oversee the Forex trading market in the country. The main institution that has some power over the market is the Bank of Uganda (BOU), which has multiple responsibilities of regulating the financial sectors but has little to do with the Forex market itself. The bank refrains from monitoring the Forex industry in Uganda. Therefore, traders from Uganda heavily rely on the market regulators in other countries of the region, notably the Financial Sector Conduct Authority (FSCA) in South Africa.
Due to the loose regulatory framework in the country, there are little to no restrictions on the Forex market. It means that there is no cap on maximum leverages offered by the brokers and no limitations to Forex promotional campaigns. However, the lack of monitoring of the market urges Ugandan traders to seek international brokerage companies that offer their services to the residents of Uganda.
The Ugandan shilling is not the most popular Forex asset, therefore it cannot be found among the exotic currency pairs. Usually, the Ugandan Forex traders will often trade ZAR currency pairs, which are frequently available with the best brokers on the market. However, traders looking for deposit options in the local currency have the possibility to choose M-Pesa as their payment method. Top Forex brokers in Uganda include M-Pesa and other popular payment solutions including Paypal and Skrill within their platforms.
Taxation on Forex incomes in Uganda is a bit complicated, as the country has no separate Capital Gains tax. Instead, the Capital gains are taxed together with the business income tax at the rate of 30%.
The best Forex traders in Uganda are already cooperating with the international brokers and have managed to settle down with the top brokerage firms who are more than happy to assist the clients from Uganda. On the other hand, one has to be very careful when trusting a physically so far away firm. That is why we always recommend choosing a broker that holds a license from the regional regulator. For Ugandan traders, the regulated brokers by FSCA are the top options. Throughout the extensive research and experience in Forex trading, we have prepared the list of only the best of trusted forex brokers with FSCA authorization available for traders from Uganda:
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
$0
Australia, Canada, Japan, Singapore, UK, US, BVI
From $500 to $5,000
1:888
1996
MetaTrader 4, MetaTrader 5, fxTrade Mobile app
$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 Ugandan securities market is monitored by the Central Bank of Uganda, with few of the best Forex brokers in Uganda being licensed by it. The Central Bank of Uganda is not a separate regulatory authority, but rather incorporates several responsibilities to oversee certain aspects of the financial sectors in the country. Even though the Bank of Uganda is responsible for monitoring and regulating the financial sectors within Uganda, the bank director made it clear that the Forex market is not regulated in the country. Even more, the director said that the Forex market is way outside their regulatory provision.
Since the Bank of Uganda is not involved in the Forex trading market, the traders from Uganda have to look somewhere else. In most cases, the best solution is to approach the brokers that are regulated by the bodies residing within the same region. The African continent has few regulatory bodies that are quite famous globally, but, the most prominent one is undoubtedly the Financial Sector Conduct Authority of South Africa (FSCA). The FSCA stands next to the high-class market regulators like the FCA of the United Kingdom and the ASIC of Australia. That is why we recommend trading with the FSCA-regulated brokers for Ugandan traders.
Register with the FSCA-regulated broker XM
Forex traders have to pay 30% of their net Forex income in tax. The tax system is very different in Uganda. In most countries, there is a special type of tax called Capital Gains Tax that applies to incomes generated through online trading in Uganda. However, that is not the case with Ugandan Forex trading. The government of Uganda combines the capital gains tax with business income tax. In total, the tax payable on Forex trading earnings at the end of the fiscal year is 30% of the net income. The net income is calculated according to the difference between the total asset price, in this case, the price of the Forex currency pair in the hold and the original cost of the currency pair.
All Capital Gains are regarded as the business income and therefore are subject to corporate tax of 30%. However, it is also possible to include the Forex earnings in the individual income tax category. The individual income tax ranges between 10 and 45 percent. Since there is no clear law regulating the Forex market, it is up to the individual interpretation of how Forex earnings are treated in Uganda.
The first thing worth to be mentioned is that the Ugandan local currency – Ugandan shilling – is not the strongest one. As of now, we have not found the Ugandan shilling among the tradable currency pairs for brokers we can recommend. The brokers do not offer the currency within their exotic currency pairs portfolio due to its non-profitable nature for the broker. On the other hand, Ugandan traders can in fact invest in other regional currencies.
One of the most popular currency pairs traded by the Ugandan Forex traders is the South African Rand. Despite the considerable volume of ZAR traded on the global currency market, ZAR is still considered as a part of the exotic currency pairs. The most common pairs with ZAR include EUR/ZAR and USD/ZAR. Similar to all the other exotic pairs, ZAR currency pairs also come with high but fixed spreads. The average spread for the above-mentioned pairs is around 200 pips.
There is no cap on leverage in Uganda and the maximum leverage can go up to 1:2000. The flexibility of leverage is one of the attractive features of Uganda’s Forex trading scene. One of the benefits of the loosely regulated local market in Uganda is the lack of restrictions on brokerage services. Usually, highly monitored markets elsewhere in the world would come with numerous limitations including the caps on leverage. Since leverage is very much like a burrowed fund from your broker, you risk losing way more than you invest in a certain trading asset. However, if your trades are successful then the pay-off is quite decent, as well. That is why often Forex traders will want to have access to flexible leverage and then they will decide how much of it they would like to use.
Since Uganda does not restrict the usage of leverage, the maximum leverage offered by the brokers in Uganda can go up to 1:2000. Anything above 1:2000 should be avoided, as most probably you will not have that much risk-tolerance to take up the losses. But bear in mind that we strongly recommend that you stay away from sky-high leverages if you are a beginner or intermediate trader. Also, if the Forex market is new for you, probably it is better to remain within the limits of 1:500 leverage.
Most of the Forex brokers that accept mobile money in Uganda will offer the solutions like Neteller, U Money, Skrill, M-Pesa and you can easily find the payment method that works best for you. You can also usually transfer money to your account from any other bank account. That might come in handy if you are planning to transfer large amounts. That, however, needs to be confirmed with both the bank and the broker first.
The Forex brokers will usually exempt their clients from any withdrawal or deposit fees. However, depending on the payment service provider that you choose some charges may apply. For example, Visa/Mastercard withdrawals come with proportionate fees but offer instant transactions. Some of the payment solutions might provide free withdrawals and deposits but the transactions may take up to several working days. Always double-check that your broker cooperates with the top-tier banks so that your transactions and funds are completely safe.
Start trading with XM using M-Pesa
In 2019, thousands of Forex traders lost over USh 50 billion of investment to Dunamiscoins famous Forex scam. The company was registered locally and operated for quite some time on the market, but never in fact getting involved in Forex trading. The Bank of Uganda was not able to identify the fraud on time and as a result numerous people lost their funds without any possibility to get refunds ever again. Alarmingly, more and more scam brokers are appearing on the market and they lure inexperienced clients into their traps, misleadingly make them invest money and then disappear forever. Understanding the idea behind regulation is the very first thing that will help you avoid getting scammed. Look for regulated brokers with decent conditions, analyze the promotional campaigns of the brokers, and do not simply trust the attractive amounts. Do your research, read the reviews written by professionals that suggest the best trading firms, and triple-check that they are regulated by the official regulated bodies!
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