Benzinga readers often choose FOREX.com or TradeNation as the best offshore forex brokers.
After the passage of the Dodd-Frank Act in 2010, forex trading in the U.S. became less exciting. With significant leverage limits and a ban on hedging, the legislation made it harder for investors to take the big risks they needed to make big profits.
As a result, some traders have found an alternative: offshore forex brokers. While some of these brokers are still governed by strict regulations, others aren’t. Here’s Benzinga’s guide to the best ones.
Quick Look: Best Offshore Forex Brokers
- Best for Fast Trades: FOREX.com
- Best for Easy-to-Use Forex Platform: Trade Nation
- Best for Experienced Traders: Interactive Brokers
- Best for High Leverage: RoboForex Ltd.
- Best for Platform Diversity: NumberOne Capital Markets - Find a Forex Broker
- Best for Non-U.S. Citizens: LMFX - Find a Forex Broker
- Best for Beginners: IC Markets- Find a Forex Broker
Best Offshore Forex Brokers
If you’re considering getting into offshore forex trading, here are some great brokers to check out.
1. Best for Fast Trades: FOREX.com
- Best For:Forex Trading in and Outside the U.S.securely through Forex.com NON US's website
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account
One of this site’s best qualities is the speed at which it executes trades — the average time is a mere 0.04 milliseconds.
FOREX.com is based in the Cayman Islands, and it’s one of the most regulated sites on the list. It has a low minimum spread of 0.2 pips, and leverage goes up to 500:1 for professional accounts. Compared to other offshore brokers, it has a high minimum deposit of $1,000.
Pros
- Regulated by seven organizations
- Very fast average order execution of 0.04 ms
- Accepts U.S. citizens
- 90 currency pairs
Cons
- Contacting customer support is difficult
- High initial deposit
- Site can be difficult to navigate
2. Best for Easy-to-Use Forex Platform: Trade Nation
86% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing money.
Trade Nation is a unique and powerful forex and CFD broker that offers fixed spreads and a transparent fee schedule. This means that you know how much you’ll be spending, you can calculate your overhead costs and taken better control of your portfolio.
Everything is handled online, and you will find that it’s simple to navigate the site. Once you open and fund your account, you will gain access to over 1000 markets. Mobile traders can get the same results without a loss of quality or experience, demo accounts are risk-free if you want to learn more about the platform and copy trading is also available.
While it’s unavailable for U.S. traders, Trade Nation offers the best option for beginners and intermediate traders who want to grow their portfolios and expertise.
Pros
- The platform is bright and easy to see, meaning that you won’t get lost looking for the info you need
- Demo accounts make it possible for you to practice your trading
Cons
- Not available to U.S. traders, meaning that you need to find other ways to access the CFD or forex market
3. Best for Experienced Traders: Interactive Brokers
Interactive Brokers is based in the United States and compliant with U.S. regulations. In 2020, it won Best Broker for Economical Investment from NerdWallet and Best Online Broker from Barron’s.
Interactive Brokers can be used on the web or mobile, and its interface includes complex features ideal for more experienced investors. As a bonus, there’s no minimum deposit.
Pros
- Trustworthy and has won multiple awards
- Spread starts at zero
- Accepts U.S. citizens
- 100+ currency pairs
Cons
- Leverage only goes up to 50:1
- Complex interface may be confusing for newer traders
- Registration is lengthy and complex
4. Best for High Leverage: RoboForex Ltd.
Located in Belize, RoboForex has leverage options up to 2,000 to 1. It’s a great choice for anyone looking for algorithmic trading, as you can develop automated trading strategies without needing to code them.
Pros
- At 2,000:1, leverage limit is extremely high
- Intuitive platform is great for beginners
- Minimum deposit is $10
Cons
- Most accounts only include 36 currency pairs
- If you overuse leverage, you can end up with significant debt
- Doesn’t accept U.S. clients
5. Best for Platform Diversity: NumberOne Capital Markets
If you want to take on far more risk than U.S. markets allow, NumberOne Capital Markets (N1CM) is a great option. It’s based in the South Pacific nation of Vanuatu and is regulated by the Vanuatu Financial Services Commission (VFSC). It has a minimum spread of 0.5 pips.
This option has the advantage of multiple forex trading platforms: MetaTrader4, MetaTrader5, web and mobile.
Bear in mind that while there’s a possibility of high returns, this one is a very high-risk broker.
Pros
- Leverage can go as high as 1,000:1
- Minimum deposit is only $5
- Accepts U.S. citizens
Cons
- Extremely volatile
- Customer reviews aren’t as good as those of other options
- High leverage makes it easy to go into debt after a loss
6. Best for Non-U.S. Citizens: LMFX
If you want practically unlimited leverage, LMFX is a great choice.
Spreads start at zero, with no account management or inactive account fees. It’s based in Macedonia and is unregulated. You can choose from MetaTrader4, web and mobile platforms.
Pros
- Leverage goes up to 1:1,000
- Minimum deposit is $50
- You get a 100% deposit bonus
Cons
- Some users say that order execution is very slow
- Complete lack of regulation opens opportunities for fraud
- Doesn’t accept U.S. clients
7. Best for Beginners: IC Markets
This forex broker was founded in Sydney, Australia, in 2007. It offers over 60 currency pairs, and its spreads start at zero. It boasts an intuitive interface, and the inclusion of risk calculators, spread monitoring and other useful tools make it especially beginner-friendly.
Pros
- Leverage up to 500:1
- Great for providing liquidity
- Helpful tools, including risk calculators and spread monitoring
Cons
- Payments can sometimes be delayed
- Doesn’t offer many bonuses
- Doesn’t accept U.S. clients
What is an Offshore Forex Broker?
An offshore forex broker is a broker that operates in a foreign country, typically one with lax regulations. Many of these brokers aren’t subject to regulations that limit leverage.
Why Choose an Offshore Forex Broker?
If you’re looking to get into forex trading or just want to diversify your investments, there are several advantages of offshore forex brokers to consider, including:
- Leverage: In the U.S., forex leverage is limited to 50:1, but some offshore brokers offer leverage up to 1,000:1.
- Higher flexibility: Lax or nonexistent regulations allow you more investment flexibility.
- Hedging: Hedging is permitted by brokers not subject to U.S. regulations.
Not all benefits apply to all offshore brokers. For instance, if an offshore broker is regulated by U.S. authorities, its leverage limit will still be 50:1.
Why Avoid an Offshore Forex Broker?
Offshore forex brokers offer the potential of a better return on investment. However, they present their share of risks as well. For instance:
- Lack of regulation: You’ll likely have no recourse if your money is lost for any reason.
- Fraud risks: Thanks to the lack of regulations, there are more opportunities for fraud on the part of the broker.
- Bonus lockups: Bonuses may be held until you hit a certain turnover target.
- Managed account fraud: Some clients are drawn in to pay for managed accounts that don’t actually exist.
- Price manipulation: Some offshore brokers may artificially manipulate prices in order to trigger stop-loss orders.
Before you choose a broker, look at some customer reviews — chances are good that potential downsides will be mentioned there.
What to Look for in an Offshore Forex Broker
How do you choose an offshore broker? To find the best brokers, you’ll want to consider a few factors:
Reputation
The best brokers will have solid reviews. If you’re part of a forex trading community, ask your sources about the broker’s reputation.
Account Features
Some brokers have very basic interfaces. Others have features geared toward professional investors. Make sure you take an in-depth look.
Costs
Some brokers have minimum deposit requirements, withdrawal fees and other account maintenance expenses. It’s important to understand the total cost before committing.
Customer Support
If you run into an issue, you’ll want to contact the support team as soon as possible. Find out how and when you can reach the support staff.
Platform
The right trading platform makes all the difference. See whether the broker has a web platform, a mobile platform or both.
Diversify Your Portfolio with Offshore Forex Trading
Although you should exercise caution when choosing a broker, working with an offshore forex broker can help keep your portfolio healthy and diverse. If you’re developing a winning forex strategy or looking for tips for success, Benzinga is here to help.
Frequently Asked Questions
Can U.S. citizens use offshore forex brokers?
They can, although any offshore broker doing business with U.S. citizens must be regulated by both the National Futures Association (NFA) and the Commodity Futures Trading Commission (CFTC).
Are offshore forex brokers safe?
If they’re regulated, they generally are. But working with unregulated brokers opens you up to significant risk.
Is forex illegal in the U.S.?
While forex is legal, it’s tightly regulated by the Commodity Futures Trading Commission (CFTC).
Get a Forex Pro on Your Side
FOREX.com, registered with the Commodity Futures Trading Commission (CFTC), lets you trade a wide range of forex markets with low pricing and fast, quality execution on every trade.
You can also tap into:
- EUR/USD as low as 0.2 with fixed $5 commissions per 100,000
- Powerful, purpose-built currency trading platforms
- Monthly cash rebates of up to $9 per million dollars traded with FOREX.com’s Active Trader Program
Learn more about FOREX.com’s low pricing and how you can get started trading with FOREX.com.