If you are wondering how to choose a forex broker in the UAE, this article will give you all the information you could ever need. We will be discussing the criteria that make a UAE forex broker legit and safe to create an account with.
UAE Forex brokers obtain licenses from different regulatory authorities, depending on if they have an office on the mainland or in one of Dubai’s and Abu Dhabi’s free zones.
These brokers provide you with the opportunity to invest in and trade a suite of financial instruments on their state-of-the-art trading platforms, while offering the best trading and non-trading fees in the region.
Forex Trading in UAE
In recent years, the UAE has opened its gates to brokers and trading platforms like retail forex and contracts for difference (CFD) brokers. This pattern emerges due to the materialization of free economic zones and independent financial centers in the country.
Although the primary regulatory body in the region is the UAE Securities and Commodities Authority (SCA), there are special “free” zones in popular cities like Dubai and Abu Dhabi, which are exempt from adhering to the rules and regulations imposed by this body. Instead, corporations operating in these zones will be regulated by the Dubai Financial Services Authority (DFSA) and Abu Dhabi Global Market (ADGM) respectively.
Many infamous forex brokers like eToro are already opening their offices in the UAE and tweaking their services to be more sharia-compliant in order to appeal to a larger Muslim populace.
Factors to Consider when Choosing a Forex Broker in UAE
The most important thing to look for in a forex broker is their licensing and regulation. Regulators play a crucial role in protecting your funds and ensuring that the forex broker you trust your money with is a legitimate one, with no ill-intentions. This involves setting policies that are in the best interest of the customers. In the UAE there are a total of four regulatory bodies: Dubai Financial Services Authority (DFSA), Abu Dhabi Global Market (ADGM), Central Bank of the United Arab Emirates (CBUAE), and the Securities Commission Authority (SCA). We will discuss them in greater detail later in this article.
The best brokers in Dubai should offer lots of different financial products, giving clients the opportunity to diversify their portfolios as much as possible. To make it to the best forex brokers list, a broker shouldn’t only offer different types of trading instruments but also have plenty of options in each of them so that customers are able to find the asset they wish to invest in or trade.
One such trading instrument that may be offered is forex. The forex market is infamous for its liquidity, and a good broker must offer a wide range of major, minor and exotic pairs so that customers are able to take advantage of price fluctuations in all the above categories.
Other examples could be beginner-friendly financial instruments like commodities, inclusive of both soft and hard ones. While forex, commodities, stocks, indices, and ETFs are a great start for beginners – other assets like futures and options should also be made available. This is because they will provide professional traders with the best opportunity to utilize their expertise in the field to benefit from these complex and risky instruments.
UAE forex brokers offer their customers both desktop and mobile trading platforms. These differ in terms of efficiency, execution speeds, customization features, and other tools like stop-loss that reduce the risks associated with trading. Although some platforms like MT4 and MT5 are offered by nearly all brokers, mobile-based trading platforms tend to be more unique to the specific broker as they are programmed by the firm. This gives them plenty of room to improve the user interface and add other features like market news alerts etcetera.
Fees and Commission
Forex brokers charge their customers some sort of fee. These fees can be broadly classified into trading and non-trading fees.
Under trading fees, commission is usually the one that presents itself as the greatest cost for clients. The commission charged can differ depending on the type of account you have. However, there are some UAE forex brokers that do not charge any commission fees on trades, for example, Pepperstone does not charge its UAE customers on trades made on their standard and swap-free accounts on any FX products.
Another type of trading fee that you may encounter is spreads. Simply put, it is the difference between the bid and ask prices of trading instruments like forex, indices, etcetera. Brokers do not charge this fee directly, but some forex brokerages may charge fixed spreads. Keep in mind that spreads in all other cases will be subject to market conditions.
Swap fees may also be incurred, if either the broker does not offer a swap-free account or you decide not to open the aforementioned account. This fee can both be incurred and earned by a trader when trading a CFD of any instrument. A positive swap is earned when the trader earns interest from the contract while a negative swap is incurred when the trader is paying interest on the contract.
While non-trading fees are inevitable, the best forex brokers in Dubai and the UAE will limit these charges to make forex trading cheaper for their clients. Inactivity, currency conversion, download/setup, deposit, and withdrawal fees all fall under this category.
An inactivity fee is charged when a trader’s live account shows zero trading activity, for a period of time determined by the online trading brokerage. This fee can be easily avoided if you make sure to place at least one trade before time runs out.
Next up, we have the currency conversion fees. All trades that are denominated in a currency other than the client’s base currency will incur a small fee that varies from broker to broker.
Then there might be download and setup costs that clients will have to take into consideration as brokers may charge their customers a one-time fee for downloading their platforms.
And last but not the least, when making a deposit or withdrawal into your respective accounts, the brokerage reserves the right to charge you a small fee for every transaction you make. However, some brokers may choose not to charge their customers this fee.
When discussing forex commission and fees in UAE, it is important to explain how spreads work because they do represent a cost to clients. The difference between the bid and ask prices of a security/asset is referred to as its spread. More often than not, they are influenced purely by market conditions and are thus variable.
You must understand that some brokers, like stockbrokers, do not add any additional brokerage fees to the final cost of spreads. They let market forces determine the spread rates for different instruments including forex pairs. On the other hand, other brokers like CFD brokers, do interfere with the spread rates and include their own brokerage fees in the final spread charge. In these cases, the spread charges incurred by the client are far greater.
Although the forex market is known for its liquidity and rapid price fluctuations – these changes are usually really small. You can only really benefit from it if you trade large volumes of the asset, which might be difficult for retail traders – this is where leverage comes in.
Leverage trading is a helpful way to increase your profits when you do not have access to large volumes of cash to give you increased exposure to the asset of your choice. With it, you only have to pay a fraction of the full price and can multiply the profit you earn from changes in the forex market.
The thing about leveraged trading is that if things go south, you can end up losing more money than you have in your account. The threat of such crippling losses is what provokes regulators to limit the leverage offered by brokers.
In the UAE, the DFSA and ADGM limit leverage to 1:30 for major currency pairs and 1:20 for minor and exotics. Professional traders however can trade with higher leverage as long as they meet the criteria.
Trustworthy forex brokers accept payment from a suite of payment providers. However, some of these might not be available in the UAE. Although it would be a great plus point to be able to deposit and withdraw funds in the local currency, which is the United Arab Emirates Dirham (AED), unfortunately, most of the top brokers do not accept payments in AED at the time of writing. Some of the payment methods widely accepted by brokers include bank wire, credit card, and debit card transfer.
All good forex brokers hire a multilingual customer support staff to assist clients all over the globe. This is due to the fact that not all traders are fluent in English, and may prefer to communicate using their local languages – UAE traders are no exception. The UAE is a melting pot of all sorts of cultures that speak different languages. As a result, most residents and citizens are familiar with the English language as it helps them communicate with each other. However, some UAE traders like Emiratis and other Arabs may prefer to have their inquiries answered in their local language: Arabic. Therefore, a factor that one should take into consideration when choosing a forex broker in UAE to trade with is that they must offer their services in the local language.
Other than this, it is preferable to have 24/7 customer support and a customer service team that is prepared to resolve your issues via your preferred channel of communication. For example, Capital.com’s helpdesk allows you to contact them via email, phone, and even live chat.
Pros and Cons of Trading with UAE Forex Brokers
- Islamic trading account offered
- No commission charges
- 24/7 customer service
- Wide array of financial instruments
- State-of-the-art trading platforms
- Arabic versions of their official website are available
- International stocks and exchanges listed
- AED cannot be used as the base currency
- Payment methods are limited
- High non-trading fees
- Leverage is limited for retail traders
Benefits of Trading with UAE Forex Brokers
Safety and Security
As explained above, forex trading in UAE is very safe because of the jurisdiction of regulatory authorities that prevents customer exploitation. There are a number of regulatory bodies in the UAE including the ADGM, SCA, and DFSA among others. These authorities have issued clear-cut guidelines that all brokers wishing to offer their services to UAE residents and citizens must follow in order for their business to be legal in the eye of the law. Therefore, forex brokers must have top-notch security features that prevent private client data from being stolen.
Owing to the fact that the UAE is a Muslim country, forex brokers have added extra features to accommodate the country’s large Muslim population. Muslims can now opt for a swap-free account (also known as an Islamic account). Swaps are prohibited in Islam, so the existence of Islamic accounts opens up a lot of trading opportunities for Muslim traders.
Local Payment Methods
As a UAE resident/citizen, you can credit funds into your account via traditional methods like bank wire, credit card and debit card transfer. You can also pay using other modern methods like Apple Pay and Google Pay when trading with forex brokers like Capital.com. Some brokers also allow you to transfer funds using e-wallets.
In addition to offering excellent customer service, many forex brokers in the UAE also offer help in the country’s local language, which is Arabic, in addition to many other languages. This makes customer support accessible to all traders in the region.
How to get Started with the Best UAE Forex Brokers?
Step 1: Open an Account and Verify your identity
Let’s take a look at eToro’s account opening procedure, other UAE forex brokers are bound to have similar requirements.
- Go to eToro.com and click on “start investing”. Start by entering your username, email id, and new password. If you have a Google or Facebook account, you can also sign up directly with that.
- Click on the “Continue” button.
- The next step is to enter your basic personal information, like full name, gender, and date of birth.
- Enter details about your current residence.
- After that, they will ask you about your trading experience with different assets and leveraged products.
- They will then ask about your financial knowledge and it is important that you choose the option which best represents your situation.
- Tell them about your reason for trading and answer all questions related to your future trading activities.
- Follow it up with accurate information about your financial status.
- The next step involves providing proof of identification which can be provided as an uploaded document or a typed national ID number. After you have familiarized yourself with the terms and agreement, select “confirm” to successfully create an account.
Step 2: Deposit Funds
Trusted forex brokers in the UAE will allow you to transfer funds in your account using all sorts of different payment methods, provided that you’ve successfully created an account with them.
The deposit procedure on eToro is explained below:
- Look at your dashboard and you will see an option to deposit funds. The amount that you want to deposit, along with the payment method can be chosen from here.
- Then your payment information and your funds will be transferred to your account shortly.
Step 3: Browse Supported Trading Markets and Start Trading
The best forex brokers in UAE offer their clients different platforms, broadly classified into desktop and mobile trading platforms. UAE customers have the privilege of being able to place a trade from both their smartphones and PCs. Brokers like eToro also have web versions of their trading platforms, making it very easy to see your trading activity directly from your browser without having to install any additional applications.
Trading Instruments Available on UAE Forex Brokers
Foreign Exchange trading, more commonly known as forex trading, is the trading of currencies from different countries against each other. Forex brokers in the UAE have various lists of currency pairs that can be traded by clients. For example, Capital.com clients can trade over 138 currency pairs. Here are some of the popular forex pairs: EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CAD, and many more. As a UAE resident and retail client, your leverage is restricted to 1:30 for major currency pairs and 1:20 for minor and exotics. Professional traders on the other hand have access to much higher leverage.
The concept of shares has been around forever. It is essentially a trading instrument that provides proof of ownership in a company or organization. If you own shares in a particular company, you also have a proportionate claim over its earnings and assets. You can easily invest in the stock market when trading with a broker that’ll grant you access to any one of the three following stock exchanges in the UAE.
- Dubai Financial Market (DFM)
- NASDAQ Dubai
- Abu Dhabi Securities Exchange (ADX)
The option to invest in stocks might not be available for UAE residents when trading with certain brokers on the UAE forex brokers list, however, CFD stock trading is open to nearly all. Apple, Tesla, Google, and Amazon are some of the more popular examples of stocks that can be traded. The maximum leverage to trade shares is 1:5.
Commodities can be traded both online and offline and can be divided into soft and hard commodities. They are goods of value that do not change in quality and are often produced by many suppliers in colossal volumes.
Hard commodities constitute those natural resources that are obtained through activities like mining or other similar procedures; the most common hard commodity is oil. On the contrary, soft commodities mainly include agricultural goods and other farm products like wheat, corn, sugar, and coffee.
While the leverage for Gold in the UAE is a bit on the higher end at 1:20, for most other commodities it is limited to 1:10 for retail traders. For professional traders, it may be a bit higher.
Indices are a measure of change in a securities market, one that belongs to a country or of a specific market sector. UAE forex brokers offer many different indices, all made up of a wide array of shares. The most popular indices are FTSE, DAX, and ASX. As a UAE resident, you will be able to trade most indices with a leverage of 1:20.
Cryptocurrencies have risen in popularity in recent years. Dubai has also hopped on the bandwagon and legalized the operations of more than 30 crypto exchanges in the region. Additionally, a regulatory framework surrounding the new crypto market was also drafted last year. Most of UAE’s top forex brokers offer popular cryptocurrencies like Bitcoin, Litecoin, and Ethereum to their clients. Due to their volatility and unpredictable nature, the leverage has been reduced to 1:2 for these cryptocurrencies.
The Different Account Types UAE Forex Brokers Offer
Forex brokers in the UAE, like eToro, feature demo accounts that can be used to test out new trading strategies or to familiarize yourself with their many trading platforms before you start trading with real money. A demo account provides a live-account-like simulation so that the trading conditions are almost accurate and gives you the best opportunity to sharpen your trading skills in a risk-free environment.
A standard account may also be referred to as a retail account. It is the default account for most UAE forex brokers. This type of account is geared toward those traders that have minimal trading experience and classify as beginners in the industry. The margin rates (i.e. leverage) are hence limited for them because they do not have enough experience to carry out trades with large leverages like 1:100.
With a standard account, you can access most if not all types of assets including forex, commodities, stocks, indices, and cryptocurrencies. Since you usually will not be dealing directly with an account manager, there also might be no commission charged. However other fees like inactivity and currency conversion fees are likely to remain the same irrespective of the type of account you have.
RawZero Spread Account
A RawZero Spread Account is a trading account that features no difference between the bid and ask price. This means that spreads as low as 0.0 pip can be seen on most financial instruments. However, the catch here is that in order to compensate for the amount lost due to low spreads, the broker will usually charge you a higher-than-average commission.
Islamic Account (Swap-free)
Forex brokers that set up their offices on the mainland, intend to serve the domestic population. The broker’s products must thus be suitable for domestic clients. This is why many trusted forex brokers are likely to offer a swap-free or Islamic account.
Swap fees are charged when your position is kept open overnight, you can both incur and earn it. Muslims, however, consider this to be a form of interest. According to Shariah (Islamic law), dealing in any kind of interest is strictly prohibited and a huge sin.
An Islamic account holder will thus not incur nor earn any swap charges for positions held overnight.
Trading Platforms Available on UAE Forex Brokers
A majority, if not all, of forex brokers in UAE do offer their clients a desktop trading platform (and maybe even multiple ones). These are downloaded directly onto your PC and can only be used with an internet connection, in most cases. Desktop trading platforms make good use of the large screen size on most PCs and utilize their complex software to provide lots of different features and customization tools.
MetaTrader 4 (MT4) is a well-established desktop-based trading platform that a lot of forex brokers in the UAE use to offer their financial products and services to their clients. The trading platform’s software is licensed to these forex brokers, who then have the option to make it available to their clients. MT4 is often customers’ top pick when it comes to CFD forex trading.
MetaTrader 5 (MT5) is the upgraded version of MT4 and has more features and assets than the MT4. It offers much faster execution speeds and is more efficient than its predecessor. This has made it skyrocket in popularity among different investors looking to trade different financial instruments and diversify their portfolio with assets only made available on MT5: all trading instruments are available on the MT5 platform.
Unlike desktop-based platforms, mobile-based trading platforms are usually designed by the brokers themselves. These mobile applications make it possible for clients to check their trading activity on the go, and the beginner-friendly user interface simplifies the process of placing a trade.
An attractive feature of these mobile trading platforms is that they can send alerts notifying a trader of any important changes in their choice of financial products. These notifications can include market news along with information on the performance of many assets. Economic calendars are also a great tool utilized by many traders.
Although the lack of customization features may prove to be a drawback to some, beginners welcome the easy-to-use interface and are delighted by the simple comprehensible design of the charts – where added information is kept to a minimum.
Payment Methods Accepted by UAE Forex Brokers
To make it to the best forex brokers in Dubai list, the online brokerage firm must accept payment from a wide array of payment providers. While many brokers do accept payments from all sorts of payment providers, some of them might not be available to UAE clients. Below are some of the payment methods accepted for deposits and withdrawals by forex brokers in the UAE generally:
- Bank wire
- Credit cards
- Debit cards
To get an edge over its contenders, a forex broker operating in the UAE may also allow deposits and withdrawals to be made in the local currency, which is the United Arab Emirates Dirham (AED). However, not all brokers have this feature and you will have to convert all of your cash into USD before funds can be transferred to your account with the firm.
Furthermore, most payment methods like bank wire, credit card, and debit card transfers also have set minimum deposit and withdrawal amounts. For example, while on eToro the minimum amount for a bank transfer is $500, Capital.com clients can enjoy a lower minimum of $250.
Lastly, some forex brokers may also charge their clients, deposit and withdrawal fees for every transaction you make. It is advisable to read the broker’s fee policy before opening an account, so as to familiarize yourself with all of the costs associated with trading with them.
Forex Trading Regulation in UAE
Regulators, wherever in the world they may be based, play a vital role in protecting your investments. In a nutshell, this refers to setting policies and practices that are in the best interest of the clients and are a way to give you confidence in the broker you’ve selected.
In the UAE, there are four regulatory bodies:
- Dubai Financial Services Authority (DFSA)
- Abu Dhabi Global Market (ADGM)
- The Central Bank of the United Arab Emirates (CBUAE)
- The Securities Commission Authority (SCA)
Any forex broker wishing to offer its financial services and products to UAE customers must be registered with at least one of them. Choosing a broker that’s regulated by one of the above regulatory bodies is a surefire way to guarantee their legitimacy and feel reassured that your funds are being handled with utmost care – diminishing the risk of fraudulent activity.
In the UAE, for example, you are entitled to a segregated account – meaning that the broker cannot access your money – ensuring that you have sole ownership of your finances. Another requirement is that the broker is expected to submit its financial books for review on a regular basis so that the concerned authorities can identify any risks of insolvency and inform consumers before it’s too late.
Lastly, the most important reason why you should choose a regulated broker is that brokers operating in the UAE must have industry-leading security features to safeguard their clients from hacks and other frauds. This means that you don’t hack to worry about your private data being stolen or used improperly.
Is Forex Trading Legal in the UAE?
As one of the most prominent financial hubs in the Middle East and perhaps in the world, the UAE has indeed legalized forex trading for its residents as long as all the conditions are fulfilled.
The main condition is that the broker must be regulated by SCA, the Central Bank of UAE, or another local regulatory body. Any legal person who wishes to offer non-banking financial services, not limited to forex trading, in the UAE has to have a registered firm either in the mainland or in any one of the financial free zones in the country.
Furthermore, they are also allowed to offer CFD trading provided they are authorized by the CBUAE, and offer products in a wide range of markets, from forex, and cryptocurrencies to equities and commodities.
Are UAE Forex Brokers Safe?
Yes! They most definitely are. All brokers in the UAE must obtain a trading license before they can make their financial products and services available to the public. In order to obtain a license, there are requirements that must be met by every broker, which are in the best interest of the clients.
For instance, all UAE clients are entitled to a segregated account to hold their funds. In this way, brokers will not be able to access your funds for whatever reason – keeping them safe.
Moreover, there are strict requirements around security features. All brokers are expected to run secure websites and platforms, which eradicates the threat of hackers stealing customer private data.
Also, brokers will have to document all business activity and submit reports to the concerned regulatory authorities on a regular basis. Regulators are hence able to analyze their current financial situation properly and make sure that they have a minimum reserve of capital. Such regular checks keep customers informed of the financial situation of the broker they are trading with and how high the risk of it going insolvent is presently.
Apart from regulatory requirements, some brokers like Capital.com have their own policies which protect client funds. When trading with leverage, yes the opportunity to profit more increases, but also the chances of making a crippling loss are magnified. For that reason, Capital.com has a negative balance protection scheme in place for all clients.
What Reddit & Quora Say About UAE Forex Brokers
This one particular Reddit user has been an eToro customer since 2017 and is more than “happy” with his experience with the “eToro CopyTrader”, as it allows him to replicate the trading activity of experienced traders.
When asked about their experience with Capital.com, many Reddit users agreed with the following user’s opinion that trading “forex” with the firm wasn’t all that it’s cut out to be.
Standing against the die, this Reddit user loves the many features Plus500 has to offer to its customers and points out that withdrawals were a hassle-free task.
What made this user gravitate towards Pepperstone was their good customer support, excellent record, and their zero-commission policy.
“Daria Kononova” on Quora believed that eToro was the most beginner-friendly app according to her. She also further added that it was the “most straightforward” and “easy to use” broker out there for those that are only just starting out in the trading industry.
Another Quora user, who also was a student at the time of writing this comment, points out that Capital.com is in fact a regulated broker. He then expressed great contentment over his decision to trade with the broker.
Being a long-term trader for 9 years, Richard Dulijan, proclaimed that “they are the best Australian broker” which showcases that he is satisfied with Pepperstone.
This particular Quora user explains that Plus500 outperforms its competitors when it comes to its services and deposit fee policies among many other things.
To conclude, the best forex brokers in UAE are also the most regulated and safest. They are regulated by all sorts of regulatory institutions, including the ADGM, DFSA, SCA, and, CBUAE. Such extra protection and regulations ensure that clients are given their due rights and are not exploited.
Furthermore, these trading brokers have the most modern up-to-date platforms, with the latest features and fastest execution speeds in the industry, so that your experience with them is the best one yet. To begin trading with these forex brokers is a simple process because as soon as your account is created, you can go ahead and place your first order – assuming that you’ve already deposited sufficient funds into your account. It is worth bearing in mind that they offer different types of accounts so that you can sign up for an account that best caters to your needs: be it a standard, demo, Islamic or RawZero Spread one.
Lastly, these online trading brokers grant you access to an array of different trading instruments, giving you the option to trade CFDs with commendable margin rates. Due to the growth of the financial sector, many forex brokers have begun to set up offices either in the mainland or free zones, increasing competition. More competition produces favorable outcomes for customers in the form of competitive trading and non-trading fees.
Q & A
Taking into consideration all the factors that make a broker the best one in the UAE, eToro is perhaps the top contender. The broker offers lots of different currency pairs and has a suite of other trading instruments and CFDs. Additionally, its spreads and non-trading fees are one of the most competitive in the industry. Forex brokers that offer Islamic accounts are very popular with UAE residents, explaining why Capital.com also features an Islamic account for its Muslim traders.
Forex traders do not have to pay any tax on their earnings as long as they can show adequate proof of legal residency.
There are many forex brokers operating in the UAE that are regulated by different entities all around the globe. Capital.com however is licensed by the ASIC, CYSEC, FCA, NBRB, and FSA – making it one of the best forex brokers in the UAE in terms of regulation and security.
All you need to do is open an account with a regulated broker in the UAE. Once you’ve created an account with them, you can deposit funds into your account and begin trading in the forex market.
It is generally considered halal. The ruling on the matter is as follows: if the currencies are different then it is permissible for the amounts (for example USD 1 for AED 3.7) exchanged to be different, so long as the exchange is made in the same sitting. However, if they are of the same kind, such as dirhams for dirhams, then the exchange must take place in the same sitting and they should be of the same amount.
This depends on the minimum deposit requirements of your preferred choice of broker. Different brokers have set different minimums. The minimum deposit on eToro is $50 (~ AED200).
Capital.com has one of the lowest fees and commissions; they charge no deposit and withdrawal fees and don’t charge their clients commission on any trades either.
Capital.com, eToro, Plus500, Pepperstone, and Evest all offer gold trading. There are many more, but these are just the most popular ones.