Offshore forex brokers have become increasingly popular among retail forex traders mainly due to higher leverage.
Forex brokers regulated in the EU, UK and Australia can due to regulatory restrictions, only offer retail clients leverage up to 1:30.
Offshore brokers, on the other hand, have no restriction on leverage and usually offer leverage up to 1:500 (or more!) for retail clients.
Kindly note that none of the brokers below accept US clients.
What is an offshore forex broker?
An offshore forex broker is usually a brokerage located and regulated in the Bahamas, Seychelles, Vanuatu, or other small island states.
The regulatory protection is usually very limited and in some jurisdictions, brokers aren’t even required to keep funds segregated (some do nonetheless).
You will not have access to any financial ombudsman or compensation fund either. There is no point complaining to your local regulator as offshore brokers are out of their jurisdiction.
The only way your local regulator (in my case, the Norwegian FSA) can react, is to issue a warning.
The risk of being ripped off, scammed, or unfairly treated is therefore much higher when using an offshore broker.
Best Offshore Forex Brokers
The best way to select an offshore forex broker is to choose a well-regulated (FCA, ASIC, or EU) and highly reputable broker that happens to have an offshore entity.
That way, any fraudulent or unfair treatment of customers will affect the whole group of companies (which are regulated in top jurisdictions).
Skilling
Skilling is a Scandinavian-owned fintech company regulated by CySEC and the Seychelles Financial Services Authority (FSA).
Skilling (Seychelles) Ltd. is their offshore entity and offers leverage up to 1:500 for retail clients.
All client funds are kept in segregated accounts and all clients are offered negative balance protection.
🏆 Best Overall Broker 2022
✅ Up to 1:500 leverage
✅ Skilling Trader, MT4 & cTrader
✅ 900+ instruments
✅ Nordic Fintech
✅ Fast 24/5 customer support
Pepperstone
Pepperstone is regulated and authorized in by several regulators including FCA, CySEC, ASIC, and BaFin.
Pepperstone Markets Ltd is their offshore entity and is regulated by the Securities Commission of the Bahamas.
The offshore entity offers leverage up to 1:400 and all client funds are kept in segregated accounts.
🏆 Best TradingView Broker 2022
✅ 1:30 | 1:400 leverage
✅ MT4, MT5 & cTrader
✅ 1200+ instruments
✅ Raw interbank spreads
✅ Fast 24/5 customer support
Blueberry Markets
Blueberry Markets is regulated by the Australian Securities and Investments Commission (ASIC) and Securities Commission of the Bahamas (SCB).
Non-Australian clients get automatically signed up under the offshore entity in the Bahamas.
Blueberry Markets can boast thousands of positive reviews from traders and are top-rated with both Trustpilot and Forex Peace Army.
🏆 Best MetaTrader Broker 2022
✅ 1:500 Leverage
✅ Spreads from 0.0
✅ No Dealing Desk (NDD)
✅ Top Rated Broker with FPA
✅ 24/7 Customer Support
Conclusion
The main benefit of choosing an offshore forex broker is access to considerably higher leverage for retail clients.
In order to avoid scams and unfair treatment, you should only choose a reputable, well-regulated broker that happens to have an offshore entity.
You should also make sure that the broker keeps funds segregated and that they offer negative balance protection.
