Foreign exchange trading, or Forex trading , has always been one of the most popular profit-making opportunities in modern times, and thanks to technology, it is now available to anyone, any time. It is no surprise than that it caught the attention of one of the largest and fastest developing web markets of today — South Africa. Thanks to the meteoric rise of internet users in South Africa, many of its citizens have been introduced to the profitable world of Forex trading.
With the average monthly income being close to 10, Rands, according to numbers, thousands of South Africans have turned to Forex trading as a way to supplement their income, or even make a living out of it. The South African nation is one of the few countries in the world to have set up a system of exchange control, and the supervisory body that oversees this system is the South African Reserve Bank SARB. Under this system, every transaction in South Africa which involves the movement of money in and out of the country is the subject of the exchange control system, with no exception.
The system allows for payments to be made under specific circumstances, but any transfer of money to a foreign party must be reported to the SARB, which is exactly what most deposits and withdrawals at Forex brokers are. As an individual, you have several circumstances under which you are allowed to send money. The only circumstances that apply to sending funds to Forex brokers is the annual offshore investment allowance and the single discretionary allowance.
The offshore investment allowance is 10 million Rands per year, while the single discretionary allowance is R1million. Combined, this gives any trader from South Africa an allowance of 11 million per year.
The FSB is an independent body that oversees financial institutions in the country that are not part of the banking sector in order to protect the users of such institutions. As such, it is the only body you can turn to in case of any disputes.
However, licenses from CySec, FSA, and other trusted regulators gives you the same level of protection, which is particularly useful considering the FSB has rarely been involved with Forex brokers. When choosing what broker to use, the first thing you need to consider is whether the broker is licensed and registered with any relevant body or not.
Needless to say, you should always choose brokers that hold a license to make sure you have the best trading experience. In short, it all comes down to having the right:. Unless you are planning on only trading Rand pairs, you should choose a broker that can offer more trading variety rather than just the standard offer.
Most brokers will offer from one to several popular platforms like the MT4, while some will even develop their own. The easier for you to understand your platform and tools, the easier will it be to start earning money. The leverage offered by Forex broker can range from something as small as And lastly, if you want to enjoy more than tight spreads, pair variety and good leverage, you might also want to check out the bonus offer.
Another way in which brokers compete against each other is by offering sign up and loyalty rewards to their customers. Some brokers will offer no deposit rewards while others will have additional promotions like trading competitions with lucrative prize pools, or similar incentives. Choose what speaks to you most. When picking your South African Forex broker, there are also other important factors, apart from the trading offer and license. And although these are not the most crucial of features, the following are still vital to having the best possible trading experience with your Forex broker:.
The payment methods offered by your broker are important, because some methods have a much faster processing time and fewer fees than others. While e-payment providers will usually process your withdrawals in up to 24 hours, banks might take anywhere from 3 to 7 days to do to this. And depending on the broker, you might also be charged fees for withdrawing money out of your Forex account. While this is no longer a standard practice in the industry, there are still some companies that do this.
There are also some brokers who charge account maintenance fees and apply other additional charges. Resources are yet another overlooked factor that is just as important as any other feature of your Forex broker. Keeping yourself updated and informed can make a world of difference when trading foreign currencies, as most major market events can be foreseen, to some length.
The regulatory body for non-banking financial institution is the Finacial Services Board FSB , although they have rarely issued licenses to Forex brokers. Is Forex trading taxable in South Africa?
Profits from Forex trading is taxable, just like your normal income, based on the applicable tax rates. You should also know that you can list your profits on your ITR12 income tax return under foreign income. Can I trade South African Rands? Some brokers might also pair it with other currencies.
Are there any fees charged for trading? This depends on the broker. Why is the Rand such a popular currency with Forex brokers? The Rand is one of the most popular currencies mainly due to the fluctuations it has seen over the past years in its value against the Dollar and Pound. In recent years, ZAR trading has accounted for 1. Top Forex Brokers in South Africa for Forex Trading Foreign exchange trading, or Forex trading , has always been one of the most popular profit-making opportunities in modern times, and thanks to technology, it is now available to anyone, any time.
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