Pakistan Forex Brokers

Forex trading, the exchange of currencies in the global market, has gained popularity in Pakistan, attracting both retail and institutional traders. With increasing accessibility through online platforms, many individuals seek to capitalize on currency fluctuations. However, navigating the forex market in Pakistan requires an understanding of its legal framework, restrictions, and regulatory environment. This guide provides essential insights into forex trading in Pakistan, covering permissible trading forms, regulatory authorities, broker requirements, taxation policies, and key factors to consider when choosing a reliable forex broker.

Top 11 Forex Brokers in Pakistan

Brokers Compared by Spread

FX Brokers Deposit Method Comparison

Brand Minimum deposit
Fusion Markets Available $0
FP Markets Available $50 (AU$100)
Axi Available $0
ActivTrades Available $0
Iron FX Not Available $100
eToro Available $50 or $100 based on country ($10 for the UK)
MultiBank Group Not Available $50 (Standard), $10,000 (ECN), $1,000 (Pro)
FxPro Available $100
Interactive Brokers Not Available $0
Markets.com Not Available $100
CMC Markets Not Available $0

Brokers by Regulator

Brand Maximum leverage
Fusion Markets Not Available 1:500 (ASIC | Pro Account), 1:30 (ASIC | Retail Account), 1:500 (VFSC | Retail Account)
FP Markets Available 1:500 (CySEC | Pro Account), 1:30 (ASIC | Retail Account), 1:30 (CySEC | Retail Account), 1:500 (FSAS | Retail Account)
Axi Available 1:500 (Elite Account), 1:400 (Pro Account), 1:30 (ASIC | Retail Account), 1:30 (CySEC | Retail Account), 1:30 (DFSA | Retail Account), 1:30 (FCA | Retail Account), 1:500 (SVGFSA)
ActivTrades Not Available 1:400 (CMVM | Pro Account), 1:30 (CMVM | Retail Account), 1:1000 (FSC), 1:200 (SCB)
Iron FX Available 1:30 (CySEC), 1:30 (FCA), 1:1000 (FSCA)
eToro Available 1:400 (CySEC | Pro Account), 1:30 (CySEC | Retail Account), 1:400 (FSAS | Retail Account)
MultiBank Group Available 1:500 (ASIC | Pro Account), 1:30 (ASIC | Retail Account), 1:500 (CIMA), 1:30 (CySEC), 1:20 (MAS)
FxPro Available 1:30 (CySEC | Retail Account), 1:30 (FCA | Retail Account), 1:10000 (SCB | Retail Account)
Interactive Brokers Not Available 1:30 (ASIC | IBKR Lite), 1:30 (CBI | IBKR Lite), 1:30 (FCA | IBKR Lite), 1:25 (JFSA | IBKR Lite), 1:20 (MAS | IBKR Lite), 1:500 (Pro Account)
Markets.com Available 1:294 (CySEC | Pro Account), 1:30 (CySEC | Retail Account), 1:300 (FSCA)
CMC Markets Not Available 1:500 (ASIC | Pro Account), 1:500 (FCA | Pro Account), 1:30 (ASIC | Retail Account), 1:30 (BaFin | Retail Account), 1:30 (FCA | Retail Account), 1:20 (MAS | Retail Account)

Forex Brokers Platform Availability

Brand FX pairs to trade
Fusion Markets Available cTrader, MetaTrader 4, MetaTrader 5, TradingView
FP Markets Not Available cTrader, TradingView
Axi Available MetaTrader 4
ActivTrades Available MetaTrader 4, MetaTrader 5, Proprietary Web, TradingView
Iron FX Available MetaTrader 4
eToro Not Available Proprietary
MultiBank Group Available MetaTrader 4, MetaTrader 5
FxPro Available cTrader, MetaTrader 4, MetaTrader 5
Interactive Brokers Not Available Proprietary Mobile, Proprietary Web
Markets.com Available MetaTrader 4, MetaTrader 5, Proprietary Web, TradingView
CMC Markets Available MetaTrader 4

Comprehensive Comparison of the Best Pakistan Forex Brokers

Brand Min. Deposit Trading Platforms Spread Regulation Trustpilot
$0
  • cTrader
  • DupliTrade
  • Fusion+ Copy Trading
  • MetaFX
  • MetaTrader 4
  • MetaTrader 5
  • TradingView
AVG 0.93 pips
  • FSAS (Seychelles)
  • VFSC (Vanuatu)
  • ASIC (Australia)
$50 (AU$100)
  • cTrader
  • IRESS
  • TradingView
AVG 1.2 pips
  • CySEC (Cyprus)
  • FSAS (Seychelles)
  • FSCA (South Africa)
  • SCB (Bahamas)
  • ASIC (Australia)
  • FSCM (Mauritius)
$0
  • MetaTrader 4
  • Axi Copy Trading
  • Axi Mobile
AVG 0.1 pips
  • CySEC (Cyprus)
  • DFSA (United Arab Emirates)
  • FCA (United Kingdom)
  • FMA (New Zealand)
  • SVGFSA (Saint Vincent and the Grenadines)
  • ASIC (Australia)
$0
  • MetaTrader 4
  • MetaTrader 5
  • Proprietary Web
  • TradingView
AVG 0.5 pips
  • CONSOB (Italy)
  • FCA (United Kingdom)
  • SCB (Bahamas)
  • CMVM (Portugal)
  • FSCM (Mauritius)
  • CVM (Brazil)
$100
  • MetaTrader 4
  • TradeCopier
AVG 1.2 pips
  • CySEC (Cyprus)
  • FCA (United Kingdom)
  • FSCA (South Africa)
$50 or $100 based on country ($10 for the UK)
  • eToro App
  • eToro CopyTrader
  • eToro Investing
AVG 1 pips
  • CySEC (Cyprus)
  • FCA (United Kingdom)
  • FRSA (United Arab Emirates)
  • FinCEN (United States)
  • FINRA (United States)
  • FSAS (Seychelles)
  • GFSC (Gibraltar)
  • AMF (France)
  • MFSA (Malta)
  • SEC (United States)
  • ASIC (Australia)
$50 (Standard), $10,000 (ECN), $1,000 (Pro)
  • MetaTrader 4
  • MetaTrader 5
  • MultiBank-Plus
AVG 0.1 pips
  • CIMA (Cayman Islands)
  • CySEC (Cyprus)
  • FSAS (Seychelles)
  • MAS (Singapore)
  • VFSC (Vanuatu)
  • ASIC (Australia)
  • ESCA (United Arab Emirates)
  • VARA (United Arab Emirates)
  • FSCM (Mauritius)
  • BaFin (Germany)
  • FMAA (Austria)
  • BVIFSC (Virgin Islands, British)
$100
  • cTrader
  • FxPro Edge
  • MetaTrader 4
  • MetaTrader 5
AVG 0.5 pips
  • CySEC (Cyprus)
  • FCA (United Kingdom)
  • FSAS (Seychelles)
  • FSCA (South Africa)
  • SCB (Bahamas)
$0
  • Proprietary Mobile
  • Proprietary Web
MIN 0.2 pips
  • CFTC (United States)
  • CIRO (Canada)
  • FCA (United Kingdom)
  • JFSA (Japan)
  • MAS (Singapore)
  • HKSFC (Hong Kong)
  • ASIC (Australia)
  • SEBI (India)
  • CBI (Ireland)
$100
  • MetaTrader 4
  • MetaTrader 5
  • Proprietary Web
  • TradingView
AVG 0.9 pips
  • CySEC (Cyprus)
  • FSCA (South Africa)
$0
  • CMC Next Generation
  • MetaTrader 4
MIN 0.5 pips
  • CIRO (Canada)
  • DFSA (United Arab Emirates)
  • FCA (United Kingdom)
  • FMA (New Zealand)
  • MAS (Singapore)
  • ASIC (Australia)
  • BaFin (Germany)
  • BMA (Bermuda)

In Pakistan, forex trading is a legal financial activity regulated by the Securities and Exchange Commission of Pakistan (SECP) and the State Bank of Pakistan (SBP). Individuals and businesses can engage in various forms of currency trading, each serving different purposes such as speculation, hedging, or facilitating international transactions. The primary legal forms of forex trading in Pakistan include:

  1. Spot Trading
    Spot trading involves the immediate exchange of one currency for another at the prevailing market rate, with transactions typically settled within two business days. This form of trading is commonly used by individuals and businesses for purposes like travel, international purchases, or immediate hedging needs.
  2. Contracts for Difference (CFDs)
    CFDs are derivative instruments that allow traders to speculate on the price movements of currency pairs without owning the underlying assets. Through CFDs, traders can profit from both rising and falling markets. In Pakistan, trading CFDs is legal when conducted through brokers that comply with SECP regulations.
  3. Futures Contracts
    Futures contracts are standardized agreements to buy or sell a specific amount of currency at a predetermined price on a set future date. These contracts are often used by businesses and investors to hedge against potential adverse currency movements. In Pakistan, futures trading is accessible through financial institutions and brokers authorized by the SECP.
  4. Options Trading
    Options provide traders with the right, but not the obligation, to buy or sell a currency at a specified price before a certain date. This form of trading can be used for hedging or speculative purposes. In Pakistan, options trading is permitted when conducted through regulated entities.
  5. Forward Contracts
    Forward contracts are customized agreements between two parties to exchange currencies at a future date and at a price agreed upon today. Unlike futures, forwards are not standardized or traded on exchanges and are typically used by businesses to hedge against currency risk in international transactions. In Pakistan, forward contracts are usually facilitated by banks and financial institutions under SBP oversight.

Restrictions on Forex Trading in Pakistan

While forex trading is legal in Pakistan when conducted through authorized dealers, several restrictions apply to ensure financial stability, prevent fraud, and protect traders from excessive risk. These restrictions primarily concern high-risk instruments, regulatory limitations, and foreign exchange controls.

  • Cryptocurrency Trading
    The State Bank of Pakistan (SBP) has prohibited financial institutions from facilitating transactions related to cryptocurrencies. As a result, trading digital assets such as Bitcoin, Ethereum, and other cryptocurrencies is not legally recognized in the country. Despite this ban, some Pakistani traders use offshore platforms, which carries regulatory and financial risks.
  • Binary Options
    Binary options trading, a highly speculative form of forex trading where traders bet on the direction of price movements within a short time frame, is restricted in Pakistan. The Securities and Exchange Commission of Pakistan (SECP) has issued warnings against unregulated platforms offering binary options, citing concerns over fraud and investor losses.
  • Leverage Restrictions
    While leverage is available in forex trading, it is subject to restrictions imposed by brokers operating under Pakistani regulations. Excessively high leverage can lead to significant losses, and traders are encouraged to use regulated brokers that offer reasonable leverage limits.
  • CFDs Involving Cryptocurrency and Fiat Crosses
    Although Contracts for Difference (CFDs) on major fiat currency pairs are permitted through regulated brokers, CFDs involving cryptocurrency pairs are not legally recognized due to the broader restrictions on digital assets. Traders should ensure that any CFD trading they engage in is compliant with SECP and SBP regulations.
  • Foreign Exchange Controls
    The SBP imposes controls on the inflow and outflow of foreign currency to maintain economic stability. Restrictions on outward remittances and foreign exchange transactions mean that individual traders may face challenges in depositing or withdrawing funds from international forex brokers. Authorized banks and financial institutions must adhere to SBP guidelines when processing forex-related transactions.
  • Trading with Unregulated Brokers
    Pakistani residents are strongly advised against using offshore or unregulated brokers. Engaging with unlicensed entities can lead to legal repercussions, loss of funds, and lack of recourse in case of disputes. The SECP regularly updates its list of authorized financial service providers to help traders identify legitimate brokers.

Who Regulates Forex Trading in Pakistan?

In Pakistan, the forex market is regulated by two primary authorities: the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP).

  • State Bank of Pakistan (SBP)

    The SBP serves as the central bank and is responsible for formulating and implementing monetary policy, including the regulation of foreign exchange. Under the Foreign Exchange Regulation Act of 1947, the SBP has the authority to regulate payments, dealings in foreign exchange, and the import and export of currency and bullion. This includes granting licenses to authorized dealers, typically banks and financial institutions, to conduct foreign exchange transactions. The SBP also monitors and enforces compliance with foreign exchange regulations to ensure the stability of the financial system.

  • Securities and Exchange Commission of Pakistan (SECP)

    The SECP is the apex regulator for the corporate sector and capital markets in Pakistan. It oversees non-banking financial companies, including brokerage firms that facilitate forex trading. The SECP’s regulatory framework aims to protect investors, promote fair trading practices, and maintain market integrity. Forex brokers operating in Pakistan must register with the SECP and adhere to its regulations, which encompass requirements for transparency, financial reporting, and ethical conduct. The SECP also issues warnings and takes action against unauthorized or illegal forex trading activities.

Requirements for Forex Brokers in Pakistan

Forex brokers operating in Pakistan must adhere to a comprehensive regulatory framework designed to ensure market integrity, protect investors, and maintain financial stability. Key requirements include:

  • Licensing and Registration
    Brokers must obtain authorization from the Securities and Exchange Commission of Pakistan (SECP) to operate legally. This involves meeting specific capital adequacy standards, demonstrating financial stability, and maintaining transparent business operations.
  • Investor Protection Measures
    To safeguard traders, brokers are required to implement several protective measures:

    • Negative Balance Protection: Ensuring that clients cannot lose more than their deposited funds, preventing them from incurring debt due to trading losses.
    • Fund Segregation: Client funds must be kept in separate accounts from the broker’s operational funds, reducing the risk of misuse and providing security in case of broker insolvency.
    • Risk Disclosures: Brokers are obligated to provide clear and comprehensive information about the risks associated with forex trading, enabling clients to make informed decisions.
  • Leverage Restrictions
    The SECP imposes limits on the amount of leverage brokers can offer to retail traders to mitigate the risk of significant losses. These limits are designed to promote responsible trading practices and financial prudence.
  • Compliance and Reporting
    Brokers must adhere to ongoing compliance requirements, including:

    • Regular Financial Reporting: Submitting periodic financial statements to the SECP to demonstrate continued solvency and adherence to regulatory standards.
    • Audit Requirements: Undergoing regular audits by independent auditors to ensure transparency and accuracy in financial reporting.
    • Anti-Money Laundering (AML) Policies: Implementing robust AML procedures to detect and prevent illicit activities, in line with national and international guidelines.

Taxes on Forex Trading Profits in Pakistan

In Pakistan, profits from forex trading are subject to taxation under the Income Tax Ordinance 2001, regulated by the Federal Board of Revenue (FBR). Forex trading profits are generally categorized as personal income and taxed based on total annual earnings.

As of January 2025, the applicable income tax rates are as follows:

  • Income up to PKR 600,000: No tax.
  • Income between PKR 600,001 and PKR 800,000: Taxed at 7.5%.
  • Income between PKR 800,001 and PKR 1,200,000: Taxed at 15%.
  • Income between PKR 1,200,001 and PKR 2,400,000: Taxed at 20%.
  • Income between PKR 2,400,001 and PKR 3,000,000: Taxed at 25%.
  • Income between PKR 3,000,001 and PKR 4,000,000: Taxed at 30%.
  • Income above PKR 4,000,000: Taxed at 35%.

Traders are required to file their forex trading profits as part of their annual tax returns. It is crucial for traders to maintain accurate records of all their trading activities, including profits, losses, and related expenses, to ensure correct reporting and avoid penalties from the FBR.

While there are no specific exemptions for forex traders, they can deduct legitimate business expenses related to trading, such as internet services, trading platform fees, and educational resources. Traders must keep proper documentation of these expenses to claim them during tax filing.

How to Identify a Reliable Broker in Pakistan

When choosing a forex broker in Pakistan, it’s essential to prioritize safety, transparency, and reliability. Here are key factors to consider:

  1. Regulatory Compliance
    A reliable forex broker should be regulated by authoritative bodies. In Pakistan, brokers must comply with the Securities and Exchange Commission of Pakistan (SECP) guidelines. If dealing with international brokers, ensure they are licensed by recognized authorities like the FCA (UK), ASIC (Australia), or CySEC (Cyprus).
  2. Transparency in Pricing
    Trustworthy brokers offer clear pricing structures, including spreads and commissions, with no hidden fees. Verify that the broker provides access to real-time pricing to ensure that you’re not subject to manipulative practices like widened spreads during volatile periods.
  3. Reputation and Reviews
    Look for brokers with a solid reputation. Research online forums, review sites, and independent trading communities for feedback. Brokers with consistent negative reviews or unresolved complaints should be avoided.
  4. Customer Support
    A good broker offers prompt, helpful, and accessible customer service through multiple channels like live chat, email, or phone. Test the responsiveness of customer support before committing.
  5. Trading Platform and Tools
    Choose a broker with a user-friendly platform offering advanced trading tools, charting features, and educational resources. The right platform will help you manage risk and improve your trading performance.

By focusing on these aspects, you can ensure that the forex broker you choose is reliable, secure, and provides a transparent trading experience.

FAQs

Is forex trading legal in Pakistan?

Yes, forex trading is legal in Pakistan, provided it is conducted through licensed and regulated brokers. Traders must adhere to the country’s foreign exchange regulations and ensure they are not engaging in illegal activities, such as trading cryptocurrencies or binary options through unregulated platforms.

Do I need to pay taxes on forex trading profits?

Yes, forex trading profits are taxable in Pakistan. Traders must report their earnings as part of their annual income tax returns and pay taxes according to the applicable tax rates. It’s advisable to consult a tax professional for guidance on deductions and tax obligations.

Can I trade forex with a broker based outside Pakistan?

Yes, you can trade with international brokers, but it is essential to ensure they are regulated by reputable authorities. However, it’s important to understand the risks of trading with offshore brokers, including issues related to fund security, legal protection, and potential challenges in withdrawing funds.

What are the risks associated with forex trading?

Forex trading carries significant risks, such as market volatility, leverage risks, and potential losses exceeding the initial investment. Traders should use risk management tools like stop-loss orders and be aware of the risks involved, especially when using high leverage.

How do I choose a reliable forex broker?

To choose a reliable broker, ensure they are regulated by recognized authorities, have transparent pricing, provide responsive customer support, and offer a user-friendly trading platform. Research online reviews and check for any regulatory actions against the broker before opening an account.

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What sets Rational FX apart is its rigorous evaluation process, which considers over 30 different criteria when selecting forex brokers. This comprehensive approach ensures that every aspect of a broker's service is taken in consideration, including regulation, forex spreads, trading platforms, deposit methods, and reputation. With its wealth of experience, transparent review process, and outstanding customer feedback, Rational FX is a trusted source for anyone seeking reliable information on forex brokers. You can reach us via e-mail at feedback@rationalfx.com or contact us through our social media accounts here: Facebook, YouTube, or leave a feedback here.