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
-
Fusion Markets
- Australia regulated broker
- MT4, MT5, TradingView, Ctrader
- Leverage up to 500
Trading InstrumentsDeposit Methods- Commodities CFDs
- Crypto CFDs
- Forex CFDs
- Indices CFDs
- Metals CFDs
- Stock CFDs
-
FP Markets
- Australia and CySEC regulated broker
- MT4/MT5, TradingView, Ctrader, Iress
- EUR/USD spread from 0.0 pips
Trading InstrumentsDeposit Methods- Commodities CFDs
- Crypto CFDs
- Energy CFDs
- Forex CFDs
- Indices CFDs
- Metals CFDs
- Stock CFDs
-
Axi
- Raw spreads start from 0.0 pips
- Offers order execution faster than standard ECN model
- Axi Select Funded Trader Program offers funding up to $1 million
Trading InstrumentsDeposit Methods- Commodities CFDs
- Crypto CFDs
- Forex CFDs
- Indices CFDs
- Metals CFDs
- Stock CFDs
-
ActivTrades
- Winner of 20+ Global Awards
- MT4/MT5, TradingView
- Leverage up to 1:400
Trading InstrumentsDeposit Methods- Bonds CFDs
- Commodities CFDs
- Crypto CFDs
- ETF CFDs
- Forex CFDs
- Indices CFDs
- Share CFDs
-
Iron FX
- IronFX offers more than 300 trading instruments.
- Access to MetaTrader 4 (MT4), along with proprietary features and trading tools to enhance user experience.
- Multiple instruments available for trading, including Forex, Indices, Commodities.
Trading InstrumentsDeposit Methods- Commodities CFDs
- Commodity Futures
- Crypto CFDs
- Currency Futures
- Forex CFDs
- Indices CFDs
- Metal Futures
- Metals CFDs
- Share CFDs
-
eToro
- Popular broker for social trading
- Trading is conducted on innovative in-house platform
- Offers both investing and trading products
Trading InstrumentsDeposit Methods- Commodities CFDs
- Crypto CFDs
- ETF CFDs
- Forex CFDs
- Indices CFDs
- Metals CFDs
- Share CFDs
- Stock CFDs
- US Stock CFDs
-
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors.MultiBank Group
- The broker offers leverage up to 500:1.
- Available trading platforms are: MT4 and MT5.
- MultiBank Group provides various account types (Standard, Professional and ECN) to cater to different trading preferences.
Trading InstrumentsDeposit Methods- Commodities CFDs
- Crypto CFDs
- Forex CFDs
- Indices CFDs
- Metals CFDs
- Share CFDs
-
FxPro
- NDD broker offering deep liquidity and ultra-fast execution
- Over 99% instant order executions with no requotes
- Supports MT4, MT5, cTrader, and a proprietary platform
Trading InstrumentsDeposit Methods- Commodities CFDs
- Crypto CFDs
- Energy CFDs
- Forex CFDs
- Indices CFDs
- Metals CFDs
- Stock CFDs
-
Interactive Brokers
- Providing access to more than 135 global markets: Forex, Cryptocurrencies, Bonds, Commodities and Stocks
- Seamless integration with third-party research platforms and API access for automated trading and portfolio management.
- Advanced trading tools, such as algorithmic trading options, which allow professional-level trading executions.
Trading InstrumentsDeposit Methods- Bond Futures
- Bonds CFDs
- Commodities CFDs
- Crypto CFDs
- ETF CFDs
- Forex CFDs
- Indices CFDs
- Metals CFDs
- Mutual Funds
- Share CFDs
- Stock Options
-
Markets.com
- Featuring a wide range of CFD assets across 7 markets
- Supports popular platforms like MT4 and MT5
- Social trading app enables smooth trading alongside proven signal providers
Trading InstrumentsDeposit Methods- Bonds CFDs
- Commodities CFDs
- Crypto CFDs
- ETF CFDs
- Forex CFDs
- Indices CFDs
- Metals CFDs
- Share CFDs
-
CMC Markets
- Provides a choice of 10,000+ trading instruments
- Supports MT4 and Next Generation (proprietary platform)
- Spreads for EUR/USD from 0.5 pips
Trading InstrumentsDeposit Methods- Commodities CFDs
- Crypto CFDs
- Energy CFDs
- ETF CFDs
- Forex CFDs
- Indices CFDs
- Metals CFDs
- Share CFDs
- Stock CFDs
- US Stock CFDs
Brokers Compared by Spread
FX Brokers Deposit Method Comparison
| Brand | Minimum deposit | |
|---|---|---|
| Fusion Markets |  |
$0 |
| FP Markets | |
$50 (AU$100) |
| Axi | |
$0 |
| ActivTrades | |
$0 |
| Iron FX |  |
$100 |
| eToro | |
$50 or $100 based on country ($10 for the UK) |
| MultiBank Group | |
$50 (Standard), $10,000 (ECN), $1,000 (Pro) |
| FxPro | |
$100 |
| Interactive Brokers | |
$0 |
| Markets.com | |
$100 |
| CMC Markets | |
$0 |
Brokers by Regulator
| Brand | Maximum leverage | |
|---|---|---|
| Fusion Markets | |
1:500 (ASIC | Pro Account), 1:30 (ASIC | Retail Account), 1:500 (VFSC | Retail Account) |
| FP Markets | |
1:500 (CySEC | Pro Account), 1:30 (ASIC | Retail Account), 1:30 (CySEC | Retail Account), 1:500 (FSAS | Retail Account) |
| Axi | |
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 | |
1:400 (CMVM | Pro Account), 1:30 (CMVM | Retail Account), 1:1000 (FSC), 1:200 (SCB) |
| Iron FX | |
1:30 (CySEC), 1:30 (FCA), 1:1000 (FSCA) |
| eToro | |
1:400 (CySEC | Pro Account), 1:30 (CySEC | Retail Account), 1:400 (FSAS | Retail Account) |
| MultiBank Group | |
1:500 (ASIC | Pro Account), 1:30 (ASIC | Retail Account), 1:500 (CIMA), 1:30 (CySEC), 1:20 (MAS) |
| FxPro | |
1:30 (CySEC | Retail Account), 1:30 (FCA | Retail Account), 1:10000 (SCB | Retail Account) |
| Interactive Brokers | |
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 | |
1:294 (CySEC | Pro Account), 1:30 (CySEC | Retail Account), 1:300 (FSCA) |
| CMC Markets | |
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 | |
cTrader, MetaTrader 4, MetaTrader 5, TradingView |
| FP Markets | |
cTrader, TradingView |
| Axi | |
MetaTrader 4 |
| ActivTrades | |
MetaTrader 4, MetaTrader 5, Proprietary Web, TradingView |
| Iron FX | |
MetaTrader 4 |
| eToro | |
Proprietary |
| MultiBank Group | |
MetaTrader 4, MetaTrader 5 |
| FxPro | |
cTrader, MetaTrader 4, MetaTrader 5 |
| Interactive Brokers | |
Proprietary Mobile, Proprietary Web |
| Markets.com | |
MetaTrader 4, MetaTrader 5, Proprietary Web, TradingView |
| CMC Markets | |
MetaTrader 4 |
Comprehensive Comparison of the Best Pakistan Forex Brokers
| Brand | Min. Deposit | Trading Platforms | Spread | Regulation | Trustpilot |
|---|---|---|---|---|---|
 |
$0 |
|
AVG 0.93 pips |
|
|
 |
$50 (AU$100) |
|
AVG 1.2 pips |
|
|
 |
$0 |
|
AVG 0.1 pips |
|
|
 |
$0 |
|
AVG 0.5 pips |
|
|
 |
$100 |
|
AVG 1.2 pips |
|
|
 |
$50 or $100 based on country ($10 for the UK) |
|
AVG 1 pips |
|
|
 |
$50 (Standard), $10,000 (ECN), $1,000 (Pro) |
|
AVG 0.1 pips |
|
|
 |
$100 |
|
AVG 0.5 pips |
|
|
 |
$0 |
|
MIN 0.2 pips |
|
|
 |
$100 |
|
AVG 0.9 pips |
|
|
 |
$0 |
|
MIN 0.5 pips |
|
Legal Forms of Forex Trading in Pakistan
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:
- 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. - 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. - 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. - 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. - 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:
- 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). - 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. - 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. - 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. - 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.
Why You Should Trust RationalFX
When it comes to making informed decisions about forex brokers, it's essential to rely on trustworthy sources. RationalFX, a company with over 20 years of experience since its founding in 2005, has established itself as a credible authority in the industry. With an impressive collection of over 2500 reviews on Trustpilot, boasting a score of 4.2, it's clear that Rational FX has built a reputation for providing reliable and unbiased information.
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.