Best Forex Brokers in Saudi Arabia

• There is an inactivity fee after 1 year
• Capital.com does not accept US customers
• Only CFD trading supported

Is forex trading legal in Saudi Arabia?

Neither the Capital Market Authority (CMA) nor the Saudi Central Bank (SAMA) prohibit the trading of foreign exchange currencies, and international brokers can accept Saudi traders so long as they have the approval of the Kingdom’s authorities. As it stands, a number of brokers have entered the Saudi Arabian market seeking to cater to the many forex traders in the region, and to great success. Some entities bear the seal of approval of the CMA, while others are regulated strictly by foreign but trusted financial supervisory entities.

As suggested, at the time of writing, forex brokers do not necessarily need to be licensed specifically by the CMA or SAMA in order to accept forex clients. However, it is generally a good idea to stick to locally licensed brokers or ones that are regulated by a supervisory body that has a good reputation in the international trading scene.

It should also be noted that a number of the forex brokers suitable for Saudi Arabia offer multiple account types that clients can choose from depending on their eligibility and preferences. This includes retail accounts, professional ones, and swap-free Islamic accounts.

Capital Market Authority (CMA) Regulation Info

In its role as Saudi Arabia’s financial supervisory watchdog, the Capital Market Authority has duties that encompass a wide range of regulatory rules that are centered around the Kingdom’s finance sector. This includes having the authorization to regulate the capital market, keep investors safe from fraudulent schemes and other such dangers, monitor companies, exercise its power to penalize financial service businesses that operate in Saudi Arabia when necessary, and more. In 2019, the CMA issued its first forex license, which was granted to Riyad Capital.

How can I verify CMA authorization?

In general, you will not face much difficulty while trying to confirm that a given forex broker is licensed. This type of information is typically provided on the broker’s website, either organized within the footer or outlined on a separate page. This is where you will be able to see both the broker’s CMA license if the CMA has granted the company its seal of approval and all of the other licenses the broker in question has been successful in both earning and holding onto.

In the case of CMA licensing, if you do not completely trust a given broker and wish to find information on their regulatory oversight elsewhere, the CMA’s website has a register that includes all CMA-authorized entities.

Are my funds safe with forex brokers in Saudi Arabia?

Whether your funds are safe at Saudi Arabia-facing brokers is something you will not need to worry about. The vast majority of regulators have strict rules in place that demand companies do their due diligence to keep users’ funds secure. Client money is stored in segregated bank accounts ensuring no mingling with the company’s funds takes place. Encryption algorithms are also utilized, specifically with regard to the transactions undertaken by users, as well as trader data in general. Of course, all of this applies to strictly regulated brokers.

Another security measure utilized by brokers looking to attract Saudi traders is two-factor authentication. This technology serves to make clients confirm multiple times and through means different from their password that they are the account owner when they attempt to log in. This can take the form of an entire third-party app or simply for the broker to send the given user a message with a confirmation code.

Last but not least, we have negative balance protection, a core aspect of the way many forex brokers treat their retail clients. As suggested by its name, this service will ensure that no retail trader’s account will be able to incur a negative balance. Seeing one’s funds drop below 0 is a very real risk without negative balance protection, hence why it has become such a popular tool in the global forex scene. Its popularity was also boosted by an event that occurred in 2015 when the Swiss national bank scrapped the Swiss Franc’s peg to the Euro. This led to devastating consequences for retail investors who lost more money than they had held in their accounts.

Do brokers in Saudi Arabia provide negative balance protection?

Once again, this is a matter of what entity your broker is licensed by. Regulatory authorities such as the UK’s FCA and the Securities Commission of the Bahamas, for instance, mandate that negative balance protection be offered to retail traders in order for their funds to be safeguarded. Therefore, if your broker’s regulator has such a rule in place, then you can be certain that, as a retail client, you will be offered negative balance protection.

Things differ for professional clients, however. Since the aforementioned rule does not apply to those who trade forex for a living, many brokers do not offer this service to their professional users. This is one aspect of professional trading that can be considered a downside.

Do you pay tax on forex trading in Saudi Arabia?

At the time of writing, individuals who work in Saudi Arabia are not obligated to pay an individual tax income. A general capital gains tax of 20% is what applies to corporations, however. Given the nature of taxation laws, the possibility of them changing, and the potential consequences should you be caught off guard by unfamiliar legislation, it is best that you consult a professional tax advisor in Saudi Arabia before you start trading.

How does the available leverage of Saudi Arabia-friendly brokers compare to the leverage at brokers regulated offshore?

This will be reliant on the regulator of your broker of choice, specifically the one that oversees the operations of the broker’s Saudi Arabia-facing business. For example, brokers licensed by the Securities Commission of the Bahamas can offer leverage of up to 1:200 to retail clients. This is a far wider leverage than what traders in most European countries, the UK, and even the outlier that is Poland, can utilize. US regulators also impose a more modest limit of 1:50.

The professional leverage in SCB-licensed brokers, on the other hand, is usually a much more familiar 1:500. Traders might also come across brokers where the permitted leverage for professionals is not capped at all, which can certainly make the said brokers quite tempting to try out. Of course, with great leverage comes greater risk, so even pros will need to limit themselves when trading.

What do you need to be designated as a professional trader in Saudi Arabia?

Becoming a professional is the long-term aspiration of many forex traders, and it certainly comes with a range of perks, the best one being the ability to trade with large or, in some jurisdictions, unlimited leverage. If you wish to qualify for a professional account at your forex broker of choice, you will need to meet two of three requirements as specified by your broker.

The first such condition is to have a trading portfolio that exceeds $500,000. Next, you may also qualify if you have worked as a professional in the financial services sector for no less than a year. Last but not least, having made notable trades at least 10 times per quarter over the last four quarters is another thing that will help qualify you for a professional account at your forex broker of choice.

What trading platforms are available to traders in Saudi Arabia?

There are no particular regulatory restrictions on what platforms Saudi Arabian traders can utilize, which means that one’s choice of platform will primarily depend on the forex broker they decide to stick with. Some brokers have gone through the effort to create a proprietary platform, with XTB being an example of a broker that only offers its own platform to clients. There are also brokers that offer multiple options in addition to their own software, however, with the said choices being either of the popular MetaTrader iterations (MT4 or MT5), cTrader, and TradingView, to name a few. Brokers that do not have their own in-house developed platforms will also offer one or multiple of the aforementioned options.

As already mentioned, many forex brokers catering to Saudi forex traders will allow them to apply for Islamic accounts that do not charge swaps on positions left open overnight. The availability of trading platforms supporting swap-free trading varies across different brokers but chances are, MT4 and MT5 will both support the Islamic forex account option.

Regardless of what platform you go with, you will find that you will not have any issues keeping track of your trading account while you are out and about. Pretty much all modern forex platforms support both desktop and mobile devices.