Overseas brokers for US citizens: legal or illegal?
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Thread: Overseas brokers for US citizens: legal or illegal?

  1. #1
    ÂI can not seem to get a direct answer to this question. As a US citizen, should I want to start a Forex account with an overseas broker, and supposing I cover all of my American taxes on my gains is this lawful? Is there any regulation or statute or code which I would be breaking? Would the IRS have some issue with this? If anybody has some experience with this particular issue I would greatly like to hear your comments.

  2. #2
    I've not ever seen it reported anywhere any US regulatory body, such as the IRS, has transitioned to any US Citizen running a forex account.

    I have not seen it reported owning or managing a forex account with an overseas broker violates any federal statute - if anyone can provide any external proof please post.

    But that which we **do** understand is the CFTC from the US tries to close down any and all Forex Brokers who accept US traders unless they comply with CFTC regs, which the accessible US ones do (50:1 max leverage, etc etc)

    Therefore the problem isnt so much that its illegal for your trader, its only very difficult who'll find a REPUTABLE non-US broker who'll take you. There are a few exceptions.

    The workaround years back was to only form a non-US corp and open a corp account, but possibly a year or 2 ago the brokers started to disallow this also if the beneficial owners were US citizens. I presume due to pressure from the CFTC.

    The whole situation is absurd, and hopefully Trump will be able to repeal Dodd-Frank, which was the legislation which ruined the retail forex business for US traders

  3. #3
    Quote Originally Posted by ;
    Â I can not seem to get a straight reply to this question. As a US citizen, if I want to start a Forex account with an overseas broker, and supposing I pay all of my American taxes on my profits is that lawful? Is there any regulation or statute or code that I would be breaking? Can the IRS have any issue with this? If anybody has any experience with this particular issue I would greatly like to hear your comments.
    http://forums.babypips.com/forex-bro...cape-cftc.html

  4. #4
    Quote Originally Posted by ;
    Â I can't seem to find a direct answer to this question. As a US citizen, should I want to start a Forex account with an overseas broker, and supposing I pay all my American taxation on my gains is that lawful? Is there any law or statute or code which I would be breaking? Can the IRS have some problem with this? If anybody has some experience with this particular issue I would greatly love to hear your comments.
    YEs brokers should be registered under their ruler NFA or CFTC. You are not allowed to exchange with offshore or Non-US brokers because its not possible to monitor for US regulator on how brokers deal with you (or they Only Want to prevent the leak of money overseas)

  5. #5
    Quote Originally Posted by ;
    quote YEs brokers should be registered under their regulator NFA or CFTC. You're not permitted to trade with offshore or Non-US brokers because its not possible to monitor for US regulator on how brokers deal with you (or they only want to prevent the flow of money overseas)
    This is the kind of confusion I always run into. A call to the cftc is needed?

  6. #6
    I had a conversation with finpro brokers, here it is.

    Suzan9:12'm Hello. How may I help you?

    Client9:12 am Do you accept us citizens?
    ReadDelivered
    Suzan9:12 am Hi there
    Yes we do accept us customers

    Client9:12 am sweet ReadDelivered

    9:13 know what's the minimum deposit? ReadDelivered

    Suzan9:13'm The minimum deposit to get an ECN account is $200 while you may also start with $100 in STP and $5 in micro account
    Client9:14'm Can you enable hedging? ReadDelivered

    Suzan9:14 am Yes we do allow hedging as well

    Client9:14'm What are your leverage amounts? ReadDelivered

    Suzan9:15 am The highest leverage we offer is 400x nevertheless the bonus offer is not applicable in such scenario, with bonus deal, the most leverage available is 200x
    Client9:15 am I see ReadDelivered
    9:16 am What's the fastest advoed payment method for us residents? ReadDelivered
    funding/withdrawals ReadDelivered

    Suzan9:17'm Each of the payment modes are instantaneous, you can proceed with any online transport mode like skrill or neteller or may proceed with Credit/before card
    you could also transfer funds via bank wire

    Client9:18'm So I will use my debit card? ReadDelivered

    Suzan9:18 am Yes you can use your debit card

    Client9:18'm Just how long has this company been around? ReadDelivered

    Suzan9:18'm We're in forex out of 2012

    Client9:20'm I see. You have been very helpful. Do you have a demo system as well? ReadDelivered
    Nevermind, I see it. ReadDelivered

    Suzan9:20'm Thank you for the comments sir, yes we don't have supply demo accounts also as
    Client9:20'm OK thanks for your help. Think I'll give it a go! ReadDelivered
    Suzan9:20 am Sure, you are welcome

    9:21 am Might I over your name, email address and phone number for the reference please

  7. #7
    Quote Originally Posted by ;
    quote This is the sort of confusion I encounter. A call to the cftc is necessary?
    Doubt it'll be of any help. Remember there is some law that prohibits trading with brokers out of US.
    Anyhow you can exchange third party account that loed outside of US

  8. #8
    Quote Originally Posted by ;
    quote Doubt it will be of any help. Remember there's a law which prohibits trading with brokers outside of US. Anyhow you're able to exchange third party account which based outside of US
    This is far too important to speculate about some random, possibly law. We have to have clarity on this! Does anybody know the solution? Is no one using off shore brokers for their financial advantages??

  9. #9
    Most of the Europe based brokers don't accept U.S. citizens in order to avoid legal compliions.
    I think the only exceptions is to get customers which can be classified as professional ones. However they have to meet strict demands.

  10. #10
    Quote Originally Posted by ;
    quote Doubt it will be of any aid. Remember there is a law that prohibits trading with brokers out US. Anyway you can exchange third party account which based out of US
    I figure the only law that restricts US traders from trading out with almost any offshore broker is that it may decrease the tax which has been charged to them when they exchange with all the brokers inside the united states.

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