You want to start trading forex in South Africa, but you find yourself feeling confused about the legality of FX trading in your country. Is it legal to trade forex in South Africa or not?
The simple answer is “yes, it is legal to trade forex in South Africa.” In this post, we will get into the details concerning regulations and taxes. Let’s dive in.
What Agency Regulates Forex Trading in South Africa?
The agency that regulates forex trading in South Africa is the Financial Sector Conduct Authority (FSCA). This agency was established through the Twin Peaks regulatory model put into effect by the Financial Sector Regulation Act.
The FSCA has existed since 2018. Prior to the FSCA, the Financial Service Board regulated trading in the country.
The goal of the FSCA is ensure that South Africa’s economy is bolstered through a financial system that is “fair, efficient, and resilient,” as explained on the FSCA’s website.
Is It Legal to Trade Forex in South Africa?
Yes, it is legal to trade forex in South Africa under certain conditions:
- All forex traders in South Africa must be age 18 or older.
- You must not be breaking any laws that involve money laundering.
- You must pay your taxes.
- All traders in South Africa must go through a licensed forex broker.
How Can You Check if a Forex Broker is Regulated in South Africa?
It is an easy matter to check whether a forex broker is regulated in South Africa. The broker will probably tell you as much on its website, but you should confirm it yourself by taking the following steps:
1. Navigate to the official FSCA website at fsca.co.za.
2. Go to the FSCA’s search tool. It should show up on the top banner on the homepage, but if it does not, you can find it here: fsca.co.za/Fais/Search_FSP.htm
3. The search tool lets you look up a financial service provider (FSP) by their number, name, postal code or ID. In most cases, you will probably find it easiest to just enter the name of the company.
4. The tool will bring up a list of results. Scan through them to see if you can locate the company that interests you. When you find it, you can click on “Details” to view the full registration number for the service provider, the date they were authorized, and additional information.
What to Know About Forex Trading and Taxes in South Africa
To stay legal while you are trading forex in South Africa, you must report your trading profits and pay taxes appropriately on them.
This is true whether the broker you are trading with is based in South Africa or is located in another country.
The agency that deals with taxation in South Africa is the South African Revenue Service (SARS).
There may be variations in how your forex trading income is taxed depending on your specific scenario.
Sometimes, you might be required to report it in the “business/trading” section of your taxes. In other cases, you might be required to report it in the “foreign revenue” section. You might be taxed as a business entity or as an individual.
To understand the correct way to report your forex income on your taxes, consult with a professional tax preparer in South Africa who specializes in working with traders.
Get Started Trading Forex in South Africa with a No Deposit Bonus
If you are ready to start trading in South Africa, you can do so in a few simple steps:
1. Choose a South Africa forex broker.
2. Sign up for an account.
3. Verify your identity.
4. Deposit your funds and start trading.
If you do not yet have a lot of funds for trading, you can start trading with a no deposit bonus forex promotion in South Africa. As the name implies, this is a type of bonus where you do not have to make a deposit to receive trading funds. Although you cannot usually withdraw the bonus itself, you can withdraw your profits once you meet the broker’s conditions.
To get started now, check out top recommended South Africa forex brokers that are offering a no deposit bonus.