Forex brokers regulated in the United Arab Emirates

From a complete desert to an oil-rich nation just 45 years later, the UAE is truly unique. Thanks to impressive oil reserves, it has become one of the world's richest countries. Naturally, the United Arab Emirates has a relatively large populations of citizens that trade the markets.

Although the country consists of a constitutional monarchy and a federation of several emirates situated within the Arab peninsula, around 89% of the nearly 10 million citizens have a diverse background. They are from South Asia, Europe, the U.S. and South America and Australia. The UAE boast a high immigration rate and its citizens are young and embrace the English language and culture.

Although the UAE heavily relies on crude oil commerce, the nation is attempting to reduce its dependence on this resource.

Forex regulation in the UAE

Blessed with few restrictions, forex trading is fully authorised in the UAE. However, forex brokerage firms need to comply with several regulatory systems as the United Arab Emirates is a Sharia-law Islamic state.

The legislative framework isn't identical for each and every broker. Furthermore, local brokers are overseen by the UAE's central bank, with licenses issued by the SCA (Security and Commoditee Authority) and they must satisfy many requirements in order to market trading accounts to UAE citizens.

First, a brokerage firm must be owned by a UAE resident or citizen. Also, the shareholders must own a majority of the broker. All company documentation must be written in Arab language. The brokerage firm must have at least $8 million in operating capital along with a bank security deposit worth $6 million. Lastly, funds must be held within the United Arab Emirates.

UAE brokerage firms also need to comply with Sharia law and have to offer Sharia-compliant accounts, commonly referred to in the industry as "swap-free" trading accounts. They don't charge interest as this is strictly forbiden by the local religion.

The UAE is also unique in that it features "free financial zones", exclusive areas reserved for financial companies, such as brokers held by foreign entities, without the need for a local umbrella structure. These zones are governed by a separate set of rules that don't fall under those of the UAE.

One such zone is the DIFC (Dubai Int'l Finance Centre), which has positioned itself as the area's finance hub and which is home to Dubaï's very own NASDAQ.

DIFC brokerage firms aren't subject to Sharia requirements. However, they cannot hold their traders' capital - they must be kept in segregated accounts, which ensures that trader's don't bear any risk above and beyond their trading decisions. Many of these brokers are regulated abroad in the UK, Cyprus, etc. and are therefore able to provide UAE traders with extremely competitive trading conditions and ultra-tight spreads.

UAE financial regulation

As we said earlier, several agencies regulate and certify UAE forex brokers. A Central Bank decree (126/5/95) affirms that it has sole authority to oversee all trading intermediaries whenever forex, gold/silver, crude oil and company shares are involved.

As far as brokerage firm licences are concerned, the SCA (Security and Commoditee Authority) oversees their issuance. The SCA also monitors their operations.

BrokersRegulationTrading platformsOfficial website
DFSA, FSCA, FCA, CySEC, FSA MetaTrader 4 HF Markets website
FRSA, FSCA, JFSA, ASIC, CBFSAI, BVI FSCMetaTrader 4 and 5AvaTrade website
FCA, ASIC, CySECMetaTrader 4 and 5 Admiral Markets website
FCA, ASIC, DFSAMetaTrader 4 + 5
cTrader
Pepperstone website
FCA, KNF, CySEC, BIFSC, CNMV MetaTrader 4
XStation
XTB website
ASIC: Australia, BVI FSC: British Virgin Islands, CBFSAI: Ireland, CySEC: Cyprus, DFSA: Dubaļ, FCA: United Kingdom, FRSA: Abu Dhabi, KNF: Poland, BIFSC: Belize, CNMV: Spain, FSA: Seychelles, FSCA: South Africa, JFSA: Japan

CFD trading involves a significant risk of loss, so it is not suitable for all investors. 74 to 89% of retail trading accounts lose money trading CFDs.

Funding a forex account in the United Arab Emirates

Most United Arab Emirate traders favour trading accounts in either AED or USD currency (the latter is especially popular with rich expats who view the US dollar as a sort of reserve currency).

Payment methods don't vary much from broker to broker. In the UAE, Mastercard/Visa are highly common and debit cards are often used for deposits as well. Such deposits to your trading account are typically instantaneous, free of charge and totally safe. Wire transfers are also commonplace, especially for larger amounts of capital. As for the withdrawals of trading profits, they may take up to 3 business days and sometimes entail a small service fee.

A third option for funding your account is the use of an e-wallet - UAE traders often use Neteller, Skrill and even PayPal. They are cheap, fast and very secure. A 4th e-wallet solution that locals use is CashU, which is accustomed to serving UAE traders with AED currency transfers.

Forex trading software in the UAE

The forex trading platform you use must match both your knowledge and abilities. In any case, the software offered by brokers is always free of charge and may even include in-house software that is exculsive to the forex broker.

MT4 (also known as MetaTrader 4) and MT5 are currently the most popular trading platforms in the UAE. Whereas MT4 is only for forex trading, MetaTrader 5 also supports the trading of futures, stocks, indices, commodities and other assets. Both can be customised and display on-screen technical analysis tools; they also can accomodate trading robots (known as expert advisors - EAs), copy trading (this is when you automatically copy the buy/sell orders of professional traders who share or sell their trading signals) and they have developped versions that will work on your smartphone. They are also great for backtesting strategies (either ones that you have programmed yourself or purchased) using historical trading data.

Trading on smartphones/tablets in the UAE

Forex trading with one's smartphone has soared in the last decade. As volatilty is increasingly present, market trends can shift or be affected at any time during the day - you therefore have to be able to monitor your trades and potential entry points throughout the day. This has become easy now, no matter if you're on an Android or Apple-based device.

A great majority of forex brokers now offer free portable versions of Metatrader (4 and 5) or their own proprietary trading software. Trading is as easy and effective as on a traditional office or home computer setup.

Common questions

1. Is forex trading legal in the United Arab Emirates?
Of course! As long as you trade with a regulated forex broker (the ones in the below chart are among the best options in the UAE).

2. Does a forex brokerage firm have to be UAE-licenced in order to operate in the UAE?
This is indeed an obligation. Forex brokers have options, though, in terms of the type of licence they can obtain.

3. What is the UAE's official currency?
The UAE dirham. However, many professional traders prefer the USD as it is a refuge currency that is highly liquid on the forex. Although not a major currency, brokerage firms typically offer trading of the AED/EUR and AED/USD currency pairs.

4. Is the use of leverage authorised in the United Arab Emirates?
Leverage is indeed allowed in the UAE. Although risky, you can trade with up to 500:1 leverage.

5. Can anyone open an Islamic forex trading account?
These Sharia-approved accounts are accessible to ALL traders, whether you are a Muslim or not. They are optional though, and brokerage firms typically emphasise their regular accounts (which often feature lower spreads as they don't have to offset the interest fees they lose on Islamic accounts).

Recommended forex brokers for traders living in the United Arab Emirates:

BrokersRegulationTrading platformsOfficial website
DFSA, FSCA, FCA, CySEC, FSA MetaTrader 4 HF Markets website
FRSA, FSCA, JFSA, ASIC, CBFSAI, BVI FSCMetaTrader 4 and 5AvaTrade website
FCA, ASIC, CySECMetaTrader 4 and 5 Admiral Markets website
FCA, ASIC, DFSAMetaTrader 4 + 5
cTrader
Pepperstone website
FCA, KNF, CySEC, BIFSC, CNMV MetaTrader 4
XStation
XTB website
ASIC: Australia, BVI FSC: British Virgin Islands, CBFSAI: Ireland, CySEC: Cyprus, DFSA: Dubaļ, FCA: United Kingdom, FRSA: Abu Dhabi, KNF: Poland, BIFSC: Belize, CNMV: Spain, FSA: Seychelles, FSCA: South Africa, JFSA: Japan

CFD trading involves a significant risk of loss, so it is not suitable for all investors. 74 to 89% of retail trading accounts lose money trading CFDs.