How to treat offshore broker registration

The mere fact of registering a broker in the offshore zone of many people leads to bad thoughts. Some refuse to work with him immediately, without delving into further details. But companies also understand that they scare away some customers in this way. And, nevertheless, most brokers are located exactly there - offshore. So there are good reasons for that.

 

Why do brokers register offshore

 

Some kind of offshore zones appeared in the Mediterranean back in the days of Ancient Greece. Then the merchants began to unload the goods not in the city ports, but secretly at the nearest quays. They did this in order not to pay taxes and duties. The essence has remained the same since then.

 

By registering in an offshore zone, a Forex broker receives a simplified and lightened tax regime from the local authorities. Benefits for both parties. The organization pays less than if it worked in its own country. And the offshore territory gets even a little, but it is much better than nothing. For example, who would start doing business in the Cayman Islands if there weren't a “tax haven” there? Nobody. And now, divisions of Intel, General Motors, Procter & Gamble, Bank of America, Deutsche Bank and many others are registered there. As we can see, not only brokers get rid of the tax burden.

 

By the way, the divisions of all the above-mentioned respected companies are listed at the same address in one office building. This suggests that the business is present in the offshore only legally. The physical headquarters of the same brokers are located in the major cities of the countries where they come from.

 

Both entire states and part of their territories with a special tax regime can act as offshores. The most popular brokers are Saint Vincent and the Grenadines, Seychelles, Marshall Islands, British Virgin Islands, Mauritius, Belize. And besides - Cyprus, which stands out from the list because it is a member of the European Union, and not an island lost in the ocean.

 

In addition to reducing the tax burden, these territories offer other advantages. The almost complete absence of regulation and control on the part of the authorities, hence, getting rid of accountability to them. All this is accompanied by the confidentiality of financial activities.

 

Risks for the trader

 

It is important to note that not only small start-up brokerage companies, but also the largest Forex participants with an impeccable reputation have offshore registration. In addition, many organizations are regulated in several jurisdictions, some of which are offshore and some are not.

 

Thus, when choosing a broker, a trader should consider many other factors and characteristics besides the location.

 

The disadvantages of offshore brokers are obvious. In case of disputable situations, they will have to be resolved in accordance with the legislation of the country of registration. Traders themselves do not understand the laws of the islands in the Caribbean or the Pacific. And finding a professional lawyer in a European country who would know them is also almost impossible. Defending your interests in the end can be too difficult and expensive.

22 October, 2020
283
views

Read more:

Comparison of fundamental and technical analysis

23 November, 2020

How to use Bollinger Bands

18 November, 2020

It turned out to be possible to increase capital 110 times per year

05 November, 2020

Trading for Muslims

16 October, 2020

The main thing about patterns

09 October, 2020

Binary options: basic

08 October, 2020

Traders and investors - what's the difference

24 September, 2020

How to make money on «black gold»

10 September, 2020

Choosing assets for trading

07 September, 2020

What is the essence of the volatility process

27 August, 2020

Currency pricing

30 July, 2020

Why bitcoin will replace Fiat money

23 July, 2020

Features of the Federal reserve system of the United States

15 July, 2020

Restrictions on Forex

10 July, 2020

Evolution of stock trading

02 July, 2020

Stock indices: the S&P 500, NASDAQ and AMEX

11 June, 2020

The Dow Jones Industrial Average: stock index first

25 June, 2020

Arrange a call