Best Forex Brokers in UAE for 2023 [Updated]
The United Arab Emirates has been classified as an emerging market and a true testimony of rapid immigration development. Fueled by the oil and natural gas industry, UAE carried the Gulf Cooperative Council expansion wave but in a different way. Elective monarchy out of seven emirates allowed opening up to the world to the point UAE is now one of the most diversified countries regarding nationalities. Only 20% of the population are Emiratis. There are 28% Indians and 12% Pakistanis. Westerners make up more than 5% living in Dubai and Abu Dhabi. The forex industry followed but still faced cultural and regulatory barriers to entry. The fast-growing open market in forex and other form of financial trading and investment required regulation. The compromise was made by making free financial zones, specifically Dubai International Financial Centre (DIFC), Dubai Multi Commodities Centre (DBCC), and the newly opened Abu Dhabi Global Marketplace (ADGM) in 2015.
Each of these financial free hubs has its independent authorities such as courts, financial and registration bodies. DBCC free zone is especially interesting since the 2021 launch of the DBCC Crypto Center in partnership with CV Labs. Many international brokers opened offices in UAE under compliance with Sharia law, even though they are not required in the free financial zone (FFZ). While DIFC and ADGM have their own rules and regulations, the financial sector as a whole is regulated by the UAE Central Bank. While FFZs are independent, the Central bank is taking over regulations in various sectors, recently merging with the Insurance Authority.
The Securities and Commodities Authority (SCA) is the specialized body for controlling the securities trading market. SCA is neatly organized to allow brokerages to connect with the UAE market without setting strict regulation barriers. This way residents of the UAE have many options to choose from when selecting brokers. SCA goals are similar to other regulatory bodies for this purpose, however, a few key points stand out - partnership and innovations
Popular Forex Brokers Accepting UAE Traders
UAE generally is very receptive to new technology, known for starting costly, large projects. Given the high income per capita, UAE has the resources and the will to finish them. For the forex industry, this means a very competitive trading environment. For example, Ripple has partnered with DIFC in 2020 to be one of more than 230 FinTech companies to conduct business in the center. Ripple relocating its HQ to Dubai was one of the more exciting additions to the financial ecosystem, clearly signaling UAE's openness to blockchain technology and crypto. The UAE Government adopted blockchain technology intending to transform 50% of its transactions to the blockchain platform. Dubai is planned to be the first city fully powered by blockchain technology. It is hoped that the tech will save 5.5 billion AED in savings annually in document processing alone. Cutting unnecessary bureaucracy in favor of new business is specific for UAE, unlike some other Middle East countries with similar capacities.
The fact that UAE FX client deposits around $16000 per month are attractive enough for brokerages, in addition, the UAE hub can cover the whole MEASA region. Trading integration is encircled with the Dubai Gold & Commodities Exchange (DGCX) which is the largest derivatives exchange in the Middle east. Primarily set for Gold and energy commodities, DGCX expanded since 2005 to connect to markets in India, Shanghai, and the US. Interestingly, DGCX is the only exchange to offer spot gold contracts compliant with the Shariah law. Since the Indian population is dominant in UAE, the DGCX is connected to the Indian currency and equities market, totaling more than 30% of all global trading volume in the Indian rupee through futures contracts. Metatrader platform brokers are connected to the DGCX enabling the feed globally, significantly cutting the costs than by going through Chicago exchanges, thus giving a better trading environment to the traders. As for compliance, DGCX is recognized by ESMA, the Monetary Authority of Singapore, ADGM, and the Dubai Financial Services Authority.
Although FX industry market foundations look healthy, there are concerns. Most common are regarding transparency and the influence of wealthy, socially recognized individuals on companies, including the FX sector. At the institutional level, most banks are owned by wealthy families and Sheikhs, thus proving risky in terms of liquidity and compatibility with the OTC type forex. Though some banks have shown interest in liquidity risk management by establishing workshops with reputable experts in the field.
The cryptocurrency area is mostly encouraged towards technology, through blockchain companies. However, they will be able to trade digital assets. SCA will be responsible for regulating crypto trading and it is expected to be not very strict since business growth is encouraged. SCA and DMCC signed for the crypto zone in 2021, a signal that not all regulatory bodies frown on crypto.
An important fact event concerning UAE and the forex industry is the normalization of the relations with Israel. The normalization act opened ways for Israeli prop companies and market makers to register with the DGCX and connect with its 45 products. However, these companies are not supervised by the Israel Securities Authority.
2021 also marks the involvement of prime trading technology companies in the UAE. Notably, Gold-i is partnering with EMEA Global Financial Consultancy to promote its complete array of solutions regarding Metatrader platforms, liquidity, risk management, and business intelligence tools. In terms of client base scope, market coverage, and understanding the brokerage business, EMEA is one of the reputable companies for setting brokerage business in the UAE.
Dirham is the official UAE currency, AED is pegged to the USD since 1978 and has not been pulled during the recent oil price dip. The peg is set at 0.272 USD for one AED.
How to check if a UAE broker is legit?
A regulated forex broker will proudly display its registration license with certain authorities. Your first stop should be with SCA. The Open Data section holds all publicly available data, including lists of licensed forex brokers. The search page can be found here.
Also, note that a broker could be registered with one of the FFZ centers. All should have their respective authorities listed on their websites. The company search or a public register of companies under FFZ should be available on each FFZ center website. Thus is the link for DIFC, and this one for ADGM.
How to file a dispute with UAE registered broker?
SCA portal has a dedicated page for disputes here and it is called "Reporting actions that contradict the principles of Good Governance". SCA does not request your identity as a whistleblower. A phone is also available. Registering as an individual on the SCA portal can be of use for other services SCA offers such as legal consultancy, complaint, and training. Disputes resolution is available with other FFZ centers, however, SCA should be your first stop.
Are UAE brokers reliable?
Globally present brokers are most likely open for UAE clients. Local brokers, registered within UAE are still subject to SCA oversight despite FFZ special regulation. Consequently, UAE brokers' reliability should be on par with most internationally established brokers. Furthermore, the push for having the best technology and a good network provided by top FinTech companies sets a high-reliability standard. When compared with other regulations in the region, SCA is better organized and user-friendly.