Forex Trading in Hong Kong

How popular is it?

Forex trading in Hong Kong is very popular as Hong Kong is considered to be one of the largest forex centers in Asia. Hong Kong is a strong competitor to the United States and the United Kingdom in terms of volume traded. In 2016 Hong Kong overtook Tokyo as a 4^th largest trading hub in the world and together with the United Kingdom, the United States, Singapore as well as Japan make up 79% of all foreign exchange trading.

Hong Kong Dollar (HKD) is in a center of attention for many forex brokers and traders as it is a very stable currency and is closely tied to USD. Additionally, the Hong Kong dollar is the ninth most traded currency in the world, preceded by CNY.

Regulated brokers in Hong Kong are trustworthy and that’s why it is highly recommended that one must opt for a regulated broker to carry on your forex trading.

Restrictions:

The rules about forex trading in Hong Kong are similar to the United Kingdom or the United States. One of the major restrictions is that only registered brokers can operate and perform services within Hong Kong. Other than that Hong Kong does not impose any severe restrictions on traders and traders are free to invest money in forex trading.

Regulation and Taxes:

Regulations:

There are few regulations that come into consideration when we talk about forex trading being operated in Hong Kong. The main regulatory body in Hong Kong’s Securities and Futures Commission (SFC).

The SFC is actively involved in:

The regulation of brokers that work under the jurisdiction of Hong Kong. The criteria of regulation are quite strict and many things are kept under serious consideration. The broker must possess an amount of 5 million HKD or a similar amount in any other currency to be able to set up a forex brokerage.
SFC works independently from governmental agencies and is actively involved in the monitoring of trade in Hong Kong.
It actively maintains a database of all brokers and is involved in regular updating of records of new people entering in forex markets.

Additionally, Investor Compensation Company Ltd is a wholly-owned subsidiary of the SFC. It administers any claims and complaints against SFC regulated brokers and offers an extra security for investors funds. In the case an SFC regulated broker or financial instructions defaults, it will help you recover your investment.

These regulations are really helpful for any individual since if you trade with SFC regulated broker, it means that your broker is competent and regulated.

To learn more about forex regulations visit: https://www.sfc.hk/web/EN/index.html

Tax liabilities:

Hong Kong has a tax rate on capital gains of 0% for both individuals and companies. Therefore, the tax is the situation in Hong Kong is perfect for traders as compared to most other parts of the world. The tax rate on shareholder dividends is also 0% in case you are interested not only in Forex trading but also in holding stocks.

Read further on Current Tax Rates in Hong Kong here.

Popular Brokers in Hong Kong

SwissQuote

SwissQuote is one of the most trusted forex brokers as it is a regulated broker in Hong Kong. It owns regional offices in Hong Kong, China, Singapore, Malta, United Arab Emirates, and the United Kingdom. It was established in 1996 and has performed well in the industry ever since.

Regulated by:

SwissQuote is regulated by:

Hong Kong Securities and Future Commission (HKSFC) in Hong Kong.
Financial Conduct Authority (FCA) of the United Kingdom.
Malta Financial Services Authority (MFSA) in Malta.
Monetary Authority of Singapore (MAS) in Singapore.
Financial Market Supervisory Authority (FMSA) in Switzerland.
Dubai Financial Services Authority (DFSA) in UAE.

Minimum deposit requirements:

You can open a live account with a minimum of 1000$.

Support:

It offers customer support with the availability of 24/7.

Trading Platforms:

It supports MT4 and MT5 trading platforms. Both web applications and mobile applications are also available.

Rating:

At the time this article is written, SwissQuote.ch is rated 2.6 out of 5 based on 10+ traders reviews.

Please click here to read and contribute reviews for SwissQuote.ch

Pepperstone

It is another versatile forex trading platform of Australia with a regional office located in the United Kingdom but it also accepts Hong Kong Clients. It was established in 2010 and has proven its reliability ever since.

Regulated by:

Pepperstone is regulated by:

Australian Securities and Investments Commission (ASIC) in Australia.
Financial Conduct Authority (FCA) in the United Kingdom.

Minimum deposit requirements:

You can start to open a live account as low as 200$.

Benefits of Using:

The minimum trade size is 0.01.
The maximum leverage is 500:1.
The minimum deposit requirement is quite low.
You can enjoy a free demo account.
You can enjoy your trading in 60 plus currency pairs.
It offers a customer support 24/7.

Trading Platforms:

It supports MT4 and MT5 and Cr trader platforms with the availability of mobile and web applications. Therefore, there is plenty of options to choose from.

Rating:

At the time this article is written, Pepperstone.com is rated 3.46 out of 5 based on 300+ traders reviews.

Please click here to read and contribute reviews for Pepperstone.com

Summary:

Overall Hong Kong is an excellent place to conduct trading activities as the industry is regulated by Hong Kong’s Securities and Futures Commission (SFC). This guarantees safety when choosing a broker that is regulated by SFC.
In case of broker default, there are agencies that will help you with recovering investment.
Capital gains tax of 0% for both individuals and corporations is an excellent factor to choose to locate there.
Hong Kong is one of the top 5 largest trading hubs in the world.
Hong Kong Dollar (HKD) is among top 10 most traded currencies in the world.

Author Profile

Fat Finger

Hello everyone!

My name is Phat Fin Ge, but most people just call me Fat Finger or Mr. Finger.

Many years ago, I was a trader on the Hong Kong Stock Exchange. I became so successful that my company moved me to their offices on Wall Street. The bull market was strong, but my trading gains always outperformed market averages, until that fateful day.

On October 28th, 1929, I tried to take some profits after Charles Whitney had propped up the prices of US Steel. I was trying to sell 10,000 shares, but my fat finger pressed an extra key twice. My sell order ended up being for 1,290,000 shares. Before I could tell anyone it was an error, everyone panicked and the whole market starting heading down. The next day was the biggest stock market crash ever. In early 1930, I was banned from trading for 85 years.

I went back to Hong Kong to work at my family's goldfish store. Please come and visit us at Phat Goldfish in Kowloon, only a 3 minute walk from the C2 MTR entrance.

I thought everyone would forget about me and planned to quietly return to trading in 2015. To my horror, any error in quantity or price which cause a problem kept getting blamed on Fat Finger, even when it was a mix up and not an extra key being pressed. For example, an error by a seller on the Tokyo Stock Exchange was to sell 610,000 shares at ¥6 instead of 6 shares at ¥610,000. That had nothing to do with me or with how fat the trader's finger was, but everyone kept yelling, "Fat Finger! Fat Finger!" In 2016, people blamed a fat finger for a 6% drop in the GBP. It really was a combination of many things, none to do with me or anyone else who had a wider than average finger.

Now that I can trade again, I'm finding forex more interesting than stocks. I've been doing some research on trading forex and other instruments and I'll be sharing it here.

If you see any typing errors, you can blame those on my fat finmgert. If you see any strange changes in price, it's not my fault.