Forex Market Trading Indonesia
Like some other countries that are still evolving when it comes to online financial trading, Indonesia is pretty new to Forex. While it may be fairly new, trading is growing at a rapid rate and the Indonesian government seem to encourage it as it is responsible for a large part of the country's funding.
While Forex trading in Indonesia is legal, there are still some religious factors to consider. That said it is down to individual choice as to whether you choose to trade or not. Currently there are still only a few good Indonesian brokers to choose from but there are plenty of overseas ones that offer their services to Indonesian residents.
Because of the lack of knowledge and experience it is critical that you choose wisely. You don't want to open up an account blindly with just anyone. We have put together a list of brokers that we rate and recommend based on their licensing and regulation and the benefits that they offer traders. This will save you much time and money conducting your own research.
If you are looking to start Forex trading in Indonesia there are things you need to know:
- The regulations that apply to Forex trading in Indonesian borders
- How various benefits offered by brokers affect you, the trader
- What methods we use to rate and recommend different Forex brokers
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Local Broker Benefits
For some who prefer to trade with a local broker there are plenty of opportunities. If, however you don't mind where they are based, there are many benefits to using an international broker that accepts Indonesian traders. Your primary concern should be their licensing and regulation first and foremost. Then you need to look at the list of benefits that they offer to new and experienced traders.
Many people will assume that in this day and age, everyone has a mobile friendly website. So much of our lives now happens on the move that trading in a fixed position in front of a laptop is not as prevalent as it once was. Instead we prefer to pick up our handheld device and just tap the screen. Check to see that the broker offers an app or a mobile friendly website before you open an account, if you are looking to trade on the move.
Bonuses And Incentives
If you are new to Forex trading then look for a broker that offers a no deposit bonus. This way you can test the broker before you deposit any of your own funds. This is especially useful when you can't decide between two brokers. You can open up an account with both and test the platform using the bonus before you decide which one to deposit cash with. It's also a great way to work out how to use the site before you commit any of your own funds.
Payouts for successful trades can vary between brokers. Often, they range from around 70% to 85%. Anything less than this is a bit too low and higher than this could be too good to be true. For those who are looking to invest more and open up a higher value account, the payouts are generally higher because of the commitment that you are giving the broker.
Those that are new to trading should pick a broker that offers good customer support. You don't want to be faced with an issue that you can't resolve. As a new trader, you may have questions that you need answered. The best thing to do is to test the site. You can do this by visiting the website and waiting to see if a live chat assistant pops up. Ask a question and wait for the response. You can also test the contact link to see how visible the company is. Do they have contact numbers and email addresses?
Legal And Regulation
Forex trading in Indonesia is regulated by the Bank of Indonesia. Up until 2013 it was an unregulated market with many scam brokers operating in the country and consequently lots of traders lost millions of dollars. It was because of this, and that the country needs it to remain popular for funding reasons, that the Bank of Indonesia introduced tougher guidelines and regulations and the Forex market became a much safer environment.
Now they carefully monitor all brokers that operate in the country. They have to meet strict criteria and follow rules and regulations to be able to practise there. Because of these strict regulations and high taxes there are only a handful of local Indonesian brokers.
This won't stop you from trading though as there are many foreign ones to choose from. In fact, there are so many options open to you that you will be able to find more than one that offers what you are looking for.
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Paying Taxes And Fees
Investment income in Indonesia is assessable at the ordinary income tax rates. If your income reaches or exceeds the threshold for where you start to pay tax then you will need to declare it. For many, Forex trading is a second income, while for others it is a primary source of income.
We recommend that you keep a history of your trading activity to present to your tax professional or certainly to use for tax assessment purposes so that you are paying the correct level of income tax.
In addition to the tax on your profits, there are also fees to consider. These range from commission fees for successful fees to smaller fees which include withdrawal fees, transaction fees and currency conversion fees. A withdrawal fee is usually charged by a broker although not in all cases. Where it is charged, it is usually a fixed fee of a few dollars.
While this isn't much, if you are making regular withdrawals you will notice it over the period of a month or more. Transaction fees are charged by your payment providers or bank account providers for foreign transactions and currency conversion fees may also be applied. It is worth checking these out before selecting your payment method.
How we Recommend Brokers
Our job is to ensure that your trading experience is the best it can be. In order to do this, we present you with a list of rated and recommended brokers with a detailed, comprehensive review. As part of our research we investigate each one thoroughly to check their offering matches up to what they claim. Our research includes:
When we have carried out our investigations, which include trading with them ourselves, we present our findings in the form of scores and a detailed review. You can find these reviews on our website for your reference. All of our information is kept up to date and is entirely relevant. In addition to our broker reviews we also research Forex trading in each country and the various tools available for Forex traders.
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Frequently Asked Questions
Is Forex trading in Indonesia legal and safe?
Forex trading in Indonesia is perfectly legal and safe. The only issue that some traders have is that it presents a religious conflict in the Muslim community. Even so whether or not you trade is down to individual choice. The market is well regulated by the Bank of Indonesia to avoid scam brokers cheating traders out of their investments. In order to ensure that you enjoy a safe trading experience you must choose a licensed and regulated broker.
Do I need to pay taxes on my trading profits?
Yes, you will need to pay income tax on your trading profits if you exceed the threshold for income tax. Make sure that you keep a trading history of your profits and losses as the tax will only be due on the profit that you make overall in a year. If you have any doubts as to how to declare the income or how to complete the self-assessment then you should seek the help of a professional tax advisor.
Can I test brokers before trading with real money?
There are two ways in which you can test a broker before you start trading with your own money. You can either use a no deposit bonus or a demo account. If you have the option to do both then this would be preferable. The no deposit bonus will only give you a limited number of trades. A demo account will give you access to a good sum of virtual funds which will allow you more chance to practise.
Is it easy to make deposits and withdrawals?
If you are used to carrying out transactions online then you will find making deposits and withdrawals no different to your online banking. You will need a debit card, credit card or other form of electronic payment. Once you deposit funds you should be able to trade immediately. To withdraw your money, simply request a withdrawal and the money will be sent back to the original source usually in around three working days.
Can I trade using my mobile or tablet device?
Trading using a tablet or mobile device is simply as long as the broker offers a good mobile trading platform. This includes either an app or a mobile friendly website. As long as you have a mobile device and an internet connection you are good to go. If there seems to be no evidence of a mobile solution then it is going to be difficult for you to trade from a small handheld device.