Forex Market Trading Turkey
Forex trading in Turkey has recently been subjected to radical new regulations that have certainly had an impact on the market. The Turkish government announced new rules, earlier in 2017, that no Turkish resident was allowed to trade with a foreign Forex broker that does not hold the required CMB license. While this has placed limitations on trading it is still a popular practise for those who can adhere to the regulations.
With many foreign brokers unable to meet the limitations, some were forced to withdraw from Turkey. This has left a smaller number to choose from but still there are plenty of options for those who want to trade. With fewer licensed and regulated companies there are still some operating under the radar of which you need to be wary of.
To help you to make sense of the licensing and regulation rules and to select a broker that meets your expectations as a trader, we research the Forex market in Turkey to ensure that we only present you with those that are operating within the law and that your money will be safe with.
For those keen trade Forex in Turkey there is a lot to consider. We explain is this guide:
- How Forex brokers are licensed and regulated in Turkish territory
- The benefits that are available to you as a Turkish trader
- All the taxes and fees that apply to you and your trading profits
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Local Broker Benefits
There is something to be said for trading with a home-grown broker. Having a company that is based in the same country with a recognisable address can be a comfort to those who are wary of investing their money. The language will be the same, the customer support will be comprehensive and you will have lots of benefits open to you. That aside if you find a foreign broker that is licensed by the CMB then they will be able to offer you the same benefits which will include:
The demo account is very popular with new traders who may have some reservations about trading. If you are nervous about investing your money in an unfamiliar environment for fear of "messing it up" then the demo account is the perfect solution. A virtual trading environment with virtual funds allows you to get to grips with the website and the various functions before you start trading for real.
Minimum Deposit And Trades
This is something that usually differs between brokers. Usually the minimum deposit requirement is around the $25 mark with a minimum trade ranging from a dollar to $50. We would stress here though that the Turkish government have minimum deposit stipulations that need to be observed so please make sure you check this out before depositing any funds.
You don't want to open an account and make a deposit only to discover that there is no mobile offering. Please make sure that you check if the broker offers an app or indeed a mobile friendly website. If you are expecting to be able to trade on the go then you are going to need the ability to trade easily from a phone or tablet.
Bonuses And Incentives
The welcome bonus is offered to encourage you to open an account with a broker. It is usually either a no deposit fixed amount or a deposit bonus which is a percentage of your deposit. The deposit bonus is usually the larger of the two but requires you to commit your own funds. The no deposit bonus is perfect if you want to test the platform without risking your own funds.
Legal And Regulation
In 2017, the Turkish government introduced strict new regulations that had a big impact on the Turkish Forex market. This is largely because they didn't want anyone trading against the lira or depositing their money offshore. The economy needed to be stabilised and this is one of the methods they used to help that along.
The new regulations are tough, especially on foreign brokers. Many were forced to pull out of Turkey as the requirements were too much. Only brokers that meet the criteria of the CMB can be licensed to offer their services to Turkish residents and no foreign broker is allowed to market their services.
In addition to this another blow came for the smaller traders as a new regulation saw a minimum deposit requirement of 50,000 TRY. For those who wanted to just dabble, this meant that, unless they wanted to invest heavily, trading would be cost prohibitive. This has cleaned up the market significantly for those serious about trading though with a much cleaner and selective trading arena.
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Paying Taxes And Fees
If you are a resident in Turkey then you will be expected to pay income tax on your Forex profits. The rate of income tax starts at 15% for earnings of 13,000 TRY, 20% up to 30,000 TRY, 27% up to 110,000 TRY and 35% for everything over. It is advisable to keep a record of your trading history including profits and losses for the tax period.
If you have any doubts consult a tax professional, especially if you need help submitting your tax return. They will be able to advise you on the amounts you need to pay, especially if this is a second income.
When it comes to Forex trading fees, there are a few to consider. Obviously, there is the commission that you pay for each successful trade. This is deducted before you are paid out. Then there are some smaller fees that you need to be aware of.
These include transaction fees for withdrawals, making a credit card payment, receiving foreign currency back into your account and currency conversion. It is a good idea to check these fees before you start trading so that you can select the most cost-effective payment provider etc.
How we Recommend Brokers
We go to great lengths to ensure that you are armed with the right knowledge when it comes to choosing a Forex broker in Turkey. Our team of dedicated experts are experienced traders that have been very successful themselves. They know exactly what to look for from a broker and what you need to ensure that you have a good trading experience. They analyse each broker on a number of criteria including:
Some of these points will be more important than others to some of you. What works for one may not be the same for the next person looking to trade. Our job is to arm you with enough information to make an informed decision.
We want to make sure that you choose the broker that ticks all of your boxes without having to spend hours trawling the internet yourself looking for the facts and figures. All you need to do is select those that look the most suitable and then make your final decision.
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Frequently Asked Questions
Is Forex trading in Turkey legal and safe?
While Forex trading in Turkey is legal and safe, there are tough regulations that surround it. These are relatively new regulations having only been introduced in 2017. What this has done, as well as restricting some brokers and traders, is ensure that the market is cleansed of the rogue brokers that were looking to scam customers. Now you can invest your money with more assurances that trading is safe, as long as you follow the rules.
Do I need to pay taxes on my trading profits?
In most countries across the world, Forex profits will be subject to either income tax or capital gains tax and Turkey is no exception. You will need to pay tax on your trading profits according to the tax thresholds and the amount that you are liable to pay. You will need to have an accurate history of your transactions to submit with your tax return. If you are unsure you should consult a tax advisor.
Can I test brokers before trading with real money?
There are two ways in which you can practise trading. The first is to open a demo account. Many brokers allow you to do this with just an email address. Simply enter the information and then start trading. The environment is virtual and so are the funds but it gets you used to the platform. Another method is to use your no deposit bonus to carry out live trades that don't involve your own money.
Is it easy to make deposits and withdrawals?
If you have a credit or debit card or indeed an electronic wallet like Paypal or Skrill then you can deposit funds. Simply enter your details, deposit your funds and your account is ready to trade. To withdraw funds, you enter the amount you wish to withdraw and the money is returned to the original source. It may take around three business days for the money to reach your account.
Can I trade using my mobile or tablet device?
If you have an internet connection and a mobile phone or tablet then you should be able to trade wherever you are in the world. No longer do you need to be sat in front of a laptop staring at the screen. You need to check that the broker offers a mobile app that suits your device or that they have a mobile responsive website available in safari or chrome.
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