5 Best Offshore Brokers in April

Offshore trading is an investment strategy that allows investors to diversify their portfolios with overseas assets. This type of investing also comes with tax benefits which makes it a popular option amongst investors who are looking to decrease payable capital gains tax. To start trading international markets and diversify with offshore investments, investors must open an account with an offshore broker.

Offshore stock brokers provide access to overseas securities that may be otherwise unavailable to investors. There are numerous offshore brokerage accounts available which can make it tricky to find the most suitable option for you. Some brokers are better suited to beginner’s who may be looking for educational resources while others cater to experienced offshore investors who might be interested in advanced charting tools for technical analysis.

In this guide, we will take a look at five potential offshore stock brokers for US citizens to decide whether or not they are worth considering in 2024.

What Are Offshore Brokers?

An offshore broker is a type of investment platform that enables investors to buy securities from markets outside of their countries’ jurisdiction. These brokerage accounts are usually opened at an overseas bank to provide access to international financial markets.

Offshore brokers follow the same processes as most traditional brokers, providing users with the tools that they need to make informed investment decisions. The main difference is that offshore brokers are opened outside of your native country.

The main advantage of using an offshore broker is tax benefits. Many offshore brokerage accounts come with low or zero tax on capital gains, dividends and interest payments. However, the regulatory standing of offshore brokerages can be volatile and the accounts often come with high minimum investment requirements.

How do offshore brokers work?

To use an offshore broker, investors must register through a platform that is not located in their native jurisdiction. This is usually done online but can also be done over the phone or in person.

Once registered, investors will be able to place buy and sell orders for securities registered on international exchanges. Offshore platforms work very similarly to traditional trading platforms. Users can browse through the assets available, conduct analysis and determine the size of the trade that they would like to place.

Investors can keep track of their investments through portfolios within their brokerage account. When investing offshore, investors should be aware of different time zones that may affect market hours.

Best Offshore Forex Brokerages Ranked & Rated

A detailed review of the top 5 trading platforms that you should consider for all your offshore trading needs is below. This includes a discussion on the different asset classes, their fees, and the other factors that you must look into before deciding on an offshore trading platform or your needs.

1. eToro – Best offshore broker that accepts US clients; access global markets through a licensed provider.

If you’re in search of a trading platform that is easy to use and provides convenience, then eToro is your best bet. As the largest and most popular social trading platform in the world, it allows you to trade over 2400 assets, which includes 45+ currency pairs, stocks, indices, cryptocurrencies, and commodities. One of the main advantages of eToro is that it offers CFD transactions without any extra fees, making it an attractive choice for active traders who frequently open and close positions.

In addition, eToro offers leverage for a variety of assets. For instance, they provide up to x30 leverage for most major currency pairs, x20 leverage for minor currencies, and x15 leverage for most major commodity pairs. With eToro’s web portal or mobile app, you can easily monitor your trading positions while on the move. Opening an account with eToro is a quick and straightforward process, and once you’ve done so, you’ll have access not only to a range of CopyPortfolios but also to a social trading network with over 17 million users. This allows you to follow the trades of more experienced and successful traders, including the best rapid traders.

Furthermore, eToro is heavily regulated and insured by various organizations around the world, which makes it a very reliable platform for trading financial assets. To get started, you need to open an account and make a minimum deposit of $20, after which you can start trading right away.

eToro fees

Your capital is at risk. Other fees apply. For more information, visit etoro.com/trading/fees.

2. Webull - Best offshore broker for day trading in the US

Webull is a trading platform that offers a variety of features for investors and traders, all without charging commissions. The platform can be accessed via a web-based platform or a mobile app, providing users with flexibility and convenience in managing their accounts and trading.

Webull's standout feature is its powerful charting and technical analysis tools. The platform offers a wide range of technical indicators and charting options, enabling traders to conduct in-depth analysis and make informed trading decisions. Moreover, the platform provides real-time market data and news feeds, keeping users informed of the latest market trends and developments.

Webull also offers a range of order types, including limit orders, market orders, and stop-loss orders, allowing traders to customize their trading strategies and manage their risk effectively. The platform supports trading in stocks, options, and ETFs, providing users with a range of investment opportunities. Regarding offshore investing, Webull provides access to securities from the US, China, the UK, Singapore, South Africa. Japan, and Australia.

The brokerage is also user-friendly, with a clean and intuitive interface that is easy to navigate. The mobile app is particularly impressive, providing all the features and tools available on the web-based platform in a compact and convenient format.

However, there are some limitations to the platform. Webull currently does not support trading in mutual funds or bonds, which may be a drawback for some investors. Additionally, the platform does not provide access to research reports or investment recommendations, which may be a disadvantage for beginner traders who rely on these resources for guidance.

Overall, Webull is a solid trading platform that offers a range of features and tools for investors and traders. Its charting and technical analysis tools are particularly impressive, and its commission-free model makes it an attractive option for those looking to minimize their trading costs. However, its limited investment options and lack of research resources may be a drawback for some users.

There is no guarantee that you will make money with this provider. Proceed at your own risk..

3. Libertex - A reputable offshore forex broker that is registered in St Vincent and the Grenadines

Libertex is a popular CFD brokerage that is known for providing market-leading forex trading services. However, it supports various asset types, such as stocks, commodities, and currencies. Libertex is compatible with the MT4 and MT5 platforms, offering the ability to trade over 51 currency pairs with leverage of up to 30x.

One of the platform's main advantages is its lack of spreads, allowing users to buy and sell items at the same price instantaneously. It's an ideal platform for active traders due to its low commission rate of just 0.006% per trade.

Libertex allows professional traders who meet their experience criteria to trade with leverages as high as 1000x on specific currency pairings, making it the highest leverage available in the market. The platform is compatible with both MT4 and MT5, but it also offers its own trading platform with various features, such as market sentiment research, a built-in news feed, and multiple customizable trading signal services.

Libertex fees

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 87.8% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

4. Skilling - Offshore forex broker that is licsensed and regulated in Europe and offshore jurisdictions

Despite being a relatively new platform, Skilling has gained immense popularity due to its high leverage offering for all traders. The platform provides forex and CFD products with leverage as high as 200x for major and 200x for minor currency pairs, which is significantly higher than most other high leverage forex brokers. Besides forex pairs, Skilling also enables traders to trade commodities with 100x leverage and gold with 200x leverage. However, the leverage for stocks and cryptocurrencies is comparatively lower at 10x and 5x, respectively.

The platform has narrow spreads, and it doesn't impose any fees or commissions on trades. It also provides copy trading options for those seeking to benefit from the expertise of skilled and experienced traders.

Skilling fees

71% of CFD retail accounts lose money.

5. AvaTrade - Best offshore broker for day trading across CFDs, forex and cryptos

If you're an experienced trader in search of algorithmic trading tools, high leverage options, and access to diverse financial assets, Avatrade is the ideal choice for you. Not only is Avatrade recognized as one of the leading offshore forex brokers, but it also supports the popular MT4 and MT5 trading platforms. Additionally, it collaborates with several automated trading programs like ZuluTrade, AvaSocial, and DupliTrade.

Avatrade's greatest selling point may be its high leverage on most trades. Experienced traders comfortable with risk will appreciate the leverage of up to 400x on most currency pairs. Additionally, Avatrade offers fixed narrow spreads throughout the day, such as 0.9 pip for the EUR/USD pair and 1.6 pip for the GBP/USD pair. The platform also provides the opportunity to trade CFDs with low fees and high leverage, making vanilla options trading more accessible.

AvaTrade fees

There is no guarantee that you will make money with this provider. Proceed at your own risk..

What Are The Pros and Cons of Offshore Brokers?

Offshore brokers can be beneficial for investors who want to diversify their portfolios with instruments from alternative markets. However, using an offshore broker also comes with several drawbacks that should be carefully considered before you set up an account.

How to Choose an Offshore Broker to Use in 2024

Investors who are looking to use an offshore broker typically want to invest with large amounts of capital, reduce their tax obligations and increase their exposure to international markets. When choosing an offshore broker, it is important to look at features that will serve each of these purposes. Below, we will take a closer look at the important aspects to consider when finding an offshore broker.

Asset protection

If you are looking to invest with a large amounts of capital, security should be one of the first things that you consider. Offshore brokerage accounts should provide multiple layers of account protection. This could include data encryption, segregated accounts, negative balance protection and advanced fraud detection systems.

Tax benefits

Some offshore brokerages come with tax benefits that could reduce that amount of capital gains tax paid on investments. It is important to fully understand the tax rates of each offshore account before investing any funds. If you are putting a large amount of capital at risk, it might be beneficial to seek the opinion of an expert who can advise you on best practices.

Asset diversity

Another important to factor to consider when choosing a broker is asset diversity. The best offshore brokers should provide access to a variety of financial markets which makes it easy to diversify your holdings. Diversification is a risk management strategy that can help to reduce the negative impact of a loss. If one instrument experiences a dip, the other instruments in your portfolio may be able to balance put any financial losses.

How to Get Started With an Offshore Trading Platform

It is possible to set up an offshore investment account online in 2024. However, the process is not as straight forward as setting up an account with a traditional online broker.

In the following section, we will discuss how to open an account with eToro - our recommended offshore platform. eToro is a suitable platform for beginners who are looking to access international markets. 

If you are hoping to invest with large amounts of capital into a brokerage that will provide tax benefits, it may be a good idea to research alternative platforms.

1. Open a trading account

Your capital is at risk. Other fees apply. For more information, visit etoro.com/trading/fees.

You can open an eToro account online by visitng the official eToro website and choosing 'create an account'.

You will be asked to provide some personal information to comply with KYC requirements. The process of filling out the registration form should take no longer than 15 minutes.

2. Confirm identity

The subsequent phase after creating an account is to confirm your identity. eToro is a highly regulated broker, thus before your account can be validated, you must provide identification and address documentation. You may present any government-issued identification, such as a driver's license or passport, as proof of identity. You might provide a utility bill or your bank statement as evidence of your address.

The eToro verification process is quite quick after the necessary documents have been uploaded. You can go to the following step if your account has been authenticated.

3. Deposit funds

The next step is to deposit funds into your account. eToro supports a wide range of payment methods including credit cards, debit cards, PayPal, International bank wire transfers, Skrill, and more. There are no deposit fees and your funds are credited to your account instantly except for wire transfers that take between 3-5 days.

4. Search for a trading market

The next step is to look for the market on which you want to trade. To do this, choose 'discover' from the left hand navigation and then click the 'exchange' drop down menu. You will be able to search through the markets that are available.

5. Place a trade

Select an asset that you would like to trade and choose 'trade'.

Here, you will be able to execute a short or buy order. Determine the amount that you would like to purchase in the relevant box, enter SL and TP targets, select leverage and then set the order.

Your capital is at risk. Other fees apply. For more information, visit etoro.com/trading/fees.

Conclusion

Retail traders are increasingly turning to offshore trading as a method to avoid taxes and access a larger range of marketplaces. When trading through an offshore trader, there are a number of crucial factors to keep in mind, all of which have been covered. They include overarching platform considerations like the list of available asset classes and trading costs. The platform's trading tools, such as its analytical features and the many order types that may be sent through it, are also included.

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