Forex Malaysia: If you’re considering investing in foreign currency trading, you should be aware of the legal status of forex trading in Malaysia. Is forex trading legal in Malaysia? How can you be sure that your forex trading is legal and secure?
In February 2012, Bank Negara Malaysia declared that buying and selling foreign money is legal in Malaysia. Only licensed commercial banks, Islamic banks, investment banks, and international Islamic banks are permitted to trade.
Malaysia’s Forex Trading Law and Regulation
The following are the three main rules and regulations that govern forex trading in Malaysia. As a result, it is critical that you, as a trader, understand how these rules apply to your trading.
1- The Exchange Control Act of 1953
Foreign exchange dealings by residents and non-residents are subject to general restrictions under the Act. Non-residents are free to invest in Malaysian ringgit assets, including land and securities, with no limitations.
Non-residents are also free to transfer all profits, returns, and divestment proceeds from their Malaysian investments abroad in a different currency.
2- The Securities Commission Act of 1993
This Act, updated in 2017, empowers the Securities Commission Malaysia to license and control enterprises that deal in securities.
3- The Money Changing Act of 1998
The purpose of this Act is to provide for the licensing and regulation of money-changing businesses and other relevant topics. A person authorized to buy and sell foreign currency under the Exchange Control Act of 1953 (ECA) is believed to be licensed under the Money-Changing Act of 1998.
In Malaysia, Is Forex Trading Taxable?
Forex income is subject to income tax in Malaysia; however, Forex capital gains are not. This indicates that any gain should be tax-free if you trade using a swap-free Islamic account and are not considered earning an income from your trading.
In Malaysia, How Do You Trade Forex Legally?
Using one of the approved institutions or brokers and maintaining an Islamic account is the only way to trade Forex legally in Malaysia. A Shariah-compliant broker or agent must be considered.
AvaTrade, eToro, FXTM, and markets.com are several shariah-compliant brokers that have gotten positive feedback from people worldwide. Before you begin trading, compare forex brokers and determine which ones have been approved by Malaysia’s regulators.
Forex Market Hours in Malaysia
Monday is the start of the Forex Trading Hours, and it ends on Friday. It is open 24 hours a day, five days a week, and in many time zones
Best Forex Brokers in Malaysia
In this article, you will also get information about the best broker in Malaysia.
1- eToro Broker
In Malaysia, eToro, the premier social trading site, is available! More than 20 million users use this online platform to trade nearly anything, including commodities, currencies, ETFs, stocks, and indices, as well as for cryptocurrencies. It provides commission-free stock and ETF trading, a user-friendly platform, and the ability to follow and mimic other investors!
On the negative, the site is only available in USD. Therefore you’ll have to pay currency conversion costs when depositing and withdrawing (unless you deposit in USD). You must buy the underlying asset to invest in actual stocks; otherwise, you will be investing in CFDs rather than genuine equities.
2- TickMill Broker
Tickmill is an MT4 broker with some of the lowest trading expenses accessible, founded in 2014 and regulated by the Labuan FSA in Malaysia. While the Classic Account has relatively wide spreads and no cost, the Pro Account has flexible spreads as low as 0 pips and a 4 USD (round turn) commission – one of the company’s lowest commissions – as well as a 100 USD minimum investment. Tickmill has recently introduced support for MT5, and crypto traders can now trade Bitcoin, Ethereum, and Litecoin.
3- AvaTraders Broker
AvaTrade, founded in 2006, provides trading in Currency trading, crypto, ETFs, indices, stocks, vanilla options, bonds, and commodities.
The revamped AvaTradeGo smartphone app by AvaTrade provides Malaysian Forex traders with an easy and reliable mobile trading experience. AvatradeGO includes an advanced dashboard, and traders may access instructive videos and contact customer service directly from the app. Traders can also place an order, set email alerts, establish watchlists, and check actual prices and graphs. Avatrade’s spreads are among the tightest available for a commission-free account with a minimum deposit of $100 — as low as 0.9 pips on the EUR/USD.