Choosing a broker - Polish or foreign?

The choice of a forex broker should be well thought out and tailored to our needs and possibilities, because this choice will determine the environment in which we will trade. This, in turn, may have a direct and indirect impact on our mental comfort and financial result. When deciding to open an account with a Polish brokerage house, we immediately lean towards certain specific factors that are related to it. When choosing an offer from a foreign broker, there are also some characteristic features to which we are "doomed".

The following article omits such aspects as regulations or legal provisions that will be described in a separate article.

Opening an invoice

Opening an investment account in a Polish brokerage house requires the signing of an appropriate contract. This contract must be delivered in physical form to the broker, so we have two options: go to the company's branch or arrange these formalities by correspondence. Usually the second option is used, where after filling out the form, the broker sends courier to us (at his own expense) to collect or with printed documents that only need to be signed. The entire operation of submitting the documentation makes the opening of the account lengthen and takes an average of one week.

In the case of most Foreign brokers are dealing with simplified formalities (depending on the regulations under which the broker is subject), where we do not have to sign anything physically or send it by post. With brokers registered in Cyprus, often opening an account (including activation and receipt of login data) may take us less than a few hours, if we send the required documents in the form of scans right away.

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commissions

Two years ago it could be clearly stated that more favorable conditions are offered abroad. The Forex market has developed very dynamically in Poland since then, competition has increased, and thus the quality of services offered has improved, and thus the fees have become more attractive to customers. It can be said that the differences have practically been blurred, and you can even find them in Poland brokers with a better price offer than abroad.

Invoice in PLN

Keeping an account in Polish zloty is undoubtedly a big advantage that we can not find with all foreign brokers. Fortunately, there are such companies as once less, and every broker who wants to conquer in our country should treat the introduction of accounts in PLN as one of the priorities. Keeping the account in the local currency means that we avoid currency risk during our trading (paradoxically playing on the currency exchange), as well as the costs of currency conversion when depositing and withdrawing funds.

Transfer of funds

Domestic brokers keep bills in Polish banks, and thanks to this, the funds transfer is fast (through Elixir sessions) and most importantly Free. This is a big advantage for people who often make withdrawals or operate on a small deposit.

In the case of foreign brokers, you can meet those who also have accounts in Poland and then there is no problem - it appears when they do not keep such accounts. In this case, you need to make a SWIFT or SEPA foreign transfer (only in EUR). The payouts are usually not the cheapest - usually around USD 10-30, regardless of the amount.

Often, foreign companies provide alternative ways of crediting an account, eg through a credit / debit card, Skrill or PayPal, and thus you can speed up the transfer of funds and reduce its costs, but here too sometimes certain restrictions appear, for example, the payment only up to the amount of the deposit paid (profits withdrawn by bank transfer).

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Some foreign companies offer pre-paid cards linked to the investment account, thanks to which we can withdraw funds for the mentioned cards, and then in ATMs in Poland without the need to order a bank transfer. The downside is, for example, 15 PLN for withdrawals + currency conversion.

Minimum deposit

Among Polish brokers, a minimum payment of at least 1000-2000 PLN is usually required, while abroad we can easily find offers where the minimum is 100 USD or less. This opens the door to trading for people who do not have too much money or want to test their ideas or machines in real conditions with the least risk.

Financial leverage

The Polish Financial Supervision Authority decided to limit financial leverage up to 1: 100 among Polish brokers - the changes are effective from July 16, 2015. This puts foreign brokers in a very attractive position. People with a small deposit and those who use strategies that require high leverage (e.g. pyramiding) only need to open an account abroad, where we will easily get a leverage of 1: 500.

Customer service

In the case of foreign companies, we may encounter a language barrier. If we do not know English well, it can be a big obstacle for us, especially when we need to use industry terminology, eg in order to file a complaint. Fortunately, the vast majority of foreign brokers who operate on the Polish market usually employ at least one Polish-speaking employee, which facilitates contact. Nevertheless, with one or two employees and the growing popularity of the broker, this contact can become very limited, and the time for response will be extended to 1-2 days.

Having an account with a Polish broker, we have access to help almost continuously through various channels - within a week we will usually receive a response to each email much faster.

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Brokers very often offer additional services in the form of training (free of course), which are devoted to the basic elements related to investing or operating the platform - more ambitious topics also occasionally occur.

Webinars, i.e. on-line lectures, are gaining more and more popularity, thanks to which the scope of this form of education is much further, and at the same time the broker saves time and money that would have to be spent, for example, on renting a room or traveling. Usually, foreign brokers limit themselves to this form of training, in English. In the case of Polish brokers, in addition to the fact that there is no language barrier, we can also count on stationary courses that can exhaust the topic more, and at the same time give the opportunity to get to know and consult the trainer in person. It is a very good option for beginners who are just starting their adventure with Forex market.

Taxes

Each licensed Polish brokerage house has a statutory obligation to issue it to its client T-8c by the end of February for the previous year. The same document is sent to the customer's tax office. Thanks to this, the investor can easily settle the tax and the tax office knows about the result achieved. Foreign brokers no longer have such an obligation, therefore they do not issue such a PIT - it would be an additional cost and trouble for them due to the need to know and follow changes in Polish law. Some may therefore come to a simple conclusion - since the broker does not inform the Tax Office about our revenues, we do not have to settle accounts - nothing more wrong. Such an obligation is still and the settlement takes place on the same principles, only that everything is on our side.

READ NECESSARY: Taxation of income from the Forex market

If we have an account in Polish zloty, the entire operation is relatively simple. Everything is a bit more complicated when we run an account with a foreign broker in a foreign currency, where every single transaction should be converted at the exchange rate NBP. With many transactions, settlement can become a "little" nightmare. This is where our Tax Program comes in handy, allowing you to calculate all the values ​​needed for the settlement by loading the transaction history from the platform.

Choosing a forex broker - what to consider?

Summation

The choice is not obvious. Everyone has to set their own priorities and, depending on them, make some compromises. Beginners will usually choose a Polish company because of good contact and better access to education, while experienced traders may require higher leverage, which immediately excludes Polish brokerage houses. As it usually happens in life - we gain something at the cost of a certain loss.