Investing in Forex from Colombia is safe, as long as you use the right Forex Broker. For a long time, the biggest problem to operate Forex from Colombia, has been in the difficulty of being able to make transfers to open an account in a Broker or to receive the benefits generated by our Trading of Forex in the account of the Bank.
If you operate from Colombia with a Forex Broker that does not have a physical office, you must go to the Banco de la República, to declare the origin of the resources and make a declaration of change in the mentioned entity.
Due to these difficulties, many investors decided to open accounts abroad, or use electronic purses to move their money with greater freedom, such as PayPal, Neteller or Skrill (See Brokers with different entry systems).
Despite all these difficulties, there is a good community of Forex Traders in Colombia, because the Forex market offers many daily opportunities to earn money.
Forex is the most liquid market in the world, it moves much more money than all the exchanges on the planet put together.
This daily volume of money generates opportunities to earn, but if you don’t know how Forex works, it can also cause many losses in your account.
The first thing to do before you start trading is to learn how the Forex market works.
Financial regulation in Colombia, regarding Forex
The Superintendence of Companies in Colombia is in charge of regulating the trading of foreign exchange or Forex in Colombia.
The Superintendence allows you to trade Forex from Colombia, the law authorizes you to trade Forex, and it is a totally legal activity.
You can make Trading in Forex, from a Broker that has physical office in Colombia, or if the Broker is not in the country, the law obliges you to make a contract with the Broker (always so), although the Supertindence clearly expresses that the operations made are under your entire responsibility.
For a long time the banks have put many hindrances to transfers abroad, having to give many explanations and justify where the money comes from, so that you send it abroad, etc, due to the famous case of the pyramid DMG in Colombia.
I believe that the authorities have tried by all means to prevent a new fraud, but at the cost of limiting citizens’ freedoms. It is good that limits are set, it is also a good idea to control, but as long as they respect personal freedoms.
Legal foreign exchange e-commerce in Colombia
The Superintendence of Finance of Colombia considers it legal to operate in foreign currency from Colombia. There is only one condition, that the Broker has physical headquarters in Colombia, and if he does not have it, that a contract is signed as stipulated in the regulations.
To avoid any kind of problem I suggest you follow these tips:
Most Forex Brokers in Colombia do not have physical headquarters, so we will have to make a contract with them and fully rely on our choice.
In order to avoid any kind of surprise, I suggest you to avoid those Brokers that are located in tax havens. If you have a problem, and you must claim, it is better to do it before prestigious financial authorities.
European Brokers, which are the majority in Forex Trading, are usually regulated by the Cyprus CySec (Cyprus Securities and Exchange Commission) or the UK FCA (Financial Conduct Autority).
European Brokers are required by law to have a default insurance, which will cover the funds you have deposited in them, in case a Broker goes bankrupt.
Although the most widely used trading platform in Forex is Mt4, there are other Forex Brokers who trade with their own platforms, or who have alternative platforms such as cTrader or WebTrader.
The important thing is that the platform is friendly, that you feel comfortable when trading, and that you understand how it works.
Although it is not important to me, I understand that traders who make many trades, or who have a specific way of trading, look at how much the Broker will charge you for Spread, or if it is a 0 spread account, the commissions you will pay for the amount traded.
It is interesting to read all the small print, and know what commissions we can incur, such as Overnight commissions.
It is very, very important that the Broker we hire speaks to us in Spanish. We can hire the best Broker, but if your customer service is in English, Russian or Chinese … well as we will have a huge problem, whenever we have to make a query.
It is also important that they have several open channels, such as telephone call, mail, chat …