Complete guide - Who are the best brokers in Georgia today, and why?

Contents

1 Best Forex brokers in Georgia
2 Georgia’s Forex regulations
3 Forex trading opportunities in Georgia
4 What is to be concluded about Forex trading in Georgia?

Georgia is a country with one of the richest, deepest, and most fascinating histories in the world. This small country with a population of 3.7 million people, and a GDP of $17.6 billion dollars, is known throughout the world for their breathtaking scenery, amazing cuisine, devoted hospitality, and the ability to remain conservative with their traditions and culture while simultaneously striving to develop itself into a Western-friendly country by adopting their values and way of life.

Indeed, Georgia has been aspiring for EU membership for many years now, and to help achieve this goal, they have made some serious reformations and improvements in many fields, such as justice, economic, social, etc. As the years go by, they are demonstrating better and better as to how committed a country needs to be in order to become a more developed and better than how it was in every single way.

In this guide, we will be making a quick overview of the Georgian Forex market and how it works, specifically what the regulatory environment is like, who are the governing bodies in charge, what are the opportunities and challenges that come with trading in the country, and much more. The guide is generally aimed at a beginner, so make sure to use the knowledge you gain from here as a tool to research even more before you get started.

Best Forex brokers in Georgia

Choosing a Forex broker, especially in a country like Georgia where the market is not established to a major degree, can be quite difficult. After all, you have to consider all sorts of different things, like your safety and security, your chances of succeeding, whether or not you should be going with the other options, and much more. If you are running to either one of these problems, then you will be delighted to utilize this list, which is composed of brokers that are only among the best. If you are interested in only the best of the brokers to be found in Georgia, make sure to check out all the options below, and you will find the best option for you in no time.

XM

Min. Depo

Licences

FCA, CySEC, IFSC, ASIC, DFSA

Leverage

1:888

1:200

Platforms

MT4, WebTrader, Copykat

Global GT

Min. Depo

Licences

FSA, FSCA

Leverage

1:1000

Platforms

MT5,

Plus500

Min. Depo

$100

Licences

FCA, ASIC, CySEC, FSCA, FMA, MAS

Leverage

1:30

Platforms

WebTrader, Windows 10 Trader

Georgia’s Forex regulations

Regulatory specifics are one of the most, if not THE most, important things to consider when choosing a Forex country to start trading in. Why? Because safety and security are important, and so is the authorities’ approach to regulating the market, as it can directly reflect on your success ratio.

In general, the more financially-advanced and prosperous the country is, the stronger, better, and more effective its regulatory environment will be. Considering the economic poverty that Georgia has had to go through for much of its existence, and also considering the fact that the Forex market is still in its state of infancy, the regulatory environment of Georgia definitely isn’t one of the most impressive ones. In fact, it still has a lot of ground to cover, and a lot of improvements are to be made. With that out of the way, let’s dive straight into it.

Forex regulation in Georgia falls under the jurisdiction of the National Bank of Georgia (NBG), which is an independent authority in charge of various monetary and financial dealings of the country, among them, obviously, the regulation of the Forex market. As mentioned, the regulatory environment of the country is still in the process of development, so there is not much to be discussed here, besides the bare essentials, and the most important factors affecting the traders’ well-being. Let’s discuss some of these things below.

Forex licensing in Georgia

For a broker to be legally allowed to provide their services to the Georgian traders, they need to be properly licensed and authorized by NBG. The failure to procure the license will result in the broker being banned and penalized accordingly. The obtainment of a license, obviously, has its own requirements and demands, which the brokers need to fulfill (more on that later).

If you are familiar with how international Forex markets work, you may know about MiFID, and how easy it makes everything for the brokers. If a broker is licensed by any EU country, they are allowed to legally offer their services to any other country in the Eurozone. As Georgia is not a part of the EU yet, brokers don’t have such luxury here, and strictly legally speaking, only the locally-licensed brokers are allowed to do business here.

This, however, doesn’t mean that the Georgian traders can’t access brokers from another country. They definitely can, and they definitely do. The problem, however, is that the government is only willing to guarantee your safety and well-being as long as you are only going with the licensed brokers. This is why the Georgian government explicitly warns us to only operate with the locally-licensed brokers.

The latter, obviously, is easier said than done, as there is not all that much of a variety of brokers available in Georgia, and if you were looking for a certain type of trading experience, your options would be very limited. This is why many Georgian Forex traders choose to go with overseas brokers. While there is absolutely nothing wrong with this, you have to remember that you waive your right to seek the help of your government if you do so. With that being said, if you go with legitimately-licensed brokers that are affiliated with proper authorities such as the UK’s FCA or Cyprus’ CySEC, then in general, you can feel pretty safe and protected. With that out of the way, let’s talk about some of the specific rules, guidelines, and restrictions that Georgia has adopted for its Forex market over the years.

Limits on leverage

As a Forex environment that is still in its state of infancy, as well as a country that is economically poor, the local authorities are strictly committed to ensuring that the country provides a safe environment for the traders. As such, the authorities have placed limits on maximum leverage. Leverage allows you to increase your potential profit by many times, despite not having much of a capital to invest. However, as the possible wins are increased, so are the possible losses as well. In fact, leverage has been one of the leading causes for a lot of people to be losing a lot of money in all the eForex environments in the world. As such, many countries have placed very strict limits on them.

In Georgia, the maximum allowed leverage would be 50:1, and this is only for the least-risky assets, such as major currency pairs. For the riskier assets, it can, and does, go even lower. If you think this limit is low, you should take into account, that in most other European countries, due to the guidelines of the ESMA, maximum leverage is even lower at 30:1.

Mandatory risk disclosure for brokers

Besides the restrictions mentioned above, the dangers of leverage are further limited by making it mandatory for brokers to inform the clients about exact risks associated with using leverage and other risky instruments such a CFDs. For any broker that makes any effort of advertising these products to customers, they are required to notify them of the exact specific risks and disclose exactly what percentage of customers are losing money with CFDs, as an example.

This is a rule that is common with many Forex environments and is a great way of ensuring safety, as preventing the losses from occurring in the first place is the best approach for combating them. As such, as a Georgian Forex trader, make sure you’re always seeking out the relevant information about the exact risks that are involved with whatever you’re planning to trade.

Other specifics

The above was just a couple of examples of the specific measures that are in place for the customers’ protection. There are many more measures that Georgian regulators have implemented to take the market towards a more positive direction in terms of its safety and ability to provide opportunities. Here’s a quick list so you can get an idea:

Binary options are banned: Binary options are one of the trading instruments that have always been under heavy criticism from pretty much any regulatory environment. Besides the fact that it’s pretty much gambling, and can’t really be called anything else, the industry itself was plagued with scammers and fraudsters. You would be very hard-pressed to find many binary options traders that have not been scammed before or haven’t lost a very large amount of money. As did most other countries in the world, Georgia has banned any kind of advertising or provision of binary options services in the country.
Offering bonuses are banned: In Georgia, it is now illegal to offer any kind of bonuses or other types of incentives to encourage the traders for using CFDs and other risky assets. Bonuses were quite common in the past with all Forex markets, as they acted as a very effective tool for enticing the traders to invest money in risky assets, which, expectedly, had lead to a lot of money loss for many people. As such, many governments – Georgia included – have decided to ban the offering of bonuses.
Brokers are not allowed to have any conflict of interest with the traders: Brokers in Georgia are prohibited from having any conflict of interest with their traders. How can this happen? Well, a good example would be when brokers open positions against their clients, which was a common concern for many years in the international Forex markets. Many countries have imposed some heavy restrictions on the markets due to this very reason. This is exactly why many Forex regulators, Georgian included, require that the brokers always submit detailed and extensive reports of their activity. With constant audits and reports, regulators are able to monitor the brokers’ activity much easier, and therefore prevent any possible malpractices right from the get-go.

As you can see, the Georgian authorities are definitely very committed to maintaining the stability, safety, and prosperity of the local Forex market. As the country aims to get more and more involved in international trade and become a valuable trading partner of the European and other Western Nations, the improvements in the regulatory and general trading environment of the country are expected to improve further as time goes by.

Forex trading opportunities in Georgia

You are now familiar with the legalities of Forex trading in Georgia, know what kind of safety mechanisms are in place for your protection, how to identify benevolent and ethical brokers, and more. Now, let’s take a look at the actual trading opportunities that Georgia offers, and what are opportunities available for the traders.

Overview of the Georgian economy

Before we talk about the specifics of Forex trading in Georgia, it is important to understand the economic and political landscape of the country, as they have a direct impact on Forex trading in the country. As we have already mentioned, the Georgian economy is definitely not a strong one.

One of the main reasons for this is the political environment that Georgia had and still has, to live in. Even after they were freed of the Soviet Union’s grasp, the country never really got a break. Due to the fact that Russia is their door neighbor, the country has always been under heavy pressure, as Russia is known for being a very notorious bully to its smaller neighbors. In fact, currently, 20% of the Georgian territory is occupied by Russia.

Even to this day, Russia keeps up with the creeping occupation of the country, stealing Georgian territory by adjusting the border zones on a monthly, weekly, and sometimes even on a daily basis. Needless to say, this kind of political environment doesn’t do the country any favors, and due to all the expenses and opportunity costs that come with this, it weights down the country heavily.

Even disregarding the above, it should be understood, that for many years, Georgia’s growth has been an uphill battle due to past poverty and hardships. Due to the fact that Georgia had never gotten the chance to cultivate skilled labor force due to the horrible sins of the Soviet Union, Georgia is now notoriously bad at producing and exporting goods.

Currently, Georgia’s exportation numbers are in a very poor state. The country’s biggest export would be vehicles, at only $747.8 million, and would represent almost 20 percent of all the exports of the country. Needless to say, as a country that doesn’t even manufacture vehicles, this is rather alarming. The agricultural sector, which would be the sector with the biggest potential for Georgia, is in an absolutely dire state, which is rather sad, as the potential is endless. Instead, the country largely relies on tourism, which, while it has had some great success with, is still not reliable enough to base a very large portion of your economy upon. The bottom line is that the exports of the country are in very bad shape, and urgent action is needed.

This fact, of course, has its own bearing on those interested in commodity trading in Georgia. In major Forex countries like Germany, the US, Canada, etc, the opportunities for commodity trading are endless, while in Georgia, such opportunities are scarce. Sure, you can still trade on pretty much any asset thanks to the many international brokers that offer their services in Georgia, but when you compare it to what you can do in the countries mentioned above, the difference quickly becomes apparent.

However, not all hope is lost for Georgia. Thanks to its strategic location, Georgia essentially markets itself as a bridge between the Western and the Eastern world, which it does amazingly well. Thanks to their ability to have amazing relationships with its Eastern neighbors while also developing new strategic partnerships with the Western countries and Europe in general, Georgia can serve as a great example of how the EU-hopeful countries should conduct themselves politically.

What is to be concluded about Forex trading in Georgia?

After reading this guide, as you may have learned, Georgia has definitely not had it easy as a country, both in political and economic terms. This collection of hardships and struggles has definitely left its economic mark on the country, and it can be seen in its Forex trading market as well. However, to say that it shouldn’t be given a chance would definitely be unfair.

Georgia has shown many times now, that it can persevere through hard times, and come out stronger on the other side. This is perhaps what we are seeing now, and will continue seeing in the future, regarding its Forex and trading markets. Due to the country constantly striving for growth and making itself a more attractive destination, many investors are now choosing Georgia as their next destination. The point is, the country has a huge room and potential for growth, and to say that they’re not utilizing it, would definitely be a lie. All in all, with the necessary time and dedication, it is quite possible to have a successful and profitable trading journey in Georgia, provided you make enough research, follow the relevant guidelines, and choose a great broker to help you start off your journey.