Short answer: An offshore broker serves you through a company licensed in a lighter-touch jurisdiction like Seychelles, Mauritius, Vanuatu or St Vincent, rather than by the FCA, an EU regulator or ASIC. You usually get higher leverage and bonuses, but weaker oversight and usually no compensation scheme.
Same brand, different company
Many well-known brokers run both a strictly regulated entity and an offshore one. Which one you get depends on where you live. A broker that’s FCA-regulated in the UK may onboard a client in Asia, Africa or Latin America through its Seychelles or Mauritius company.
What changes
| UK, EU or Australian entity | Typical offshore entity | |
|---|---|---|
| Max leverage (major FX) | 1:30 | 1:500 or more |
| Negative balance protection | Required | Policy, not law |
| Compensation scheme | FSCS or ICF (not in Australia) | Usually none |
| Bonuses | Banned for retail | Common |
| Supervision | Frequent, well-resourced | Lighter |
Is offshore always bad?
Not always. For many countries it’s the only way to reach a well-known broker. The risk is mostly about what happens if something goes wrong: weaker rules, slower complaints, and less chance of getting money back if the firm fails.
How to check which entity you’re with
Read the company name in your client agreement, then look it up on the broker’s BrokersNest profile under “Which entity holds your money”. See also how to check a broker’s licence.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Most retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
