Discover your best Forex broker in Latvia with our guide

The common misconception that seems to persist regardless of having no actual factual proof is that the countries that used to be a part of the USSR are not to be treated as significant economic players for years to come. While it is somewhat true that for many states that were once subjected to the Soviet rule there is still a long way to go until their economies achieve a significant level of prosperity – this is definitely not true for every single country in the post-USSR space – and it is definitely not the case for Latvia.

A relatively small country, it, nevertheless, managed to showcase some very impressive indicators of economic growth. With a population of only a little over 1.92 million, Latvia keeps its GDP at 63.940 billion USD. This number shows just how well the country is doing economically, and what a great job it does at providing its citizens with quite a high level of life.

Being a member of the EU, Latvia seems to be able to utilize all the benefits that the regional organization has to offer for its own rapid economic development. Moreover, in parallel to the overall development of the national economy, the Latvian Forex trading market has been growing in popularity at an impressive rate.

In the guide below we will have a closer look at the benefits that one can derive from trading in Latvia, regulatory measures imposed upon the local FX market, as well as provide you an overview of the best Latvian Forex brokers.

A full list of top Forex brokers in Latvia

As mentioned above, the state of the economy in Latvia is very promising and full of opportunities for both brokers and traders alike. However, how should the latter go about choosing the brokerage to start trading with? We know that this is, by all means, not an easy task. What we also know is that it requires quite a lot of patience, dedication, and stress-resistance, as the failure to find the right broker can result in some devastating losses.

We decided to make this task a little easier for you by creating a full list of some of Latvia’s top Forex brokers, the main benefits they have to offer, and more. While this is by no means a substitute for the extensive research that you will have to conduct before starting to trade Forex in Latvia. we are confident that it is a great point of reference that both the beginners and the experienced traders will benefit from.

XM Group

XM Group Forex Review

Minimum deposit

5 USD

Licences

CySEC, IFSC, ASIC

Maximum leverage

1:30*

US Clients

No

Forex.com

Forex.com Review

Minimum deposit

100 currency units

Licences

CIMA, FCA, NFA

Maximum leverage

1:200

US Clients

Yes

IQ Option

IQ Option Review – can the broker be trusted?

Minimum deposit

10 USD

Licences

CySEC

Maximum leverage

1:1000

US Clients

No

Exness

An in-depth review of Exness Forex broker

Minimum deposit

1 USD

Licences

CySEC, FCA, FSA

Maximum leverage

1:Unlimited

US Clients

No

RoboForex

RoboForex Broker

Minimum deposit

100 USD

Licences

CySEC

Maximum leverage

1:200

US Clients

No

Latvian economy and opportunities for FX trading

Latvia is definitely not the utmost huge economic player, neither in the region nor in the world. With that being said, one has to note that the greatest trait of Latvia’s national economy is its unwavering gradual growth. What it lacks in the size and rapid speed, the country makes up for with stability and steady expansion of various economic segments.

One should also note that Latvia, although enjoying strong trading ties with some of the strongest economic players in the EU ( such as Germany, neighboring Russia and Poland, and many others), it is not, by any means, a strong exporter. Recent statistics show that Latvia was only able to export 15.5 billion USD worth of goods – a number that it is extremely low, even for the Eurozone. Latvia’s main export is wood, closely followed by machinery, computers, beverages, vinegar, and various electronic equipment.

Having seen just how moderate the country’s economic indicators are, you might be wondering why exactly should anyone even think about getting into Forex trading in Latvia? Well, the answer is – one should bet on the country’s potential.

As mentioned above, the economy, although not particularly impressive at first sight, does not cease to grow, and is very likely to continue to do so in the years to come. What it means is that the opportunities for the FX market will also increase simultaneously, and it would be a shame to miss them just because the market is not as perfect as one would like it to be today.

License and regulation

As we have already mentioned, the Latvian FX market is only now starting to grow in popularity and expand accordingly. Thus, it is no surprise that the countries’ Forex regulatory environment is also at its very early stages of what works best for the specifics of the local traders and broker. However, this should definitely not be taken as a security threat, because the local regulatory body does perform its functions in a very efficient manner.

The main regulatory body in Latvia is the Financial and Capital Market Commission (FCMC). This autonomous institution has an extensive list of responsibilities, that include overseeing and enhancing the operation of Latvian banks, insurance companies, pension funds, e-money, and, of course, the FX market. Its mission is to reinforce customer support, competitiveness, and development of various financial markets by closely assessing their functions and imposing timely regulatory measures.

Below, we will address the specific measures that the FCMC that regulated Forex brokers in Latvia have to follow.

Licensing of brokers

As in many other countries across the world, the primary function that the FCMC performs in regulating the local FX market is issuing official licenses to the brokers in Latvia. If the broker wishes to provide their services in the country, it is compulsory that they seek to obtain an official license from FCMC.

Possessing such a license confirms that the broker has made all of the official requirements and is both qualified and trustworthy for the local traders to join them. Moreover, by choosing a licensee of the FCMC one makes sure that in case of any disputes with the brokerage, they will have an official regulatory body step in on their behalf.

But does this mean that only Latvian brokers with a license from FCMC can operate in the country? It most certainly does not. Latvia is an EU member-state, which means that the standards and policies of the Markets in Financial Instruments Directive (MiFID)  extend upon it. According to those, any broker based in the EU, and with a license obtained from one of Europe’s regulatory entities, can offer their services in the EU member states without having to seek a license in every single one of them.

Although many would think that this is a security concern in the making, the contrary is actually the case. The truth is that European regulatory bodies are both extremely reputable, and often share the same standards that the brokerages have to meet in order to be eligible for an official license. Thus, EU-based brokers that offer their services in Latvia are in no way less trustworthy than the brokers licensed by the FCMC.

Investor compensation fund

Like many other countries of the region, Latvia is putting a special emphasis on the protection of brokers – both from the unnecessary risks and from the unforeseen circumstances that traders have little control over. Making the provision of investor compensation fund (ICF) a compulsory condition for the brokers seeking an FCMC license is one of the measures within this framework.

In a nutshell, an investor compensation fund is something that the brokerage should keep in case they go bankrupt. The compensation is then provided to the broker’s respective traders, who end up with their funds lost or frozen. In Latvia, the minimum required ICF is 20 000 EUR, but some of the best Forex brokers in Latvia might be offering an even larger sum. The ICF should be kept intact at all times, and brokerages are required to provide a proof of it being intact periodically, or else face the appropriate punishment.

Segregation of funds

Another way in which the FCMC reinforces the safety of the Latvian traders is by making it mandatory for the brokerages to abide by the segregation of funds requirement. This particular measure has long proven to be that extra layer of security and the peace of mind that many traders-to-be are searching for.

What it aims to do is to provide as much safety of the traders’ funds as possible. The FCMC does so by demanding brokers to keep their operational funds separately from the funds of their respective traders – and there are two good reasons for keeping things this way.

Firstly, in the case of the broker going bankrupt, traders will not risk having their funds lost or frozen together with the funds of their brokerage.  Secondly, with traders’ accounts segregated, the risk for their funds being misused, whether accidentally or otherwise, is reduced to little to none.

This particular standard is very popular among the European regulatory bodies, and one can be certain that every broker on the list of top Forex brokers in Latvia will be abiding by it.

Reports and audits

Imposing regulatory measures upon the local brokers, while definitely necessary, is in no way sufficient for the proper management of the FX market. Upon introducing the measures, any regulatory body should then make it its goal to carefully assess whether the standards are strictly followed.

The FCMC demands its brokers to submit regular audits and reports with a detailed breakdown of all financial activities and other relevant information, such as the statistics of the broker’s customer base, trader’s success rates, and many more. This is done to both make sure that the Forex trading brokers in Latvia abide by the relevant standards at all times, and, for the purpose of determining and countering any illicit activities that the brokers can potentially be involved in.

On top of regularly assessing the broker’s performance, the FCMC has created a well-functioning whistleblowing channel, where anyone can report the broker’s wrongdoing hassle-free and without fear of possible repercussions. The latter measure shows just how prepared the FCMC is to go the extra mile to make sure that the local Forex market is both attractive and safe for the traders.

Leverage restrictions

The debate over the provision of leverage in trading persists, with advocates calling for no restrictions at all, and those against it demanding the leverage to be banned altogether. The controversy of this particular trading tool is due to the fact that it can both be the reason for some of the highest returns, and some of the most significant losses at the same time.

Most experienced traders will be using this instrument in a way that will benefit them, however, beginners that are often attracted by the possibility of lucrative profits with little actual investment required mostly end up losing more than they have originally deposited.

Following the regulations issued by the European Securities and Market Authority (ESMA), Latvian FCMC has reduced the maximum allowed leverage down to 30:1. Although this might seem like very little, if you look through the top Forex broker list in Europe, you might find that a lot of them are offering leverage as small as 5:1.

Ban on bonuses and promotions

Although one of the main goals that the FCMC continuously pursues is the expansion of the local FX market, it does, nevertheless, recognize that Forex trading should not be actively marketed as it can potentially become a very risky financial investment.

In turn, the provision of bonuses and promotions is one of the brokers’ favorite marketing tool. There are two main types of bonuses that brokers can offer – refill ad welcome bonuses. Refill bonuses are issued periodically to the returning traders, while welcome bonuses are gifted to the newly joining clients. Such kickstarters are a great way to both expand and maintain the brokers’ customer base, and many traders seek them as the single most important deciding factor in choosing the brokerage to join.

But what about Latvia? Well, we regret to inform you that even the best Latvian Forex brokers will not be offering any such bonuses because they are strictly prohibited in the country. Nevertheless, one can still benefit from the other efficient trading instruments that the local brokers can provide, and leverage would be a good example of that.

So, should you trade Forex in Latvia?

Having learned about the specifics of Forex trading in Latvia, you are probably looking is the final verdict of whether or not you should get into the local FX market.

We can easily recommend exploring the opportunities that the Latvian Forex market has to offer – and we have some good reasons for that. First of all, the national economy in general, and the FX market in specific are both growing rapidly, which means that the opportunities that the traders can benefit from will also increase gradually in the years to come. On top of that, our review showed that the Latvian regulatory environment is both sufficiently good and in line with the guidelines put forward by the MiFID and ESMA.

If that is still not enough to convince you, let us reassure you that the process of getting started with trading Forex in Latvia is extremely easy. The only legal requirement is being 18 years of age or older, and once you tick that box and meet the requirements issued by the broker of your choice, you will be able to start trading in no time.

It is completely free to get into FX trading in Latvia, or, to be more specific, it is free to join a brokerage in the country. However, you will be required to make the first deposit, and the minimum amount will be different depending on the brokerage that you end up with. We suggest that you do your duly research of the minimum deposits that different brokers require and only invest what you are comfortable with. It is worth noting that even the best Forex broker in Latvia can be asking for something as little as an equivalent of 5 USD or something all the way up to 500 USD.

Overall, if you are a Latvian citizen with some interest in the FX market, we can easily recommend you go ahead and explore what the trading in your country is like.