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As one of the main financial centres in Asia, Hong Kong has a reputation for being highly advanced in terms of technology as well as in all forms of finance and investment. This is made clear by the fact that ‘financial literacy’ is a subject taught in schools from an early age and with plenty of open and honest advice most recently provided by the IFEC (Investor and Financial Education Council) aided and abetted by its memes ‘The Chin Family’ for Hong Kong citizens of all ages.

By the time you are legally old enough to become a day trader, you will most likely have absorbed all of the facts about different types of trading, assets, derivatives and the potential for high profits and losses. You are therefore in a very good place to move forward by selecting a broker that fulfils your expectations by providing an environment in which you are comfortable and supplying you with the best tools possible to make your trading not only successful but pleasurable too.

It is not a difficult process to assess one broker against another, but it is a time-consuming one and that is where we hope to assist you. We aim to provide recommendations for best brokers suited to the needs of Hong Kong day traders, based on an extensive review process, which could save you a great deal of time were you to undertake this alone.

In this article, you will learn:

  • What regulations Hong Kong brokers must follow
  • The fees and government taxes you can expect to pay
  • How we review brokers for Hong Kong traders

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Risk Warning / Ad Disclosure

Risk Warning: The products offered by the companies listed on this website carry a high level of risk and can result in the loss of all your funds. You should never risk money that you cannot afford to lose.

Ad Disclosure: Some of the links that you will find on this website are advertisements for which we do receive financial gain for referring new customers.

Traders in Hong Kong

Hong Kong

We believe that one of the most important aspects of trading is to find a great broker. There are certain factors that are essential to security, such as licensing, but there are other subjects which can be equally impactful when you come to sign up and start trading with your own funds.

Mobile Trading

Hong Kong has the third-fastest average Internet speed in the world and with a service like that, almost every Hong Kong citizen owns a mobile device from an early age. As a day trader, the availability of such a great service means you can actively seek out your favourite trading platform without worrying that your available bandwidth will not support it. In recognition of this, brokers who service the Hong Kong trading market invest heavily in the development of mobile apps and websites. Competition between them is fierce, so you will have no shortage of great mobile platforms to choose from.

Deals And Incentives

Citizens of Hong Kong tend to stick with the tried and trusted rather than being concerned with ploys designed to catch their attention. For this reason, it is rare for Hong Kong traders to become the target for the usual influx of ‘tempting’ broker offers used in the rest of the world. Any astute brokers being more concerned with retaining clients than with attracting them. For you, this means that you will generally enjoy better spreads and lower fees from your broker.

Diverse Asset Types

All brokers offer a slightly different experience in terms of assets and derivatives. Some may concentrate largely of Forex, offering not only the major FX currency pairs but a selection of exotics too. Others specialise in CFDs related to the world’s stock exchanges. For an experienced trader, it is a matter of personal preferences and trading style that will lead you to a broker that provides exactly what you need. For anyone just setting out, you are best keeping your options open, so to speak and finding a CFD broker that has something of everything.

Good Customer Support

You should never underestimate the importance of good customer support and by this, we mean a broad spectrum of features across the broker's website. Not only does this show that the broker cares about its clients, it is always helpful to have plenty of information readily available to answer any questions you might have. Of course, you should also have constant access to trained personnel as well, ideally a toll-free phone number, but at the very least a live chat facility available throughout trading hours across the world.

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Broker Fees And Tax

Brokers will apply trading fees to your account in one of two ways. The first is on a fixed fee per trade basis, which is perhaps the best option for anyone new to day trading, even though it does mean slightly less competitive spreads. The second option is a commission-based account. The commission you pay is calculated as a percentage of the investment which will vary between different assets.

Other fees you may need to include in your overall evaluation are routine charges made by your broker for maintaining your account and the cost of any subscriptions such as automated trading software or an advanced analytics feed. A good broker will provide clear guidance on any costs you are likely to encounter on his main website, which you should always peruse in advance of signing up for an account.

Income Tax levied in Hong Kong is at one of the lowest rates in the world, with the top rate even for the highest earners being only 17%. If you trade and you show an overall profit from your activities, then you become liable to pay income tax. However, whether you are liable to pay any tax is dependent on where the income was derived. with a broker based in Hong Kong In theory, you could trade with an offshore broker and your profits would be tax-exempt. No tax sounds great, but you would lose the protection of Hong Kong’s excellent regulatory system, so always weigh up the pros and cons before making a decision.

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Hong Kong Licencing

All broker licensing is dealt with by the Securities and Futures Commission (SFC) on an individual basis. This is a lengthy process as extensive checks are made into all applications and also into the background of those who will be running the business. Financing is a crucial part of the application and any funding sources or private investors must be backed by references from a top-tier bank. As you can see, any broker who makes it through this level of scrutiny is deemed legitimate.

Some day traders still opt to sign up with offshore brokers, this may be to gain tax advantages, or to access financial instruments and assets they cannot trade with a Hong Kong broker. There is nothing wrong with this approach, but it is important that the broker you select is appropriately licensed and under the regulation of reliable authorities. The ones that we recommend are:

  • Financial Conduct Authority (FCA)
  • Cyprus Securities and Exchange Commission (CySEC)
  • Malta Financial Services Authority (MFSA)
  • Australian Securities and Investments Commission (ASIC)

There are plenty of other licensing bodies around the world and of those, there a few that should definitely be avoided because the authorities regulating them are lax and you will have little or no help if there is a problem. Brokers operating under the authorities listed above are all required to comply with stringent regulations and are monitored consistently, so they are the safest options you will find offshore.

Our recommendations would always be for a homegrown broker and definitely so in a country as well-regulated as Hong Kong.

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How we Recommend Brokers

Unless there are very good reasons to say otherwise, our recommendations would always be for a homegrown broker and definitely so in a country as well-regulated as Hong Kong. As we have pointed out, there is a tax advantage to trading offshore, but you will not have quite the same level of protection. That said, there are some excellent offshore brokers that we have reviewed and recommended for other countries. The most important thing really is that the broker holds the licensing claimed and has adhered to regulations imposed by it.

With such great Internet access available in Hong Kong, when we check a broker’s website we look at security throughout the site, particularly for sensitive data and then aim to recommend those which provide the fastest and most functional website. Day trading is a fast-paced environment and a slow-loading website could cost you money. The same applies to mobile platforms, again we check for appropriate security but then test out the app or mobile website for speed and functionality.

We like to see a good range of assets and derivatives on offer, but with a bias towards Asian stocks and commodities, which many day traders in Hong Kong seem to prefer over other instruments like Forex. Lastly, we check out how a broker supports clients throughout the entire process of signing up, account and platform selection, right through to trading with live funds. If you live in Hong Kong, you will be used to having financial information and help readily accessible to you. For that reason, we aim to recommend brokers that provide support across a broad spectrum as well as in terms of trained personnel being available should you ever experience an urgent problem. 

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  • Special Features
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Risk Warning / Ad Disclosure

Risk Warning: The products offered by the companies listed on this website carry a high level of risk and can result in the loss of all your funds. You should never risk money that you cannot afford to lose.

Ad Disclosure: Some of the links that you will find on this website are advertisements for which we do receive financial gain for referring new customers.

Frequently Asked Questions

FAQ

Is day trading in Hong Kong legal and safe?

Day trading is legal in Hong Kong and provided you choose a licensed and regulated broker, the environment is safe.

Do I need to pay fees and taxes on my profits?

You will be charged trading fees by your broker and may incur additional expenses for the use of extra software or other sundries. If you trade with a broker licensed in Hong Kong, you will pay a moderate amount of income tax but are exempt if you trade offshore.

Can I test brokers before trading with real money?

Almost every broker has seen the wisdom of providing a free demo account for potential clients and we highly recommend that you take advantage of the opportunity.

Is it easy to make deposits and withdrawals?

Yes, depositing and withdrawing funds is very quick and easy. You will need personal ID and evidence that any account belongs to you to make your first withdrawal.

Can I trade using my mobile or tablet device?

More residents of Hong Kong trade on mobile devices than on fixed ones, so you should have no problem finding a broker with a trading platform suited to your device.

Meet The Author
Emily Lanham
Emily Lanham
Trading Economist

Emily has written for us for 2 years, and with an education and career in economics, markets are something she understands. Working as a consultant for various financial institutions gives Emily the ability to devote a certain amount of her time to the site.

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