What are the reasons for withdrawal refusals in overseas forex trading and how to deal with them? Tax and tax filing information is also explained

overseas forex brokers they are considered risky because they are not registered with Japan's Financial Services Agency

Therefore, you might be worried that "using an overseas forex broker might result in your withdrawal being refused."

Therefore, this article will explain the reasons why you might encounter withdrawal refusals when using overseas forex brokers, and what measures you can take to avoid them

If you are considering using an overseas forex broker, please use this as a reference

If you are looking for a reputable and safe broker, please also check out our ranking of highly-rated and popular overseas forex brokers

Is it possible for withdrawals to be refused when using overseas forex brokers?

In conclusion, if you use overseas forex brokers, there is a possibility that your withdrawals may be refused.

If your withdrawal is refused, you will not be able to withdraw the profits you made from trading, resulting in a significant loss

There are two main reasons why you might encounter a withdrawal refusal when using an overseas forex broker

1. Investor-side causes
2. Causes on the FX broker's side

In many cases, withdrawal refusals are due to fault on the investor's side . Therefore, by trading according to the rules of the FX broker you are using, you can significantly reduce the probability of your withdrawal being refused.

However, there are cases where unscrupulous FX brokers intentionally refuse withdrawals

The following sections will discuss the causes and solutions for withdrawal refusals when using overseas forex brokers

6 Reasons Why Withdrawal Refusals Overseas Forex Transactions Overseas

The reasons for withdrawal refusals in overseas forex trading can be divided into "reasons on the forex broker's side" and "reasons on the investor's side."

There's a non-zero chance that an FX broker could go bankrupt or be a fraudulent company. In such cases, you might face withdrawal refusal

Furthermore, there are cases where investors engage in prohibited activities or fail to follow withdrawal rules

Here, we will explain six reasons why you might experience withdrawal refusals when using overseas forex brokers

1. An overseas forex broker has gone bankrupt
2. The overseas forex broker I was using was a fraudulent company
3. A trader's prohibited activities were discovered
4. Withdrawal rules are not being followed
5. The withdrawal account information is incorrect
6. Non-withdrawable bonuses

An overseas forex broker has gone bankrupt

If an overseas forex broker goes bankrupt, you may be denied withdrawals

In the case of domestic Japanese forex brokers, trust protection applies, so even if the company goes bankrupt, investors' funds are protected. However, overseas forex brokers are not obligated to provide trust protection , so if they go bankrupt, investors may be refused withdrawals.

it is advisable to avoid using FX brokers that have poor financial performance or a bad reputation, as described below .

• Forex brokers with a bad reputation
• Minor FX brokers
• Even if a FX broker has a good reputation, it may be small in scale

It is recommended to use an overseas forex broker that has a large user base or employs secure asset management methods

The overseas forex broker I was using was a fraudulent company

Using unscrupulous overseas forex brokers significantly increases the likelihood of withdrawal refusals

If a company refuses withdrawals, it will lose credibility and will be unable to continue its business. Therefore, generally speaking, no company intentionally refuses withdrawals

For unscrupulous operators, all they need to do is collect funds from investors , so they have the following characteristics:

If you come across an overseas forex broker that fits these characteristics, you should absolutely never open an account or deposit money into it

Prohibited actions by investors have come to light

From here, we will introduce cases where withdrawal refusals occur due to reasons on the investor's side

Generally, withdrawal refusals are often due to reasons on the investor's side

If you violate the terms of service set by the overseas forex broker, they may refuse to allow you to withdraw your funds . In the worst case, your account may be frozen, so you must not engage in prohibited activities.

Engaging in the following actions will significantly increase the likelihood of your withdrawal being refused and your account being frozen, as these actions constitute a violation of the rules

These transactions are prohibited because many overseas forex brokers employ a zero-cut system .

A zero-cut system
is a mechanism that prevents investors from incurring losses exceeding their deposit amount, even if the market fluctuates sharply and losses exceed their account balance. Since the FX broker covers losses exceeding the deposit amount, the investor's risk is reduced.

If the zero-cut system is abused to engage in the prohibited activities mentioned above, investors will profit, while FX brokers are highly likely to incur losses.

Trading in a way that places all the risk on the FX broker may violate the terms of service and could result in your withdrawal being refused

Withdrawal rules are not being followed

If you submit a withdrawal request using a method different from the one used for deposit, you may be unable to withdraw your funds

When using an overseas forex broker, there is a rule that the deposit method and withdrawal method must match up to the deposit amount

If you deposit 200,000 yen from bank account A and make a profit of 100,000 yen, the withdrawal method will be as follows:

• The 200,000 yen will be withdrawn from bank account A, just like the deposit method
• The 100,000 yen profit will be refunded to your credit card

Therefore, you must request a withdrawal of the 200,000 yen deposit to your bank account.

Be careful, as failure to follow the withdrawal rules

The withdrawal account information is incorrect

If the bank account information registered as the withdrawal destination is incorrect, withdrawals will naturally not be possible. This is due to an oversight on the investor's part, and it is the most common reason for withdrawal refusal.

You will need to enter the bank name, branch name, and branch number, but there is a possibility of errors in the registration information due to spelling mistakes or typos

Subsequent withdrawal requests can often be simplified, so it's important to carefully check for any registration errors when making your first withdrawal

As a countermeasure, pasting the bank name and account name from the internet can reduce input errors.

Even a slight input error can result in withdrawal rejection, so be especially careful when registering for the first time.

Non-withdrawable bonuses

When you use an overseas forex broker for the first time, you will receive a bonus, but some bonuses cannot be withdrawn.

The following table summarizes the bonuses offered by the overseas forex broker XMTrading and whether they can be withdrawn

Types of bonuses	Withdrawal eligibility
Account opening bonus	×
Deposit Bonus	×
Point Bonus	〇
Friend referral bonus	〇

Points bonuses and referral bonuses can be withdrawn. However, bonuses received for opening an account or bonuses earned through deposits cannot be withdrawn

However, the type of bonus offered and whether it can be withdrawn will vary depending on the FX broker you use

Whether or not you can withdraw the bonus you receive varies depending on the overseas forex broker, so you should check with them individually

For bonuses with favorable withdrawal conditions, please check out latest overseas forex bonus campaign ranking

Three things you should NOT do when using overseas forex brokers

One reason for withdrawal refusal is "prohibited investor behavior."

FX brokers may refuse withdrawals if you engage in trading that violates their terms of service or if you engage in trading that prevents investors from incurring losses

In particular, are often prohibited

Therefore, I will introduce three typical types of trading that are prohibited by overseas forex brokers

1. Hedging transactions that exploit the zero-cut system
2. Trading targeting the gap at the start of the week
3. Arbitrage

Hedging transactions that exploit the zero-cut system

overseas forex brokers employ a zero-cut system they prohibit investors from abusing this zero-cut system through trading

By abusing the zero-cut system to engage in hedging trades, investors can obtain risk-free profits, but the FX broker ends up bearing the investor's risk.

Therefore, trading that abuses the zero-cut system is prohibited and may result in withdrawal refusal

The zero-cut system is explained in detail in this article below ↓

Are there no margin calls in overseas forex trading? An explanation of the disadvantages and mechanisms of the zero-cut system

Trading targeting the gap at the start of the week

Some overseas forex brokers prohibit trading strategies that target the difference between the closing price on the weekend and the opening price on the following week

1. Significant political and economic events will occur over the weekend
2. It has a significant impact on the foreign exchange market
3. Then, a large exchange rate fluctuation will occur at the beginning of the week
4. The upward momentum in the exchange rate over the weekend makes its movements easier to predict

When a gap appears on a chart, it becomes easier to predict currency movements, so some traders aim to make large profits at this time.

Thus, when profits are obtained by targeting gaps in the market, there is a high possibility of withdrawal refusal, so caution is advised

Arbitrage

Some overseas forex brokers prohibit arbitrage

Arbitrage is
a trading strategy that allows you to profit from price differences between different forex brokers for the same product, without taking any risk.

Specifically, the following cases are possible:

• At Company A, the dollar-yen exchange rate is 100 yen
• At Company B, the dollar-yen rate is 101 yen

In this case, if an investor buys dollars from company A and sells them to company B, they can reliably earn a profit of 1 yen with no risk

As with other prohibited activities, if you engage in trading where the FX broker bears almost no risk while the investor bears almost no risk, your withdrawal will be refused.

Before using an overseas forex broker, be sure to check what types of trading are prohibited

You can find a detailed explanation of arbitrage in this article below ↓

[Overseas Forex] Is Arbitrage Profitable? A Beginner-Friendly Explanation of Methods and Prohibited Practices

Three ways to avoid withdrawal refusals when trading with overseas forex brokers

So far, we have explained the reasons why withdrawals may be refused and the types of transactions that are prohibited by overseas forex brokers

While adhering to investment rules and correctly entering registration information can often prevent withdrawal refusals, there are also cases where withdrawal refusals are due to issues with the FX broker.

From here, we will introduce three measures to prevent your withdrawal from being rejected

1. Check the withdrawal rules
2. Use a reliable FX broker that holds a financial license
3. Check your fund management methods

Check the withdrawal rules

Regardless of whether you're using an overseas forex broker or not, be sure to check the terms of service and withdrawal rules beforehand

This is because if you don't follow the withdrawal rules or try to withdraw a bonus that is not eligible for withdrawal, your withdrawal will be refused

In particular, withdrawals are often refused when depositing funds via credit card . The deposit and withdrawal process when using a credit card is as follows:

• Deposit: The funds are deposited into the FX broker's account as a purchase
• Withdrawal: The funds will be withdrawn as a cancellation of the shopping transaction

If you deposit funds using a credit card, you can only withdraw up to the amount you deposited. Therefore, any profits exceeding the deposit amount must be withdrawn using a method other than a credit card.

To avoid feeling like your withdrawal has been refused due to not knowing how this system works, be sure to understand the deposit and withdrawal rules

If your withdrawal is rejected, first check the withdrawal rules

Check out this complete guide to withdrawing funds from overseas forex brokers,

Use a safe FX broker that holds a financial license

Overseas forex brokers that hold financial licenses are authorized by public institutions, making it impossible for them to misuse funds. Therefore, they can be considered forex brokers that you can use with peace of mind.

Reliable financial licenses include the following:

You can check whether a company has obtained a financial license on the official website of the financial regulatory body

However, unscrupulous companies may falsely claim to hold a financial license on their official websites. Always verify this on the official website of the financial regulatory body .

This article explains in detail how to assess the safety of overseas forex brokers ↓

Overseas Forex Broker Safety Ranking | Points to Check and How to Choose a Reliable Broker Explained

Check your fund management methods

Choosing an overseas forex broker that securely stores investors' assets is one way to avoid withdrawal refusals

There are two methods for managing funds: segregated accounts and deposit-based protection

Segregated accounts refer to
a method of managing investors' funds separately from the assets of the FX broker.

Because customer assets are managed separately, the goal is to ensure that funds are returned even if the company handling the segregated management goes bankrupt due to deteriorating financial conditions

In other words, if you use an FX broker that employs segregated accounts, the likelihood of your withdrawal being refused is lower.

Next, we will explain deposit-based protection

Deposit protection is
a method of managing investors' funds by entrusting them to a third-party institution such as a trust bank.

When a depositary protection method is used, investors' funds are entrusted to a third-party institution, thus ensuring that investors' funds are kept safer than through segregated management .

To avoid having your withdrawals refused by your FX broker, it's a good idea to check how your funds are managed

The security of assets is enhanced if either segregated accounts or trust protection is adopted

What is trust protection for overseas forex trading? We'll also explain how it compares to segregated accounts

Three ways to deal with a withdrawal refusal from an overseas forex broker

Even if you take measures to avoid having your withdrawal rejected, the possibility of having your withdrawal rejected is not zero

If you become a victim, you may lose not only your profits but also the money you deposited, leading to significant losses

Here are three things you can do if you actually become a victim of a withdrawal refusal

• Check that there are no issues with your identity verification documents
• Contact the support center of the overseas forex broker
• Consult a lawyer

If your withdrawal is rejected, the first thing you should do is check if there are any issues with your identity verification documents

Check that there are no issues with your identity verification documents

Most withdrawal refusals are often due to careless mistakes on the investor's part .

If the withdrawal denial is due to incomplete identity verification documents, registering the correct information and uploading clear images should resolve the issue

Contact the support center of the overseas forex broker

If your withdrawal is still being denied despite having no issues with your identity verification documents, please contact our support center

With major FX brokers, you can contact them with peace of mind because they offer support in Japanese

Providing specific details about the circumstances surrounding the withdrawal rejection will allow the support center to provide an appropriate response

You can contact the FX broker through their official website. While it varies by broker, you should receive a response within 1-3 business days

Consult a lawyer

If your identification documents are complete and your issue cannot be resolved by contacting the support center, you may consider consulting a lawyer

In particular, if a large withdrawal is refused, you should consider consulting a lawyer

If you search the internet for "recommended lawyers for overseas forex trading," you can find lawyers with a proven track record

In cases where a withdrawal of a few tens of thousands of yen is refused, the legal fees may end up being higher than the amount of the withdrawal. Before consulting a lawyer, be sure to check the fees they charge

Top 5 Safe Overseas Forex Brokers with Few Cases of Withdrawal Refusal

Even if you understand the reason for the withdrawal refusal and take all possible countermeasures, you may still be deceived by information from unscrupulous FX brokers

To avoid becoming a victim of withdrawal refusal, the most important thing is to use a reliable overseas forex broker that does not refuse withdrawals .

Therefore, I will introduce overseas forex brokers that are less likely to refuse withdrawals

The five FX brokers I will introduce below hold financial licenses and employ secure fund management methods , so you can use them with peace of mind.

1. HFM
2. Exdefine
3. AXI
4. AXIORY
5. Threetrader

HFM: A recommended overseas forex broker for beginners with generous deposit bonuses

One of the overseas forex brokers that is less likely to refuse withdrawals is HFM

item	Content
Operating company	HF Markets (SV) Ltd
Establishment	2015
Financial License	Financial Services Authority of Saint Vincent and the Grenadines (FSA)
Asset management methods	Separate management
Zero Cut System	can be
Stop-loss level	20%
Maximum leverage	2,000 times
Minimum withdrawal amount	1,000 yen (bank transfer)
Japanese support	can be

HFM always offers a 20% deposit bonus , which can be used as margin for trading.

While funds are managed separately, we are enrolled in a civil liability insurance scheme, which provides coverage up to 5 million euros in the event of an emergency

Furthermore, it offers a copy trading feature called "HF Copy," allowing you to trade like a top-performing trader , making it a recommended overseas FX broker for beginners.

Exness: An overseas forex broker offering high-leverage trading for intermediate to advanced traders

The second overseas forex broker that is less likely to reject withdrawals is Exness

item	Content
Operating company	Exness Limited
Establishment	2008
Financial License	• Seychelles Financial Services Authority (FSA) • UK Financial Conduct Authority (FCA) • Cyprus Securities and Exchange Commission (CySEC) • Mauritius Financial Services Commission (FSC) etc.
Asset management methods	Separate management
Zero Cut System	can be
Stop-loss level	0%
Maximum leverage	Unlimited
Minimum withdrawal amount	Approximately 30,000 yen
Japanese support	can be

Exness is one of the oldest overseas forex brokers, having provided services since 2008

This overseas forex broker holds the most financial licenses among those we're introducing today, with eight licenses in . Therefore, it can be said that this forex broker is extremely reliable.

Furthermore, because there are no leverage restrictions, this overseas FX broker is recommended for intermediate to advanced FX traders .

AXI: An overseas forex broker that has a sponsorship agreement with Manchester City FC

The third overseas forex broker that is less likely to reject withdrawals is HFM

item	Content
Operating company	AxiTrader Limited
Establishment	2007
Financial License	Six financial licenses, including those from the UK Financial Conduct Authority (FCA), the St. Vincent and the Grenadines Financial Supervisory Authority (SVG FSA), and the Cyprus Securities and Exchange Commission (CySEC)
Asset management methods	Separate management
Zero Cut System	can be
Stop-loss level	20%
Maximum leverage	1,000 times
Minimum withdrawal amount	$10 equivalent
Japanese support	can be

AXI is a well-known forex broker that has won numerous awards in the overseas forex market. Furthermore, it holds six financial licenses , it enjoys a high level of trust from investors.

Furthermore, they have significant financial resources, as they have a sponsorship deal with Manchester City FC of the English Premier League

AXIORY: An FX broker with a wide range of unique services

The fourth overseas forex broker that is less likely to reject withdrawals is AXIORY

item	Content
Operating company	Axiory Global Ltd.
Establishment	2007
Financial License	Belize International Financial Services Commission (IFSC)
Asset management methods	Trust protection
Zero Cut System	can be
Stop-loss level	20%
Maximum leverage	2,000 times
Minimum withdrawal amount	1,100 yen
Japanese support	can be

AXIORY's most distinctive feature is its funds are managed through trust protection.

With trust protection, investors' assets are deposited and managed by a third-party financial institution. Therefore, even if the FX broker goes bankrupt, investors' funds are guaranteed , making it a safe FX broker.

Because it offers services not provided by others, such as "trust protection," it can be said that this overseas forex broker is more suitable for intermediate to advanced traders than beginners

Threetrader: An overseas forex broker with narrow spreads, suitable for day traders

The fifth overseas forex broker that is less likely to reject withdrawals is HFM

item	Content
Operating company	ThreeTrader Global Limited
Establishment	2021
Financial License	Vanuatu Financial Services Commission (VFSC)
Asset management methods	Separate management
Zero Cut System	can be
Stop-loss level	20%
Maximum leverage	1,000 times
Minimum withdrawal amount	Bank transfer: 10,000 yen
Japanese support	can be

When trading with Threetrader, hedging across multiple accounts, which is prohibited by other overseas forex brokers, is possible under certain conditions.

Furthermore, the availability of a points program that can be exchanged for cash or goods is another reason why it is popular among investors.

Furthermore, the fact that they are supported by TMGM, the world's largest FX broker, means they possess extensive expertise in FX trading, which is another factor that makes them trustworthy

Threetrader's Reputation and User Reviews | Thorough Investigation of Withdrawal Rejection Cases and Security (Threetrader)

If I'm denied a withdrawal from an overseas forex broker, do I need to file a tax return?

Profits earned from investments, including FX trading, may require filing a tax return

If you are required to file a tax return but fail to do so, you may face penalties such as "reporting penalty tax" and "late payment tax," so be careful.

However, even if you are a victim of a withdrawal refusal, are you still required to file a tax return and pay taxes?

From here, we will explain whether or not you are required to pay taxes if your withdrawal is refused

If your income is 200,000 yen or more, you must file a tax return and pay taxes

Even if your withdrawal is refused, if your income after deducting necessary expenses from your profits is 200,000 yen or more, you must file a tax return and pay taxes.

However, income from FX trading is classified as "miscellaneous income," and the determination must be made based on the total amount including other miscellaneous income such as income from side jobs

In the following cases, even if your FX income is less than 200,000 yen, you must file a tax return

• Income from FX trading: 100,000 yen
• Income from side jobs: 150,000 yen

In this case, the total miscellaneous income is 250,000 yen, so you will need to file a tax return. It's important to understand that you must consider the total amount of all your miscellaneous income, not just your FX income

Do I need to file a tax return for losses from overseas forex trading? We'll explain how to fill out the necessary forms and how to offset losses against gains for tax purposes!

If the transaction is invalid due to withdrawal refusal, you do not need to file a tax return

If a transaction is invalidated due to a withdrawal refusal

If you feel your withdrawal has been rejected, the first thing you should do is check your transaction history

If the transaction is canceled and there is no record of it, it will not be recorded as income. Therefore, you do not need to file a tax return. Of course, you do not need to pay any taxes

If you're unsure whether you need to file a tax return in this case, you might want to consult with the tax office or a tax accountant

If you have any concerns regarding taxes, consult with the tax office or a tax accountant

If an FX broker goes bankrupt, the loss can be recorded as a necessary expense

an FX broker goes bankrupt and you are unable to recover your deposited funds, you can claim the loss as a necessary expense for miscellaneous income.

However, if the company's bankruptcy or insolvency has not been officially recognized, and profits can be confirmed through transaction history, a tax return is required . In this case, even if funds cannot be withdrawn, losses cannot be claimed.

Losses can only be claimed if the FX broker's bankruptcy is officially recognized

For information regarding taxes on overseas forex trading, please refer to our complete guide to overseas forex taxes

Summary of Tax-Saving Strategies for Overseas Forex Trading | Explanation of How to Avoid High Taxes and Whether Loopholes Will Be Discovered

8 Frequently Asked Questions Regarding Withdrawal Refusals in Overseas Forex Trading

Finally, we have compiled a list of frequently asked questions regarding withdrawal refusals by overseas forex brokers

By reviewing the information we've discussed so far, you can take steps to avoid having your withdrawals rejected. Furthermore, if you do become a victim, you'll be able to handle the situation calmly

Q1: What are some cases where withdrawals are refused when using an overseas forex broker?

When using an overseas forex broker, withdrawal refusals can be attributed to either the broker's fault or the investor's fault

This article explains in detail the "6 Reasons Why Withdrawal Refusals Overseas Forex Transactions Overseas."

Q2: What measures can I take to avoid having my withdrawal refused?

First and foremost , it is crucial to use a broker that holds a financial license .

Even when using FX brokers with these features, withdrawal refusals can still occur. In such cases, take the following steps

• Contact the FX broker's support center
• Consult with a lawyer in Japan

Contacting the support center will help you understand the cause of the withdrawal refusal and what measures can be taken. If the problem persists, it is recommended to consult a lawyer

Q3: What are the consequences of a withdrawal refusal?

If withdrawals are refused, investors are unable to withdraw their funds and lose the opportunity to invest in other assets, resulting in lost opportunities.

If you deposit a large amount, you may experience mental stress if you are unable to withdraw it

To avoid such negative consequences, it is recommended to use an overseas forex broker that is less likely to refuse withdrawals

Q4: How long does it take to resolve a withdrawal refusal?

The time it takes to resolve a withdrawal refusal varies from case to case, as it depends on the cause

If the investor has entered incorrect deposit account information, this can be easily resolved by entering the correct account information .

On the other hand, if the overseas FX broker is a fraudulent company or goes bankrupt, it becomes

Q5: If my withdrawal is refused, do I need to file a tax return?

Whether or not you are required to pay taxes if a withdrawal is refused by an overseas forex broker depends on your individual circumstances

Specifically, if you earn more than 200,000 yen in income annually, you are required to file a tax return and pay taxes.

Conversely, if a transaction is canceled and no income is generated, you do not need to pay taxes

For more details , please see "[What happens to taxes if you are refused a withdrawal when using overseas forex trading?]"

Q6: Is there a way to prevent my company from finding out about my profits from overseas forex trading?

Simply trading FX won't get you caught by your company

However, if you declare your resident tax payment method as "special collection" when filing your tax return for profits earned from FX trading, your company may find out

Because the local tax on profits earned from FX trading is deducted from your company salary, it will be revealed that you have income other than your salary

FX trading is for asset management, so it's not a problem even if you work for a company that prohibits side jobs. However, if you don't want your company to know you have extra income, choosing "ordinary collection" can reduce the risk of your company finding out.

To reduce the risk of your company finding out, pay your local tax on your FX profits through "ordinary collection."

Q7: Is it illegal to use overseas forex brokers?

It is not illegal for investors to use overseas forex brokers

However, according to Japan's Financial Services Agency (FSA), it is illegal for FX brokers to operate without being registered with the FSA

To summarize, it is as follows:

• Investors: Using overseas forex brokers is not illegal
• Overseas Forex brokers: Operating without registration with the Japanese Financial Services Agency is illegal

In fact, XMTrading and AXIORY, which have a large number of users in Japan, have received warnings on the Financial Services Agency's website

Overseas forex brokers that are not registered with Japan's Financial Services Agency (FSA) may receive warnings on the FSA's website.

Q8: Have there been any actual cases where withdrawals were refused?

In 2023, FX Fair experienced significant delays in withdrawals

The following are believed to be the reasons for the large-scale withdrawal delays at FX Fair:

As a result of this, the number of days required to process withdrawals has been extended from "up to 5 business days" to "up to 25 business days"

Furthermore, they announced the discontinuation of the service in September 2023

From an investor's perspective, this is almost like a refusal to withdraw funds, so the risk is not zero.

Understand the reasons for withdrawal refusals and choose a trustworthy FX broker

There are two main reasons why you might experience withdrawal refusal when using an overseas forex broker: "reasons on the part of the forex broker" and "reasons on the part of the investor."

Most withdrawal refusals are caused by issues on the investor's side , and can be prevented simply by trading according to the rules.

Therefore, if your withdrawal is rejected, we recommend that you check whether you have violated any prohibited actions

Overseas forex brokers offer high-leverage trading options that are not available with domestic forex brokers, so it's a good idea to keep them in mind as an option when investing in forex