Updated
“Domestic FX is the safest,” “Overseas FX can earn big with high leverage,” “Prop firms are the strongest” — you can find all these claims on the internet.
But the truth is, few people really know which one to choose.
This article will do a thorough comparison of domestic FX, overseas FX, and prop firms.
We’ll examine tax rates, leverage, risks, and capital efficiency from every angle to reveal which one is best for you.
✅ What You’ll Learn in This Article
- The differences between domestic FX, overseas FX, and prop firms in a comparison chart
- The pros and cons of each
- Specific simulations (how your take-home pay changes with the same skill level)
- The conclusion on which one you should choose based on your situation
To cut to the chase, there is no one-size-fits-all answer.
The optimal choice depends on your “skills,” “capital,” and “goals”.
After reading this article, the right option for you should become clear.
【Conclusion】The Recommended Choice for Your Situation
Let’s start with the conclusion.
| Your Situation | Recommended Choice |
|---|---|
| Earning over 5 million yen per year + have over 5 million yen in capital | Domestic FX |
| Want to take big risks with a small amount + haven’t been profitable yet | Overseas FX |
| Have the skills to be profitable + lack the capital | Prop Firm |
| Undecided + want to test your skills | Prop Firm’s Small Challenge |
Chapter 1: Comparing the Three Options
First, let’s take a look at the differences between domestic FX, overseas FX, and prop firms in a comparison chart.
| Item | Domestic FX | Overseas FX | Prop Firm |
|---|---|---|---|
| Leverage | Maximum 25x | 500-1000x | 100-200x |
| Tax Rate | Fixed at 20.315% | Maximum 55% | Maximum 55% (can be reduced via corporate structure) |
| Margin Call Risk | Yes | No (zero-cut) | No |
| Maximum Loss | Entire capital + margin call | Entire capital | Challenge fee only |
| Required Capital | Hundreds of thousands of yen+ | Tens of thousands of yen+ | 10,000-100,000 yen |
| Reliability | Registered with the Financial Services Agency | Overseas licenses | Overseas licenses |
| Profit Share | 100% | 100% | 70-90% |
| Source of Trading Capital | Own capital | Own capital | Company’s capital |
Summarizing the Comparison Points
The 3 key points to focus on in this table are:
1. Tax Rate Differences
Domestic FX has a fixed 20.315% tax rate. The rate doesn’t change no matter how much you earn.
On the other hand, overseas FX and prop firms have progressive tax rates, meaning the rate increases as your profits grow (up to 55% maximum).
At first glance, this makes “domestic FX the strongest”. But the story is not that simple.
2. Maximum Loss Differences
Domestic FX has margin call risk. If the market moves rapidly, you can lose more than your deposited capital.
Overseas FX has zero-cut