Local broker (XTB, TMS) vs foreign (IC Markets) — which to choose?

"XTB or IC Markets?" — the question comes back in every discussion about a forex account, usually with the assumption that one correct answer exists. It does not. A Polish brokerage house licensed by the KNF and a regulated broker from another EU member state operate inside the same MiFID II rules and under the same ESMA limits. They differ where the advertising never looks: in how the cost of a trade is charged, in how the annual tax return gets done, and in who receives your complaint. Below I compare both models across six dimensions.

Dimension 1: Regulator and safety

A Polish broker operates under an authorisation from the Polish Financial Supervision Authority (KNF) and keeps client money in accounts segregated from the firm's own assets. If the brokerage becomes insolvent, the compensation scheme run by the Central Securities Depository (KDPW) steps in: the ceiling is the zloty equivalent of 22,000 EUR, with the first 3,000 EUR paid in full and 90 percent of the excess above that. A broker from elsewhere in the EU (CySEC in Cyprus, BaFin in Germany) or from the United Kingdom (FCA) carries equivalent obligations, but its guarantee fund is a national one — the Cypriot ICF covers up to 20,000 EUR, the British FSCS up to 85,000 GBP.

The second difference is the complaint route. A dispute with a Polish brokerage house is conducted in Polish: first with the broker itself, then through the KNF or the Financial Ombudsman, inside a legal system you already know. In a dispute with a Cypriot broker the correspondence goes in English, and once the internal complaints procedure is exhausted the case lands with that country's regulator and its guarantee scheme. As long as the broker behaves properly, none of this matters. It starts to matter on the day something goes wrong.

Dimension 2: Trading costs

This is where the two models diverge most visibly. Polish brokerage houses (XTB, TMS) run retail accounts mainly on the Market Maker model, where the whole cost sits in the spread and there is no separate commission. Foreign brokers (IC Markets, Pepperstone) build on ECN/STP: a tight market spread plus a commission charged per lot.

The conclusion is less obvious than the marketing on either side suggests: in the deepest liquidity hours the cost of a single trade can be comparable. The differences show up outside those hours — a raw ECN spread widens along with the market, while a Market Maker more often holds a wider but steadier quote. Which is why the only credible calculation is your own: take your currency pair, the hour you actually trade, and your typical position size, then price a trade at both brokers from their current fee schedules.

Dimension 3: Tax — and here the Polish broker wins clearly

This is the least advertised dimension and, in practice, the one a Polish investor feels most.

In practice it works out like this: with a few dozen trades a year, doing it yourself is one evening with a spreadsheet and the NBP rate tables. With a few hundred trades it becomes a job you either automate or hand to an accountant — and at that point the bookkeeping fee belongs in your cost of trading. A Polish broker simply does that work for you, because the numbers arrive ready on the PIT-8C.

Dimension 4: Support, language, locality

• A Polish broker answers in Polish, on a Polish phone number, during office hours — typically 8:00 to 18:00 Polish time — and in an emergency will let you close a position over the phone.
• An EU broker from abroad answers in English on an international number, but usually around the clock from Monday to Friday. Polish-language support is rare.
• Educational events in Polish — webinars, seminars, in-person workshops — are in practice run only by domestic brokers. XTB does this regularly; TMS has its own training materials.

For a beginner still asking the first questions, a conversation in their own language has real value — misunderstanding how an order type works costs more than the difference in spread. For someone who simply executes trades according to a plan, support drops well down the list.

Dimension 5: Instruments and platform

XTB lists roughly 1,700 instruments — forex, equities, ETFs, crypto, indices and commodities, which is a broad menu for an ordinary investor. IC Markets quotes around 2,000 positions, weighted towards the currency market and shares. Pepperstone runs a narrower list, of the order of 1,200 instruments. For anyone trading a handful of major pairs these differences mean nothing; they start to count only on niche markets.

Platforms split the field more sharply. The foreign brokers build on MetaTrader 4 and 5, and IC Markets and Pepperstone additionally offer cTrader, a favourite among scalpers. XTB went its own way and leans on the proprietary xStation 5 — comfortable for a beginner, but thinner on automated trading than MetaTrader with its Expert Advisors.

"There is no broker that is better in general. There is a broker better matched to how often you trade and how much time you are willing to spend on your tax return." — Jarosław Wasiński, editor-in-chief of MyBank.pl, 2026.

Dimension 6: Leverage and ESMA

Here there is no difference at all. A KNF-licensed broker and a regulated broker from another EU country apply the same ESMA leverage caps: 1:30 on the major currency pairs and 1:20 on minor pairs, gold and the main stock indices. The British FCA kept equivalent rules after Brexit. Negative-balance protection is mandatory as well — a retail client cannot lose more than the account holds — along with automatic close-out once account equity falls to half of the required margin. The level at which a broker sends an earlier margin warning varies from firm to firm; the forced close-out threshold is common to all of them.

The exception is the offshore broker (Vanuatu, Saint Vincent, Belize) advertising 1:500. That is not "a foreign broker from the EU" — it is an entity outside European supervision, to which the ESMA rules simply do not apply. Always check the regulator rather than the claim on the website. Holding several licences in different jurisdictions at once, offshore ones included, is deliberate regulatory arbitrage by the broker, and it is worth understanding. For a retail investor in Poland the rule is simple: retail leverage above 1:30 is a warning sign when you assess a broker. And if you have already been caught by a dishonest operator, beware of so-called fund recovery firms — a second fraud, aimed at people who have just lost money.

What to do before you open an account

1. Count how many trades you really place in a month. Open the history of your demo account or of the live account you already run and write down the number of trades from the last three months. Without that figure any cost comparison is guesswork, because trading frequency is exactly what decides whether the difference between the two pricing models touches you at all.
2. Price both models on your own data. Take the pair you trade most often, your typical position size and the hour at which you actually sit down to the chart. Open the fee schedules of both brokers, work out the cost of a single trade under each model, then multiply it by your monthly number of trades.
3. Verify the licence in the regulator's register. Take the licence number from the footer of the broker's site and look it up in the KNF entity search or the CySEC register, and while you are there read through the KNF public warnings list. The same verification logic, step by step, sits in the technical walk-through of broker regulation at ForexMechanics. If the number is missing or the company name does not match, the check ends there and you keep looking.
4. Plan the tax filing before you deposit anything. Establish whether the broker issues a PIT-8C. If it does not, decide in advance how you will collect the trade history and convert it into zloty at the NBP rates — and treat that time, or the accountant's fee, as part of the price you pay for a tighter spread.

Nothing stops you from running both accounts at once. Some investors keep a domestic account for calmer, less frequent trading and a simple tax return, and a foreign one for active trading in the deepest liquidity hours. It is not for everyone — two accounts mean two sets of costs, two onboarding procedures and two sets of documents at year end — but for someone who genuinely combines two styles of trading it is often the most comfortable answer.