Is it possible to buy ETFs that are traded on the NYSE, here in Taiwan? I’d like to try and invest a little and this is all new to me, but when it comes to management I wonder if it’s better to just open an online account via my US bank and trade there.
(ETF online in US - Scottrade, Etrade, etc)
Pros
Easy to trade
Fees seem okay
Can also do other trading online (stocks, funds, bonds, etc)
Cons
Need to transfer to US acct (fee)
Can’t bring back money to Taiwan w/o paying another transaction fee
Tax issue and IRS document logistics for tax
(NYSE ETF in Taiwan)
Pros
Can keep everything in NT
Easy access
Tax issue is simpler
Cons
Call/visit TW bank to make trades
If the TW bank is trading on the NYSE, then there’ll be a TW-to-US management fee anyway?
Not sure how much of this info is accurate, just some research I’ve been gathering. I’ve got a fairly okay grasp of index funds, but it’s the management side of it that I’m curious about. I don’t plan to trade everyday and just want to do some startup investing to put away and let it sit.
Some TW friends in the finance industry let me know that there are also ETFs traded in Taiwan, but since that info will be mostly in Chinese, I’d rather stick to the NYSE ETFs like iShares, ProShares MSCI because then I can follow it easier. Or maybe these are also available in TW, I’m not really sure.
I didn’t think of that, but I think it’s probably an option. Never worked with the financial folks in HK before so as far as administrative things go, I wonder how it compares to trading online in the States? Maybe the tax issue is an added benefit. I don’t think I’d like the IRS to see that I’m funneling money (not a huge amount) to an account in the States without me claiming that much income.
I don’t mean to discourage you from looking into it as it has been a couple of years since I have done so myself, but I’m pretty sure you will be better off cost-wise if you buy ETFs traded in US exchanges through a US brokerage. The fees that will be charged on ETF transactions in Taiwan and HK will be a bit high compared to what you would pay through a discount brokerage in the US, and the expense ratios on each fund are much higher than what you would pay on the same or similar ETF in the US.
Are you a US citizen? If so, you are going to be required to report these holdings no matter where you own them. Lack of a tax treaty with the US is not going to provide you with good protection over the long term as 1.) the IRS still has a lot of direct leverage on non-US-based financial institutions to cough up account details; and 2.) there is a fair chance that whereever you live will eventually have a tax treaty with the US and your accounts could be checked. Reporting would be easier with foreign held ETFs than foreign mutual funds (the latter is such a pain in the ass that it is not worth doing at all), but if you are a US citizen or permanent resident anyway, then why not just buy and keep in the US? That question is made with the assumption that you are buying for retirement savings and won’t be touching these shares for a number of years.
Are you married to a non-US citizen/permanent resident? If so, you might consider buying ETFs under your spouse’s name. There are two benefits to doing it this way. First, your spouse will never pay US taxes on cap gains and dividends so long as s/he remains a non-citizen/permanent resident. The second benefit is that you won’t have to worry about US estate taxes if you kick the bucket first. Current US law does not allow non-US citizens to inherit their spouse’s estate tax-free. This means that a non-citizen spouse could end up paying up to 30% tax on his or her life savings to a government that won’t even give them whatever Social Security benefits that their US citizen spouse may have accrued.
I would skip the Taiwan ETF’s altogether. There just isn’t enough turnover. The expense ratios will likely be high and the the trading market is probably not very cost-efficient. For ETF’s, it is really best to stick to the big ones like iShares, State Street or Vanguard.
If you do go the HK route, skip the banks and go straight to the brokerages. Both will be expensive relative to the US, but the banks are especially so. I’m pretty sure that all of them will broker transactions for iShares. Please do tell us what you find out.
I want to buy etfs through my taiwan bank for myself (private - EU citizen) and also for my taiwanese company.
I looked through a couple of taiwanese websites about available etfs.
The Bank clerk wants to convince me, to just by the “Taiwan Top 50”, but I rather have a more diversified global index fund.
As far as I know msci world, or ftse all world isn’t available in taiwan.
The best I could find would be an S&P 500
one denoted in NTD (by yuanta bank, which is actually also my companies bank)
and one in HK$:
Seems like transaction costs are very low: only 0,1425%
And the TER (total expense ratio) of this fund seems also acceptable with 0,45%
The bank account is for free, and (if I understand it correctly) the bank doesn’t have any management fee.
One thing I’m not sure is how the capitals gains is calculated.
I guess for business it would be 10% and for personal income capital gains is 0?
Do I also need to take other things into account or have some input on this stuff?
I would like to revive this topic, because I still haven’t found a good way how to invest.
So I compared the yuanta sp500 etf with a European ishares sp500. All converted to euro the taiwanese yuanta has about 10% less performace each 5 years.
This can’t just be the higher etf fees in Taiwan, maybe they also calculate some tax directly into the etf stock price?
Currently, I’m buying Yuanta S&P 500 ETF locally through Esun Securities. I buy manually through the Esun Stocks app, which then draws funds from one of my local Esun NTD accounts.
Besides the Taiwan-based US index ETFs, the other option for US market ETFs is to buy them directly (can be done through Taiwan securities such as Esun Securities). I’ve never done it that way, but I imagine there would be some exchange fee is there, either when depositing into your Taiwan bank’s US dollar account, or when purchasing stocks with NTD.
AFAIK there is no capital gains tax on local stocks. I’ve never seen any such thing pop up in my tax filings either.
still easier to keep everything in taiwan,
if i would transfer it to IB, I also would need to file a tax return back home, with a 27,5% capital gains tax…
fees for buying taiwan based securities with yuanta:
buy: 0,0855%
sell: 0,1855% (same as buy, but additional 0,1% “trading tax”, not sure what that actually is)
fess for buying us securities with yuanta:
about 0,5% for buy and sell, they deduct taxes when selling
and something ridiculous like a 250 USD minimum order fee…
Hello Taiwan Tiger,
Are you a foreigner in Taiwan or local?
I am interested in buying the Yuanta S&P 500 ETF (00646) but it seems like my bank CTBC is not being very helpful. When I wanted to buy the US S&P500, they told me to visit a securities CTBC branch, and that branch told me to go to a different bank to buy US ETFs.
Is it a simple procedure to buy the Yuanta S&P 500? Should I just get a Yuanta bank account to simplify this?
As a foreigner, was it easy to setup an Esun Securities account?
CTBC told me it is too much of a lengthy process and only 1/5 foreigners get approved. They told me to go to a different bank.
Is the Esun Stocks app easy to use and in English?
Once you open a brokerage account (with any securities company), you can buy any stocks or ETFs available on the Taiwan Stock Exchange.
You can also get set up to buy US stocks and ETFs directly. I believe I set this up at the same time, but I’ve never tried to buy one, opting for local instead.
I phoned CTBC English service and was told I don’t need a CTBC securities account to use the app to buy ETFs. I did however need a Trust account which took about 45 mins to setup at a normal branch. Now I can use the CTBC phone app to buy/sell ETFs and stocks. However, for international stocks I get a message about not having a USD account so for now I am just limited to Taiwan ETFs/Stocks.
The fee to buy or sell a Taiwan ETF/Stock is 1% and international is 1.5%
