I have just opened an HSBC account and found out that they have an online bank in English and that I can buy unit trusts/mutual funds through it which is great of course. I already invested some money in a fund.
Now I wonder what is the implications for me as a foreigner to have an investment account in Taiwan. Is there any capital gains tax in Taiwan? Any other tax implications I should think of? What happens if my ARC is cancelled or if I leave Taiwan?
Also they offer three types of funds. Domestic funds, offshore TWD funds and offshore foreign currency funds. Now what is the difference between these three different types. In my country all funds are domestic and denominated in local currency as far as I know. Of course there are still tons of funds that invest abroad which will give you exposure to foreign currencies and stocks but they are all denominated in my country’s currency. It seems among the “domestic” funds that are offered in the HSBC Taiwan investment account a lot of them are still funds that invest outside Taiwan and give you exposure to foreign currencies and securities. Then what is the deal with offshore funds?
Domestics funds are managed by local banks / fund managers while offshore funds are domiciled offshore, usually in a tax haven. See here.
The difference between the TWD and foreign currency is the denomination, not that it really matters if the fund invests worldwide as it then also invests in many other currencies *. However I assume they may also have different strategies as where to invest.
( *Say you have two funds that you bought with your Taiwan Dollars, both invest in the same stocks worldwide - one is denominated in USD, one in TWD. So it doesn’t matter if you convert from the foreign currencies (where the fund is invested in) into USD and then TWD, or directly from those currencies into TWD.)
Sounds like quite a limitation if only domestic funds are available. Take a look at the ISIN, if it doesn’t start with SE it’s actually not a domestic fund, even it’s denominated in SEK.
Sounds like quite a limitation if only domestic funds are available. Take a look at the ISIN, if it doesn’t start with SE it’s actually not a domestic fund, even it’s denominated in SEK.[/quote]
Ok, I didn’t understand that domestic meant managed by local fund managers. Now I get it. And I agree with you there doesn’t seem to be much of a point to separate between offshore funds in TWD and foreign currencies.
