So maybe someone knows, but as Taiwan investors buying assets through IBKR here in Taiwan, what kind of protection do we have if IBKR were to suddenly go belly up? Obviously Taiwan government offers no protection, but are we protected by the country that IBKR is based in?
Interactive Brokers is an American company open for 44 years. I don’t think you need to worry about it going belly up as its been around so long and they probably have safeguards in place to avoid going too far into the red. The knowledge in this article is applicable: What Happens When a Stock Broker Goes Bust?
I don’t think the company being open for 44 years is in any way a reason to believe it can’t go bust. 2008 crash showed us that. I’ve no doubt there are protections for US investors investing with IBKR, but not sure what kind of protections are available for international investors.
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all accounts are covered by SIPC up to 500K USD. that being said, you are right, if something happens it will take you long time to get your money back (it will involve legal activities which are more complicated to do from here remotely )
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Given that you invest in a synthetic index fund, this is an interesting question to ask. As long as you stay within 500,000 USD you are effectively insured against the broker going bust. However, if the swap counterparty of your fund defaults, you have no or only very limited protection.
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Interactive Broker accounts of Taiwan residents are opened at the US entity, it seems (according to support and this page: IBKR Entity)
Does anyone know if this means more taxes (withholding, estate) even if I limit myself to investing in non-US domiciled ETFs on non-US exchanges?
You cannot avoid the 15% dividend tax for Ireland-domiciled ETFs as an example. Also, Ireland has a higher inheritance tax threshold of 325,000 GBP.
https://www.bogleheads.org/wiki/Nonresident_alien's_ETF_domicile_decision_table
I see, but this would also be the case if I bought them through a broker in, say, the EU, right?
I’m asking because there was another post (by gator), earlier in this thread, saying that the fact that the account itself would be in the US, this would have tax implications (even if no US residency/domicile or investment in US stocks was involved).
Maybe or maybe not, I am not sure. Any reason you would want that? Any country you have in mind?
My current broker in Europe has super-high fees… USD 50-100 for transactions which on IB seem to cost less than USD 10…
Sounds familiar. Where is your domicile for tax purposes?
Taiwan 
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Well in my experience investing from Taiwan with a US broker is great. The biggest downside is the estate tax above 60,000, but if you hold Ireland-domiciled ETFs you will not need to worry about that.
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Good to know! Will try IB, and make sure the ETFs I buy aren’t domiciled in the US.
You may want to make sure they are Ireland-domiciled ETFs. If they are domiciled anywhere else there may be implications you will need to research separately.
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Interesting thread.
As European citizen with APRC, I just opened my IBKR and I do confirm our accounts (as TW residents) are hold in US.
Might be different for those residents in HK, Singapore or other countries where IBKR has a physical presence.
Btw, I found out when I login I get redirected to interactivebrokers.com.au but the assistance said it’s merely due IP location and to speed up the server. Financially speaking Australia is not involved.
The thing is: I like IBKR because it’s big and old, therefore it’s quite safe, because it’s cheap and because I get access to US stocks/bonds/ETFs, but if being a European with APRC still makes me liable of any US tax, sounds a rip off to me, but I don’t think changing broker would be a solution. I believe all brokers must comply with US tax.
Another big question mark comes to my mind after reading here. Will I be anyhow involved with FACTA declaration?
Wherever I open a bank account in Asia I am asked to sign several papers that I’ve nothing to do with FACTA declaration.
As I am not US citizen, nor green card holder and I do not have anything linking me with US I had easy life before, but what about now that I open IBKR and my funds are ‘parked’ in US?
Will I have to do anything about FACTA?
Yes, you’ll most likely have to fill out a form stating that you’re not a US citizen / US person in regards to taxes. That form itself could also be some kind of FACTA-related form.
Also, you‘ll probably have to fill out a W8-BEN (?) in order to trade US stocks. IBKR might require this when opening the account.
If you only trade and hold funds domiciled in Ireland, you should not (directly) come in contact with any US taxes. If you trade US stocks, IBKR will automatically deduct 30% taxes on dividends (because Taiwan doesn’t have a tax treaty with the US).
The „physical“ location of where your broker keeps your holdings shouldn’t matter to my knowledge (for non-US stocks / funds).
Yes, even my German bank / broker again asked me to confirm that I am not a US citizen and had me fill out a W8-BEN, too, after I told them about my move to Taiwan…
For Canadian non-residents, perhaps it would be better to stick with Canadian brokerages? Canada has no estate taxes. And it feels a bit safer to keep money out of reach of the IRS since they are not allowed to levy tax due against Canadian citizens at any Canadian institutions. Canada also has a tax treaty with Taiwan, which reduces dividend and other taxes.
However Canada doesn’t have Irish domiciled ETF equivalents. VFV, XSP, VUN etc. on the TSX are just wrappers around the US equivalents, so you’d be hit with full withholding. I think it’s 30% tax withholding for Taiwan residents since the W8Ben you sign indicates you can’t claim the US-Canada tax treaty for being a non-resident.
Maybe the next best thing for Canadian non residents is to buy Irish domiciled ETFs from Canadian brokerages that take non-residents. I think Questrade does, but I’m not sure if you can buy Irish ETFs from there.
Thanks for very helpful thread.
Quick question regarding to Canadian investing in Taiwan if you guys don’t mind. If I have some investment in IBKR or Questrade (non resident account) while I’m tax resident in Taiwan with APRC, then somehow I couldn’t stay in Taiwan for over 183 days in next year due to work or travel and couldn’t make a requirement to be a tax resident in Taiwan.
What would happen to my investment account? Do I have to close it or can keep it still as a tax resident in Taiwan?
I have an HSBC account and am interested in doing the same.
At what point does the conversion from TWD to USD happen? Or does IB accept trading in TWDs?