Hi all,
EU-based Boglehead investor planning to move to Taiwan in the next few years. I’m very interested in knowing if there are other like-minded investors on the island, and what brokerages you use, special tax laws one should pay attention to, and also what you have on your portfolios.
Looking forward to the replies.
Interactive Brokers is the only platform I’ve found that is of any value to foreign investors based in Taiwan
are you moving here permanently ? or just for a few years?
the local investment scene is not too friendly for foreigners ( lack of English interface, relatively high fees, relatively speculative local stock market ) , i would not suggest to tie too much of your portfolio to the local market.
interactive brokers is probably the user friendly option here.
I can still use Vanguard and Fidelity but I have heard that living abroad you run the risk that they’ll cash you out and send you a check. We’ve kept the same address via US inlaws and a google phone number. I think Vanguard is probably a better deal than anything local. I have other advice as a US investor (whenever we go back to the States we invest in a roth, etc.), but probably not applicable to you. I do mutual funds and avoid ETFs.
I use Charles Schwab and it works just fine.
Don’t bother opening an account in Taiwan…terrible service, outrageous fees, maximum inconvenience.
Probably won’t work for the OP as he is not a US citizen.
They open international accounts for everybody as far as I know. I don’t have a U.S. based account myself.
Interesting. A few years back that wasn’t possible.
Thanks for the feedback - no local Brokerage accounts, got it.
What about taxes / capital gains taxes, or anything specific one should look out for? I assume foreign brokerages don’t report any taxes to local authorities?
I will start to research this topic shortly, but a few pointers would be of great help to point me in the right direction.
May I ask why?
Don’t take my word on this, and definitely check with an accountant/tax specialist, but word on the forum is that you don’t need to report annual gains on foreign investments under 1 million NTD, and you don’t pay tax on gains from foreign investments under 6 million NTD. It’s never sounded right to me, but there you go.
that sounds almost too generous - I mean 6Mio. NTDs is over 150K USD! - will definitively have a closer look at this ‘loophole’. thanks!
From Taiwan, it makes sense to keep investing into Ireland-based ETFs (unless you’re also a US citizen - that would be a really really bad idea and might even make you liable for penalties in some cases!).
Taiwan doesn’t have a double-taxation treaty with the US, so all dividends from the US would be subject to 30% withholding tax. On the other hand, Ireland does have one, so all the Irish funds benefit from reduced US withholding taxes.
Buying US-based funds would especially be a bad idea if you planned to return to Europe because they come with some bad tax implications (and lots of bureaucracy) there from what I have heard. Also, you might become subject to US estate taxes… (though I am honestly not sure if that would also be the case when having a US broker such as IBKR or just holding individual US-listed stocks…)
Personally, I just keep using my German broker to buy ETFs using a savings plan every month. Although switching to IBKR would probably be more cost effective. But I don’t need to worry about taxes if I should need to return to Germany on a short notice because the broker would handle them (unlike IBKR). For me, that’s a big advantage!
I remember a while back that at the individual level for longterm investors it was better to kind of “set and forget” with mutual funds, but doing a quick search I can see how etfs could have some benefits. I do think I’d be more tempted to trade with etfs, so I’m going to stick with mutual funds.
You can be a US NRA (non-resident alien). I recommend Interactive Brokers and I have used TD Ameritrade as well.
Consider holding Ireland-domiciled ETFs for reasons of estate taxes (important!) and dividend taxes (15% instead of 30%).
IB automatically withholds dividend tax at 15% or 30%. I think there is no need to declare anything unless your annual income exceeds 6M NTD, so there are no capital gains taxes to be paid in Taiwan.
It’s also my understanding that you don’t pay tax on annual gains from foreign investment under 6 million NTD…but if that’s the case then I’m not sure why you still need to report such gains?
simply explained : because you are taxed on your total income, the government wants to know your total income, then subtract relevant deductions , then pay on the amount thats left.
On the subject of brokerages, Interactive Brokers offer 4%+ interest on uninvested cash over 40K USD, if the value of your account meets a certain minimum.
By the way, this page says you get 4% over 10K, but I found that not to be true. There is a blended rate you get until 40K. You only get 4% over 40K USD.
