Andrew Hallam and Expat Brokerage Options
The best information out there on this topic is from Andrew Hallam, in The Global Expatriate’s Guide to Investing: From Millionaire Teacher to Millionaire Expat. He recommends three brokerages for non-Americans including DBS Vickers, TD Direct Investing and Saxo Capital Markets.
DBS Vickers allows expats to purchase shares using the Hong Kong, Singapore, Canadian and US exchanges. Hallam recommends purchasing shares on the Hong Kong or Canadian markets as opposed to the American one because if you die, your heirs will avoid capital gains taxes, which will be levied even if you, or your heirs, are not American. Fees for DBS Vickers are quite high with minimum trading costs of $29 per trade. However, this is no monthly minimum fee, nor is there an annual fee.
TD Direct Investing International
Another option for non-Americans is TD Direct Investing International, while owned by Canada’s TD Bank it is based in Luxembourg. Through TD Direct, you have access to eighteen markets worldwide. Unlike DBS Vickers, they charge an annual account fee of 0.2% and their trading costs range from 28-35 Euros or higher.
Saxo Capital Markets
The final option Hallam recommends is Saxo Capital Markets, which is located in multiple locations around the world. You can trade on many exchanges around the world and the minimum trading fee is around $25.
Interactive Brokers is where I hold my personal account and Andrew Hallam calls it the “Dark Horse Winner” with extremely low trading costs and the only stipulation being a minimum commission of $10 per month. So, if you are not an active trader and do not generate $10 worth of trading fees, you will be charged that $10 anyway. They get their pound of flesh one way or the other! However, this monthly minimum fee is waived once you hold $100,000 in your account, but of course, you will still pay a commission if you make any trades.
Thus far, I have been extremely happy with Interactive Broker’s customer service and trading platforms (their mobile app is excellent) but would caution that is perhaps not for the total beginner as it is more geared to the professional, frequent trader and can get quite complicated if you do not know what you are doing, or do not have someone to show you how to get started the first few times.
The only hesitation about using Interactive Brokers, as opposed to the previous three, would be that it is an American company and you might be charged U.S. Estate taxes upon your death, even if you buy from non-American exchanges. You need to check with an international tax accountant for confirmation on this because even Andrew Hallam does not seem that clear on the rules about this.
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