Investing On Your Own
With a local brokerage
The other way is to invest on your own. After considering what you want to get invested in, you just have to check with your current brokerage firm whether they offer investments in other countries – most brokerages in Singapore offer investments in overseas exchanges. The most common countries include Malaysia, Hong Kong and the US.
If you decide to do this, there are several fees that you need to know about. Using a local brokerage, you will often have to foot similar fees to buying local stocks, including brokerage commission charges, foreign goods and service tax (GST) and clearing fees. In addition, you will have to foot a trading fee.
Once you have bought the stocks, you will have to bear additional fees for holding your foreign stocks. This is typically about $2 per counter per month, but is waived if you make six trades per quarter. Also, if you receive dividends, you have to note that some countries apply a withholding tax on a portion of your dividends, and your brokerage will also apply small a handling fee.
However, for countries like Hong Kong, there are no withholding tax. So, it differs quite drastically from country to country.
When you sell your stocks, you typically only pay the same charges as when you bought the stocks. However, there are still discrepancies, such as Indonesia setting a 0.1% withholding fee on sell trades. So, the rule of thumb is to always check with your brokerage.
A last point to note is that foreign stocks have to be bought in foreign currencies. This means that you also may incur exchange rate charges to convert money whenever you buy and sell stocks. Local brokerages usually offer multi-currency accounts so you do not have to keep exchanging currencies every time you buy and sell foreign stocks.
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