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General Category => Shares => Topic started by: gto52 on August 02, 2018, 04:00:38 pm

Title: Investing in US Stocks?
Post by: gto52 on August 02, 2018, 04:00:38 pm
I want to invest in US Stocks primarily for dividends, I have an ZAR account with Easy Equities for over 2 years and was considering the US account but after reading some posts about the issue of withdrawing funds(needing a forex account with Bank) and some of the shares I want to invest in aren't listed on the Easy Equities.
I started looking at local offshore brokers like Webtrader but costs and minimum deposits are an issue as I will only be investing a few thousand rand a month. 
Then I read about going directly overseas, and over the last few weeks have been reading up about it on this and other forums.
I opened a Std Bank Shyft account with the app as I have a Std bank current account already.
TD Ameritrade seemed like a possibility, then I read about DeGiro but the EU bank account requirement is an issue, N26 bank account seemed an option but again EU address is needed then I read that some people use Aramex to get a forwarding address but that seems a bit dodgy.
I have duel citizenship(Irish & SA) but I have never even been to Ireland(Grand father was born there) and it doesn't seem possible to open an Irish bank account as a non resident.
Also I still need to apply for my South African passport, I have never had the need to apply but I probably need it for applying to some of the options above.
Does anyone have any further advise for me?
Title: Re: Investing in US Stocks?
Post by: Patrick on August 02, 2018, 04:07:20 pm
If you have $10 000+ you can open an account with Interactive Brokers without needing a foreign bank account.

Less than that and De Giro is the way to go. N26 have an Irish office, so if I was you I'd try find a relative in Ireland to accept the card on your behalf. All they need to do is give you their postal address and then repost the card to you somehow.

You'll need a passport to open the N26 account, and ideally it should be your Irish one, though some people managed with their SA one.
Title: Re: Investing in US Stocks?
Post by: gto52 on August 02, 2018, 04:19:02 pm
Problem is my mother lost contact with relatives in Ireland long ago(40 years or so ago), I would have to cash out some of my investments for the $10000 min and I don't want to do that.
TD Ameritrade has no minimum deposit.
Title: Re: Investing in US Stocks?
Post by: Patrick on August 02, 2018, 04:29:31 pm
I'm not sure if they trade on the London stock exchange where the Irish funds are listed, but for under $60k estate duty isn't an issue so that's no big deal. Whatever you do make sure you never cash in a TFSA! In fact the first R2750 each month should go in to that before you even consider anything else.
Title: Re: Investing in US Stocks?
Post by: gto52 on August 02, 2018, 04:31:40 pm
Also just thinking about dividends tax say I managed to register with DeGiro with Irish passport.
Ireland I see also has a tax treaty with the US like SA, how would that effect my tax situation?
Would I have to pay tax in Ireland?
Title: Re: Investing in US Stocks?
Post by: gto52 on August 02, 2018, 04:34:41 pm
I'm not sure if they trade on the London stock exchange where the Irish funds are listed, but for under $60k estate duty isn't an issue so that's no big deal. Whatever you do make sure you never cash in a TFSA! In fact the first R2750 each month should go in to that before you even consider anything else.

Sorry what Irish funds are you talking about and the under $60k estate duty?

Yes will definitely not cash in TFSA
Title: Re: Investing in US Stocks?
Post by: gto52 on August 02, 2018, 04:39:15 pm
Here is a link to an article on opening a US brokerage account as a non-resident foreigner although after doing further research I dont seem to think the W-7 form is necessary?:

http://onemoredime.com/2016/02/13/invest-without-ssn/

Another one from TD Ameritrade:

https://tickertape.tdameritrade.com/personal-finance/trade-securities-foreign-tax-14997

 
Title: Re: Investing in US Stocks?
Post by: jaDEB on August 02, 2018, 04:42:22 pm
I have an account with Sasfin, had it for years, and was happy to discover about 2 years ago, I can invest offshore. All they did was open an Saxo Account for me and transferred money out of my SASFIN account into Saxo / Converted to Dollars account and so far I bought Netflieks, Tiensent and Tesla. 

I did have to fill in some additional forms i.e. W-8BEN
Title: Re: Investing in US Stocks?
Post by: gto52 on August 02, 2018, 04:48:17 pm
I have an account with Sasfin, had it for years, and was happy to discover about 2 years ago, I can invest offshore. All they did was open an Saxo Account for me and transferred money out of my SASFIN account into Saxo / Converted to Dollars account and so far I bought Netflieks, Tiensent and Tesla. 

I did have to fill in some additional forms i.e. W-8BEN

What are the costs like with SAXO and the minimum deposit?

TD Ameritrade only do US exchanges no international ones
Title: Re: Investing in US Stocks?
Post by: gto52 on August 02, 2018, 04:54:02 pm
I see min is $10000 for SAXO, Std Bank Webtrader is only $1000.

But how do they compare with fees?
Title: Re: Investing in US Stocks?
Post by: Orca on August 02, 2018, 07:01:27 pm
Due diligence is needed when dealing with foreign brokers as many of them are not regulated or say they are but headquartered outside of the jurisdiction of their regulator.

Some of these brokers pretend to invest your money in the country and company you chose but it does not. It gets pooled in one account in their name and you trade against the broker.

If you are a long term investor they may invest your money but they have ways of making money from you.

I have had a bad experience with SAXO- Bank some years ago and I posted here about it. Do research and the best place to do so is the "forexpeacearmy" as they have the expertise and legal people to help.

https://www.forexpeacearmy.com/forex-reviews/149/www.saxobank.com
Title: Re: Investing in US Stocks?
Post by: andre on August 02, 2018, 07:09:17 pm
Also just thinking about dividends tax say I managed to register with DeGiro with Irish passport.
Ireland I see also has a tax treaty with the US like SA, how would that effect my tax situation?
Would I have to pay tax in Ireland?

As long as you have a forwarding address in any of the supported EU countries (Euro based) you can open an N26 bank account with your SA passport
Once you have the N26 account created you can open a DeGiro account. (Send me a PM if you want referral links to either.)
Make sure you understand what a custody account is and choose accordingly.

As long as you are considered 'ordinarily resident' in SA you will be taxed in SA.
Dividend Withholding Tax will be deducted by the broker before it hits your trading account - depending on your SA tax rate there is a potential to get a slight rebate when you declare it to SARS. If the product/share you sell is domiciled in Ireland then CGT will be collected by SARS when declared - if it's not done by Ireland already. Make sure you have a will in place to deal with offshore assets.

Dont consider the above as complete information on the matter of tax without following your own due diligence - I'm no expert and only offer my opinion


Title: Re: Investing in US Stocks?
Post by: Orca on August 02, 2018, 08:01:20 pm
Ireland has no rights to tax Capital Gains as it is residency based tax by the DTA treaty rules. You will pay tax to SARS on Interest, Dividends and CGT only in SA.

This is not advice as is the norm to state after giving advice. This is real and the true advice that no one can refute. I do not offer opinions as opinions can be wrong. This however gets me many enemies here but so what. >:D
Title: Re: Investing in US Stocks?
Post by: gto52 on August 03, 2018, 07:26:15 am

[/quote]

As long as you have a forwarding address in any of the supported EU countries (Euro based) you can open an N26 bank account with your SA passport
Once you have the N26 account created you can open a DeGiro account. (Send me a PM if you want referral links to either.)
Make sure you understand what a custody account is and choose accordingly.
[/quote]

What if N26 decide to stop accepting forwarding addresses and then block your account, which is the account linked to DeGiro?
Title: Re: Investing in US Stocks?
Post by: gto52 on August 03, 2018, 10:59:12 am
Maybe I should just use Easy Equities?

I was just worried about withdrawals, although I don't normally sell anything!

When I come to withdrawing one day I should hopefully have more than enough to warrant opening a forex account with Std Bank in the Isle of Man
Title: Re: Investing in US Stocks?
Post by: Patrick on August 03, 2018, 11:05:19 am
They're more expensive than the offshore guys but otherwise there's nothing wrong with EE for the first $60 000.
Title: Re: Investing in US Stocks?
Post by: gto52 on August 03, 2018, 11:47:29 am
This why I didn't want to use EE for US shares:

https://mybroadband.co.za/vb/showthread.php/944979-Easy-Equities-USD-Account-Warning
Title: Re: Investing in US Stocks?
Post by: Patrick on August 03, 2018, 12:20:16 pm
Very interesting, I wasn't aware of that! Thanks for the heads up, I was nearly going to start recommending them to others. I think I'll wait until they sort out the repatriation of funds.
Title: Re: Investing in US Stocks?
Post by: gto52 on August 07, 2018, 03:25:09 pm
I asked Easy Equities about the withdrawal process they said:

"Thank you for the query.

The withdrawal process is the same as your ZAR account. You can make a withdrawal into a cheque account, just keep in mind that we only pay Dollars for USD account withdrawals so your bank would contact you to convert the funds into Rand."

So it seems like it isn't a problem after all.
Title: Re: Investing in US Stocks?
Post by: willemm on August 08, 2018, 01:25:27 pm
So I see Saxo Capital Markets SA is no more after the acquisition by Sasfin. Looks like it is rebranded to Direct Market Access now: http://www.dma.co.za
Title: Re: Investing in US Stocks?
Post by: t_Rex on January 24, 2019, 11:46:52 pm
So, for those who have neither $10,000 for an IB account, or an EU address/passport for a De Giro account, what is the best way to go?
Title: Re: Investing in US Stocks?
Post by: Patrick on January 25, 2019, 10:43:36 am
Interactive brokers has dropped the $10 000 minimum. They only issue I have with them is that they have a $10/month minimum fee, so if you only spend $5 in transaction fees for the month, you have to pay another $5 at the end of the month.
Title: Re: Investing in US Stocks?
Post by: Co on April 08, 2019, 07:11:21 pm
Orca have very solid advices here. So many scums out there, you need to be carefull even with local stocks and local brokers. How can you be sure they will do what they promise to you even after you will get the needed bank account for that.
Title: Re: Investing in US Stocks?
Post by: Orca on April 09, 2019, 07:24:07 pm
@Stefan. I have never traded on a foreign stock exchange but can give you some pointers.
In SA you pay tax on your worldwide income so any trades made and concluded will be regarded as income. Many people think that if the money is still overseas after the trade is over and done then it is still gaining or losing value as Forex and no SA tax is due until the cash is available in SA. This is not true.

You donít pay tax on currency movement while you are invested so you must do all the calculations in USD such as the purchase and sale plus the profit/loss. Only then do you convert the USD to ZAR at the spot price on the day the trade is concluded.
This amount must be recorded by you for efiling later. Note that all amounts in your broker account must remain in USD for all future trades. Only once the trade is concluded do you record the profit/loss in ZAR.

This is trading much like selling and buying cars so you will be a provisional tax payer and must adhere to the dates required for provisional tax returns.

The same applies to investors except they are not provisional tax payers.
Title: Re: Investing in US Stocks?
Post by: XXXXX on April 13, 2019, 04:16:01 am
I used Internaxx for 10 plus years (Closed last year) with no problems.    Very happy with the product and service levels, perhaps more expensive than other alternatives.   But I would use them again.
Title: Re: Investing in US Stocks?
Post by: XXXXX on April 13, 2019, 11:57:55 pm


You donít pay tax on currency movement while you are invested so you must do all the calculations in USD such as the purchase and sale plus the profit/loss. Only then do you convert the USD to ZAR at the spot price on the day the trade is concluded.
This amount must be recorded by you for efiling later. Note that all amounts in your broker account must remain in USD for all future trades. Only once the trade is concluded do you record the profit/loss in ZAR.



Correction to above.  An individual taxpayer (for CGT purposes) has the ability to choose to translate the foreign gain at either the Spot price on the date that the share was sold or at the average exchange rate in the year that the security was disposed.  Two important take away's from above are as follows.   1.  In times of rapid currency fluctuations the taxpayer should compare the rate and apply the rate that will be most beneficial for him selves.   
2.  If you long term view is of a gradual devaluation of the Rand, the above method of calculating the capital gain on foreign securities is extremely beneficial to the taxpayer (no matter which method you use), as effectively the forex gains (from date of purchase to date of sale) is received free of capital gains.  You do not get the same benefit if you acquire South African denominated securities with offshore exposure.