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General Category => Shares => Topic started by: Govprof on July 28, 2016, 06:46:27 pm

Title: Offshore broke4s
Post by: Govprof on July 28, 2016, 06:46:27 pm
Hi all

New to the site. Been reading a lot and really enjoying it.

With regard to offshore brokers - I just completed my first trade with De Giro.  They are a Dutch online brokerage with ridiculously low prices.  In fact for a whole slew of etf's they don't charge anything. When registering I used the UK  platform and my SARS tax number for the NI number as instructed by the support team.

I now think the cheapest path to offshore investment is via exchange4free as recommended by Partick, into your international bank account (UK?) and then invest with De Giro.

Thoughts?

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Title: Re: Offshore broke4s
Post by: Patrick on August 03, 2016, 08:20:09 am
I haven't looked at De Giro, but I'll take a quick look. When I compared I found interactive brokers to be the cheapest.

Do you have a UK bank account? I'm looking for a cost effective offshore account option for someone in my family who doesn't have the ability to travel and open one.
Title: Re: Offshore broke4s
Post by: Govprof on August 03, 2016, 09:47:14 am
I started looking at interactive brokers after reading your post. Also looked at Saxo but in the end it looked like De Giro was really a whole lot cheaper (free etf trading) and a lot less shlep setting up.

I do have a UK bank account, opened it with Investec.  You need £1000 to open the account but you don't need to maintain that level. Costs £10 per month.



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Title: Re: Offshore broke4s
Post by: Patrick on August 03, 2016, 10:47:59 am
Thanks, I'll look into the investec option. For DeGiro, I'm trying to get my head around all the costs. The commission free ETFs sound great, my favourite, VWRD is there too, just listed on a euro exchange in euros rather than $. What I can't find is if there are any monthly fees for the account, or any custody fees if you're holding those ETFs.
Title: Re: Offshore broke4s
Post by: Govprof on August 03, 2016, 07:06:33 pm
VWRD is available in pound, it's just not listed that well. If you search using the IE number you will find it. But only the Euro denominated fund falls under their free trading offer.



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Title: Re: Offshore broke4s
Post by: yozzi on August 05, 2016, 10:14:20 am
I haven't looked at De Giro, but I'll take a quick look. When I compared I found interactive brokers to be the cheapest.

Do you have a UK bank account? I'm looking for a cost effective offshore account option for someone in my family who doesn't have the ability to travel and open one.

Patrick, I have an acc in the UK with Nationwide and they have always been very efficient and provide good service and attend to any queries immediately not sure how you open an acc from here as I am originally from the UK and go back frequently but would recommend them
Title: Re: Offshore broke4s
Post by: Patrick on August 05, 2016, 10:27:10 am
Thanks, I'll send them a note to see if they'll open an account for a foreigner. I know some European countries do, but it's not a fullt fledged transactional account, and won't allow the use of a debit card when traveling.
Title: Re: Offshore broke4s
Post by: yozzi on August 05, 2016, 10:30:06 am
Thanks, I'll look into the investec option. For DeGiro, I'm trying to get my head around all the costs. The commission free ETFs sound great, my favourite, VWRD is there too, just listed on a euro exchange in euros rather than $. What I can't find is if there are any monthly fees for the account, or any custody fees if you're holding those ETFs.

Have opened an offshore broker acc with TD Direct International which because of all the forms and questions they ask has taken forever and now when I transferred funds into the acc and asked to buy ETF's they sent me this reply:

If this is an ETF that is leveraged or involves short selling then you will have to complete the ‘complex products test’.

You will also have to accept the exchange agreement for investing in the US.


So doesn't look like I'm going to be using them and the DeGiro option looks much better - was it easy to open an acc with them to trade ETF's? No 'products tests' or similar?
 
Title: Re: Offshore broke4s
Post by: yozzi on August 05, 2016, 03:11:38 pm
Opened an acc with Degiro today after reading this review online:

moneygrower.co.uk/2015/06/degiro-a-review-of-uks-cheapest-investing-platform/

Title: Re: Offshore broke4s
Post by: Govprof on August 05, 2016, 05:50:14 pm
No products test. Very simple

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Title: Re: Offshore broke4s
Post by: Mr_Dividend on August 11, 2016, 11:34:45 am
Govprof - how is this combination (investec account and de Giro) working out for you?

Very interested in the combination myself.

Are there are monthly account fees with de Giro?

Anyone find a way to open a UK bank account without having to visit the UK?

Title: Re: Offshore broke4s
Post by: Govprof on August 11, 2016, 04:32:29 pm
Hey Mr_D.

Thus far it's been great. I have a local Investec account and through them was able to open the UK Investec account. The cost is £10 per month. 

On the De Giro side the only costs are trading costs and these are ridiculously low in comparison to what I have seen on other platforms.

I'm new to the game so I might be missing something. But so far... all good.

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Title: Re: Offshore broke4s
Post by: Mr_Dividend on August 11, 2016, 06:15:35 pm
aaah, only read that part now, unfortunatly.

Quote
Available to South African Investec Private Banking clients, the Investec UK Private Bank Account provides you with a transactional account in the United Kingdom.

And heres me with only a capitec account.

 :D
Title: Re: Offshore broke4s
Post by: Patrick on August 12, 2016, 10:37:07 am
For you guys opening the De Giro accounts, just make sure you get the CUSTODY account, and not the regular account. With the regular account your shares are lent to others (to be shorted I assume). Trouble is, the risks are on you should the party lending the shares not be able to return them.

This isn't an issue with the newer custody accounts.

I'm still looking at costs. At the moment if I buy VWRD through interactive, I pay 0.08% with a minimum of $1.70 per transaction. With De Giro I'd pay €2 + 0.02%.

Here's how I see the costs:
$1000 IB: $1.70 DG: €2+$0.2
$2000 IB: $1.70 DG: €2+$0.4
$3000 IB: $2.40 DG: €2+$0.6
$4000 IB: $3.20 DG: €2+$0.8 (+-$3)
$5000 IB: $4.00 DG: €2+$1.00
$10000 IB: $8.00 DG: €2+$2.00

It looks to me like there's a crossover point at around the $4000 mark, before that interactive is cheeper, and after that De Giro is cheaper. This is all provided you have $100 000 in interactive, otherwise you pay $10 per month for the account. There will be another crossover too, with IB there's a maximum fee of $39, so for very big transactions IB will be cheaper again.

In theory you could also just buy VWRD in Euros for no fees, however since I have $'s in my account and not Euros, I'd have to pay 0.1% currency conversion, so again it would only be cheaper for very small amounts.

Another theory says I should just buy VT in USD, which has TER than VWRD (0.17% vs 0.25%), but then the hoops to jump through to get the divvie tax reduced from 30% to 15%, and there's the risk of holding over $60k and dying and having to put the US estate tax treaty with SA to the test. So much to consider for a saving of a couple of $ a month!
Title: Re: Offshore broke4s
Post by: francismichael on September 26, 2018, 10:32:22 am
Hi all,
I'm new to the the investor challenge, but have listened to a lot of the Fat Wallet Show ,and been reading Patrick's blogs. I have a Euro bank account and have been looking for the most cost effective way to invest in global ETF's. I finally got the De Giro recommendation through Patrick's blog and these discussions and have successfully opened a CUSTODY account with them.

They allow 1 ETF purchase per month free of fees, and after that the fees are pretty low anyway. So my plan is to buy the Vanguard FTSE world monthly. I think this is the Ireland domiciled ETF, which Patrick recommends and has a 0,25% fee. No monthly account fees for De Giro and if I stick to the plan no broker fees, amazing!

My only concern is I don't know much about EU legislation and how De Giro handles shares. If De Giro goes bust, what is my country party risk? Vanguard physically holds the shares in my name right?
Also, I presume I need an additional will, but should that be in the domiciled country of the ETF (Ireland), or of the Broker (Netherlands or Ireland) or of my EU bank account (Germany) ?

Others who have their ETF's with De Giro, are you confident with your money sitting over there on the other side of the world? Still coming to terms with offshore investing.

Also I read somewhere that De Giro do Crypto.. I wonder if I can deposit Bitcoin and sell it and buy ETFs....
Title: Re: Offshore broke4s
Post by: andre on September 28, 2018, 08:53:43 pm
About a year ago I sent a mail to Just ONe Lap regarding this https://justonelap.com/community-post-buying-etfs-offshore/
Note that De Giro allows the first trade executed in an ETF of the "Free ETF Selection" free of charge (every calendar month) regardless of size of trade.
You can, however, have more than one free trade in a month as long as the trade is in the same direction (i.e. buy) and for more than 1000 EUR

I'm also still feeling my way around the pitfalls of direct offshore and still need to figure out the will issue - but from what I understand you do need a will in the domicile country of the broker - where your trading account is held?

Title: Re: Offshore broke4s
Post by: Exponentx on September 30, 2018, 05:54:07 pm
Hi francismichael

I am in the same boat. I am a saffa based in Austria. Opened an Ireland (so its in english and to avoid BREXIT issues) based DeGiro Custody account. So far done one EUR1000 VWRL purchase which I am happy with.
I am however now nervous to increase my holdings due to estate issues.

@Patrick, I would be interested to know how you have set up a will in foreign countries. Do you use a South African based lawyer? And as francismichael mentions, do you need the will in the country of your DeGiro account or where the company is domiciled? Your input would be great :)

Thanks for the great blog and putting your thoughts out there, I enjoy following it!
Title: Re: Offshore broke4s
Post by: Exponentx on September 30, 2018, 06:25:15 pm
Just read through this thread and seems to give some answers - thanks Patrick.
https://shareforum.co.za/shares/us-shares-for-those-with-ee-accounts/30/
Title: Re: Offshore broke4s
Post by: t_Rex on January 24, 2019, 11:34:10 pm
Hi francismichael

How is the De Giro solution working out for you? I am also looking for a cost effective way to invest in foreign currency denominated ETF's on a monthly basis.

Is your Euro account local or offshore?
Title: Re: Offshore broke4s
Post by: Olive555 on July 13, 2019, 02:30:24 pm
Tried to open a Degiro account but they don't allow opening of accounts from SA.  Any other suggestions for a low fees offshore broker which opens accounts for SA residents?
Title: Re: Offshore broke4s
Post by: Patrick on July 14, 2019, 06:49:45 pm
Interactive brokers, but you have to pay $10 a month until you reach $100 000.
Title: Re: Offshore broke4s
Post by: willemm on July 19, 2019, 02:46:41 pm
For the guys with a IB account. I see you can actually deposit ZAR? Was that always an option? Wondering what the currency conversion would be - cannot find it on the IB site anywhere (so far..)
Title: Re: Offshore broke4s
Post by: willemm on July 20, 2019, 09:19:28 am
For the guys with a IB account. I see you can actually deposit ZAR? Was that always an option? Wondering what the currency conversion would be - cannot find it on the IB site anywhere (so far..)

still can't seem to find the exchange rates on IB if you deposit ZAR..
Title: Re: Offshore broke4s
Post by: MoneyChief on August 20, 2019, 03:41:41 pm
With interactive brokers I see they can provide a debit card. Does anybody know if they will ship the card to SA?
Title: Re: Offshore broke4s
Post by: conradl on August 21, 2019, 06:30:16 am
Hello MC. No, I tried getting access to the card its unfortunately only for US citizens (top of my head)
Title: Re: Offshore broke4s
Post by: MoneyChief on August 22, 2019, 10:53:32 am
Thanks conradl, I found another company that might offer a card, https://transferwise.com/gb/borderless/card, looks quite promising.
Title: Re: Offshore broke4s
Post by: yozzi on January 14, 2020, 02:31:10 pm
Thanks conradl, I found another company that might offer a card, https://transferwise.com/gb/borderless/card, looks quite promising.

Is there any update on this thread who are the best money transfer companies with branches in SA? Looking to transfer a sizeable amount to the UK has anyone used any transfer companies lately that they would recommend?
Title: Re: Offshore broke4s
Post by: IndustryGuy on January 15, 2020, 12:59:30 pm
Thanks conradl, I found another company that might offer a card, https://transferwise.com/gb/borderless/card, looks quite promising.

Is there any update on this thread who are the best money transfer companies with branches in SA? Looking to transfer a sizeable amount to the UK has anyone used any transfer companies lately that they would recommend?
Hi Yozzi,

Do you mean you are looking for someone to handle the transfer of funds from SA to an already existing account in the UK? If that is all you are looking to do, try us at Rand Swiss. We already have about 20+ of you guys from this forum using us to handle your offshore transfers. Just send me a mail to [email protected] with any questions.
Title: Re: Offshore broke4s
Post by: gcr on January 16, 2020, 12:53:48 pm
There are a number of options that one can follow - to date I have been advised that I could use Credo and then it is also possible to use Saxo through Standard Bank. What I have found is that charges are quite exorbitant, but I will follow up with Standard Bank

What I'm looking for is to externalise funds I London but then I also want to be able to use a company's platform to buy and sell shares as I do with my local broker. This seems like an almost impossible option, yet all local banks have London American and European operations and within these domains they must have trading platforms their retail customers
I am even contemplating flying to London with the express purpose of opening an account, depositing funds and gain a right to access that banks trading platform and then operating the buy/sell instruction over their platform back in RSA. However I need to do further research as I don't want to end up in London without having established all the attributes and pitfalls of establishing accounts and platforms
     
Title: Re: Offshore broke4s
Post by: IndustryGuy on January 16, 2020, 01:05:04 pm
Hi GCR,

You can also open an offshore Saxo (now locally operating as DMA after Sasfin bought shares in the local operation) through us. If you are not happy with the rates Standard Bank are giving you, just let me know. With a DMA account you can easily download the platform and execute your own trades.
Title: Re: Offshore broke4s
Post by: yozzi on January 16, 2020, 02:07:32 pm
I've seen a lot of money transfer companies offering free transfers ie Exchange4Free, Travelwise, etc, etc so where do they get their commissions from? Do they get it when you remove funds from their accounts?
Title: Re: Offshore broke4s
Post by: IndustryGuy on January 16, 2020, 02:25:03 pm
Can't speak for Travelwise but I see on Exchange4free's website they have 'all inclusive costs of 2% to 6%' so it seems like they are being creative with the '4free' part. In other words they don't charge commissions on top of what they charge inside the spread like the banks do. That is the '4free' part. But even at the lower end of 2%, it is not really all that much better than the banks. At 6%, rather go to the bank. Even they don't charge that much.
Title: Re: Offshore broke4s
Post by: gcr on January 16, 2020, 04:10:12 pm
Hi IG - thanks for the heads up
Title: Re: Offshore broke4s
Post by: Patrick on January 17, 2020, 02:22:13 pm
These are all the places I've used to transfer cash offshore, and the costs:
https://docs.google.com/spreadsheets/d/1EMgyU0OdmTHQQR4sdgsY0fJzzWvrRV2IOnKE_witg_U/edit#gid=160542905
Title: Re: Offshore broke4s
Post by: gcr on January 17, 2020, 04:26:33 pm
Patrick - the important issue to me is how as a RSA citizen did you manage to open an account with a foreign country bank, my info is that they won't entertain such a request - I even tried Isle of Wight, Scotland, and a French Bank.
Would be interested in seeing your road map
Title: Re: Offshore broke4s
Post by: DaavG on January 18, 2020, 10:40:40 am
Hi All,

A question, which Interactive Broker account does one choose? When opening the account online I get an option of cash, margin, portfolio margin and I think the normal cash account as I'm not trading and shares are not lent out to short sellers?

Then on bank accounts, my old man has an account with Deutsche Bank and I have asked him for a breakdown in his fees per month. He did open this whilst in Germany but they have his address for his SA residence recorded. Will revert in due course.
Title: Re: Offshore broke4s
Post by: Patrick on January 20, 2020, 09:23:39 am
Patrick - the important issue to me is how as a RSA citizen did you manage to open an account with a foreign country bank, my info is that they won't entertain such a request - I even tried Isle of Wight, Scotland, and a French Bank.
Would be interested in seeing your road map
Maybe I should do a blog post on this. I recently opened my second account in Portugal with a bank called Activo Bank. You need to be in Portugal to do this, but you don't need to be a resident.

The only requirement is that you need to find a resident help get you registered for a tax number (this doesn't mean you'll be paying tax though, it's just to get registered).

A lawyer would be the easiest way to do this, but I know people who had friends do this and even some who asked their airbnb host.

I chose Portugal because it's the cheapest place in Europe to fly to, and a really nice place, and chose Activo bank because they have no monthly fees.
Title: Re: Offshore broke4s
Post by: gcr on January 21, 2020, 03:24:36 pm
Patrick - thanks for this feedback.
If you do come out with a blog, would you cover some or all of my listed curiosities:-
* How to open a foreign bank account - required to opened in person, or, can it be done from country of residency i.e. SA
* Most banks require an opening deposit in the currency of the banker
* Though most countries in the world don't enforce exchange control - here in SA they do and you are limited as to how much you can export overseas - currently a R1 million but reasons are required as to how funds will be used (buy property/holiday/business venture etc.)
* If you find a friendly bank who will open such and account for you do they have a trading platform that can feed into the NYSE; LSE, or even the DAX. If not who do they use as stockbrokers to enable you to trade over any of these exchanges.
* Given that you may have opened a foreign bank account you would have to instruct them to transfer funds to companies like Credo or SAXO and all along the line you pay fees to transfer and fees to place in your trading account. Thus fees could be a real killer

My ultimate objective would be to have a share trading account with an overseas operation where-over I buy and sell foreign country shares as quoted on the major stock exchanges but in reality can execute buy/sell orders from RSA

That about sums up where I want to be

Thanks for listening/reading
Title: Re: Offshore broke4s
Post by: Patrick on January 21, 2020, 05:29:33 pm
I'll do my best GCR, but for now why don't you simply open an account with Interactive Brokers? You don't need a foreign bank account, you can simply transfer into them using exchange4free or clickfx or similar, and they trade on practically every market out there.

The offshore bank account is a middle man you don't really need (though I still think it's a good idea if you plan to jump ship SA).
Title: Re: Offshore broke4s
Post by: gcr on January 21, 2020, 10:30:04 pm
Thanks Patrick - will explore further
Title: Re: Offshore broke4s
Post by: jaDEB on January 22, 2020, 04:34:51 pm
Interesting, I have SASFIN account with local shares , and also use SASFIN to buy offshore, which is DMA.  :whistle:
Title: Re: Offshore broke4s
Post by: gcr on January 22, 2020, 06:50:41 pm
Interesting, I have SASFIN account with local shares , and also use SASFIN to buy offshore, which is DMA.  :whistle:
jaDEB - when you sell your foreign shares where do the proceeds default to - 1) a Rand denominated account in SA 0r 2) a foreign currency account in your name in the foreign country or 3) a SASFIN account styled in your name in the foreign currency of the shares sold.

Be interested in hearing your answers
Thanks
Title: Re: Offshore broke4s
Post by: yozzi on January 23, 2020, 09:46:10 am
Thanks Patrick - will explore further

GCR - Speak to Mike Brown at ETFSA as they can assist with an offshore account which you can fund from SA by using one of the money transfer companies as mentioned by Patrick. Their rates are good and very helpful too and I'm no expert but I do have a UK bank account and I want to buy ETF's offshore and using the money transfer system seems the easiest option to me.
Title: Re: Offshore broke4s
Post by: gcr on January 23, 2020, 10:47:58 am
Thanks Patrick - will explore further

GCR - Speak to Mike Brown at ETFSA as they can assist with an offshore account which you can fund from SA by using one of the money transfer companies as mentioned by Patrick. Their rates are good and very helpful too and I'm no expert but I do have a UK bank account and I want to buy ETF's offshore and using the money transfer system seems the easiest option to me.
Yozzi - thanks for the response - will also pursue this avenue. However some of the responses I have received seem to think that I want to trade in currencies and CFD's - this is not my intention at all, I want to buy shares in e.g. Royal Bank od Scotland, Ralph Lauren Clothing, RCI Hospitality etc.. So what I'm really looking for is an account from which I can fund my broking purchases initially and then having a portfolio account with a broker (as per my RSA set up) and that I can buy/sell over their platform augment and or change my portfolio as required

Hope this clarifies where I want to be and how I want to operate 
Title: Re: Offshore broke4s
Post by: IndustryGuy on January 23, 2020, 12:22:23 pm

Yozzi - thanks for the response - will also pursue this avenue. However some of the responses I have received seem to think that I want to trade in currencies and CFD's - this is not my intention at all, I want to buy shares in e.g. Royal Bank od Scotland, Ralph Lauren Clothing, RCI Hospitality etc.. So what I'm really looking for is an account from which I can fund my broking purchases initially and then having a portfolio account with a broker (as per my RSA set up) and that I can buy/sell over their platform augment and or change my portfolio as required

Hope this clarifies where I want to be and how I want to operate
[/quote]

Hi GCR. I really think we can assist you. I sent you a personal message.
Title: Re: Offshore broke4s
Post by: gcr on January 23, 2020, 12:48:22 pm

Yozzi - thanks for the response - will also pursue this avenue. However some of the responses I have received seem to think that I want to trade in currencies and CFD's - this is not my intention at all, I want to buy shares in e.g. Royal Bank od Scotland, Ralph Lauren Clothing, RCI Hospitality etc.. So what I'm really looking for is an account from which I can fund my broking purchases initially and then having a portfolio account with a broker (as per my RSA set up) and that I can buy/sell over their platform augment and or change my portfolio as required

Hope this clarifies where I want to be and how I want to operate

Hi GCR. I really think we can assist you. I sent you a personal message.
[/quote]
Hi IndustryGuy - will contact you via landline to set up an appointment to discuss face to face
Thanks for message
Title: Re: Offshore broke4s
Post by: jaDEB on January 23, 2020, 12:54:37 pm
Interesting, I have SASFIN account with local shares , and also use SASFIN to buy offshore, which is DMA.  :whistle:
jaDEB - when you sell your foreign shares where do the proceeds default to - 1) a Rand denominated account in SA 0r 2) a foreign currency account in your name in the foreign country or 3) a SASFIN account styled in your name in the foreign currency of the shares sold.

Be interested in hearing your answers
Thanks

If I sell it is in USD and stays in dollar account - DMA.