{"id":51273,"date":"2024-11-15T12:00:27","date_gmt":"2024-11-15T04:00:27","guid":{"rendered":"https:\/\/www.imoney.my\/articles\/?p=51273"},"modified":"2024-11-18T16:43:53","modified_gmt":"2024-11-18T08:43:53","slug":"international-brokerage-comparison","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/international-brokerage-comparison","title":{"rendered":"How To Buy International Stocks From Malaysia With These Brokers"},"content":{"rendered":"

Want to invest in stocks like GOOGL or AAPL? Here\u2019s everything you need to know about buying stocks from international brokers.<\/p>\n

<\/span>Why buy international stocks?<\/span><\/h2>\n

a) Potentially better gains<\/h4>\n

The Malaysian stock market has been one of the <\/span>worst performing markets<\/span><\/a> in Asia. If you had invested in the KLCI (the index that tracks the 30 biggest Malaysian companies) since 2018, you would have <\/span>lost an average of 4.4%<\/span><\/a> a year.<\/span><\/p>\n

On the other hand, international stock markets have performed much better. For example, the world\u2019s biggest stock market index, the <\/span>S&P 500<\/span><\/a>, which tracks the 500 biggest American companies, generated an annualised return of 12.69% in the past 5 years.<\/span><\/p>\n

Even when considering a longer time span of 2010 to 2019, many international stock markets have <\/span>performed better<\/span><\/a> than Bursa Malaysia.<\/span><\/p>\n

b) Hedge against ringgit depreciation<\/h4>\n

The ringgit has seriously depreciated over the past decade. In December 2011, US$1 equaled RM3.18. Today, US$1 equals approximately RM4.69. This means that the ringgit is now worth less, making imported goods or overseas travel more expensive.<\/p>\n

If your investments are mostly held in ringgit or invested in Malaysian assets, this means that the value of your portfolio would fall if the ringgit depreciated further. Having assets held in other currencies can protect you against depreciation. But remember that this works both ways – if the ringgit appreciates against other currencies, then your portfolio might be worth less in ringgit.<\/p>\n

<\/span>Tax implications of buying US stocks<\/span><\/h2>\n

As a non-US resident, your US stock dividends will be subject to a 30% withholding tax. So for every US$1 dividend you receive, you\u2019d really only get US$0.70.<\/p>\n

Some investors get around this by investing in Ireland-domiciled exchange traded funds (ETFs). This takes advantage of the US\/Ireland tax treaty, which only imposes a 15% tax<\/a> on dividends. If you\u2019d like to invest in Ireland-domiciled ETFs from Malaysia, you\u2019d need to find an international broker with access to the London Stock Exchange.<\/p>\n

<\/span>Brokers regulated by the Securities Commission Malaysia<\/span><\/h2>\n

Some of the biggest foreign brokers are not regulated by local regulatory authorities in Malaysia.<\/p>\n

Many popular and well known international brokerages like Tiger Brokers and TD Ameritrade that are accessible to Malaysians may not be licensed by the Securities Commission of Malaysia (SC).\u00a0 While these platforms aren\u2019t regulated in Malaysia, they are usually regulated by international regulatory authorities, or by the national regulatory authority in the country it operates in. For example, TD Ameritrade Singapore is regulated by the Monetary Authority of Singapore, while its international counterpart is regulated by the Securities and Exchange Commission (SEC) in the US.<\/p>\n

There\u2019s just one downside – if you have a dispute with any of these platforms, you won\u2019t be able to resolve it by going through the SC in Malaysia.<\/p>\n

For Malaysians, the SC advises investors to check their Investor Alert List<\/a>. This list contains the names of unauthorised platforms, entities and individuals. The SC cautioned that some names who appear on this list may impersonate legitimate financial services providers. So it is not the actual company but a \u201cpotential clone\u201d. This may expose investors to scams and other illegal activities. The SC states that ‘if you invest through unauthorised entities and individuals, you will not be protected under Malaysian securities laws’.<\/p>\n

Update: In the past two years, several local and foreign stock brokers have gained licensing approval from Securities Commission Malaysia after meeting local compliance regulations. You can easily check if the investment company you want to sign up with is licensed by entering the company’s licensed name in the SC’s public registry<\/a>.<\/p>\n

<\/span>International brokerage comparison<\/span><\/h2>\n

So which broker should you go with? Here\u2019s a list of how some of the top brokers compare.<\/p>\n

Brokers licensed by Securities Commission Malaysia:<\/p>\n\n\n\n\n\t\n\t\n\t\n\t\n\t\n\t
Platform<\/td>Year est.<\/td>Markets covered<\/td>Trading fees<\/td>Investment products<\/td>Min. balance to open account<\/td>Regulation<\/td>Fractional shares<\/td>\n<\/tr>\n
FSMOne<\/strong><\/td>2000<\/td>SG, HK, US, CN, MY<\/td>0.05% - MY
\n
\n0.08% - SG, US, CN, HK<\/td>		Unit Trusts, Stocks, ETFs, Bonds, Managed Portfolios, and Insurances<\/td>RM100<\/td>SG, MY<\/td>Yes<\/td>\n<\/tr>\n
Rakuten Trade<\/strong><\/td>2017<\/td>US, HK, MY<\/td>MY: RM1 - RM100
\n
\nUS: US$1.88 - US$25
\n
\nHK: HKD35<\/td>		Stocks, Company Warrants, Structured Warrants, ETFs, REITs<\/td>US$0<\/td>MY, JP, US, UK<\/td>Yes<\/td>\n<\/tr>\n
Moomoo<\/strong><\/td>2018<\/td>US, MY<\/td>0 commission* to trade Malaysia & US stocks, ETFs
\n
\nUS stocks: USD 0.99\/order
\nMY stocks: RM3\/order
\n<\/td>		Stocks, ETFs, Warrants and REITs
\n
\nSecurities, Derivatives Trading<\/td>		US$0<\/td>US, AUS, SG, CN, MY, HK, CA, JPN<\/td>Yes<\/td>\n<\/tr>\n
M+ Global<\/strong><\/td>1963<\/td>HK & US<\/td>0.05% per contract or minimum brokerage at RM8, whichever is higher
\n
\nCommission charge as low as US$ 3.00<\/td>		Stocks, ETFs, warrants, Callable Bull\/Bear Contracts, Odd-lot shares trading<\/td>US$0<\/td>MY<\/td>No<\/td>\n<\/tr>\n
Webull<\/strong><\/td>2017<\/td>US, MY<\/td>MY:
\nBrokerage: 0.08% * Total Trade Amount
\nClearance: 0.03% * Total Trade Amount
\n
\nUS:
\nCommissions: 0.05% * Total Trade Amount<\/td>		Stocks, ETFs, ADRs, Structured Warrants, REITs<\/td>US$0<\/td>MY, US, UK, SG, AU, HK, JP<\/td>Yes<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

Foreign brokers not licensed by Securities Commission Malaysia:<\/p>\n\n\n\n\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t
Platform<\/strong><\/td>Est.<\/strong><\/td>Markets covered<\/strong><\/td>Trading fees<\/strong><\/td>Investment products<\/strong><\/td>Min balance to open account<\/strong><\/td>Regulation<\/strong><\/td>Fractional shares<\/strong><\/td>\n<\/tr>\n
Charles Schwab
\n<\/strong><\/td>		1971<\/td>US<\/td>0% for online-listed stocks and ETFs<\/td>Stocks, ETFs, mutual funds, bonds, fixed income, options, futures<\/td>US$25,000<\/td>US<\/td>Yes<\/td>\n<\/tr>\n
Interactive Brokers<\/strong><\/td>1978<\/td>30+ countries<\/td>Tiered
\n- 0% commission for US ETFs
\n- stocks: min US$0.35 per order
\n
\nFixed
\n- 0% commission for US ETFs
\n- stocks: US$ 0.005 per share, min US$1 per order<\/td>		Stocks, options, futures, ETFs, warrants, currencies, metals, indices, fixed income, mutual funds<\/td>US$0<\/td>US, UK, CA, HK, SG, IE and others<\/td>Yes<\/td>\n<\/tr>\n
Saxo Markets Singapore<\/strong><\/td>1992<\/td>36 exchanges<\/td>- Fees differ based on market
\n- US stocks: 0.06% (min US$4)<\/td>		Stocks, ETFs, bonds, mutual funds, currencies, CFDs, commodities, futures, crypto<\/td>S$3,000<\/td>Denmark, UK, SG, AUS, HK<\/td>No<\/td>\n<\/tr>\n
TD Ameritrade Singapore<\/strong><\/td>1975<\/td>US<\/td>0% commission for US stocks and ETFs<\/td>Stocks, ETFs, options, futures<\/td>US$0<\/td>US, SG<\/td>No<\/td>\n<\/tr>\n
Tiger Brokers
\n<\/strong><\/td>		2014<\/td>US, HK, SG, CN, AU<\/td>US$0.01 per share (min US$1 per order)<\/td>Stocks, ETFs, mutual funds, options, warrants, futures<\/td>US$0<\/td>US, SG, NZ<\/td>No<\/td>\n<\/tr>\n
TradeStation Global<\/strong><\/td>1982<\/td>18 exchanges<\/td>US$0.07 per share (min US$1.5 per order)<\/td>Stocks, ETFs, futures, currencies<\/td>US$1,000<\/td>UK<\/td>No<\/td>\n<\/tr>\n
XTB<\/strong><\/td>2002<\/td>Over 2,100 markets<\/td>Standard account - No charge on execution commission but trades on slightly wider spreads
\n
\nPro account - Charge commission for every trade but you are trading on market spreads<\/td>		Stocks, ETFs, commodities, currencies, indices, crypto, CFDs<\/td>US$0<\/td>UK<\/td>Yes<\/td>\n<\/tr>\n
Capital.com<\/strong><\/td>2016<\/td>Over 3,700 markets<\/td>No charges on:
\n- Opening an account
\n- Inactivity fees
\n- Commission
\n- Currency conversion
\n- Funding and withdrawal<\/td>		Stocks, forex, indices, commodities, crypto, ESG<\/td>US$20<\/td>EU, UK, Cyprus, Australia, Seychelles and Bahamas<\/td>No<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

To open an account with these brokers, visit their websites and register online. They will typically ask you for proof of your identity (passport, driver\u2019s license, national ID, etc.) and proof of address (mortgage statement, utility bills, etc.).<\/p>\n

<\/span>How do some foreign brokers charge zero fees?<\/span><\/h2>\n

If you\u2019ve glanced through the table above, you may have noticed that some foreign brokers charge zero fees<\/a>. How do they do that? Generally, a few ways:<\/p>\n