An investment in StashAway or Autowealth will probably contain a high proportion of US ETFs and equities. I’m pretty new to investment, but I caught this part mentioning that there is this 30% withholding tax for all US investments. How does it work? Does this mean when I sell them off eventually, all my earnings will need to slash off a big chunk of 30% of it? Doesn’t this sound not worth it and invest in something else instead? For instance, Asian equities that doesn’t have this kind of tax.
The tax is on dividend. So example you get 1% dividend for a particular us stock. You will have to pay 0.3% to US government and you keep 0.7%. If you were to buy ireland domiciled ETFs from london stock exchange, the withholding tax will be reduced to 15% as they have tax treaty with the US. If you dont want to buy etf yourself, robo advisors are alright.