Asked on 12 Jun 2019
Want to invest in foreign stocks but need to do some homework first
What kind of foreign stocks are you looking at? Usually you can only purchase foreign stocks through a custodian account, like SC, IB or TDAmeritrade. You have like a "bank account" inside the brokerage where you can top up/withdraw, and that is where your dividend will be transferred to. Depending on where, for example US, there will be a 30% tax on it as well for Singapore residents.
If you do it through SCB, you can request the counter or the RM to open a foreign currency account. let me confirm with my RM friend and update here.
through a traditional broker, they will deposit into the trust account. If no trust they will send u a cheque.
Straight into your brokerage account, in the currency of the stock.
Taxes will depend on which country the stock is listed in.
For example, HK has no dividend holding tax. US has 30%.
Most foreign companies will be held in custodian by your brokers, so likely into account.
If you're talking about US companies, there is a 30% tax on dividends (subject to change in the future of course).
Usually the dividends from foreign stocks are credited to your brokerage account. Because the stocks are held in custodian account of the broker.
Tax on dividends depend on which country the stocks are from. US, 30% dividend tax. HK, no tax. Malaysia, yes. Can check with broker exactly which country and how much is the dividend tax
Will credited to your cash equivalent account in your brokerage. For SCB, it will be transferred to your foreign currency settlement account.
There are other fees that you need to consider beyond the withholding taxes. Some brokerages charge monthly/annual custodian/custody fee for foreign stocks. Some charge platform fees.
For Singapore, generally investment dividends are not income taxable for individuals. For US stocks, the 30% withholding tax on dividends is charged by US when you sign the W8-BEN form at your brokerage.
Most of us invest overseas via a custodian account method. The dividends will be credited to our bank account tagged to the brokerage (mainly via EPS tracking). Yes, it will be taxed but the tax will be determined by the overseas country rate- Singapore dosen't
We are so fortunate for being in singapore. Because there are no tax for capital gain dividend gain.
But to note: For US company, if the company give out dividend, will still have e 30% tax though.
So usually, i don't look for dividend company to invest in the US. For US, i go for capital growth. But if the stock happen to be give out dividend, it is a bonus then.
Dividends will be credited to your bank account if you buy using local brokerage firm. If you using platform such as Interactive broker or Tdameritrade, it will be into platform then.
Usually the foreign stocks you own are held in custodian by the broker. So dividends received will go into the brokerage account. For US stocks there will be a 30% withholding tax so the amount you receive will be net of the tax.
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