How can foreigners invest in S&P, Japan and China 500

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Topic Author
Maono
Posts: 4
Joined: Wed Sep 09, 2020 9:22 am

How can foreigners invest in S&P, Japan and China 500

Post by Maono »

Hey All,
How can a foreigner invest in the 500 best companies in US, Japan and China?
What platforms are available?
Thanks!
nirajn123
Posts: 32
Joined: Sun Aug 02, 2020 9:09 am

Re: How can foreigners invest in S&P, Japan and China 500

Post by nirajn123 »

You need to provide more details so people can help, this is an international forum so everyone is a 'foreigner' as far as international investing is concerned.
Topic Author
Maono
Posts: 4
Joined: Wed Sep 09, 2020 9:22 am

Re: How can foreigners invest in S&P, Japan and China 500

Post by Maono »

Thanks for your comment! I am trying to move my investments out of my home country in Africa and so I would like to invest on a platform in dollars or euros as our currency is not doing too well against the stronger currencies. I am just looking for a platform or company who can take my money and invest it for me on these indexes or similar. I have a dollar and euro account outside of my home country and I now need to invest those funds properly
stimulacra
Posts: 788
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Location: Houston

Re: How can foreigners invest in S&P, Japan and China 500

Post by stimulacra »

VOO (US), EWJ (Japan), FXI (China).

You might consider a total world fund like VT as well.
TedSwippet
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Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: How can foreigners invest in S&P, Japan and China 500

Post by TedSwippet »

stimulacra wrote: Wed Sep 09, 2020 2:44 pm VOO (US), EWJ (Japan), FXI (China). You might consider a total world fund like VT as well.
None of these is suitable for a resident of a country without US tax treaties. African investors should almost certainly use EU domiciled UCITS equivalents. For example VUSD (US), VJPN (Japan), ICHN (China), and VWRL (all-world).

Full detail in the wiki: https://www.bogleheads.org/wiki/Outline ... ent_aliens
Topic Author
Maono
Posts: 4
Joined: Wed Sep 09, 2020 9:22 am

Re: How can foreigners invest in S&P, Japan and China 500

Post by Maono »

Great thank you so much!
Do you perhaps know what platforms are out there that offer these indexes and ETF's?
Like Plus 500, Etoro something like that?
nikhoxz
Posts: 5
Joined: Wed Sep 09, 2020 11:27 pm

Re: How can foreigners invest in S&P, Japan and China 500

Post by nikhoxz »

TedSwippet wrote: Wed Sep 09, 2020 6:21 pm
stimulacra wrote: Wed Sep 09, 2020 2:44 pm VOO (US), EWJ (Japan), FXI (China). You might consider a total world fund like VT as well.
None of these is suitable for a resident of a country without US tax treaties. African investors should almost certainly use EU domiciled UCITS equivalents. For example VUSD (US), VJPN (Japan), ICHN (China), and VWRL (all-world).

Full detail in the wiki: https://www.bogleheads.org/wiki/Outline ... ent_aliens
Hi, i'm new here but i don't understand why you say that, i'm chilean (as i know we don't have tax treatis with the US) and i can buy basically every ETF in the world (even the ARKK ones) through my traditional broker dealer platform same way as i do with chileans stocks and ETF.. and that broker dealer is one of the 30 authorized in our country.

I know i have tax benefits if i invest in stocks and etf of my own country but why US ETF would be "not suitable" if i don't live in the US?
typical.investor
Posts: 2292
Joined: Mon Jun 11, 2018 3:17 am

Re: How can foreigners invest in S&P, Japan and China 500

Post by typical.investor »

nikhoxz wrote: Wed Sep 09, 2020 11:39 pm
TedSwippet wrote: Wed Sep 09, 2020 6:21 pm
stimulacra wrote: Wed Sep 09, 2020 2:44 pm VOO (US), EWJ (Japan), FXI (China). You might consider a total world fund like VT as well.
None of these is suitable for a resident of a country without US tax treaties. African investors should almost certainly use EU domiciled UCITS equivalents. For example VUSD (US), VJPN (Japan), ICHN (China), and VWRL (all-world).

Full detail in the wiki: https://www.bogleheads.org/wiki/Outline ... ent_aliens
Hi, i'm new here but i don't understand why you say that, i'm chilean (as i know we don't have tax treatis with the US) and i can buy basically every ETF in the world (even the ARKK ones) through my traditional broker dealer platform same way as i do with chileans stocks and ETF.. and that broker dealer is one of the 30 authorized in our country.

I know i have tax benefits if i invest in stocks and etf of my own country but why US ETF would be "not suitable" if i don't live in the US?
Amounts over $60,000 are subject to US estate tax.

Schwab is able to open accounts in many countries. Then if amounts got too large, you could transfer to Interactive Brokers who offer the non-US domiciled ETFs that aren’t subject to estate tax. IB has minimum monthly commissions ($10) if you are below $100k, so it might not be best to start with them.

Except of course if you are in the EU but that is another headache for another thread!!!
mohd
Posts: 63
Joined: Wed Jul 22, 2020 2:10 am
Location: Bahrain

Re: How can foreigners invest in S&P, Japan and China 500

Post by mohd »

typical.investor wrote: Thu Sep 10, 2020 12:53 am
nikhoxz wrote: Wed Sep 09, 2020 11:39 pm
TedSwippet wrote: Wed Sep 09, 2020 6:21 pm
stimulacra wrote: Wed Sep 09, 2020 2:44 pm VOO (US), EWJ (Japan), FXI (China). You might consider a total world fund like VT as well.
None of these is suitable for a resident of a country without US tax treaties. African investors should almost certainly use EU domiciled UCITS equivalents. For example VUSD (US), VJPN (Japan), ICHN (China), and VWRL (all-world).

Full detail in the wiki: https://www.bogleheads.org/wiki/Outline ... ent_aliens
Hi, i'm new here but i don't understand why you say that, i'm chilean (as i know we don't have tax treatis with the US) and i can buy basically every ETF in the world (even the ARKK ones) through my traditional broker dealer platform same way as i do with chileans stocks and ETF.. and that broker dealer is one of the 30 authorized in our country.

I know i have tax benefits if i invest in stocks and etf of my own country but why US ETF would be "not suitable" if i don't live in the US?
Amounts over $60,000 are subject to US estate tax.

Schwab is able to open accounts in many countries. Then if amounts got too large, you could transfer to Interactive Brokers who offer the non-US domiciled ETFs that aren’t subject to estate tax. IB has minimum monthly commissions ($10) if you are below $100k, so it might not be best to start with them.

Except of course if you are in the EU but that is another headache for another thread!!!
Just wanted to add a point to the US estate tax, since it caused me a confusion last time. US estate tax law applies to US-situs (means cash in broker, or US domiciled etfs). TedSwippet did a good job in explaining this in my recent post viewtopic.php?p=5422146#p5422146


I started last month with Interactive Brokers with an amount less than $100k. I didn't find any good alternative. I am non-US & non-UK person.

Since you have to pay $120 annually for IB commissions, and let's say you invested $20k. That's 0.6% of your capital, I think it's okay to start with less than $100k. In one year you may gain or (lose) more than 0.6%. So it will cover the commissions. I ignored dividends, TER in this example.
TedSwippet
Posts: 3166
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: How can foreigners invest in S&P, Japan and China 500

Post by TedSwippet »

nikhoxz wrote: Wed Sep 09, 2020 11:39 pm I know i have tax benefits if i invest in stocks and etf of my own country but why US ETF would be "not suitable" if i don't live in the US?
As already noted above, the reason is tax. Specifically, US tax. Just because you can buy US domiciled ETFs, does not mean that you should buy them.

As well as the threat of confiscatory US estate tax, if you hold US domiciled ETFs as a Chilean resident you are also overpaying US tax annually on dividends, 30%. You can reduce that to between 15% (on ETFs that hold US stocks) and 0% (on ETFs that hold non-US stocks) by switching from US domiciled ETFs to EU domiciled ones. Full details in the wiki, already linked.
Last edited by TedSwippet on Fri Sep 11, 2020 2:38 am, edited 2 times in total.
Topic Author
Maono
Posts: 4
Joined: Wed Sep 09, 2020 9:22 am

Re: How can foreigners invest in S&P, Japan and China 500

Post by Maono »

Thanks to everyone for the comments!
So its better to utilise EU domicile, thanks for pointing that out!
What platforms are there where one can purchase such ETF's and indexes?
Which are the best brokers or platforms to use with the lowest fees?
nikhoxz
Posts: 5
Joined: Wed Sep 09, 2020 11:27 pm

Re: How can foreigners invest in S&P, Japan and China 500

Post by nikhoxz »

typical.investor wrote: Thu Sep 10, 2020 12:53 am
nikhoxz wrote: Wed Sep 09, 2020 11:39 pm
TedSwippet wrote: Wed Sep 09, 2020 6:21 pm
stimulacra wrote: Wed Sep 09, 2020 2:44 pm VOO (US), EWJ (Japan), FXI (China). You might consider a total world fund like VT as well.
None of these is suitable for a resident of a country without US tax treaties. African investors should almost certainly use EU domiciled UCITS equivalents. For example VUSD (US), VJPN (Japan), ICHN (China), and VWRL (all-world).

Full detail in the wiki: https://www.bogleheads.org/wiki/Outline ... ent_aliens
Hi, i'm new here but i don't understand why you say that, i'm chilean (as i know we don't have tax treatis with the US) and i can buy basically every ETF in the world (even the ARKK ones) through my traditional broker dealer platform same way as i do with chileans stocks and ETF.. and that broker dealer is one of the 30 authorized in our country.

I know i have tax benefits if i invest in stocks and etf of my own country but why US ETF would be "not suitable" if i don't live in the US?
Amounts over $60,000 are subject to US estate tax.

Schwab is able to open accounts in many countries. Then if amounts got too large, you could transfer to Interactive Brokers who offer the non-US domiciled ETFs that aren’t subject to estate tax. IB has minimum monthly commissions ($10) if you are below $100k, so it might not be best to start with them.

Except of course if you are in the EU but that is another headache for another thread!!!
Ok thanks, but that only applies when you have over $60000 usd? i mean, i could have $50000 aprox in US domiciled ETFs and the rest in my own contries ETF right? as i know our ETF are pretty shitty, there are only a few ones good enough, basically those that are the same as VT, VOO, VGK and VPL... so i could have most of my portfolio in the chilean VT and the rest in some ETF domicilied in the US right? like VGT, BND, BLV.. etc.. as long as they are worth less than $60000.
mohd
Posts: 63
Joined: Wed Jul 22, 2020 2:10 am
Location: Bahrain

Re: How can foreigners invest in S&P, Japan and China 500

Post by mohd »

nikhoxz wrote: Thu Sep 10, 2020 9:22 pm
typical.investor wrote: Thu Sep 10, 2020 12:53 am
nikhoxz wrote: Wed Sep 09, 2020 11:39 pm
TedSwippet wrote: Wed Sep 09, 2020 6:21 pm
stimulacra wrote: Wed Sep 09, 2020 2:44 pm VOO (US), EWJ (Japan), FXI (China). You might consider a total world fund like VT as well.
None of these is suitable for a resident of a country without US tax treaties. African investors should almost certainly use EU domiciled UCITS equivalents. For example VUSD (US), VJPN (Japan), ICHN (China), and VWRL (all-world).

Full detail in the wiki: https://www.bogleheads.org/wiki/Outline ... ent_aliens
Hi, i'm new here but i don't understand why you say that, i'm chilean (as i know we don't have tax treatis with the US) and i can buy basically every ETF in the world (even the ARKK ones) through my traditional broker dealer platform same way as i do with chileans stocks and ETF.. and that broker dealer is one of the 30 authorized in our country.

I know i have tax benefits if i invest in stocks and etf of my own country but why US ETF would be "not suitable" if i don't live in the US?
Amounts over $60,000 are subject to US estate tax.

Schwab is able to open accounts in many countries. Then if amounts got too large, you could transfer to Interactive Brokers who offer the non-US domiciled ETFs that aren’t subject to estate tax. IB has minimum monthly commissions ($10) if you are below $100k, so it might not be best to start with them.

Except of course if you are in the EU but that is another headache for another thread!!!
Ok thanks, but that only applies when you have over $60000 usd? i mean, i could have $50000 aprox in US domiciled ETFs and the rest in my own contries ETF right? as i know our ETF are pretty shitty, there are only a few ones good enough, basically those that are the same as VT, VOO, VGK and VPL... so i could have most of my portfolio in the chilean VT and the rest in some ETF domicilied in the US right? like VGT, BND, BLV.. etc.. as long as they are worth less than $60000.
These are US-domiliced ETFs, so u will be taxed on gains by 30% in case of no US-treaty with your country, and it may reduce to 15% with tax treaty.

If you invest more than 60k on US-domiliced ETFs (even if u hold more than 60k usd in cash in US broker), you are at risk to face estate-tax in case of death.

To avoid US tax complications there are Ireland domiliced ETFs and equivalent to what you have mentioned above.

Both US-domiliced and Ireland-domiliced ETFs will give u same performance with very tiny difference. But the big difference is in taxes.

Take a look at this page it will help you

https://www.bogleheads.org/wiki/Non-US_ ... _tax_traps
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