Online Brokerage Accounts

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silverfoxrox

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Can anyone recommend a good South African online brokerage account that:

1. Will allow me to invest in ETF's that are managed by foreign-registered companies (this is key)
2. Has—ideally—low to minimum admin fees

Just as a background, I am an American, South African permanent resident and my permanent address is now in South Africa. The fact that I am American is important because the U.S. is one of the only countries in the world that requires its citizens to pay and file taxes based upon citizenship, not residency. This means, that I still have to file and pay U.S. taxes even though I don't live there or earn a U.S. based income. Why does this matter? It matters because of tax legislation that requires me to pay a punitive amount of taxes if I invest in stocks, shares, unit trusts, or funds from non-U.S. based companies (these are referred to as Passive Foreign Investment Companies). Since the passage of FATCA in the U.S., the IRS has invested a lot of money in trying to hold all Americans accountable for reporting all foreign accounts.

My dilemma is I really need to start saving for the long-term (retirement) etc. However, I can't get a South African unit-trust, etc. But what I CAN do, is sign up for a brokerage account and invest money in ETF's that are held by institutions based in the U.S. (e.g. VT-Vanguard Total World Stock). I can also open up bank accounts here (I have to report what's in them), without punishing taxes on them.

One might be tempted to suggest I just transfer my money back to the U.S., open a brokerage account there and do just that. However, I'm trying to avoid extra international transfer costs. Moreover, many U.S. based brokerage accounts will not work with expats (unless they live in a few countries, like UK, Hong Kong, etc).

Any advice? I can clarify more if anything is unclear.
 
I'm using Nedbank Private Wealth stock broking account. Works fairly well. Recently bought the DBXWld ETF to get some international exposure.
 
How does easy equities compare to gt247, are they both derivatives platforms?
 
You're not going to be able to avoid a US brokerage account for that. JSE has exactly 5 international EFTs all of which are ZA registered.

You might as well go for a US account anyway for wider selection & it being denominated in a more stable currency.

silverfoxrox said:
One might be tempted to suggest I just transfer my money back to the U.S., open a brokerage account there and do just that. However, I'm trying to avoid extra international transfer costs. Moreover, many U.S. based brokerage accounts will not work with expats (unless they live in a few countries, like UK, Hong Kong, etc).
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You can try a multi currency one outside of US...should be easier to register & still have access to US exchanges. Off the top of my head I'd try TD direct intl. Think that should work but not 100% sure.

Thor187 said:
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Cius said:
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Someone didn't read/understand the question...
 
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HavocXphere said:
You're not going to be able to avoid a US brokerage account for that. JSE has exactly 5 international EFTs all of which are ZA registered.

You might as well go for a US account anyway for wider selection & it being denominated in a more stable currency.


You can try a multi currency one outside of US...should be easier to register & still have access to US exchanges. Off the top of my head I'd try TD direct intl. Think that should work but not 100% sure.



Someone didn't read/understand the question...
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Thanks, I think you're right. I've been looking into the other suggestions here and in previous threads i've looked at, and it seems that things like EasyEquities and GT247 only allow you to trade stocks and ETFs on the JSE.

I thought i'd double check to see if there's anything i'm missing.
 
silverfoxrox said:
Thanks, I think you're right. I've been looking into the other suggestions here and in previous threads i've looked at, and it seems that things like EasyEquities and GT247 only allow you to trade stocks and ETFs on the JSE.

I thought i'd double check to see if there's anything i'm missing.
Click to expand...

But aren't those 2 options derivatives trading?
 
If you want to invest in Vanguard ETFs (and you should as they are the best investment company in the world, and the only one you can trust blindly) you'll need an international brokerage account.

Locally you can use Saxo bank or absa stockbrokers international account, but both charge a custody fee of around 0.1%. which is unacceptable to me. That's why I send my money overseas, and use interactive brokers. For my case it's the cheapest, but for others De Giro works out cheaper.

There isn't a monthly fee and custody fee free account in SA, and I refuse to pay either.

Some more reading and a comparison here: http://shareforum.co.za/shares/offshore-broke4s/
 
patrick said:
If you want to invest in Vanguard ETFs (and you should as they are the best investment company in the world, and the only one you can trust blindly) you'll need an international brokerage account.

Locally you can use Saxo bank or absa stockbrokers international account, but both charge a custody fee of around 0.1%. which is unacceptable to me. That's why I send my money overseas, and use interactive brokers. For my case it's the cheapest, but for others De Giro works out cheaper.

There isn't a monthly fee and custody fee free account in SA, and I refuse to pay either.

Some more reading and a comparison here: http://shareforum.co.za/shares/offshore-broke4s/
Click to expand...

Also the route my dad went. You can open an account in London or New York and pretty much trade all the vanguard products as well as everything else. It is a bit of a process to get the money offshore though so its probably only worthwhile doing once you have a fair amount of money to take out the country. For me I would not bother for under 200K but that is me.
 
patrick said:
If you want to invest in Vanguard ETFs (and you should as they are the best investment company in the world, and the only one you can trust blindly) you'll need an international brokerage account.

Locally you can use Saxo bank or absa stockbrokers international account, but both charge a custody fee of around 0.1%. which is unacceptable to me. That's why I send my money overseas, and use interactive brokers. For my case it's the cheapest, but for others De Giro works out cheaper.

There isn't a monthly fee and custody fee free account in SA, and I refuse to pay either.

Some more reading and a comparison here: http://shareforum.co.za/shares/offshore-broke4s/
Click to expand...

Thanks, Patrick. I've also heard of 'Interactive Brokers' from others in the world-wide American expat community. It seems like this is the way to go. I just thought that once I pay the international transfer bank fees, etc. that it would get to be expensive, which is what prompted me to ask my question here. But it sounds like it will still be cheaper than the ABSA international stock brokers account (plus, I absolutely HATE dealing with Absa).
 
Cius said:
Also the route my dad went. You can open an account in London or New York and pretty much trade all the vanguard products as well as everything else. It is a bit of a process to get the money offshore though so its probably only worthwhile doing once you have a fair amount of money to take out the country. For me I would not bother for under 200K but that is me.
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Getting my money offshore isn't a huge problem for me because I already have a bank account in the U.S.

I was just worried that the international transfer bank fees would be super expensive. As is, I already have to pay around R250 per month just to get my salary into my local ABSA account (my employers are in Belgium).
 
I'd be much more concerned about the ZAR than the bank fees...

silverfoxrox said:
(my employers are in Belgium).
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Can't you ask them to split your salary - portion to ZA account, portion to your US account? That way you don't need to do an extra conversion.
 
silverfoxrox said:
Getting my money offshore isn't a huge problem for me because I already have a bank account in the U.S.

I was just worried that the international transfer bank fees would be super expensive. As is, I already have to pay around R250 per month just to get my salary into my local ABSA account (my employers are in Belgium).
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That does make it faster. In my dad's case though the bigger issue was getting the tax clearance certificate needed to move the funds off shore. SARS at the time was dragging on a nothing tax query against him for years in their usual slow fashion and it delayed things a lot.
 
HavocXphere said:
I'd be much more concerned about the ZAR than the bank fees...


Can't you ask them to split your salary - portion to ZA account, portion to your US account? That way you don't need to do an extra conversion.
Click to expand...

I've considered this. Or having my Belgian employers deposit my salary into a Belgian account and then, I manually transfer money to the U.S. and to my SA bank account each month. The problem with this, is that logistically it is a lot more work for me. Also, my American bank account charges me a $20 fee (289ZAR, with the current mid market exchange rate) to accept incoming foreign transactions. So then, each month I would be taking charges from both banks.

My current strategy is to have it all deposited into my ABSA account. From there, I'm funneling money to a Capitec multiple deposits, fixed term account. The idea is that when I get a large enough sum (R100,000 or more at the account maturity date), then i'll send it to the U.S. in one large chunk. That way I only pay the U.S. incoming bank fees once.

I'm a young-ish (31 years old) professional, so I can't afford to to pay tons of bank fees often.

Let me know if you can think of a better strategy!
 
Cius said:
That does make it faster. In my dad's case though the bigger issue was getting the tax clearance certificate needed to move the funds off shore. SARS at the time was dragging on a nothing tax query against him for years in their usual slow fashion and it delayed things a lot.
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I know in the past when i've transferred money to my U.S. bank account it was also a mission to do so. I had to prove that the money I was sending was from sources outside of South Africa. At the time, it was a mission because I was employed by a South African university. I don't quite remember what the process was that finally allowed me to transfer money. I also vaguely remember that it had something to do with my temporary residence permit. Now i'm a permanent resident, so i'm not sure if the process will be easier or harder.

During the past few years, if I ever needed to transfer money to my U.S. account (not for investments, but to pay a student loan), I made deals with some Americans here. I gave them rand when they were here (or paid their rent), then they deposited money into my American account from that side. I'm pretty sure that's not super legal though...
 
Can anyone recommend online brokerage accounts like de Giro that doesn't require the applicant to be a resident.
Alternatively, for those who have decided to open their de Giro accounts with details from a virtual postbox / street courier address like UKPOSTBOX - how is it going?
 
Jose88 said:
Can anyone recommend online brokerage accounts like de Giro that doesn't require the applicant to be a resident.
Alternatively, for those who have decided to open their de Giro accounts with details from a virtual postbox / street courier address like UKPOSTBOX - how is it going?
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You don't need to be a resident. Get a Number 26 bank account and bob's your uncle.
 
The online application doesnt let me proceed without a post and street address from one of the 19 or so countries De giro is active in(RSA not one of them).
WRT bank account - I have a UK transactional account with IBAN no.
 
Dear Sir,
Thank you for your inquiry and interest in DEGIRO.
Due to a regulatory change, as of 22/10/2018 to open an account, you will need to be a resident and hold a bank account in your name in one of the countries DEGIRO offers our services.
At this time, you are able to use bank accounts and residency from the following countries:
  • Austria
  • Belgium
  • Czech Republic
  • Denmark
  • Finland
  • France
  • Germany
  • Greece
  • Hungary
  • Ireland
  • Italy
  • Netherlands
  • Norway
  • Poland
  • Portugal
  • Spain
  • Sweden
  • Switzerland
  • United Kingdom
For an account on the UK platform, we require a mainland UK bank account in GBP to be registered to your DEGIRO account. Unfortunately, we cannot accept transfers from UK overseas territories or Crown dependencies such as Jersey, Guernsey, Gibraltar, or Isle of Man.
Please be aware that if you wish to open a DEGIRO account on the UK platform, you are required to have a UK GBP bank account. Alternatively, you can open a EUR denominated DEGIRO account on our Irish platform.
With an account on our UK platform or Irish platform, the registration, all documentation, and the trading platform will be in English.
If you require any further information, our Servicedesk would be happy to assist.
Kind Regards,
 
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