Although investing in foreign stocks can take you out of your comfort zone, it isn’t necessarily a bad thing. Investing in foreign listed stocks can be beneficial for many reasons. One great reason is diversification: whether it’s diversification of assets or currency. The benefit of this is obviously to spread out investment risks. Dealing in a plethora different currencies will help you cancel out global currency fluctuations. Another obvious reason could be just to keep your money ‘offshore’. There are thousands of Major Corporations overseas, such as South Korea for electronics, Brazil for steel, Australia for mining and USA for technology. Some big corporations and brands have given investors incredible rates of return!

2 Ways for Foreign Stocks Investment

There are basically two simple ways you can trade in foreign shares.

  • Method 1

Open a trading account in the country where the respective stocks originate from. So for instance, if you want to invest in an American company, open a trading account in the US to buy stocks at the New York Stock Exchange (NYSE). In this way, you can keep your transaction costs to a minimum.

  • Method 2

Open a global trading account in Malaysia associated with the local investment banks and security firms, and purchase foreign share. The location of your assets will be considered local although technically your money in invested overseas. This provides convenience, especially when taking money out to fund your retirement, or transferring your wealth to your children.

Means of investment

You’d be surprised at how many brokerage firms and investment banks there are in Malaysia that aid in foreign investment. So here are just a couple of prominent banks that provide global share trading. This is by no means an exhaustive list, but just an example of the diversity and their rates and services.

 

Provider & Product Name Online/Overseas transaction fees/Brokerage commission Other fees Dividend Fees
NYSE (USA) SGX (Singapore) ASX (Australia)
eAlliance Share Either US$ 20 min. or 0.15%, whichever is greater Either SGD 25 min. or 0.10%, whichever is greater AUD 35 min. or 0.25%, whichever is greater
  • HKEX (Hong Kong): HKD 100 min. or 0.15%
  • SEC (US): 0.00192% on contract sale
  • SGX: 0.0075% Access Fee
  • Collection fee 0.5% of net dividend
  • Scrip fee HKD 2.5;
  • AUS & US tax charges; foreign 3rd party broker 1% of net dividend; 1% of dividend for additional charges
JF Apex Either US$ 29 min. or 0.35%, whichever is greater Either SGD 25 min. or 0.18%, whichever is greater
  • 0.05% on Initial AUD 40,000
  • 0.04% on AUD 200,000
  • 0.03% on >AUD 500,000
  • AUD20 min.
  • LSE: GBP30 min. or 0.6%
  • RM100 min. site charge or 0.6%
Commission: Less than RM100,000: 0.06%, More than RM100,000: 0.30% of contract value.
CIMB I*Trade Either US$ 25 min. or 0.40%, whichever is greater Either SGD 28 min. or 0.42%, whichever is greater AUD 50 min. or 0.70%, whichever is greater
  • SEC (US): 0.00192% for sale of contract
  • SGX: 0.0075% access fee
Scrip S$20/US$15, Cash US$10-80, 1% on net dividend
HL Brokering (used by PC Wong, thetrainer of Invest Foreign

Share)

  • 0.35% on Initial US$ 40,000
  • 0.25% on >US$ 40,000
  • US$30 min.
  • 0.35% on Initial SGD 40,000
  • 0.25% on SGD 40,000
  • SGD30 min.
  • 0.60% on Initial AUD 40,000
  • 0.40% on >AUD 200,000
  • AUD50 min.
  • SEC (US): 0.00192% for sale of contract
  • SGX: 0.0075% access fee
  • Clearance fee 0.04% (Singapore)
Corporate excise fees for dividends flat rate RM2.50
Jupiter Online Not Applicable
  • 0.60% on Initial SGD 40,000
  • 0.50% on >SGD 40,000
  • SGD 50 min.
Not Applicable
  • HKEX: 0.06% for initial HKD40,000, 0.5% for >HKD 40,000, HKD 50 min.
Dividend processing 1% RM5 min -RM100 max
Maybank2u Either US$ 25 min. or 0.40%, whichever is greater Either SGD 25 min. or 0.40%, whichever is greater AUD 60 min. or 0.40%, whichever is greater
  • SEC (US): 0.00192% for sale of contract
  • SGX: 0.0075% access fee

Clearance fee 0.04% (Singapore)

  • Dividend Handling fee RM5.83
  • Clearing Fee 0.03%
  • Dividend reinvestment total 29.61 (local),  31.73 (overseas)
Public Invest e-Trade Either US$ 50 min. or 0.80%, whichever is greater Either SGD 40 min. or 0.75%, whichever is greater AUD 60 min. or 0.80%, whichever is greater
  • LSE: GBP 50 min. or 0.80%
  • SEC (US): 0.00192% for sale of contract
  • SGX: 0.0075% access fee
  • Clearance fee 0.04% (Singapore) with contract stamp of max. RM200.00
Dividend Reinvestment/Handling RM2-65 per payment/ dividend cheque.
Dividend Reinvestment Plan (DRP) subscription: RM2-65 per (with additional stamp duty fees)
RHB Invest
  • 0.70% on Initial US$ 100,000
  • 0.50% on >US$ 100,000
  • 0.30% on >US$ 500,000
  • US$ 35 min.
  • 0.70% on Initial SGD 100,000
  • 0.50% on >SGD 100,000
  • 0.03% on >AUD 500,000
  • SGD50 min.
  • 0.90% on Initial AUD 100,000
  • 0.65% on >AUD 100,000
  • 0.45% on >AUD 500,000
  • AUD50 min.
  • LSE (London): 0.70% on initial GBP 100,000, 0.50% of >GBP 100,00, 0.40% or GBP 35 min.
  • SEC (US): 0.00192% on contract sale
  • SGX (Singapore): 0.0075% and clearing fees 0.04%
n.a.
SJENIE Either US$ 35 min. or $0.05%/share, whichever is greater Either SGD 50 min. or 0.25%, whichever is greater AUD 50 min. or 0.50%, whichever is greater
  • LSE (London): 0.50% or GBP 35 min.
  • SEC (US): 0.00192% on contract sale
  • SGX (Singapore): 0.0075% and clearing fees 0.04%
n.a.
Utrade Either US$ 30 min. or 0.42% for <RM100,000, whichever is greater
  • Either SGD 20 min. or 0.42% for <RM100,000, whichever is greater
  • SGD 20 min. or 0.30% for >RM100,00
Not Applicable HKEX (Hong Kong): Either 0.30% for >RM100,000 min. or 0.42% for <RM100,000; whichever is greater SGD 1 with GST for less than or equal to dividend SGD 10;
SGD 5 with GST for less than or equal to dividend SGD 500;
1% of dividend capped at SGD 25 with GST Dividend greater than or equal to SGD 500

 

Find a suitable US stocks trading provider

Needless to say, there are lots of stock brokers out there. The only way to find a suitable one for you is to actually do your homework on them! For instance, my friends from Intel Penang use Ameritrade. Their unbeatable fees and various other facilities, like 3rd party research, makes it highly trusted and efficient! On the other hand, Interactive Broker is highly recommended by Peter Lim, trainer of Bursa Method, for its low interest margin financing facility. In contrast, I personally use Wells Fargo Trade because I have an account there when I stayed in the US between 2011-2012.

No matter which brokerage firm or method you use, it is important to invest safely in good companies. Don’t speculate.  Do research and invest safely based on value investing method.

Want to know more info? Check out my course Bursa Method and Invest Foreign Share.

 

Stock 101 Quiz






KCLau
KCLau

Personal finance author and trainer

    66 replies to "How to Trade Foreign Stocks from Malaysia"

    • Alex Ho

      Recently, I came across a forex trading acct where the foreign broker shares a portion of it’s brokerage fees with it’s cstmrs., as a result they are able to use a more conservative trading position, as they need not have to rely on big spread in pips profits, but rather than the share of the brokers commission.

      Can you comment on this ?

      Regards.

      alex

      • KCLau

        I think a lot of FX trading platform is profiting from this in order to get their members to refer and close more sales.
        I don’t personally trade FX though, no trading for me.

      • Fxunitedscam

        Fxunited is a scam broker. You should not fall for that commision sharing plan. This is a shame in fx industry. Newbie always fall for lucrative offer and then blame the whole industry when they are fucked.

    • Anderson

      Your info for Alliance IB is not really accurate as you had left out pertinent details. In addition to the fees stated in your list, one need to add Alliance off-line/phone-in fees. Alliance IB foreign share trading are done off-line (i.e. phone-in, no online trading).

      • KCLau

        Hi Anderson, thanks for clarifying that.

    • Jason

      Hi KC, thank you very much for sharing your knowledge, I have one question, is trading with non local bank but with website like etoro the same? I heard that you can buy and sell stock in that website but I am doubting is that kind of website really giving you real equity or is it just a platform simulating synthetic purchase and did not go through the stock market? And even if it is real equity trading, is it allowed in Malaysia?And also I am wondering is Bursa Malaysia involved when it comes to foreign stock trading with the local banks/brokerage you mentioned?

      • KCLau

        I’ve never heard of etoro though. so no comment on that.
        I am not sure of who is actually governing the foreign share trading provided by the local bank. I think it should be the Bank Negara, not Bursa Malaysia.

    • KT YEO

      HI KC LAU, first of all, thanks for the knowledge. a question here, I heard my friend said it is hard to transfer money to oversea platforms such as IB and another platform because these platform involved in forex trading, and some of this are listed in BANK NASIONAL MALAYSIA that we couldn’t transfer money to their bank. do you have any other ways to do that ?

    • Keith

      Hi KC,

      I am planning to open a HK broking account. Just wondering if you know of any broker in HK?

      Thank You.

      • KCLau

        Hi Keith, sorry I don’t know any broker there.

    • Devendran

      Hi KC,
      suppose i open a local malaysia account denominated in USD, i should be able to wire in USD from my account to ,say, ETrade directly without conversion charges, correct? If this is so, are there any hidden tax or issues related to this method, and receiving dividends and capital appreciation from USA to here in Malaysia?
      Where do you think i can get a professional advice on this?
      thanks, your articles are very helpful, keep the sharing alive!

      • KCLau

        I am not sure of all this. I think you should be able to check with the bankers providing this service.

    • KJ

      Hi KC, would like to know if tax is applied to capital gains from US market investment, does malaysia inland revenue board impose any of this?

      • KCLau

        As far as I know, capital gain made in the US market is taxed if you are a US resident, and being taxed by US government.
        If you are Malaysian making capital gain from US share market, there is no tax since Malaysia government don’t tax capital gain. Check with your accountant to verify.

    • Zconsiez siez

      Hi…I got us share in rhb invest….recently was giving dividend…but there was dividend handling fee amount of 2.61usd instead of net dividend amount 4.64…may I know how to calculate the fee?

      • KCLau

        I think dividend handling fee is charged by your broker. You need to ask your broker about the charges calculation.

    • Kain

      How can one buy shares of other countries like the UK, TSX, or even the latin american corps ?

    • Nik Hisham

      Hi KC Lau,

      Thank you for sharing your knowledge. I am fairly new to this and forgive me if these are newbie questions but I would like to know:
      1. if the fees in the table above are still valid?
      2. when we sell to cash out and TT money back home, will we be subject to withholding tax?
      3. when we TT money back to malaysia, will we be subject to any taxation locally?

      Best
      Nik

      • KCLau

        Hi Nik,
        1. Fees schedule might not be the latest – it is subjected to change. It is best you verify with the service providers.
        2. That depends on the country of your brokerage account, and the tax law. I am not an expert in this and you will have better info if you ask directly from the service provider.
        3. Local Malaysia government don’t tax money made oversea yet, as I know. But that may change also. It is best to consult a local tax accountant.

    • Aaron

      Hi. Please advise if there is any withholding tax on dividends if I invest in hk or us market? Also which way is more cost efficient to trade foreign markets?

      Thank you

    • steve

      How I can I trade the small penny dreadful stocks on the ASX if I am Malaysian.
      I don’t have account in Australia
      I don’t want to buy the expensive blue chip companies
      I only like up and coming companies and many of these are not covered by brokers.
      So..is there any way I can get a platform to make my own trades without having to ask a broker to do this for the ASX only?

    • Yoke Wah

      Dear Mr Lau,

      Your articles is awesome & I forwarded to others friends too. Will write an article soon about the overseas broker, for e.g: Ameritrade, Interactive Broker & Wells Fargo?

      Best regards,
      Yoke Wah

    • Kayson

      Hi, KC. Nice to meet u. Do u have any opened talk bout basic stock invest in somewhere at selangor state?

      • KCLau

        Hi Kayson, I seldom do physical seminar talk. But you can check out my online courses.

    • need help

      Hi KC, I am ex-intellier holding their stock option and wanted to sell off. somehow the Intel support are not straightforward therefore I am asking if you have the knowledge of how I can sell my stocks in Malaysia. Tq and appreciation your reply.

      • KCLau

        Normally, the trading account created for you by your employer is still valid after you left. I suggest that you talk to the HR department to get more info.

        • need help

          KC, thank you.

    • LLL

      Hi, KC. Thank you for sharing. To trade in US market, will you suggest to open an USD account in Malaysia first, for all the wire transfer and withdrawal. Which bank will you suggest?

    • Sadruddin

      Hi KC,

      Could u please comment on financial.org? It provides auto trade and big margin to trade in Nasdaq.
      This company based in London and one of the F1 William Martini sponsor.

      https://financial.org

      Thanks

      • KCLau

        Hi Sadruddin, I don’t use it so have no experience to give comment.

      • Maarof Judi

        Financial.org is an educational platform. They DO NOT deal with securities and receive any financial benefits from Financial Products & Service Providers.

    • mj

      Hello Kc,

      just reading your article and i have a question, if we using us broker(exp ameritrade) it will be charge 30% tax for each dividend distribution ,and how to we claim back the interest?

    • Aun Thiam

      For method 1, open a trading account, you mean like “Fidelity investment”?

    • Aun Thiam

      Do you have online/overseas transaction fees/brokerage commission for NASDAQ?

      • joe

        i use ameritrade previously. 9.90USD per transaction.

        • Ak

          Hello. I just learned that BNM does not allow deposit to TDameritrade anymore. Bummer. Any other option?

          • KCLau

            Not all banks forbid that I think. You can try different banks especially the oversea banks operating here. Most of the times, they need you to show the document proof of your overseas account.

        • Aun Thiam

          Thanks a lot, Joe. I really appreciate it. 🙂

    • Azlin

      Hi KC Lau,

      I have a question regarding ASX. I would like to sell and let go all my shares. Can you suggest to me any way to do that? if i need to go through a broker, may you suggest one? thank you.

    • JB

      is it legal under BNM/SC regulations for Malaysians to trade directly with non-resident brokers

      • KCLau

        When your money go overseas, it is not regulated by the local authority anymore. So you will have to trade at your own risk.

    • Zaki Zakaria

      How do I invest in Canadian stocks?

      Do Malaysians who invest in Canadian stocks get to be a permanent resident there?

      • KCLau

        Can trade Canadian stocks with the local brokerage firm that offer such service. Or you can open foreign trading account with international brokerage firms like Interactive Brokers.
        About the PR status, I don’t know anything about it.

    • Ken

      Hi KC Lau

      I’ve heard non US citizens like Australian people using Interactive Broker unable to short US stocks. Is there discrepancies between US citizens and non US citizens using Interactive Broker ?

      Thanks

      • KCLau

        Not sure about that. Better ask Interactive Broker support team.

    • Bobby

      Isnt there a BNM rule that states that Malaysians can only trade securities with a locally regulated brokerage firm?

    • Jc

      Are these foreign share trading allow Malaysian to short the share as well? Another silly question, any available platform which provides foreign option trading?

      • osiris

        Having same question as yours if Malaysians can short US shares ?

    • VJ

      Dear KC Lau,

      From the above, I noticed that you’ve included RHB Invest and SJENIE as having the London Stock Exchange. Can you confirm if they do provide LSE ETFs?

    • osiris

      Do one have to open 2 separate accounts for stock trading and another for futures trading on foreign shares ?
      Also, can a Malaysian shortsell foreign shares, because for BURSA, it is supposed under RSS.

      All in all, it is more convenient and overall cheaper to just open a trading account in the US for the transactions above ?

      • KCLau

        You need separate accounts to trade derivatives, or foreign shares, or local stock.
        I am not sure if we can short-sell foreign stocks with a local account.

    • CLEMENCE

      Hi KC Lau,

      We can use CFD (Contract for Difference) Broker / Trading Platform to trade the price movement of US stocks, not the real stock. Example, CFD have a Leverage effect, say you buy a US Stock at USD150, using CFD Leverage you only pay USD15 to buy a share. Using CFD you can Go Long or Sell Short. There are many CFD Broking Apps available, such as ThinkorSwim, IG Trade and Interactive Brokers.

    • Don Kruuz

      I am a Malaysian living in Hong Kong. From reading the comments, I get the impression that it’s not easy for Malaysians to trade the HK market. Is this observation close to reality?

      • KCLau

        To trade specifically in HK, the local Malaysia Public Bank provide a good solution, since they have branches in HK too.

        • Henry

          Relatively High Cost

        • Winner

          Relatively High Cost 0.5% dealing comm. Can get 0.25% Anyone have better deal, pls help

    • Don Kruuz

      Btw, retail investors can definitely short US stocks through thinkorswim. the interest is steep often more than 10% pa but of course also depends on the stock.

    • CLEMENCE

      CFD Trading is now very popular in Singapore, with IG Trader and CMC Markets and City Index which are trusted and reputable. The best platform is still LCG London Capital Group, but then LCG is being delisted from AIM and taken private. Other CFD Traders which I found out to be SCAM and not trusted such as XTrade, Plus500 and AVATrade. For FX trading in Forex, a reputable one should be FXTM.

    • Tan Bun Eng

      Hi KC Lau

      Is there any course or training on index option trading on US market in KL ?

      • KCLau

        I don’t have any course on technical trading.

    • CM Yong

      Just learn that TD Ameritrade no longer doing business with Malaysia. And I just learn that all my stocks were liquidated. Wondering if you still able to keep the US stock trading account like TD Ameritrade, Etrade?

      • KCLau

        Try InteractiveBroker

        • Sonny

          I just tried doing a TT over the counter at HSBC today. They refuse to transfer to Interactive broker due to not being approved by BNM. Asked me to contact BNM directly to get approval. Anybody experienced this b4?

    • JC KONG

      Hi KC Lau,

      can malaysian trade future using foreign brokerage?
      as i concern, money would be blocked if the Tele- Transfer profit was from future.

    • KC Lim

      Can you also include HKEX in the costs column?

      Thank you.

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