Don't think we have a tax treaty with the US so the 30% is a fixed number.
However I think it only applies to US company-issued dividends. So not all that painful either if you opt out of dividend ETFs too.

It's small fry in light of the 0% long term capital gains tax (most US peeps who have $ to invest get knocked with 15% if it's not in a 401(k) ) and low management fees.

I'm looking seriously at wiring a bit of money into Schwab and the withholding tax is prolly my last concern (other than picking between Schwab's own ETFs or ponying $9/trade for Vanguard stuff)

30k is on the low side man. ETrade wants 75k ringgit.
Actually it's only a $500USD minimum to open there. But trades aren't cheap at $10 a notch.

I believe that happens to your active income taxation if you declare yourself either a US resident or a low-bracket income-earner ("Green Card Hax") but dividends going under passive/FDAP income, don't seem to trigger any mention of exemption.

This post has been edited by X.E.D: Jun 24 2014, 12:07 AM

I wouldn't say 30k's a lot of money- it is Ringgit after all :V
Okay lah, say 1-2 years savings for average joe. If you can't leverage the economies of scale yet, put it in a local UT then... the management fee rape isn't too obvious in a short timescale, but the front load is.

For me I see the case there tho. Putting in six digits in a three/four fund allocation, set it and forget it, and enjoy no front load + minimal management costs.

Oh and you can only declare residency if you fulfill certain eccentric conditions. Certainly not lying. And doesn't help the 30% dividend case here. Most countries with US tax treaties are ones that tax their citizens worse- hence the gov stepping in to prevent dual taxation.

Yet for people in between who prefer liquidity and ease of mind, ETFs are pretty much right sized.
I can't just snap my fingers and sell off a bungalow in KL to pay for tuition at Haas, for example.

(Also, the US is doing pretty good in urban properties. SFBay, Seattle etc... crazy rents these days!)

Brokerages have SIPC + internal insurance coverage. Not as much of a wild west as you think.


That's pretty good for a world index (something that Schwab doesn't have) but Schwab has <.1% ERs on the majority of its domestic offerings. Just small cap intls going slightly higher.

I guess I don't like how Vanguard doesn't have a physical presence; if things go wrong and unchecked it's not exactly easy to rectify stuff.