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 All about ETFs / Foreign Brokers, Exchange traded funds

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lewei P
post Jan 10 2022, 04:12 AM

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QUOTE(TOS @ Aug 2 2021, 12:37 PM)
I think you mean dividend withholding tax? That applies to US domiciled funds like VOO, rate is 30%. CSPX is UCITS, domiciled in Ireland, they still pay tax behind, rate is 15%, but that is factored in behind in the annual charges, so you don't need to sign any forms like W-8BEN etc.

In both cases (VOO and CSPX), the dividend will be affected since it is taxed anyway. The only thing to compare is whether the fees/charges from investing in CSPX UCITS, after accounting for the lower WHT of 15% vs 30% of VOO, is still lower than or higher than buying VOO directly the US. If it is lower, than CSPX is a better choice, if not, then VOO works better, for the long run. 

Can you share the link/source which states CSPX more expensive than VOO? I think the $10 per month is the monthly inactivity fee charges but that is abolished now. So it does not matter now. In the past few brokers allow one to access UCITS on LSE, IB is one of them, whereas US is a more developed market, so more brokers have access to them.     

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Hi, I'm New to ETF and IBKR. May I know which region of IBKR you register for ? as I can see many IBKR (US,UK,SG, AUS, etc.) and if we buy US etc we need to sign any forms like W-8BEN?

Thanks, your reply really means a lot to me. Thank you so much.
lewei P
post Jan 10 2022, 11:12 AM

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[quote=TOS,Jan 10 2022, 10:12 AM]
Hello. If you start your registration newly directly with IBKR, your account is likely US-based, otherwise if you switched from TradeStation International, then your account will be UK-based. But it doesn't matter for the purpose of day-to-day matters. Your shares are held in custodian accounts either way. As long as the custodian is fine, you are fine. Bu there are differences in US and UK finance laws when things go wrong, consult a lawyer to know more.

The many IBKR websites that you see, like US, UK SG, AU etc. are just different servers across the region. You will be automatically be routed to the nearest server, usually SG/AU (for my case, HK). The account functions similarly for either servers. Account remains registered with either US or UK despite the different servers that you are routed to.

When you open an account with IB, during the registration steps, if you choose to invest in the US, you will sign the W-8BEN form by typing your name in the blank space provided, that's for dividend withholding tax purposes. All investors go through the same step.


Thank you for the kind reply and settle my doubt. Thank you so much. appreciate it. then I shall go to the US based. I think the Ireland-Domiciled ETFs is available in the us-based IBKR am I right ?
lewei P
post Jan 10 2022, 02:34 PM

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QUOTE(TOS @ Jan 10 2022, 12:51 PM)
Yes, UCITS as they are called are available on IBKR. They are listed on multiple exchanges across Europe, most are in UK, some in Germany, Switzerland. Some are even found listed in Mexico. Check the fund providers website to know more. 2 well-known ones are Vanguard and Blackrock.
Counterparty risk exists whenever financial intermediaries come into play. Brokers, banks, forex, derivatives counterparts, swaps counterparts and even insurance companies all entail some form of counterparty risk. You can and should diversify, large fund houses typically have a few brokers. But managing accounts across brokers can be a hassle for many if you have small holdings. So one needs to balance between the marginal cost of managing multiple brokerage accounts and the marginal benefit of the extra security earned. One way of risk management is to verify your broker's finances. It's kind of a dilemma sometimes, you don't want your broker to earn a lot from you, yet earn too little you risk your broker failing. (That's why bankers are rich!)
Yes sir, thanks for correcting. biggrin.gif
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Thanks you for the explanation, will now open one IBKR account for UCITS ETF. Appreciate
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