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The Unbiased Guide to Expat Investing

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Join my Expat Investing Academy and take control of your money! Learn how to plan, save and invest by yourself, so you can reach Financial Independence faster than you every thought possible. Beginners welcome.

“Every attendee that I’ve spoken to has loved Steve’s course.” – Andrew Hallam, author of Millionaire Expat
“This course literally saved my marriage.” – Nisha, expat      “One of the highlights of my 2020.” – John, expat
“The best course on investing for expats. I sincerely recommend it to everyone.” – Elena, expat
“Incredibly helpful, this is exactly what I needed.” – Julia, expat

 

If the information below looks complicated, don’t worry – once it’s set up, it is fairly quick and painless. No techie skills required. Don’t let someone take a lifetime of fees from you – believe in yourself enough to fill in a few forms and learn some new concepts.

Investing as an expat is mysterious. It’s not easy to find out how to do it. Everyone is either clueless or trying to sell you some terrible investment plan that isn’t even legal in your home country.

Figuring out expat self-investing is absolutely worth it though. Let’s say you invest $1,000 monthly for 30 years. If you make an 8% average annual return from your sensible stock portfolio, minus 1% per year for all investing costs, you’ll end up with $1,227,000. More than a million dollars – nice!

Paying just 1% extra in costs will lose you $218,000 of that (and most plans will charge you a lot more). If you want to make the most of being an expat, you must keep those investing fees as low as possible.

No financial company wants you to know this

Even when you hear about low-cost options like Vanguard or learn what an ETF is (see below), you can still hit a brick wall. Contact Vanguard and they will say nope, we only deal with residents in a few countries. Anti-Money Laundering regulations make servicing expats a hassle.

I first learned about Vanguard in 2011. I sold alllll the random actively-managed funds in my old UK ISA (tax-free savings account) and replaced them with just one fund – the Vanguard LifeStrategy 80/20 fund. I can’t stress enough how wonderful the LifeStrategy funds are for UK residents – literally all you need.

But, living in Dubai, nobody could tell me how to invest with Vanguard as an expat. I dug around, then life moved on and I accepted it wasn’t possible.  Only in 2016 did I come across an article explaining how to do it, and I immediately realised what a huge find this was. Unexpectedly, I got a bit emotional, because I knew then I could finally help people invest cheaply and sensibly. Here was my mission! (Tissues ready.)

So here we go – I’m going to give you the keys to the expat investing kingdom. Where you live, no financial company wants you to know how to invest offshore cheaply, because they won’t make any significant money out of it.

This is how to invest in stocks and bonds as an expat, exactly how I do it myself. I’m going to use the UAE as an example, but the principles should work for most expats regardless of location and country of origin.

Wherever I name the exact companies I use to invest it is to show you who I use personally to invest. I don’t make any commission from recommending these companies – I’m mentioning them because they get the job done.

Setting Up the Chain

There are five links in the expat investing chain – it’s easiest to work backwards:

1. Exchange-Traded Funds (ETFs)

Offshore investing1

Like most expats, you probably want to invest in a mix of stock and bond Exchange-Traded Funds (ETFs). Mutual funds (such as Vanguard LifeStrategy) popular with those back home aren’t easily available to expats, so we have to use ETFs. In fact, ETFs are so awesome they could stand for Expat Total Freedom. They are similar to mutual funds, but are traded more like an individual stock. This makes them easy to buy and sell.

Let’s say you want to invest in one stock ETF and one bond ETF, to keep things simple (which you should do). You settle on 80% in VWRA (the Vanguard FTSE All-World UCITS ETF in USD with dividends reinvested) and 20% in IGLA (the iShares Global Government Bond UCITS ETF in USD with dividends reinvested). Congratulate yourself for your incredibly smart fund choices, as these funds are cheap and well-diversified.

Unless you are a US citizen, you don’t want to invest in US-domiciled ETFs, i.e. those based in the US. These may be liable for estate tax if you die (up to 40% on amounts over $60,000) and a 30% withholding tax on dividends. Stick to ETFs domiciled in Europe (with ‘UCITS’ in their name) and you will be ok.

JustETF.com and Morningstar.com are great places to learn more about all the different ETFs out there, including where they are domiciled, fees and what they invest in.

Find out more about VWRA here. Find out more about IGLA here. There are further thoughts on asset allocation and ETFs here or you can enquire here.

2. Fund Managers

Offshore investing 2

Vanguard and iShares are highly-respected fund managers, managing literally trillions of dollars. Vanguard is especially awesome, as all profits go towards reducing your management fees (helping you grow your investments faster). It was founded by all-round hero Jack Bogle, who invented passive index funds and sadly passed away in early 2019.

Fund managers create mutual funds and ETFs, packaging together hundreds or even thousands of shares to create a fund with a single price. Without them, you’d have to buy all the shares in an index individually and you probably wouldn’t bother.

You can’t buy VWRA and IGLA direct from Vanguard and iShares as an expat, just as you don’t go direct to Chiquita to buy bananas. You access them via a broker, which is like a supermarket for funds.

Find out more about Vanguard here.

 

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3. Offshore Brokerages

Offshore investing 3

Most brokers in your home country won’t allow you to open an account with them if you aren’t a resident there. You need to find an offshore broker instead.

You send the broker money (more on that in a bit) and tell them which ETFs you want to invest in. They will quote you a price, buy the shares and hold them for you. When you want to sell, they quote you a price, you click ‘Sell’ and should have the money within 3 days for transfer to your bank.

Most brokers have a website and a mobile app that allow you to easily track your investment performance, receive dividends, buy or sell ETFs and transfer money in or out.

Brokers are required by law to keep your money and investments separate from their own money, so your assets are protected if they go bust. If they have committed fraud and used clients’ money, then you are further protected (e.g. clients of US brokers are covered by the SIPC for up to $500,000 of stocks and bonds, and $250,000 of cash).

I use Interactive Brokers (IB), which is based in the US and is large, robust and cheap. They have a good mobile phone app for investing and tracking your portfolio. You won’t be liable for US estate tax as long as you don’t invest in US-domiciled ETFs and don’t have more than $60,000 sitting uninvested in your IB account.

Setting up an IB account requires you to fill in a few online forms and send them proof of identity and address online. You want an individual cash account (‘cash’ here means you will invest with your own money and not borrow money to invest). After that the setup is fairly quick. If you work for a Financial Services company, you may need to get a permission letter from them, due to share trading restrictions.

To add money to your IB account (no minimum, though account fees are cheaper once your account is above $2,000 and then disappear above $100,000), you need to set up a Bank Wire. Enter your own bank details and the amount you want to transfer, then IB gives you an account code for the transaction.

Find out more about Interactive Brokers here. A slightly more expensive alternative with a branch in Dubai is Saxo Bank.

4. Exchange Houses

Offshore investing 4

You need to send money to your broker and probably need to change the currency as well. Some brokers charge high fees for foreign exchange (FX) conversations so be careful. IB doesn’t have high fees, but also doesn’t accept smaller currencies like dirhams, so you have to make the exchange before the money reaches your broker account.

You can use your bank to convert the money into the right currency and send it to the broker, but often their fees are high and exchange rates not very favourable.

Instead, you can use an online company like TransferWise.com or CurrencyFair.com, ideal for cheap global transfers between major currencies, though not particularly fast.

However, your broker may not like it if the money arrives from that company’s bank account rather than from your account. This can give them Anti-Money Laundering headaches, especially when you first open your account. Check with your broker or look for guidelines saying transfers must come from an account in your name, at least for the first transfer.

As an alternative, exchange houses can offer good rates and help you through the transfer process, if they are familiar with sending money to your broker.

In the UAE, I have used Wall Street Exchange Priority Club, which has great service and literally the best AED to USD rate in town.

5. Local Banks

Sending money to your broker is usually much cheaper via an intermediary (such as an exchange house or online transfer company) than direct from your bank, especially if a change of currency is involved. So if you are using an intermediary, you only need your local bank for transferring the local currency from your account to the exchange house’s local account.

Some banks offer free local transfers, which will reduce your costs even further.

At some banks, especially if you have a premier account, the exchange and transfer fees aren’t too much worse, so you can always skip using an exchange house if you prefer simplicity over minimising fees.

Smart skeleton dead simple saving

Summary

This process may sound complicated but, once you have the accounts set up and have transferred money a couple of times, it becomes fairly straightforward. You should be aiming to invest monthly or at least quarterly – making a transfer shouldn’t take more than 15 minutes out of your day.

Now that you know how to become an offshore investor, just get started! You can practice with small amounts (e.g. $1000) to build up your confidence. Don’t leave it 6 months or more before dipping your toe in!

Not enough expats know how to invest offshore without getting ripped off and this information is really hard to find anywhere. Please share this article with any expats you know!

Have you found any savvy tricks for investing offshore cheaply, quickly and sensibly? Or have you had problems trying to do this? Share your thoughts in the Comments section below…

Join my Expat Investing Academy and take control of your money! Learn how to plan, save and invest by yourself, so you can reach Financial Independence faster than you every thought possible. Beginners welcome.

“Every attendee that I’ve spoken to has loved Steve’s course.” – Andrew Hallam, author of Millionaire Expat
“This course literally saved my marriage.” – Nisha, expat      “One of the highlights of my 2020.” – John, expat
“The best course on investing for expats. I sincerely recommend it to everyone.” – Elena, expat
“Incredibly helpful, this is exactly what I needed.” – Julia, expat

 

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323 thoughts on “The Unbiased Guide to Expat Investing”

  1. Hi,
    So glad I have come across your post. I have been looking for information about investing as an expat for a long time and it is such a confusing area to investigate, which has prevented me from investing for several years 🙁

    As I am a complete beginner to investing I would really appreciate some advice.
    I am a UK national (non-resident) currently living in Qatar paid in Qatari Riyal. I wanted to know the tax implications on having a general investment Vanguard UK account currently open? Is this liable to capital gains tax? Currently it has around £35k. I also have a SIPP which has £20k.. am I allowed to still contribute to these accounts? I have quite a a large amount of savings in my UK bank accounts which I planned to drip feed monthly into these accounts due to terrible interest rates offered by banks at the moment. I haven’t opened an ISA as I know these shouldn’t be opened whilst living outside of the UK, however I didn’t know if this also applied to GIA and SIPPs as I have a UK address and also National Insurance No.
    I am not planning on moving back to the UK any time soon, I just really want to have the most efficient way to save and invest without exposing myself to unnecessary tax. I have read that capital gains are not paid by expats on anything other than property and land on the UK Gov website.

    Thank you in advance for any help and guidance!

    1. Steve Cronin

      Hi Lorah, if you are a beginner do take a look at my Expat Investing Academy, it will give you all the knowledge and support you need to start investing with confidence. You won’t have to pay any capital gains tax on your UK account. It’s ok to contribute to it but many people warn against investing back in your home country. Tax rules can change etc. It may be easier to create an international brokerage account at e.g. Interactive Brokers and invest in USD- or GBP-based ETFs. In general, you shouldn’t be contributing to your SIPP while abroad and there is little reason to, as you won’t really get tax benefits.

      1. Hi Steve,

        Thank you for your response, greatly appreciated! I will take a look at your suggestions.

  2. Hello, first of all thanks for all this useful information!

    I’ve been investing in the US since 2019, while living and working there. I’m now moving to Spain (I am EU citizen). My broker is asking me to close my account before I leave the US. I need to either transfer my account to another broker or sell everything. My portfolio today is around 70% US-based ETFs and 30% single stocks.

    I have basically 2 options, one is to cash out all my gains and re-buy everything from Europe. The other option is to transfer my stocks to another broker that can support EU clients. My first option was IB but the fees are too high for me. My second option would be to transfer my US portfolio to a US account at Schwab, and once I move, request a change to an International Account. I’ve been in contact with their client service and this plan seems to be feasible.

    The downside is that I won’t be able to use DRIP for my US-based ETFs.. which is the whole point of my investing strategy.

    The last option is, of course, to sell everything. Which again, is not my preference.

    – Does it make sense to go through all of this if I won’t be able to use DRIP for those US-based ETFs? Does this rule apply to single US stocks as well (MSFT, Google, Apple, etc)?
    – Does it make sense to keep my ETF portfolio or should I just sell everything and re-buy the EU version again once I’m there?
    – Is it tax suicide to keep my investments in the US while living in the EU?

    Thanks!

    1. Steve Cronin

      Hi German, it’s not a good idea to have lots of US-domiciled ETFs/stocks when you live outside the US anyway. So it might be better to sell everything and start again. Transferring stocks is also generally a nightmare. I don’t know if there are any decent brokerage platforms in Spain, but at least they will be set up for Spanish tax reporting, tax-free accounts, pensions etc. IB is cheap and even cheaper now they have removed their inactivity fees, so that is an ok option if you can’t find anything in Spain, or you don’t like DeGiro etc. I would stay away from Schwab as they have a history of being picky about people not living in the US. You don’t need a dividend-reinvestment plan if you buy accumulating ETFs. So yes it probably is tax suicide, time for a fresh start.

  3. Hello
    Thanks for the wonderful work of doing research and sharing with Expat community.

    I am Indian (resident in Dubai) and just preping to invest the way you are suggesting (IB).
    Question
    1. Are Automatic Dividend Reinvestment Plans (US domiciled) also liable to Withholding Tax?
    2. Rather than lumpsum investment, I prefer to invest monthly specific amount in ETFs (Systematic Transfer Plan) as the markets are currently very high.
    a. Do we have any options, where IB automatically buys on monthly specific dates?
    b. Rather than sending money everytime (& incurring charges), do we have any bank account option (Citibank or any other) – Dollar account, where IB debits my Dollar account automatically monthly?

    Thanks in advance and God bless.
    Gaurav

    1. Steve Cronin

      Hi Gaurav, there is no escaping withholding tax, even with automatic reinvestment. It’s better to invest in Accumulating ETFs though, then you don’t have to pay for automatic reinvestment. You should avoid US-domiciled ETFs anyway. Are the markets high compared to where they might be in 1 year, 5 years? We just don’t know. Monthly investing is fine, but your lump sum might then miss gains while sitting in your bank. THere is no automatic investing but I think exchange houses like Wall St Exchange might set up a regular transfer for you. It will still cost the same though, just it’s automated.

  4. I have 3 questions regarding ETFs and tax.

    1. Why is it encouraged in some overseas finance books to buy ETFs in your country of origin? I am currently residing in the Gulf and am a non-tax resident. If I buy ETFs in Australia, I would be obliged to pay tax on dividends and capital gains as it is income generated in Australia.

    2. I am a non-tax resident living in a tax-free country. If I buy ETFs domiciled in Germany, the UK, Ireland and the US, do I have to pay tax on either or both the dividends and capital gains on these ETFs to their domicile countries? Especially as my country of origin has a double-tax agreement with them?

    3. Is the tax on dividends or on capital gains? Is there a website official database on ETFs that explains this?

    1. Steve Cronin

      Hi Ayman, I’m not a big fan of home country bias in your portfolio. I don’t think you need to buy Australian ETFs until you are back living in that cointry (then the franking credits on dividends are quite beneficial for tax purposes). As a non-resident I doubt you would pay CGT on Australian ETFs while not living there, but I am also not going to say I’m an Australian tax expert.

      While you are living in a tax-free country you will not have to pay any CGT. You will still have to pay 15-30% withholding tax on dividends, as there is no way to escape that. Irish-domiciled ETFs at least bring it down to 15%. The Bogleheads wiki explains withholding tax on ETFs in excruciating detail if you really want to dig into it. Otherwise stick to Irish-dom ETFs.

  5. Hi,
    I am a non-resident Canadian citizen living in Shanghai. I’ve tried to open an Interactive brokers account but they are asking for a tax number. Should i use my Canadian or Chinese TIN(tax number). The Chinese one seems to change, looking through old tax records I have at least three. Should I use my family’s address in Canada and my Canadian tax number?

    Thank you
    Mike

    1. Steve Cronin

      Hi Mike, I would definitely not use your Canadian tax number. If you are resident in China then tax isn’t going to be such a big deal, it’s ok to give them a Chinese TIN.

  6. Hi,
    I transfer money to etoro via
    1. Credit card: transferred 300 $, received 300 $ in e toro.
    2. Bank Transfer: transferred 500$, received 480$ in e toro. As per e toro and ADCB (Bank), no body charged me.
    Questions:
    1. Who charged me 20$? ( as per e toro, all USD transfer go through American bank which charge fix 15-30$), is it correct?
    2. Any other way to transfer money cheap?

    1. Steve Cronin

      Yes it’s a correspondent banking fee charged on USD bank transfers over to the US. Best to use your card or much bigger transfers e.g. $5k less often.

  7. Hi Steve,

    Your block is really well written and amazing for a beginner like me.
    I read your recommendation for not investing in U.S. ETF’s as a non-U.S. citizen in the UAE and I fully understand the tax implications on dividends and the risk of the estate tax.

    I see also the advantages of investing with IB (availability of UCITS ETFs…) but have an issue with IB’s inactivity fee/min. trading fees of monthly $10. Since I start from scratch and can invest monthly only between $500 and $2000 I assume I do not reach a monthly minimum trading fee of $10 by investing in one ETF.

    Therefore, my question: Would you think it makes sense to start investing in a low expense rate U.S. ETF with a cheaper broker like eToro or TradeStation?
    Since I will be for a couple of years below the $60.000 estate tax threshold and can expect therefore small dividends only, the tax impact of the U.S. ETF isn’t enough to compensate the higher expense rates of UCITS ETFs and the minimum trading fees of IB.

    In a nutshell, the $120 annual trading cost on a $6000 investment p.a. is 2% which seems high to me. Am I correct?
    I would appreciate your opinion.
    Best
    Nick

    1. Steve Cronin

      Hi Nico, the $10 monthly fee gives you 2 free trades a month. And there are no hidden costs like wide spreads that you see on other platforms. Which platform you choose matters much less than making an effort to invest as much as possible each month. If IB’s fees push you to invest $6k per quarter rather than $1.5k, then they are doing you a big favour. You can go with the US-domiciled ETFs if you want but I think it’s best to start how you mean to go on and focus on growing the portfolio rather than switching around. By the time you have $60k+ you will be thoroughly familiar with the platform and the funds – and that’s worth a lot psychologically to stop you making silly mistakes and knee-jerk reactions.

  8. Hi Steve,

    Thanks for all the helpful info.

    I have a specific question-
    I left the US earlier this year and and relocated to the UAE. I am NOT a US citizen. I want to open an IB account and start investing as an expat here. My bank account at one of the big US banks is still open in a checking account with over $20,000 sitting there. I was wondering if it would be ok to transfer money (until it runs out) from that account to IB, instead from a bank here in Dubai even though I’m no longer US-based. My reasoning is that I could avoid transfer costs from bank to exchange house to brokerage. I’ll sell before I leave Dubai and deposit the money into my local account (HSBC) here before transferring everything to wherever I’m next and continue investing. Do you think this is a safe plan?
    Additionally, are you aware of any tax implications US wise if I use my US bank account for investing?

    Thank you sm!

    1. Steve Cronin

      Hi Shaye, that should be fine as long as the account is clearly in your name. Much more cost efficient to send it from a US account. There should be no tax implications as long as you don’t build up more than $60k in USD cash in the US, and you avoid US-domiciled ETFs/stocks. You may not need to sell on leaving Dubai unless you are going to a country with better platforms and tax-free savings accounts related to that country.

  9. Hello!
    First off thanks so much for this post and for all the wealth of information you’ve been so kind to be sharing!

    I have 2 questions:

    First on accumulating vs distributing ETFs. In your article you quote an accumulating ETF. What’s the reason behind that or pros/cons? Assuming you’ll continuously invest over the coming several years and the value you invested in X ETF will continue to grow – wouldn’t it be better to always have the flexibility to decide what to do with the dividends paid out (whether to reinvest in more of the same ETF, withdraw them, or invest in something else) vs it always being accumulating. I might want them accumulating now but in 25 years i might want to have that flexibility to choose.

    Second – estate tax implications in the US. Is an option having a joint brokerage account (even if not a partner for example a family member) to avoid estate tax? Rationale being in case the account holder passes away – the account ownership would technically automatically be transferred to the second owner, and i would assume no estate tax would apply?
    Interested to hear your input!
    Thanks
    Joe

    1. Steve Cronin

      Hi Joe, doesn’t make a huge difference but accumulating is more efficient until you retire. You shouldn’t really need the dividends for anything until then and likely they will not be invested as regularly or efficiently as letting a computer do it. Then you switch to distributing on retirement and/or when you move home. A joint account won’t avoid estate tax – much easier to avoid US-domiciled ETFs and stocks, then you don’t have to worry about estate tax anyway.

  10. I have been using swiss quote to buy my ETF portfolio as an expat in the UAE, I will be moving back to the UK and wonder if its best to sell up and move or if I can continue in the UK as long as I dont draw down on my account?

    1. Steve Cronin

      Hi Lee, yes 100% sell up and move, much easier to use a UK platform that has ISAs, SIPPs and UK tax reporting. Also should sell your investments before you move so as to reset the capital gains.

  11. Hello Steve,

    Hope all is well. And sincere thank you to the great and impactful Dead Simple Savings work; it truly makes a difference.

    I have two small questions if I may:
    – What is your view on inflation-linked bond indexes? Would you go for IGLA or IGIL as your bond ETF? or would you go for both (e.g. splitting your bond portfolio 50/50 across both ETFs)
    – Would you advise changing from Interactive Brokers if portfolio size is above 500K? If so, which brokerages would you go for as an expat in the UAE?

    Many thanks again, your responses to all these comments are appreciated!
    All the best,

    1. Steve Cronin

      Thanks Ameer! Inflation is very hard to predict. If inflation goes away next year but there’s a stock crash then IGIL isn’t really going to protect you. If it helps you sleep at night then you could throw in 50% IGIL, otherwise I don’t think you need to. You def don’t need to move away from IB once your portfolio is above 500k – see my updated post on this topic: https://www.deadsimplesaving.com/blog/expat-interactive-brokers-invest/

  12. Excellent article. A question I have is on Interactive Brokers. I am based in Qatar and the Qatari Riyal is fixed to the USD (not sure if that is relevant to say).

    I cheked on Interactive Brokers and they dont accept transfers through Moneygram. I am yet to find out if they accept through Exchange Houses.

    When looking at the ETFs for IB, I noticed that the VWRL are only offered in CHF and EUR. So when making a bank transfer, I would have to charge for the FTT fee charge rate.

    I also dont know whether there is an incoming fee either? Or how to find out about this?

    1. Steve Cronin

      Probably easier to invest in VWRA or VWRD, which are in USD. There is always going to be a correspondent banking fee of $15-30 to move USD around the world, but at least with an exchange house you would probably get a better QAR to USD rate. Best to shop around the banks and exchange houses, plus make sure they know how to send money to IB.

  13. Thank you for this great article.

    I am a German citizen and currently a resident of Germany. I am about to relocate to the US for a couple of years and then most likely return to Germany. I am investing mostly in ETFs. My current investment is at a German broker, which will not allow me to keep the account once I relocate to the US. To the best of my understanding, this is because of tax reporting standards.

    Question:
    Is it a valid approach to open a borkerage account with IB while I am still in Germany and transfer my investments to that account? Will I be able to keep investing into this account while I am in the US? If this is possible, my understanding is that there are issues with investing into EU domiciled ETFs while being an US resident for tax purposes and also issues with investing into US domiciled ETFs while being an EU resident. Do you have any suggestions about what to consider when selecting ETFs?

    Thanks again for your work.

    Tobias

    1. Steve Cronin

      Does your German broker really need to know that you’re out of the country for a couple of years? If you don’t sell any investments then it shouldn’t really matter from a tax perspective – perhaps for dividends. You could wait till you get to the US, open an IB account, transfer the money (not the stocks) across via a bank account and then invest in US-domiciled ETFs like VT. Then when you return to Germany, you can sell everything from IB just before you move, open a new account once back and reinvest in EU-domiciled ETFs. Try the fb group US Expat Tax Questions also to make sure you have the tax figured out.

  14. Hi Steve,

    Thank you for the article and for the helpful session you held last month at our organisation.

    I am based out of Dubai and am paid in dollars. I was wondering if I can invest in ETFs that are traded in dollars on the LSE but are domiciled in Ireland. That way do you think I could save some money on the currency transaction fee in Interactive Brokers (since I won’t have to convert Dollars into Euros) as well as on the withholding taxes on dividends (since I am not an American citizen)?

    Thank you again!

    1. Steve Cronin

      Hi Ron, I really enjoyed it! Yes you definitely can and that’s what I do. Plenty of Irish-domiciled ETFs in USD on the London Stock Exchange, e.g. VWRA.

  15. British expat Dad

    Hi, thanks for sharing this. I am a British expat and spent 2017-20 working in Singapore before moving to Australia at start of 2021 on a temporary work visa. While in Singapore I prioritised paying off the mortgage on my home in UK and did not end up opening a share trading account. Now, after reading your article, I have been looking into opening an IBKR account but am finding the online account opening process a bit confusing, starting with the question of whether to open a UK based IBKR account or an AU based IBKR account. My government issued ID docs are all from UK but my proof of address docs are all for an Australian address. Where does that leave me? I emailed same question to IBKR but so far had no response. By the way, as an alternative to IBKR it seems I could use my local bank’s share trading platform to buy various Vanguard ETF’s (listed on ASX) and then only downside to this seems to be paying 0.3% to 1% fee for every trade (depending on how large). Those fees sound small but will quickly add up to hundreds if not thousands and then thousands of dollars over the next few years as I invest surplus pay and bonuses. At this stage I am most likely staying living in Australia for 3-4yrs or perhaps permanently. Am I missing anything else in this equation? Much appreciated.

    1. Hi Thomas, you might as well invest directly with Vanguard in Australia. That’s probably a lot cheaper than using your local bank. Or you could use IBKR Australia. If you have residency in Australia, you should be able to open Australian-based accounts.

      1. Dear Steve, I am an expat working in Saudi Arabia and considering buying the VNGA80 ACC through IB. As the ETF is domiciled in Ireland will I be taxed on any sales even though I am a Saudi tax resident (tax free)? Also if I sell the stocks while I’m still in Saudi in the same year I become a tax resident somewhere else, e.g. UK, would I need pay tax on the sale I made in Saudi? What would you recommend for expats returning to the UK from the Middle East with respect to capital gains tax. Also would I be able to sell in Saudi and then repurchase the same stocks shortly after I changed taxed residency? Thanks

        1. Steve Cronin

          Hi Matt, VNGA80 is denominated in EUR so I don’t think it makes sense to invest in that if you are not living in the Eurozone and not planning to live there in future. While in Saudi you would only pay tax on dividends (15%), which you would have to pay in any country – it’s taken out at a high level so you won’t even see it. Otherwise no tax. Before you move back to the UK yes you should sell everything (unless it is making a loss at the time) and rebuy something similar using a UK platform once back there. Did you get my email in response to your assessment form? Thanks, Steve

          1. Hi Steve, thanks for the quick response. I already set up the VNGA80 domiciled in Ireland as this appeared to be the only option on IB? Do you recommend me transferring to another ETF, if so which one? I’m from the UK and will probably end up back there or in Philippines. Thanks, I received your response to the assessment form.

          2. Steve Cronin

            Hi Matt, bit of a pain having to exchange into EUR, especially if you’ll never need EUR. At the end of the day it doesn’t matter too much – lots of small pluses and minuses vs the huge benefit of investing regularly every month or quarter. You could buy e.g. VWRA/V3AA + IGLA instead for example, in USD if you find it cheap to convert PHP into USD and send over. Or if GBP is easy to transfer then you could use VWRP. So main difference is having to buy a separate bond fund and making sure you actually do that!

  16. My question is slightly different from most here. I m uk citizen living in uae. I am familiar with investing from prior history, and I am looking to actively trade in u.s stocks for short and medium duration. Is ib The best option? Also, what are the implications for cg or speculation tax keeping in mind that I may also hold cash at times. Would it be better to domicile the account somewhere else? Thank you very much in advance.

    1. Hi Ahmed, no capital gains tax as you are resident in UAE. But if you die, anything over $60k that is US-domiciled such as US stocks will be hit with 40% inheritance tax. So you could consider SAXO Bank instead if you insist on short-term trading of US stocks (obviously I don’t recommend that at all unless it is just your fun money you’re prepared to lose).

  17. Hi Steve,

    Great article, thanks.

    I’m a UAE resident but I have a Hargreaves Landsdown account in UK, with VUSA ETF and some individual stocks.

    Going by your advice, should I set up an IB account and sell these stocks and reinvest in VWRA/IGLA? Or will I be liable for UK tax on those gains?

    Thanks

    1. Hi Phil, if you have an ISA in the UK then I would keep it, as it’s tax free forever. You can always change what the account is invested in. Bear in mind the fees – min £45 per year, so what is that as a % of the account value? For the rest of your money coming from your salary and elsewhere, you can use IB.

  18. Very useful article, thank you!
    As a British expat living in the US looking to just drop a lump sum of GBP (has been sitting in UK savings account) into a growth fund, if the only option is to go offshore through a broker, would it just be easier to convert the GBP into USD and invest on-shore within US? Not in excess of 50kGBP

    1. Steve Cronin

      Hi Emma, if you’re living in the US then it’s easy to set up an Interactive Brokers account in USD. You can send your excess GBP to them via their GBP account and then turn it into USD inside IB – they have some of the best exchange rates/fees in the world.

  19. Hi Steve & DSS,

    Thanks for this excellent article, looking for advice as have recently relocated to Dubai (UK passport holder) and am looking at investing upwards of 100K GBP currently held with my bank in the UK. I’m interested in the Vanguard LifeStrategy 60 / 80 fund or similar ETF solution however understand the LifeStrategy option isn’t easily available to expats per your article, I read this is potentially an option via Swissquote from Dubai however am not sure if that is still current? At present I am not sure where I will retire to (Planned a 25 year timeline from now) as I have been living abroad most of my working career as it is but am looking to take advantage of Dubai tax laws as much as I can. If I do return to the UK at some point will I be liable for CGT on any funds / ETF that are purchased during my stay in Dubai?

    Best regards,

    1. Steve Cronin

      Hi Chris, when I last checked the SwissQuote option seemed a bit more expensive. It’s not hard to buy a couple of ETFs and you can eliminate the bias to the UK that LifeStrategy has. As long as you sell just before you leave for the UK and rebuy an ETF that’s similar but different, you won’t have any CGT to pay except on gains made once back in the UK.

  20. Hello,

    Thank you very much for this gem of a website!
    I am an expat in the UAE with an Interactive Brokers account set-up through Sarwa. Is it possible to retain the existing IB account and go the DIY route or would I need to open a new account with IB?

    Also, I noticed that my stock allocation through Sarwa is split between VTI and IEMG (with much better IEMG performance noted so far). I see VWRA recommended as a good choice for UAE expats and was wondering if you could shed some light or advice on the differences between these 3 stock options, and any advantages that VWRA may have over IEMG?

    Thanks

    1. Steve Cronin

      Hi Zant, that’s a question for Sarwa, I don’t know if it’s easy for them to do that or not. VTI is US only, so not that diversified. IEMI is emerging markets only. Both of them are US-domiciled, which is problematic for non-US investors when you grow above $60k. VWRA is Irish-domiciled and covers 95% of the world’s stocks (by value), so it’s very diversified.

  21. Hi

    I’m a teacher living in Abu Dhabi and trying to get setup to start investing in ETF’s. My issue is I’m unsure of how long I’ll be living here in the UAE, and unsure of where ill be settling down. I’ll definitely be here for the next 18 months, where I’ll possibly move to the UK for a short stint to become fully qualified before returning to the UAE for another few years. I’m not sure of my final destination and may venture through a number of countries before settling down.

    Can I create an account with Interactive brokers now whilst I’m in the UAE and keep funding it from the UK or any other country? Without having to close it and reinvest the money each time I move country?

    Or should I open an account with Degiro for example, and fund it with my home account in the UK and keep all my investments in that?

    Thanks

  22. Hi, Many thanks for the detailed post, would need your help with form W-8BEN and withholding tax. I am an Indian citizen residing in UAE and want to know if submitting form W-8BEN helps in having zero Withholding tax with IBKR. Anything special that needs to be mentioned on the form as UAE has no tax treaty. Please, can you guide,

    Thank you

    1. Hi Yousuf, IBKR should populate most of the form for you. Then you select my country of residence doesn’t have a tax treaty. Also your country of residence doesn’t issue TINs.

      Cheers,Steve

  23. Thanks Steve, when you say the rest (outside of isa allowance) can grow happily, do you mean tax free though? My understanding was if you sell before moving back, all gains to date (ie when realised) would not be taxed (eg say the first 5 years of a 30 year investment horizon), but from that date onwards any realised gains would be (ie the next 25 years of a 30 year horizon)…so when I come to sell at the end the vast majority of the investment growth would be taxable? Sorry if I’m getting confused and thanks so much for your help!

    1. V unlikely you will ‘sell at the end’. You hold the vast majority in these funds till death. Maybe you take out 4% annually to cover your living expenses. Also each year you have a capital gains tax allowance and you use it (in the same way you sell+buy when you move home). That keeps resetting the capital gains. If there are two of you, you have double the allowance. There’s no way to avoid tax but you can greatly minimise it.

  24. Hi – I’m an expat in Dubai and have been contributing to 3 index funds (2 x stocks/shares, 1 x government bonds) through Saxo Bank for several years for retirement planning. At the point that I move back to the UK I understand I need to sell the positions before so as not to incur UK CGT and then reinvest so not out of the market for too long (as above I have a 30 year time frame) – I understand this can be done through stocks and shares ISAs but this will only cover my realised investments up to a limit, so my question is what I do with the extra money I want to reinvest? This is putting me off building too big a pot before returning to the UK as ultimately it will end up getting taxed in some form as soon as I move back? Thanks in advance for your help!

    1. Hi there, definitely make the most of your time in Dubai to invest as much as possible. As soon as you sell the shares, you can immediately buy something similar but different e.g. from VWRA to IWDA or SAWD. Then you’re fine. You can stay with Saxo while in UK if you want, you don’t need to move everything into a UK platform. Only the realised gains when you sell get taxed in the UK, so while you should make the most of your ISA and capital gains tax allowances each year, the rest can grow happily. Thanks, Steve

  25. Hello, thanks for such an article. You are really giving a big help there. I’m an expat living in Dubai and I was wondering if I need to have a TRN being an employee here as well. I was checking how to get one but seems that the process is for people who are openning a company.

  26. Thank you so much for your article !

    I am wondering the following. Let’s say i’m a German citizen and i left the country to live in the Phillipines and married a woman there and now am living there basically as a permanent resident. How would i go about using my cryptocurrency money to convert it to FIAT then use that FIAT money to invest it into a ETF ? Like for example the iShares Core MSCI World UCITS ETF .
    I looked up Interactivebrokers as the option to be my broker, but the issue is they seem to have very stringent requirements on documents and so on that i need. How do i make sure i’m able to have an account / have acess, and have my ETF money with them without having to rely on registering with them via proof of residency of my former home country Germany ?

    It seems they want a tax ID or something like that, if i lived in the Phillipines, i’d have no local tax id there, so what do i do ?

    Are there any third countries i could fly to and set up something there ? Are there online brokers that are less uptight as Interactive brokers are ?

    Can you please tell me how i can go from my let’s say 250k in crypto currency ( USDC / USDT ) to FIAT and then get a bank account in the Phillipines for example and then use the money to pay the broker so i can buy ETF with that money. How would it work out, every time i sell some ETF shares ? Where would the taxes for that be deducted ? Can i get away without paying taxes on those sells ? Will Interactivebroker basically rat me out to the German financial insitututions ? Usually In Germany if i don’t live in the country anymore for like a year, i don’t need to pay any taxes at all, so how would i go about preventing Interactive broker from not deducting any taxes from my ETF sales ?

    I’d be so grateful for any answers on this. Thank you so much !

    Jake.

    1. Hi Jake, I would say most brokerages are even more uptight. If you don’t have a tax ID in Phillipines you can try to apply for one. Or you can use your details in Germany to set the account up (proof of address is accepted for 12 months). No third country would grant you proof of address in time. IB will not deduct tax from your account and Germany won’t either as you will be non-resident. I assume the Phillipines does not tax foreign nationals on non-local income and gains, but I could be wrong. I don’t know how to convert crypto into fiat, not my area, but you can open an account in Ph or in an offshore country. Then send the USD to IB. Again no tax on any sales, as you’re not a resident.

  27. Hi Steve
    Fantastic blog! I live in Hong Kong.
    In his book, Andrew Hallam recommends IGIL (Inflation protected government bonds) not IGLA/IGLO for a “Global Nomad” like me.
    Why do u prefer IGLA/IGLO over IGIL? I will retire soon. I currently own:
    60% VWRD
    30% IGLO
    10% IGIL
    To make things as simple as possible I wld prefer to own one bond fund (I think?).
    Shall I consolidate to IGLO or just continue the way it is? Note, I will have some new money to add to my portfolio quite soon.
    Thks for help.
    All the best. Geoff

    1. Hi Geoff, I think he alternates between different funds in his recommendations to show they are all more or less the same. I don’t see inflation as a huge threat so I am happy to hold a fund with a mix of government bonds. I don’t think there’s a need to sell your IGIL – you can keep buying more IGLO until you retire. It’s important to get everything right before and during the start of retirement – check out the Expat Investing Academy program or my private coaching if you want to go through the details. In general though I would say you are streets ahead of most people! Thanks Steve

  28. Hi Steve,
    This is so helpful for me as an expat (Non residential Indian in Saudi Arabia). Thank you so much. God bless
    I request you to please address my below queries which has confused me while opening an account on IBKR.

    1. I am a Non – resident Indian residing and working in Saudi Arabia. I have had trouble completing the
    Tax residency part of the form. What all countries do I need to enlist as Tax residency (Both India and Saudi Arabia) or just Saudi Arabia?

    2. Saudi does not issue Tax identification numbers. so I have been wondering whether I will have to pay
    any taxes in Saudi or not?

    3. What will I have to select as the Order Type and Time-In-Force while buying Stocks?

    Your help and blog post is truly appreciated. Thank u once again!

    1. Hi Ajit, you are resident in only Saudi for tax purposes. One of the options to select on the form is the country does not issue TINs. There are no capital gains or income taxes in Saudi. Stick to the default settings for Order Type and TIF, they are best. We cover all these things in our Expat Investing Academy program, as it’s easy to stuck on these exact questions! Not like anybody teaches us this at school. Best of luck! Steve

  29. Hi Steve

    Your page has been a really useful, thank you for sharing.

    I am a British expat in Qatar, paid in QAR, and have just opened an IB account following your recommendation.

    Reading through your article and the subsequent Q&A, I am still a little confused regarding best options on currency. I plan to stay here for around 5 years and then return to the UK so my question is, which is likely the best option:
    1. Invest in USD – transfer QAR to USD to invest and then convert to GBP and send home in the tax year before returning.
    2. Invest in GBP – transfer QAR to GBP to invest and then transfer home in the tax year before returning.

    Reading your previous comments it seems investing in USD is often the recommended approach but in my case am I not losing on exchanges twice (option 1), rather than once (option 2)?

    Or am I missing something obvious?

    Many thanks in advance.

    1. Hi FP, this a big sticking point for people but in the end you are not going to lose too much either way. QAR to USD you will likely get a better FX rate, as it is fixed. QAR to GBP is floating. Also I find it annoying to invest in GBP, because you can’t tell whether the performance of the fund is due to GBP movements or stock movements. It is vv cheap to exchange USD into GBP when you go home, though I have to say – why would you? You need to be invested for longer than 5 years and can sell the stocks just before you move home, to reset the capital gains clock, but re-buy something similar but different immediately and keep all your money invested in IB. There’s quite a lot going on here – do consider taking the Personal Roadmap Assessment and a quick strategy call with me.

  30. Hi Steve,

    Just to reiterate the many other comments of thanks for such a great resource to help us newbies to all this!

    I am originally from the UK and currently based in Saudi Arabia and likely to move on in August 2022 to somewhere new (not sure where yet but not the UK). Monthly investments into IB would be from my UK GBP account.

    1. I was thinking it would be best to keep the currency with IB as USD as I am unsure where I will move next. However, is this the best thing if my monthly investment is coming from the UK (GBP)?
    2. IBKR Lite or Pro? I figured for my needs (couch potato portfolio as much as possible – VWRA & IGLA most likely) that Lite would be best?
    3. Would Transferwise be better than direct from my bank for transferring from UK to IB? Or another exchange company?
    4. Are you able to recommend anywhere that gives a good and simple guide to navigating the IB website and setting up/purchasing VWRA & IGLA? I have tried their dummy account trial and find it quite confusing as a newbie to this.
    Thanks in advance for any advice you can offer

    1. Hi Richard, if you are earning in GBP (even in Saudi?) then you might as well invest in GBP or convert to USD inside IB. Doesn’t make much difference. Once you buy a global fund, you have effectively converted the money into USD anyway. It’s v quick and easy to send GBP to IB as they have a UK bank account – so you don’t need Transferwise. You will need Pro as you can’t buy Irish-domiciled ETFs via Lite and you should avoid US-domiciled ETFs because of tax. Yes, my new Expat Investing course goes through the IB setup process in great detail using videos you can follow along with 🙂

      1. Hi Steve,
        Thanks for the info. I am not earning in GBP in Saudi but would be investing in IB using property income from the UK each month. My Saudi wage goes in a pension pot with vanguard. I will transfer this lump sum to my IB account once I have to cash it out (5years after leaving my role in Saudi).
        Great to know that IB has a UK bank account. I will checkout your workshop and guide, many thanks again.

  31. Hi SS,
    Was directed to this page from one of the simplyfi blog posts and i must say this is some great info you passed on to us. Im a total newbie in the investment world and getting into it a bit late (indian passport holder, 36, with a family residing in dubai, looking to retire by 60ish).
    Would be of help if you could advise on the below.
    1. Im looking to start my IB funding with an initial lumpsum of 15k USD, and then subsequent monthly funds of 1k USD. Would this be a good approach, or should i break the 15k into smaller funds?
    2. If i were to open a joint account with the Mrs and one of us God forbid passes away, will the joint holder have access to fund and withdraw the account without any issues?
    3. Do you recommend putting each month’s complete savings into IB, or split it between IB, Indian FDs and leave some in my dubai bank?
    4. Do you have any links to IB investement calculators so that we could check various scenarios on the funds to be sent to the account monthly/quarterly.

    Thanks in advance.

    1. Hi JJ, 36 is not late at all! Plenty of time to invest well. 1. It’s fine, as long as you can sleep at night. 2. Yes, especially with a death certificate. 3. You need your cash buffers for safety nets, then you can put the rest in IB. Some of the cash buffer could go in Indian FD if you can get it out quickly and the bank is rock solid. 4. Not sure what you want to calculate. You can try portfoliovisualiser or the Moneychimp compound interest calculator or take our new course!

  32. Hi Steve,
    I live in the gulf area. I’ve started investing with IB since may and I went for a mix of ETF as, VWCE, VWRA AND IGIL
    If all goes ok I’ll be able to keep working 10 years before retiring. I’m not sure about my retirement place but it could be between Europe and somewhere in Asia.
    How would you set the ratio between equity and bond 70/30 or 80/20?
    Would you go with different ETF?
    Euro is still very high so changing from QAR to euro would get me much less than few month ago. Would it be better to invest more in dollar now?
    Thx for your help

    1. Hi Chris, I don’t think you need both VWCE and VWRA, they are the same thing except you can buy them in EUR or USD. Once you have bought them, you are effectively invested in USD, so it doesn’t really matter whether you buy them in USD or EUR. If you buy them in EUR, it just saves the FX conversion if you happen to have a lump sum of EUR to invest. However, currency conversion in IB is insanely cheap, so that doesn’t really save much either, maybe a few dollars.

      I would do QAR to USD, as that is pegged so you will get a much better FX rate.

      It’s hard to say about asset allocation without seeing your finances in detail, plus how calm you are during a downturn. Within 5 years of retirement you should be getting closer to 60/40 than 80/20, for sure.

  33. Hi,
    I am an expat living in Saudi Arabia, and truly appreciate the advise you are giving.
    I have already opened an account with IB a few months ago but have not yet transferred any money to them.
    I am curious about the the transfer fees – some people in my network who have transferred money friends/family in the USA tell me that USA banks charge a fee of around USD 40 per USD 1000 tranferred.
    I have also heard similar stories from people transferring money from here to their USD bank account in their sub-continent home country.
    Do these sort of charges also apply for transfer to IB from UAE? And any chance you are aware of the cheapest way to transfer money to IB from Saudi Arabia?

    1. Hi Bilal, the biggest cost is the correspondent banking fee for moving USD from KSA to US. It’s hard to avoid. You will probably need to shop around for the best rate from all the banks and exchange houses in Saudi.If you save up more to do a transfer every quarter then the fee becomes less important (and the rate more important). Thanks Steve

  34. Hello, great information on this blog! How much is capital gain tax(both short term or long term and how are they defined) in UCITS ETFs at the time of redemption? This assuming I went dividend reinvested funds.

    Keep up the good work!

    Thanks,

    Karan

    1. Hi Karan, it depends where you are resident. In many expat countries, it will be zero. If you move back home, you will pay tax either from the day you moved back or the day you bought the asset, depending on the country. Check out our online course for more!
      Cheers
      Steve

      1. Thanks a lot for the response! I am an expat from India living in Abu Dhabi. So likely no tax for me? What is the cut off point for short term vs long term gain? My understanding is that in most cases it is 1 year. Will definitely consider the course! Keep up the good work!

  35. Hi Steve,

    Firstly thank you so much for sharing all of this incredibly valuable information, after being a part of your 4 day challenge during the summer and reading all of your advice I am now in the position of being signed up to Interactive Brokers, but before I commit to my first set of investments I just wanted to ask you a quick question – I am currently a Dubai resident but potentially planning to return home to the UK next summer (July 2021), does this mean I would be better off in the longer term investing in VWRL and IGLS rather than VWRA and IGLA or doesn’t it really matter at all as the only difference is literally the currency?

    Also when I return back to the UK, in your opinion, should I continue to invest in these aforementioned ETF’s or are there even better options available once I’m a UK resident again?

    Many thanks again and if I ever see you out in Barasti or any other high end Dubai establishment there’ll be a pint and jagerbomb ready for you – keep up the great work!

    Cheers, Cam

    1. Noted!I would get started with VWRA. If you are worried about not have any GBP exposure, you could go with IGLS if you trust UK gov bonds. When you return, Vanguard LifeStrategy via Vanguard or Interactive Investor should do the trick, or you can stick to ETFs.

  36. Thank you for this well explain article.
    Looking forward for the guide for expats on how to transfer their money.

    I am a canadian citizen, and I am now an expat in the UAE. I am in the process of opening my IB account.

    Based on the comment thread, I understand that the best option to buy an ETF including US stock is to buy Irish ucits ETF. This allow to to be only tax the 15% withholding tax on dividend and no capital gain tax for UAE resident.

    Is it also posible to invest direclty a Canadian, UK, or European ETF/stocks? Example buy direclty an ETF like VCN.To or XEI.To on the TSX (Toronto Stock exchange). If yes would you recommand against it for any reason?

    I am asking since I would like to buy
    1) global ETF like VWRA or VWRD with USD currency
    2) A canadian ETF (VCN.TO). For this step I assume the best way would be to transfert CAD into IB and make a purshace on the TSX. But I am not sure if this make sense from a Tax, Fx and Fee perspective.

    What are the way we can encourage your team to continue tho provide this helpful content? You don`t seem to have a donation section.

    1. Hi there, yes you can buy a Canadian ETF and USD/CAD transfers are cheap in IB. But why do you need a Canadian ETF? I don’t believe in home country bias, it adds a lot of extra cost and hassle for no clear benefit. Something like VWRA will already have the big Canadian companies in without overrepresenting them as part of the world market. Also most truly global Canadian companies will probably be more driven by USD.

      Thanks a lot for your support, you can always sign up for our new course on investing, or our Patreon account is here.

  37. hi Steve,

    I opened an account with IBKR after reading your blog. Thanks for all the amazing insights. My first deposit was via the bank transfer and it took out an expensive sum of fees from my account. Do you have any recommendations for exchange house in Dubai? I’ve checked most of the exchange centre in Dubai. None of them support money transfer to US especially if it’s a trading account.
    Do you recommend setting the base currency on my IBKR account to USD or other currency if I’m transferring money from Dubai? Please let me know what you think, really appreciate your advice. Thank you.

    Stephanie

    1. Hi Stephanie, the bank transfers tend to be quite expensive in terms of fees charged and also the exchange rate. Wall Street Exchange in UAE has the best rate for AED to USD.

      USD as a base currency in your IBKR account seems like the right choice since your salary in AED is pegged to USD.

  38. Hi Steve,

    Thank you so much for providing such a clear guide on expat investing. Its the best one I have found so far! I have two questions I would appreciate your insight and advice on.

    1. I am a Canadian permanent resident living in the UAE and I plan on moving to Canada and taking up residence there in the next 3 to 5 years. From what I have understood, i can link whatever bank account to my IB account to transfer funds (use an exchange house as an intermediary in case of a different currency denomination from USD) or withdraw funds to. Have I got this right? Because if i do move to Canada I can then link my Canadian bank account to my IB account.

    2. Do i need to take any Canadian taxes into consideration?

    Thank you in advance for your advice.

    1. Hi Ameera, I’m glad you’ve found it useful! You can convert USD to CAD v cheaply in IB and then send the money to any account in your name that you nominate at the time. It’s very easy and fast. You would only have to think about Canadian taxes once you are resident in Canada again – if you are still considered ‘resident’ now for tax purposes then ye: capital gains tax and income tax on dividends. Thanks Steve

  39. Hi, very helpful information, thank you. I’m a British expat in the Caribbean. I have sterling to invest with IB long term and am thinking 60% to VWRP (as its in GBP and accumulating), 20% in VAGP for bonds, and 20% in WSML iShares MSCI World Small Cap UCITS (in USD) as I don’t mind some volatility for potential extra gain. I couldn’t find a Vanguard global small cap ETF, just a mutual fund. If I’ve understood all this then this looks like a good mix but would appreciate your thoughts/confirmation. Thank you.

    1. Hi Steve, I’d love to reach more expats in the Caribbean – watch out for the xFI podcast coming soon… That portfolio looks good to me! A bit stock-heavy if you are less than 5-10 years to ‘retirement’ but otherwise great. There isn’t a Vanguard small cap UCITS ETF sadly, but the iShares one looks decent. Thanks Steve

  40. Hello,
    Thank you so much for the article and the valuable information. I just wanted to ask about few points:
    1- I read somewhere that SIPC guarantee is covering only US investors and not those located outside US. Is this true?
    2- Do you think it’s worth it to use the brokerage service of an international bank (HSBC/Citi)? I know they are expensive compared to IKBR but at least they could be more secure especially when investing big amounts (just to sleep well at night).
    3- Do you have an idea if the new DEWS funds run by Mercer for DIFC employees are good to invest in (as part of employees voluntary contributions). As per the funds fact sheets they seem to be well diversified (equity/bonds/REITs, large/small cap,…)
    Thank you

    1. Hi Nessim, the SIPC guarantee should cover you anywhere if you invest in shares, ETFs and cash. I don’t see banks as more secure at all (see Lehman Brothers and multi-year unwinding) and IB grew its customer base hugely in 2008 when all the banks were failing. I wouldn’t add any extra into DEWS unless your employer is matching your contribution. The fees are A LOT higher than what you will get by investing by yourself via IB. Thanks Steve

  41. Hello!

    First of all, let me start by thanking you for putting together such a great set of articles and materials. I’ve recently complemented your blog with the reading of ‘Millionaire Expat’, all of this was such an eye-opener. Being an expat in Dubai, I feel lucky (and probably long-sighted) to have resisted my personal ‘shark in a suit’ – yes, the guy keeps calling me from time to time, but after me mentioning ‘index investing’ I think he’s going to stay away for a while!

    I’m actually about to set up my IB account and start my DYI saving plan, I just have a couple of practical questions:
    – Joint account vs. 2 Single accounts : clearly worthy from an economic perspective, but is there any drawback/implication I should consider if to open a joint account for me & my wife? Please note we are of different nationalities (both accepted by IB, I’ve checked that), not sure if this can be a relevant point? Or anything else we should be mindful?
    – Bond index : after scrolling the comments, I see the most popular options are IGLO and IGLA. I’d be keen on a accumulating plan (hence, IGLA), however I note there’s a huge difference in terms of size (currently IGLO being at more than $1,000m and IGLA just above $40m). Is this something to consider, i.e. the smaller size of IGLA (which is a younger fund) could mean lower volume of exchange and potential challenges? Or is it something I shouldn’t be worried as the fund is anyway going to grow in size long term?

    Many thanks for taking the time to answer!

    Alberto

    1. Hi Alberto 🙂 Joint accounts are perfect as long as you trust your wife haha. I think IGLA will grow over time – it’s not likely to get closed down unlike small standalone funds. You may find the spread is wider (the difference between the red price and the blue price in IB) but this is fairly easy to check and shouldn’t be a major expense. Because the underlying assets are very liquid (easy to buy/sell), it makes the ETF pretty liquid as well. Thanks, Steve

    1. Yes Sarwa are great, especially if you can’t be bothered to learn how to DIY. I also think though it’s pretty easy to learn how to DIY and it will save you money over the long term as your portofolio grows.

  42. Russell N Coleman

    Hi, Im starting to investigate the whole ex-pat investment world so this was very useful.

    If I just have a single lump sum investmnet to make and not likley after that to make further monthly, 6 monthly additonal invetsments is that an issue?

  43. Thank you so much for this! Very hard to find this information in a clear format anywhere. Just a quick question. A couple of years ago I ended up starting a Vantage Platinum 2 savings account on the advice of a financial advisor here (Malaysia). As I do more reading it seems that my money would be better off elsewhere however there are penalties associated with withdrawing the money with 17 years still left on the contract. Do you think I’d be better off continuing this and paying separately into my own EFT investments, or just taking the hit, taking what I can out of the Vantage account and investing it all?

    1. Hi Manbread! Thanks for stopping by from Malaysia! I don’t know the details of the fees on your Vantage plan or the fund it is invested in, so can’t tell for sure, but typically you would be better off surrendering the saving plan and investing in a low cost ETFs on your own.

  44. Hello once again,
    Appreciate your reply, Steve,

    Is the real estate tax liable to the whole portfolio or to the part with the US emitents only?

    Juliya

  45. Thanks for the extremely valuable information , I have been looking for this for ages.
    I took your advice and immediately opened an account with IBKR on the very same day i read the article
    tired buying VWRA as advice but below is only one i can find , i wonder if it is the same thing you mentioned in your article,

    VWRA VANG FTSE AW USDA LSEETF

    Thank you , Ahmed

    1. Hi Ahmed, yes the “VWRA VANG FTSE AW USDA LSEETF” stands for VWRA Vanguard FTSE All-World in USD traded on London Stock Exchange ETF, so it is the same one.

  46. I’m curious how much of an advantage Irish domiciled VWRA really is over, for example it’s US domiciled cousin, VT which has higher withholding tax but much lower ongoing charge fees.

    Hypothetically, if the dividend yield on VWRA is 2.5% p.a. and the US holding of the fund is 57% (according to the May 2020 factsheet), the saving on US withholding tax for using Irish domiciled VWRA is 15% * 2.5% * 57% = 0.21%.

    The OCF of VWRA is also 0.14% higher than VT (0.22% vs 0.08%). So net of the fee differential the advantage of VWRA over VT is 0.07%. Still positive but not as much as I’d initially thought when first reading this post. Have I got my numbers right?

    Not to negate of course the advanatage of estate tax avoidance for VWRA on portfolios over $60,000, that’s clearly also a very important factor.

    1. Steve Cronin

      For me, the estate tax beats everything. If I stand to lose 40% of your portfolio on death, I would do anything to avoid that. The other differences are minor in comparison.

  47. Hello!
    Thank you for your article. So basically Irish ETFs with a US source are taxed at a rate of 15%. Does the fact that they are listed on LSE in the UK make an impact on the tax? Or only laws of taxation of Irish ETFs is applicable.
    Secondly, are there any taxation of the capital gains?
    Thank you,
    Juliya

    1. Steve Cronin

      Hi Juliya, the dividends of US companies inside the Irish-domiciled ETFS are taxed at 15%. Given dividends are around 2% total per year, it’s not a major tax. Only the domicile impacts the tax, not the listing. Capital gains tax depends on where you are resident, e.g. UAE = 0%

      1. Hi Steve!
        Thank you for the reply.
        Also in the case if I pick certain stocks on the US market still the whole portfolio (including UCITS ETF) is liable to estate tax or not?

  48. Daniel Slevin

    Hello,
    Brit in Korea soon to be in Turkey here. Thank you so much for this blog. I’m learning so much.
    I’m trying to open an IB account for ETF’s but cannot navigate past the following sections on the form:
    1. ‘Investment Objectives and Intended Purpose of Trading‘ Which should I select: Growth / Hedging / Preservation of Capital and Income Generation / Profits from Active Trading and Speculation ?
    2. ‘ Trading Experience and Permissions’ section.
    What should I select here?

    Thank you again for this resource and your time.
    Dan

    1. Daniel Luke Slevin

      I should add, I am new to this so only have ‘limited knowledge’ and 0 years experience for each question in the ‘ Trading Experience and Permissions’ section that I’m struggling to get through.

    2. Steve Cronin

      Hi Dan, great that we are reaching Korea! Anyong haseyo! Objectives – Growth. Trading permissions they won’t usually accept less than 2 years’ experience, 1-10 trades, good knowledge. Thanks Steve

  49. Also to add to the above, what do you think about E-Toro?

    How would you rate it in comparison to IBKR?

    Thanks!

  50. Hi Steve/Dorota,

    First off, I would like to say thanks for creating such a column which explains everything in such detail and your response time has been incredible. I am an Indian citizen residing in Dubai and am 23 yrs old just venturing into the world of stocks and investing in this Covid-era. I have done some analysis and am planning to invest in stocks and having a diversified portfolio. My idea is to invest around $1000 every alternate month. My idea of investing is around 50% on reliable companies like Cola, Apple, Wells Fargo, AMD etc and rest are split among Oil, Gold, Software companies etc. (Very few in disruptor stocks). (Advise if this is good) I am seeing a lot of ETFs related comments in this 🙂

    I came across various platforms and blogs that IBKR is the best in the business, so have tried to register with them. Have submitted all docs/proofs etc but when it came to fund the bank, its not letting me change the country of bank from USA to anything else (maybe its a glitch)-FYI.

    Can you please explain in layman terms how i should conduct my portfolio and continue to invest etc? I know there is the monthly inactive fee of $10 charged, but will it be voided if i even buy a share worth 1$? (May sound silly, sorry)

    Also, back when i wasnt active myself, I have opened an account with Sarwa and have invested around 3k$ till date and have noticed they invest in ETFs and its similar to mutual funds and its in for the long run.

    Should I keep investing in Sarwa and in IBKR once its set up alternatively? I am planning on investing for the long run, bit by bit since i just got a job and started saving up.

    I am sorry for this long post but would really appreciate some guidance and answers to these queries 🙂
    Will try to come for a workshop and sign up as well!!

    Thanks!! Stay safe.

    1. Hi, we would always say that instead of investing in few individual stocks just buy the whole world! You can do it by buying one ETF that holds stocks from across the globe and across almost all the sectors. That way you diversify your portfolio to the max.
      I am not sure what you mean by changing the country of the bank for IB? IB is based in the US and you will transfer your money there.
      Sarwa does a great job for you. Ideally, you should do on your own what Sarwa does for you with investing in the ETFs for the long term, then you could resign from their services. Until then, keep investing and keep learning. We are looking forward to have you on the workshop, you can register through the website.

      1. Hi Dorota,

        Makes sense, but isnt it smart to invest in certain stocks right now since the market is low? ETFs are always reliable as per my understanding and is always a safe bet for future returns.
        What I meant by bank country in IB is that there was news that UAE customers cannot have access to IB anymore, so while registering with them, and when i tried to fund the account, it did not allow me to change the country of bank from default USA to UAE where i have an account. I am taking it up with them, no issues.
        Yes, Sarwa is good and will keep that going until I learn well post which I will do it myself.

        Also, IB is more preferred over EToro right?

        Will definitely register for the workshop soon!

        1. Hi Bala, you are trying to time the market by buying some specific stocks because you feel that the market is low. First you should build your investment strategy and then stick to it, without trying to outsmart the market, because nobody know what will happen in the future. The ETFs will give you exposure to the stocks you mentioned as they are also holding them.
          The UAE is still on the list of the countries supported by IBKR, so that should not be an issue.

  51. This is a fantastic post….. thank you for the very wise words.

    I am just venturing into the world of investing, I am UK expat based in Dubai and planning to invest via IB.

    Before I jump into this, I have two quick questions;

    1 – I am planning to keep it simple and invest in one stock ETF and one bond ETF. I just wanted to check, is 80/20 still recommended bwtween VWRA and IGLA ?

    2 – Can anyone also confirm the dividend frequency (I realize both will accumluate)? Or let me know where I can find this info.

    Thanks again

    1. Hi, the VWRA and IGLA are both a good choice and both accumulate the dividend. You can find this information online under Key Facts of the fund description. The Asset Allocation depends on your risk appetite, how much loss can you tolerate before you will want to sell your shares when the stock market drops, your investing horizon. Usually anything between 60/40 to 80/20 works for most people.

  52. James Anderson

    Hi Steve… I was wondering why a lot of offshore ETF investments are in the form of an insurance policy? Is that common or is it something I need to be careful about?

    1. Steve Cronin

      Hi James. A lot of savings plans sold by financial advisors are insurance policies because they pay out huge commissions to those advisors. They are not usually ETFs though. You can buy ETFs through an offshore broker platform like IB so you can manage your own money.

  53. James Anderson

    Great article Steve!
    Is transferwise a good option to send USD to the brokerage from the UAE?

    1. Hi James, it’s a reasonable option though the FX rate on AED to USD is not that great (at the moment) compared to what you can get elsewher. It’s certainly useful to have a Transferwise USD account based in the US, which you can open as UAE resident, e.g. for withdrawing money from your broker or paying people in the US. Beware though, if the money is sent from the UAE via Transferwise, especially the first time, your broker may not accept it or hold it for a few days, due to anti-money regulations – the money will not have come directly from an account in your name but from Transferwise’s account. So the first time at least it’s better to fund the account with a small amount from your bank or use an exchange house.

  54. Hello,

    I have just read the post, very informative and the best thing I’ve seen to advise. I am looking to start with IB and I’ve selected some funds to invest with like;
    VTI, VYM, VOO. and maybe VGT. I am just wondering where I can find out if they are US-domiciled or not.

    Also, I saw from a previous post how does the dividends works on IB, can it be reinvested automatically? if not where does the dividend money go to?

    Finally, what currency do you suggest I set up IB with? Any idea of the best currency exchange house as obviosult UAE exchange is out!

    Kind regards

    Rob

    1. Hi Rob, the ETFs you chose are US-domiciled. It is mentioned on the fact sheet or on the issuer’s website. I also found that sometimes the domicile is not mentioned and then it usually means that the fund is US-domiciled. Also, for all Europe-domiciled ETFs there would be UCITS in the name.
      To reinvest your dividend automatically you need to choose an ETF that does it for you. Such ETFs are described as “accumulating” (as opposed to distributing).
      For your currency exchange and transfers you can try Wall Street Exchange. Revolut is good if you have the possibility to open an account with them (limited to certain nationalities). Good luck!

  55. Excellent article. I would please value your thoughts on a choice of ETFs I want to switch to with my SIPP pension. Now I’m more informed from articles like this and Andrew’s I feel my FA has over complicated fund choices to give themselves a task to keep rebalancing.
    I have approx £100k in a SIPP. It will reman invested for min of next 10 years. I would prefer to invest in GBP and to create dividends to avoid unnecessary selling to pay annual fund charges. I was thinking 70/30split E/B. For equity keeping it simple with either VWRA or SWDA (GBP / dividend paying) equivalent with maybe an extra ETF to add some equity diversity. For bonds i was thinking of keeping it very simple again with 1 or 2 options, based on blogs like this maybe IGLA or something similar. Any thoughts greatly appreciated.

    1. Hi AB,
      Your choice of ETFs seems good, these are the most globally diversified ETFs. Just note that both VWRA and SWDA are denominated in USD and accumulate their dividends, so they are not so much what you are looking for. There are different versions of those ETFs which are GBP denominated and distribute dividends: VWRL and IWDG – look these up. Hope that helps!

  56. Hi Steve, following up on my previous question… Is is not possible to invest in Vanguard’s index mutual funds through IB? I read (unless I got it wrong) that there are no transaction fee in IB for mutual funds. A more basic question will be – are we (UAE resident, Indian passport) allowed to buy mutual funds from IB?

    THank you very much!

      1. Thanks much Steve/DSS team, I have started my application to create an IBKR account. However at the last section of registration where it asks to select if I am a resident of a country with tax treaty with US (for form W-8BEN), should I be selecting India or ‘country not listed’ (UAE doesn’t have a treaty. I am an Indian citizen (non resident) residing in UAE). If I have to select ‘country not listed’ then will I be inviting 30% withholding tax even for Irish domiciled etfs? Thanks in advance for your help.

        1. Hi AV, in your application process you should list the country in which you are a resident. The withholding tax is based on the domicile of your ETF.

  57. Hi Steve,
    First of all, this is an absolute treasure of a blog! So relevant, easy to understand and up to date. Thank you for sharing with the community.
    I am an Indian passport holder and residing in UAE (and a complete beginner to global investments) and would like to know about the 15% dividend withholding tax on Irish domiciled ETFs:
    1. Is the tax applicable for Indian passport holders residing in UAE and investing in such ETFs?
    2. If I opt for dividend reinvestment, will the reinvestment amount be minus 15%? Or is the tax charged only during a payout?
    3. Is there any way this tax can be avoided?

    Thank you for your support!

    1. Hi, this tax can’t be avoided, it is withheld at source by the US tax office. If you invest in a distributing ETF the dividends paid to you will be arriving to your account already reduced by this tax. By investing in the accumulating ETF you are avoiding (in most cases) any tax on dividends applied by your country of residence (different from the withholding tax), which for the UAE residents is 0%.

  58. Hi,

    Thanks for the great advice. I am getting my head around it all. I want to keep it simple and easy to manage.

    On IB, I have been playing with the free trial. The IGLA and VWRA don’t have UCITS in the text. (ISHARES GLOBAL GOV BND-ACC & VANG FTSE AW USDA) How can I be sure that they are UCITS?

    In terms of navigating the IB site and working out costs etc any advice would be helpful. I am sure it is straightforward but being completely new to it I want to be sure I can be clear on how it works and where to go to find information etc.

    On the site with trades you have options of limits and market etc…….what is the best option?

    I am assuming as these are USD funds that I should transfer USD into the IB account to avoid exchange fees.

    My situation is/needs are:
    – I will invest a lump sum initially split 80/20
    – Invest 500 per month
    – Want to re-invest dividends, how do I set that up?
    – Will invest for approx. 20 years.
    – I want to be as couch potato as possible. Can I set it up to automatically purchase the funds each month in an 80/20 split and I will rebalance once a year?
    – Is it better to invest the 500 monthly or wait quarterly in relation to fees for trades?

    Apologies if you have already answered all these questions in previous posts.

    1. Hi Rich, this is a lot of questions in one question 😉 Here are some answers: if you buy IGLA & VWRA you will not be receiving dividends because these are accumulating ETFs, so no problem of reinvesting. I am afraid there is no automatic set up for the trades on IB, you will need to spend those 10 min each month to log in and make a trade. You could however, try to automate your transfers to the IB account from your local bank account. On IB you can transfer other currencies too and exchange on their platform, their exchange fees are very low. They do not accept AED though. IGLA and VWRA are the ticker codes for the Irish-domiciled ETFs, but IB isnt putting UCITS in their description unfortunately. Hope that helps!

  59. Hello DSS team,

    Thank you so much for this gold mine of information. I managed to open my account successfully with IB, wait was longer than 14 days. I am really stuck at “transferring money stage”. I tried to look at all responses here, but still the doubt remains. I just connected my IB acocunt with ADCB account. Now, do I need to connect UAE exchange account with my IB account as well for the transfer to take place, how would IB account know of the transfer for my account and then was there a purpose to connect my adcb with IB? Sorry in advance if this is silly. Would appreciate your help.

    1. Hi Ads, there are no silly questions! You need to inform IB of the incoming funds, whether they are coming from your bank or an exchange house. For the first trial, and just to get you started, it is easiest to do a direct transfer from you personal bank account. Once you are done with the first transfer, you can find the best way to optimize your transfers. Please note that we are not using UAE Exchange any more and do not recommend others use it.

  60. Thanks Steve for your prompt reply. Yes , I will surely join your online workshop.
    With Saxo as base currency is GBP , I can send money only in GBP. It gets converted to dollars when I buy ETF in USD. Unfortunately with Saxo one cannot change the base currency, but can open Sub account with USD as base currency. I have opened subaccount with USD as base currency just few days ago. I can send and trade in USD in subaccount . I hope this solves the problem.

    1. That sounds like a good solution, having the sub account in USD. You may want to consider changing your broker alltogether as Saxo is now chargind 0.25%p/a which becomes expensive over time.

  61. Hi Steve, I am UK citizen and currently living in Qatar. First, I would like to thank you very much for info on your blog. It is extremely helpful. I would be grateful if you could help me advise with the following.
    I opened Saxo account with GBP as base currency early this year. Some other colleagues of mine have opened account with US dollar as base currency.
    I have invested in ETF (vwra) and Bonds (IGLA) both are traded in US dollars. All my profits are converted into base currency (GBP). I note that there is significant conversion (P/L) losses after conversion into GBP. I am looking into long term investments.
    My question is have I done a mistake opening account in GBP. Should I have followed other colleagues of mine and opened SAXO account in US dollars to avoid conversion losses. Is it worth opening a subaccount in US dollar ? Please advise. Thank you very much.

    By the way if you are planning to run any workshops in future in Doha, I would like to know. Thanks.

    1. Hi Raj, are you sending USD? Because you are buying USD-denominated stocks. I would change it to USD as a base currency unless you are about to go home to UK within 6 months. Our workshops are now online so you can join from wherever you are! I’d love to help more people in Qatar! We also sent you an email reply few days ago, check your spam folder!

  62. Hello Steve,

    I can’t thank you enough for all the knowledge you are sharing with us. If all this is gold, then your reply to every question asked is actually diamond!
    I have red your blog and comments in and out and am ready to dip my toes in the investment world. Hopefully will join you in the coming workshops!
    Cheers

    1. Hi Firas, thank you for these words on behalf of Steve! We are glad you found it useful and helpful. In fact, now is a great time to join our workshop as we are running a discount! Check our Workshop page for more info.

  63. Francois Joubert

    Hi Steve.

    Much appreciated article. I bought my first shares using IB. I bought the VWRA even though I am a complete noob.

    Just a quick question if you won’t mind. I see on vangaurds website for VWRA the following:
    “Tax status : UK, Austria, Germany, Switzerland Reporting”
    AND
    “Countries registered : Austria, Denmark, Finland, France, Germany, Ireland, Italy, Liechtenstein, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, and United Kingdom”

    My question is, as a South African am I allowed to buy it? How does tax reporting work?

    1. Hi Francois, your tax implications will depend on where your tax residency is and what products you buy. It will depend on the tax treaties between the country of your tax residency and that of your product’s domiciliation. The countries in which the product is registered may also change the tax level applicable to you. We are no experts in South African taxes, so I would suggest you consult a tax accountant to avoid any mistakes. Good luck!

    2. HI Francois,

      Good choice! I’m also in SA and was about to buy the same. Please share any info on tax enquiries you made?

      Scott

  64. And a further probably dumb question. I have exchanged currency but when I try to buy an ETF in USD I get the message that “The order is not accepted, their is insufficient settlement cash” however if I look in my account I clearly have enough cash. Does this mean the currency trade has not settled? Cheers

    1. The position is the number of shares you hold in that particular ETF. If you closed the position, you would sell all the shares you had in that ETF. Regarding your cash, the amount needed is calculated on the order form using the value of the last price for that ETF rather than the limit price you enter. So it can over-estimate the cost sometimes. Failing that, make sure the ETF is in USD and you actually have the currency in USD, not just for reporting purposes.

  65. Hi, maybe a dumb question here but in IBKR, where it shows ones positions, how is that supposed to be read. And what happens if one clicks open/close to these positions?
    Are they just records of the ETFs purchased?

  66. Great informative article and follow up posts.

    I’m a UK expat based in the UAE , what are your thoughts on using the IG Index UAE share dealing platform (not spread betting or CDF) instead of IB to buy ETF’s?

    Thank you,

    1. Hi Ray, not that familiar with it but I think it’s more expensive. Hard to beat IB on price really, especially when your portfolio gets above $100k.

  67. Hi, is it still possible to open an Interactive Brokers account from the UAE?
    I tried many times in the official website and it seems that Interactive Brokers does NOT ALLOW accounts for UAE customers anymore…
    Is it true or not?
    Thanks

    1. Hi Simon, haven’t heard of that from anyone before. Some people complained of the long time it takes to open the account (sometimes even 14 days as per recent reports, apparently due to volumes of new clients). Where in the process do you get stuck exactly, are you getting some kind of communication from IB? UAE is still on the IB’s list of available countries.

      1. Hello,
        During my research, I came across the below message which I only saw on one website, so not sure if it is the case, or perhaps they are trying to promote other platforms? or maybe they only meant UAE citizens and not residents?
        https://www.business24-7.ae/interactive-brokers-uae/
        The say: “​Interactive Brokers does NOT ALLOW accounts for UAE customers anymore. Underneath is a list of brokers we can highly recommend to sign up with as an UAE citizen.”

        1. I don’t know where do they source they information from, but the link you posted is from August 2019 and since then many people from the UAE opened their accounts with IB. UAE is still on their list of countries.

    2. Hi Simon,

      I’m a UAE resident as well and I’ve just got an IB account opened successfully. However, I did run into some minor tech glitches on their website at certain times.

      Should still be possible.

      1. Hi Matty, I am having some problem with tech glitches indeed!
        I will try again; thanks for sharing your personal experience.

  68. Nicholas Drysdale

    Hi there, great blog and thanks for sharing. I am a Brit and based in Dubai, I’ve set up an account on IB and would like to invest in GBP – is that possible, or do deposits, account balances and investments on IB have to be in USD? Thanks

    1. Hi Nicholas, you can fund your account in GBP and buy funds denominated in GBP. If you would want to buy a fund that’s traded in USD but you only have GBP in the account, it’ll tell you that you have insufficient funds. Then you will have to exchange part of your cash into USD (or transfer new funds in USD) to buy the USD denominated fund. Your account can hold cash in several currencies.

  69. Hello! I am a UK Expat based in the UAE. How do I invest in the Fundsmith Equity Fund whilst keeping my money outwith the UK? It seems this fund (and several similar) are not available through Interactive Brokers and Saxo Bank…and the only option is HL or ii. Appreciate any help or guidance!

    1. Hi Adam,
      Having looked up the fund you are asking for it seems it is not an ETF (Exchange Traded Fund) therefore would not be traded on a stock exchange.

  70. Hi, question please: I want to open an IB account and invest about 100k$ to start with, but I will be moving from Dubai to Singapore in 6 months from now.
    Should I open an account now or wait till I move to avoid hassle with changing tax residence and bank account? Thanks!

    1. Hi Aurora, in your shoes we would start investing as soon as it is possible. Changing address and bank account shouldn’t be a major hassle.

  71. Hi Steve,
    Thank you for the great article, very useful.
    I am an Aussie expect living in Dubai. From tax perspective (growth and dividend), it it better to etrade with US based companies such is Interactive broker or UAE based companies such as Citi Bank Etrade? If you recommendation is UAE based, which one?

    1. Hi Adie, you pay taxes based on your tax residency and also based on the domiciliation of the prodcuts you buy, not based on where is your brokerage account located. IB is our preferred option for the low cost and high security.

  72. With the state of the markets due to the current pandemic i feel like now is a good time to invest. i am a complete novice, 36 years old and have over £50k (equivalent) sitting in my account. i need to get my pension started and generally invest. i am a uk citizen with NI number but have lived in Abu Dhabi the past 3 years. I just wondered what is your take on robo-advisers like WealthSimple. Is it possible to use these app investors as an expat?

    Thank you

    1. Some of the robo-advisers allow expats to set up accounts and some don’t, so it is best to contact them directly and ask. They will however charge you an additional service fee which you could avoid by DIY investing strategy. A little bit of learning and setting up and you can save yourself some extra pension money by not paying the fees.

    2. I do not know about WealthSimple, but I did reach out to Betterment and WealthFront. Both of them replied that they serve only those clients who meet ALL of the following criteria:
      1. Live in the US at least six months out of the year.*

      2. Have a valid Social Security number or ITIN.

      3. Have a US bank account and a confirmed US address.

      Might be a good idea to reach out directly to WealthSimple and see what they say.

  73. Hi Steve,

    Thank you for the amazing blog. I am a US and UK citizen living and working in the UK and will likely have German citizenship as well within the next year. I have hit the obvious US, UK tax investment restrictions and would like a clear path to invest my money.

    I thought it would be an ideal time to invest some of my savings while the market is down due to Covid and then continue to put in money every month or every quarter after that. I have just started my career so don’t have much yet, but want to start my international financial investments now. Best advice to avoid international tax laws and get set up for a simple investment plan?

    Thank youuu! Ella

    1. Hi Ella, as a UK citizen living and working in the UK you should be able to open an investment account directly with Vanguard UK and invest through their platform with extremely low fees. Normally taxation is based on your residency, however we can’t confirm how will this be impacting your tax situation due to your US and German citizenship, so this is best to be checked with a tax adviser.
      Great that you get to start early as time is your best ally in the investing journey!

  74. Hi Steve,

    How does one know which VWRL ETF to buy on IKBR? Seems to be a number of options. There are two LSEETF options both for USD, but when selection one is GBP and the other USD. Whats the difference between the two. My account is USD, so does that mean I am better off buying the option where I pay with USD?

    Thanks
    Gaz

    1. Hi Gaz, do you want to invest in USD denominated ETFs? On London Stock Exchange (LSE) you can buy 2 types of Vanguard All World ETFs: VWRD which is denominated in USD and VWRL which is denominated in GBP. Be aware, that the VWRL ticker also is available on other stock exchanges (e.g. Swiss, NYSE Euronext) By buying the fund denominated in USD (VWRD) from an USD-based account you will avoid any exchange fees.

  75. Hi SS,
    I just “binge read” all of your blogs and am ready to get my feet wet. May I also have the contact details of the relationship manager at the exchange club exclusive?

    Much Appreciated,
    Vee

    1. Hi Vee, I am not using UAE Exchange anymore. We are busy creating guide for expats on how to transfer their money and you can check here to get notified when it is ready.

      1. Looking forward to the guide. Are you able to give some insight for now over why you stopped using UAE exchange? I have noticed that the rate is worse than using brokers such as currencytransfer or transferwise – even after taking into account bank intl transfer charges to get the the money from UAE to the broker.

        I have also noted that they only give the option to transfer AED to the currency of the country the bank is domiciled in. So for example for a bank in UK UAE exchange convert from AED to GBP, and a bank in Denmark from AED to DKK.
        It’s not clear however whether you could send AED to a bank in Denmark in GBP? (Eg if using Saxo Bank).

        1. Hi, when I was using Saxo Bank I used to send USD to Saxo in Denmark through UAE Exchange, so should be possible with other currencies as well?

  76. Steve,

    Thank you so much for this wonderful information. I am an Indian expat in Bahrain. Are you planning to do live workshops here? I’d very much like to attend.

    The financial adviser from my bank says that if I invested into a mutual fund, I wouldn’t have to pay any tax on the returns. However, if I invested the same amount in Ireland domiciled ETFs as you’ve suggested, I’d have to pay the 15% withholding tax, which would diminish my returns.

    What’s your take on this?

    1. Hi,
      for the time being there are no planned workshops in Bahrain, but due to COVID-19 restrictions we have moved online, so you could join us there. Would be great to build a community in Bahrain!

      As for the advice of your FA from your bank, I would be careful if what he is trying to sell you instead is his bank’s product, because his advice can be biased.. The taxes you pay depend on your tax residency. The mutual funds (specially those offered by banks) tend to be more expensive than the ETFs and the ongoing expense would diminish your returns more than the mentioned 15% tax on dividends.

  77. Hello. Great batch of info. I’ve followed the method and have ETFs in IBKR now. I’m just wondering…do I really need the pro version of IBKR? It seems like I’m paying (I know only 10 bucks a month) for something I don’t need. Cheers.

    1. Hi Chris, the Lite account is available only to Americans living in the US, up till now it has not been possible to open the Lite account as a resident of the UAE.

      1. Cheers for the reply. About that $10 monthly fee…where is that deducted from? I happen to have an extra hundred or so in the account as cash, but what would happen if I didn’t have that? Would it come from monthly dividends? I wanted to follow that up with your recommendation for sending funds to my IBKR account now that you’re no longer on board with UAE Exchange. Thanks again!

        1. Hi Chris, the fee will be deducted from your cash balance. In case there isn’t enough cash to cover that your cash balance will go into negative. As soon as some cash comes in (from dividends or your transfer) it will pay the ‘debt’first and your balance will be lower by that negative. The 10$ fee is paid for portfolios below $100k, it adds up fast so when you get to that amount the account will be free.

          1. Thank you for that. Yeah, it does seem like it’ll add up fast. I was hoping to get up to 100k in the next few months. I’m still looking for the best way to send money to IBKR as an alternative to UAE Exchange. I’d love to hear any suggestions. Cheers.

  78. Hi Steve,
    Thanks for this super helpful blog post. I’m a non-tax resident Canadian living in the Philippines. I’m looking at different brokerages to begin investing. IKBR appears to offer the best value for money. However, I worry about their requirement to complete the IRS W-8BEN form. I understand the form enables IKBR to apply preferential withholding tax rates (and for possible IRS audit), but I’m unsure if that applies to all securities I purchase through them or only to US-listed securities. Their website requirements imply the former. I don’t intend to invest in any US securities to avoid risk of estate tax and would prefer to not give my personal information to the US government. But, I guess I’ll complete it if the alternative is to lose access to preferential withholding tax rates across my entire account. Any thoughts on this?
    Likewise, since I’m resident in Asia, I would apparently have to open my IKBR account with IKBR’s US branch. Do you know if that presents any additional estate tax risks compared to if I had the option to open an account with one of IKBR’s other subsidiaries? (assuming I don’t purchase any US-listed securities?)
    Thanks very much in advance!!

    1. Hi John, the US estate tax applies on the US domiciled ETFs and is not dependent on the location of your brokerage account.

  79. Hi Steve,
    Again thanks for this information. Does it make sense to have a USD offshore account linked to IB for buying and selling and only use UAE Exchange to convert my Dirhams into USD from my local bank account to my offshore account? If so I know some banks in the UAE offer offshore USD accounts, any recommendations? Also what was the investment ratio you propose in the two ETFs you recommended? Was trying to get to the bottom of that? Let me know, cheers

    1. Hi Pieter, by using a USD offshore account you would be adding an additional step in your transfer. You can as well transfer USD directly from the exchange house to your IB account. Make sure IB will accept the funds from the exchange house. Note, that we are not using or recommending to use UAE Exchange any more.
      As for the asset allocation – this will depend on your risk appetite, the time you will stay in the market, etc. The general rule of thumb is “your age in bonds”.

  80. Hi Steve,
    Thanks so much for the information, really really helpful. I’m a UK Expat living in SA. I’ve recently read the Barefoot Investor by Scott Pape which has lit a fire under me to get my investment portfolio squared away. Your articles are really similar and extremely straightforward. I have two questions:

    1. I’ve been looking at investing with a very popular and well performing South African based Asset Management Company, (sygnia.co.za) but was hesitant to do so because I’d be investing ZAR instead of USD or GBP. With the volatility of the ZAR and higher inflation in SA, would it be unwise to invest in ZAR (and rather go for your IB recommendation) … or would I avoid currency risk by purchasing International Funds through Sygnia?

    I’m working and living in SA so investing locally has obvious tax benefits for me but I’m super worried about currency issues.

    2. If I was to purchase VWRA and IGLA through IB, what tax would I be liable for if I kept the dividends invested with IB?

    1. Hi Dan, I would personally avoid further exposure to ZAR – if you sold the investments in Sygnia then they would probably get converted back into ZAR. It might be better to send money ‘offhsore’ to the US to invest, as far as South African transfers permit. You can actually send ZAR directly to IB and then convert cheaply into other currencies. If you invest in Irish-domiciled ETFs then there will be no US tax considerations other than an automatic 15% withholding tax on dividends of US companies within the ETF, but you can’t escape that anywhere. You will probably still have to declare any capital gains from selling. With accumulating ETFs the dividends are automatically reinvested (net of the 15%) and, depending on SA law, you may not have to pay tax on them as you are not receiving the income directly.

  81. Hi ! Very nice read without pointless words!

    Currently living in Cyprus and therefore earning in EUR. Might move to Dubai in half a year working for the same company.
    Couple of questions to the expert:
    1) If I register an IB account as a Cyprus Tax Resident and then move to Dubai, do I need to close my Cyprus account and open a completely new one in Dubai or can I just “switch” my residency in IB by providing them the relevant information?
    2) Would you recommend converting the EUR to USD or should I stick investing in EUR?
    Thanks for the information provided!

    1. Hi VT, yes you can just change your details with IB via Account Management in your Client Portal. EUR vs USD is a tough question and both options are fine really. Depends how long you will stay outside of the eurozone. You can keep stock funds in EUR or USD, bear in mind that global stock funds will effectively be in USD anyway. Bond funds you might want to keep 25-50% in EUR bonds if you plan to return within 5 years or so.

  82. Hi Steve,

    Which stock market would you recommend buying Vanguard FTSE All-World UCITS ETF from? I am being quoted AEB, EBS and LSEETF? I’m a British expat living in Vietnam. I’m guessing LSEETF would be most suitable?

    Thanks,

    James

    1. Hi James, yes LSE as you are buying in USD (or GBP). How is the Financial Independence scene in Vietnam? Lots of financial advisors moving out there from Dubai :/ I would be interested in helping people there.

      1. Hi Steve: thank you for your great advice. Best blog I have read in the last several days.

        I am living in Singapore and want to avoid the 30% witholding tax? When I look for VUSA on IBKR, I get three options — AEB, EBS and LSEETF. Do you have a recommendation for which one I should use? I want to invest in USD and avoid any currency risk.

        Thanks!
        Aditya

        1. Thanks Aditya, glad to hear that 🙂 I would go with LSE, which is the London Stock Exchange. The others will be in EUR (AEB) and CHF (EBS) currencies. I generally prefer to invest in a global fund rather than just the US, as the US doesn’t always outperform the rest of the world over different decades.

  83. Hello

    Thanks for suck good job with this blog.

    I’m starting in the new aventure of the investment ,and I got some questions.
    -I’ve read in another blog that the minimum deposit in IB is the $10K but you said or at least I’ve understood that is $ 2K., so minimum 10K or 2k?
    -Regards commission: what could be better option , yearly, quartile , monthly or doesn’t matter because the $10 fix fee will charge anyway?
    -I’m spanish national but UAE resident, are you recommending to sell ours EFT to all the expat before go back home or only to the British?
    -in one of your comments you say:” set up bank wire and use UAE exchange” I’m really don’t understand very well the context , so I should set up a bank transaction but after use a exchange company?

    Thanks in advance

    1. Hi Luiso
      These days there is no minimum for IB, but if you have less than $2k you might pay a higher platform fee. It’s $10 per month once you are above $2k. What impacts your decision to send money monthly vs quarterly is transfer fees to IB, not how much IB charges for commission. Yes you should sell before you return, then buy immediately on return using a Spanish broker. You can stay with IB but probably cheaper to not send money across the world when back in Spain. UAE Exchange will change your money from AED to USD cheaply, so send your AED to them and then they will send USD to your IB account.
      Edit: I am not using UAE Exchange anymore. We are busy creating guide for expats on how to transfer their money and you can check out this page to get notified when it is ready.

      1. Thanks for your answerd.

        Would you recommend open off shore bank account and operate with it in case come back?
        I don’t see the point to open IB account and then after of few year sell it and buy again in spain , and may be not in the best moment on the market and losing for the exchange and transfer.

        regards

        1. It’s definitely worth investing for a few years, the amount you lose on exchange and transfer will be tiny compared to potential investment gains. If you were leaving in 6 months’ time I would say maybe not, but for anything longer than that you should invest now.

  84. Hi,

    What is the US withholding tax and US estate tax for a non-US person who is investing (via say IB) in a non-US domiciled ETF which holds US-listed stocks?

    Reading your answers to similar questions, it seems that there is no withholding tax and no issue with the estate tax upon death? But what about the fact that this ETF is actually holding US-listed stocks?

    Why is there a withholding & estate tax if the stocks are held directly but no tax if held indirectly via a non-US domiciled ETF?

    Thanks
    Khaled

    1. Hi Khaled
      Withholding tax 15%, estate tax 0%. The domicile of the ETF is everything, doesn’t matter where the stocks within the ETF are listed. If held directly, the domicile is the US, not Ireland. Ireland has negotiated a tax deal with US and other countries, while you haven’t 🙂

  85. Andrew Compton

    Hi Steve,
    Great article. So pleased to have found it. I’m just about to start my investment journey and had been struggling to get my head around how to invest in stocks/shares and Vanguard index funds as a UK expat living/working and 100% paid locally in Thailand.
    Having spoken to several expat financial advisors over the past few months, the “off shore” investment solutions being sold (and fees) just makes me nervous. Maybe it’s the 20+ years in a procurement career that’s makes me distrust salesmen ?
    Getting my Thai Baht transferred in to $ or £ is one hurdle. Have previously used TransferWise to convert £ to THB but looks like they don’t offer the reverse transfer !! I’m planning on investing monthly circa 70-80k THB (£1750-2000).
    How can I find out if Interactive Brokers accept Thai Baht currency ?
    Thanks and keep up the good work.👍
    Andy

    1. Hi Andrew, great that I’m reaching people in Thailand! Stay well clear of offshore investment solutions, always a disaster. Much cheaper to do it yourself. THB is not accepted by IB, so you would need to convert beforehand. You’ll have to do some research – often exchange houses or online currency sites are cheaper than banks. Here’s some useful info: https://www.expatden.com/thailand/thailand-currency-exchange/

      Let me know if you need more help with planning and investing. I’d also love to help more people in Thailand reach Financial Independence!

      1. Hi Steve,
        Have been weighing up which Broker to use since you replied last month. Charles Schwab was another option but I think they have a minimum $25,000 requirement to open an account for foreign investors !
        I’m really interested to invest a % of my monthly disposable income in Dividend stocks and building up passive income from dividends as well as capital appreciation in the long term. Found various interesting videos on YouTube but all seem to be based in USA. Companies that offer dividend stocks tend to out perform the S&P500 what what I have researched.
        As I would be investing directly in USA or UK company stocks I’m going to get hit with various taxes from what you wrote in your article.
        Any experience or advise on any of the points above would be appreciated.
        Looks like the capital gains tax and income tax rules here in Thailand allow income from overseas sources to be tax free provided the income was generated more than 12 months before moved to a Thai Account.
        Thanks, Andy

        1. Hi yes some people are into dividend stocks, but it’s also good to think about total return (gains + dividends). In theory you shouldn’t need passive income now, reinvest that dividend income into growing your portfolio faster. I prefer just to buy all stocks rather than chasing value or dividends – it saves time and performs perfectly well. High dividend stocks won’t necessarily outperform in terms of total return in the future. It’s also a slippery slope trying to be more and move clever, taking more and more time. But definitely worse things you can do than invest in a high dividend fund. Investing in US stocks would hit your dividends at 30% (rather than 15% in an Irish-domiciled ETF), which slightly defeats the point.

          1. Hi Steve, completely agree regarding re-investing dividends. No need for the income generation for the next 10 years so would be buying more funds/stocks with div payouts for sure.

          2. Hi Steve,
            When setting up the IB account, it’s asking for tax account details.
            As I file tax returns in both Thailand, where I live/work, and in UK (self assessment for property rental income), which country should I declare in the IB account ?
            Many Thanks, Andy

          3. Hi Andrew,
            You should enter a tax registration number from a country you reside in, if this country has issued such number to you.

  86. Hi Steve, really appreciate all the advise on here and very interested in joining the workshop.

    My situation; British Expat living in Dubai. I want to carve out c£1.5k per month for retirement planning through passive funds on offshore platform. I’ve been recommended to use swissquote due to no tax implications Switzerland, UAE…but there is a high likelihood will be moving to Singapore in the next 12 months for 2-3 years before returning to the UK. My questions are:
    1. Swissquote over IB or Saxobank – my understanding was swissquote as based in Switzerland, but the above seems to make out this has no bearing – the platform just dictates the fund access and fees, but it is the funds you invest in which dictate tax implications. Is that true?
    2. Any implications of moving from UAE to Switzerland – would I have to sell up before I go and then reinvest, or can just leave as is with no extra tax implications?
    3. Your recommended portfolio that I invest in, keeping it simple? As ultimately I want to end up in the UK I’m assuming I should invest in UK denominated funds to not be exposed to currency risk.

    Thanks so much in advance – I’m also assuming the day before I leave to go back to the UK (either from UAE or Singapore) I should sell the funds to avoid CGT and then reinvest through an ISA once back in the UK.

    Thanks,

    Sam

    1. Hi Sam, come along to one of our workshops in January! Then you can see whether £1.5k is enough and how that will impact your time to retirement. IB is much cheaper than SQ or Sx, to the extent that I see no reason to go with them. There will be no tax implications. Also when you move to Singapore, you won’t be taxed on overseas gains/income.

      I would invest in a global stock ETF and a global government bond ETF, that’s all. The underlying currency of the world is USD so if you are earning in USD now I would just invest in USD. Also you will be able to track performance much more easily, without the confusion of USD/GBP changes in there. For stocks there is no currency risk that you can cost-effectively deal with, because your investments will be USD-based even if you buy them in GBP. For bonds it is different and you could invest 25-50% of your bond allocation in GBP-denominated bond funds.

      Re selling before you go back, yes absolutely, but you might have to sell before the end of the previous tax year in case HMRC and you disagree on the date you become UK resident. You can also just swap into another global index fund e.g. FTSE to MSCI before the end of the previous tax year to realise gains without being out of the market too long.

      1. Thanks so much Steve. The only point of confusion for me still is with the difference between the different brokers and where CGT could be due – whether this is dictated by the country of the platform (e.g. IB – US, Saxo – Denmark, Swissquote – Switzerland) or the underlying funds that you invest in. Just want to make sure I get this rights as friends have invested in Swissquote on the understanding that no CGT in either Switzerland or the UAE. This makes me nervous using IB or Saxo (where there is CGT in US/Denmark) – even though I’m sure there is no reason to be.

        Also IB fees being much lower – it’s difficult to get an understanding with so many fees but I can see a charge of $10 per month with IB, that I can’t see with the others. If I am planning on investing quarterly c.$5k in the stock and ETF and bond ETF as recommended does IB definitely still work our far cheaper? Or is it better for people trading regularly?

        Cheers.

        1. Hi Sam, CGT is based on where you are resident. If you live in the UAE then there is no CGT to pay. IB is definitely cheaper: the trades are cheaper and there is no custody fee to pay (% of assets). The cost of any trades you make will be netted off the $10 per month, so you can expect to pay about $120 total until your portfolio gets huge.

  87. Dear Steve
    I would like to invest in the Vanguard LifeStrategy Funds. I am an expat in Bahrain, Middle East, originally from South Africa.
    I have the following questions:
    Is it possible for an expat to directly invest with Vanguard LifeStrategy Funds?
    Is it financially wise to invest directly with Vanguard? Thus, are there tax implications or costs that can be avoided when investing through a broker like IB?
    Would you recommend to work through a broker like IB?

    1. Hi Johan, it’s hard for expats to access Vanguard LifeStrategy funds. Only through SwissQuote and it seems expensive. Much easier to use a broker like IB (which is what I use) to ‘recreate’ LifeStrategy using a global stock fund and a global bond fund. You can’t access Vanguard directly as an expat.
      I do Skype coaching if you need help with any of this. And I’d love to reach more people in Bahrain also!
      Thanks
      Steve

  88. Hi Steve,
    I’m interested in adding BABA to my current expat portfolio of VWRD and AGGG. However, it’s only on NYSE not LSE. Thoughts on the EFT KWEB LSE (not super keen on this) Or other way to invest in BABA?

    1. Ishares MSCI China UCITS ETF is domiciled in Ireland and has 17% exposure to Alibaba. VWRA is about 0.5%. I would be careful investing too much in individual companies, certainly the total should be less than 10% of your investment portfolio.

      Thanks Steve

  89. Global Entrepreneur

    Hello Steve,

    I am a non US citizen Dubai resident, and already have an account with an European broker.

    To diversify, I’m looking to open an account with another broker that :
    – is not US based (So Interactive Brokers doesn’t work) or in Europe (since I already have an account there)
    – has access to Irish ETFs, or ETFs based in a country that has the 15% withholding rate tax rates with the US, and not the 30%
    – Can be opened by a Dubai resident

    Do you know a broker like that ?

    1. Why do you not want a broker in the US? There is no exposure to US Estate tax unless you have US-domiciled funds (or cash). Otherwise you could look at brokers in Singapore, even Saxo has a branch there.

  90. Hi steve,
    i would like to know what taxes will i be subjected to if i invest in etfs ( through IB) if it is not ucits? Also i have shortlisted a few etfs for my portfolio, but they are not ucits, how can i look for ucits only etfs?
    thanks in advance !

    1. Hi Jackie, if you invest in non-UCITS ETFs, they are usually domiciled in US. You will be liable for 30% withholding tax on dividends and 40% estate tax on your portfolio if you die (>$60,000). So stick to UCITS. If you are looking for a global ETF, just google World UCITS ETF. It’s that easy! Try Vanguard and iShares, they should have everything you need (i.e.. a global stock fund and a global bond fund). Contact me if you need more help.

  91. Hi, Thank you for extremely useful information . Couple of questions

    1- To summarise, being a resident of UAE , I need to ensure I have a USD account to transfer money e.g to UAE exchange who then forwards it to the off shore brokerage …. ? Transferring directly to the brokerage costs more ( fees etc ) ?

    2- On a lighter note , how did you come with the calculation of 1,227kUSD At the beginning of the articulate . If you invest say 24K per annum with average 7% profit ( after the 1% cost deduction ) , shouldn’t it be much more ?

    1. Hi Imran, you can’t send AED to the broker, so you have to exchange first. You don’t need a USD account, use an exchange house like UAE Exchange to do the exchange and transfer for you.
      Thank you, I meant $1,000 per month! I have updated accordingly 🙂
      Edit: I am not using UAE Exchange anymore. We are busy creating guide for expats on how to transfer their money and you can check out this page to get notified when it is ready.

  92. Hello,

    Thanks a lot, Steve for your work.

    I am UK citizen living in UAE. Does what wrote mean that if I buy US shares through IB I will have to pay US taxes?

    Thanks and regards,

    F.

    1. Hi Faisal, you will be exposed to 30% withholding tax on dividends and 40% estate tax on your death for anything over $60k. So it’s better to invest in Irish-domiciled ETFs,

      1. Hi Steve,

        Why Irish domiciled ETFs in particular? Does the same apply to indicdual stocks? Can this be done through IB? Special code to search for?

        Thanks, John

        1. Hi John,
          If you are living in the UAE and not a US resident then you will be taxed on non-US domiciled (e.g. Irish) ETFs only with a 15% withholding tax on dividends, as opposed to US-domiciled ETFs which would have 30% tax on dividends. Yes, this can be done through IB, e.g. if you want to buy Vanguard All World just search for VWRD.

  93. Hi Steve,

    Thanks for all your help, much appreciated by myself and plenty of others. I’m trying to invest in IB but am having problems with UAE Exchange. I entered the exact wire instructions given by IB but it was rejected because “the beneficiary name and beneficiary bank name are not properly updated” (I put ‘CITIBANK NA’ and ‘INTERACTIVE BROKERS LLC’ respectively). I then called UAE Exchange, who said that they don’t transfer to corporate accounts, which is why the transaction was rejected. Please can you help?

    I also spotted in the IB smallprint the following: “We will charge a special handling fee of 1% of the deposit amount”. I’m looking to deposit several hundred thousand dirhams – does this mean that AED3,000+ will immediately be wiped from my deposit?

    Many thanks again!

    1. Hi Safa, you need to set up a Club Exclusive account and then deal with the relationship manager directly – much easier. You can message me for his details.
      Edit: I am not using UAE Exchange anymore. We are busy creating guide for expats on how to transfer their money and you can check out this page to get notified when it is ready.

  94. Hi Steve,

    Great advice. I’ve opened an account with Sarwa, and will close out my holdings through Citibank (only bank that allows US Equities trading) and transfer everything to IB since their fees to be so much less than what i’m paying with Citi.

    I’m also closing one of my term insurance policies and taking a 50% hit and transfering the money to Sarwa/IB; lets see how it goes.

    Do you have any idea about Options trading? I have some money to play with but would like to take a formal class in the UAE before doing so. Any advice?

    Moe

    1. Hi Moe, options trading is like any kind of trading or gambling really – you might get lucky or you might not. If you are doing it because you might enjoy it, then go ahead but limit any investment to less than 10% of your total investment portfolio. You could literally lose everything. If you are doing it to make money, it’s probably not worth it.

  95. Hey! I came across this while reading some Andrew Hallam material and there’s just one question I can’t seem to find an answer for: if I buy an ETF through Saxo that’s listed in the UK stock exchange, is it liable for Capital Gains Tax when I draw it out after 30 years? thanks!!! Y

    1. Hi Sarah, it depends where you are tax resident on the day you sell your ETF shares. If you are back in the UK, you could be liable for 30 years of capital gains if you sell the whole lot. Best to sell the ETF just before you move back. When UK resident you can invest more easily via a UK platform anyway.

  96. Hi Steve, This is great work and really appreciate sharing this knowledge in the public domain.

    A question ….. at the time of redemption, can these funds be transferred from IB to any accounts [in any country] or it should be to the same account, which was used to open IB account

    1. Hi Jestin, you can nominate any bank account you like to withdraw the funds to. However, the account needs to be in the right currency, otherwise IB will be sending e.g. USD to an account in your local currency. You can do currency transfers cheaply via IB first, though it doesn’t support smaller currencies.

  97. Dear Steve,
    Thank you for the above information, it really helps us beginners.
    I have yet to open an account with IB and start. I am an Indian expat in UAE. I am mostly interested in purchasing ETFs and keeping them for 10-12 years. Will I still be charged $10 per month as inactivity fee, even though I am purchasing a commission free ETF? Won’t this charge be eating into my net return.? I plan to start with $10K and gradually increase it by $25K every year. I will only be buying and holding the ETF for 10-12 years.
    Please advice.

    1. Hi Deepak
      I like to think of it as a platform fee rather than an inactivity fee. Are there commission-free ETFs? Yes it will eat into your net return a bit, but you can’t really avoid allll fees. The more you add, the less it will be an issue as a percentage of your portfolio. Don’t let it stop you getting started, $10 per month is what you pay for Netflix, which won’t transform your life!

  98. I want to add my thanks to everyone else’s. Brilliant resource for guidance. I’ve signed up for UAE Exchange and IBKR accounts and will be doing my first transfer/purchase soon.

    But I have also come across Sarwa.co. They seem to be offering a service to automate the investment process on IBKR. Couple of questions around this:
    1. Is their margin worth it? Or better to just do it yourself on IBKR?
    2. Can I invest both through Sarwa and direct to IBKR at the same time?

    1. Sarwa are great if you don’t feel confident managing your own money, or you want to start with a low amount and don’t see it going above $30k anytime soon. But if you a confident enough to buy a couple of ETFs yourself then you can just use IB and DIY.

  99. Hi SS,

    Great Blog. I have just set up an IBKR account and purchased my first ETF’s in line with your recommendation here. I have a question about the nature of withholding taxes. Assuming I will be resident in the UK in 3 years with a personal marginal tax rate of 40%, would I be liable to pay any additional tax on my dividends(over & above the 15% withholding tax), or does HM Gov feel that I have paid my dues?

    1. Hi Kenny, yes you would have to pay income tax on your dividends. You can probably avoid that if you automatically reinvest them (accumulation version of the ETF e.g. VWRA (USD) or VWRP (GBP)). Tax rules change regularly though so you would need to check that independently. If you move to the UK you might be better off selling your ETFs in the tax year before you move and then investing in Vanguard LifeStrategy once you are back in the UK.

  100. Hi Steve,
    thanks for summarising this information here, It’s worth is more than Gold(Even if you compare with today’s rate).

    Although you have provided enough information on Taxation, I just wanted to clarify that I am India expat living in UAE, for me to avoid Taxation in the USA, I need to buy ETF’s not domiciled in the USA(Broker house location does not matter)?? Those ETFs could be taxed internally(means them selling/buying stocks, I can’t control that anyway, can I??)

    Thanks
    SG

    1. If you are living in the UAE and not a US resident then you will be taxed on non-US domiciled (e.g. Irish) ETFs only with a 15% withholding tax on dividends. That’s it. Broker location does not matter, unless you are holding lots of cash in your brokerage account, which you shouldn’t anyway.

  101. Hi Steve,

    Thank you very much for the valuable info you put out here. As I am searching my options to build a stock portfolio, can i use the same method, using my IB account to buy and hold/trade US individual stocks that would be returning dividends quarterly ??

    Appreciate your input
    Regards,
    Shay

    1. Hi Shay, yes you can but I wouldn’t make them a large part of your portfolio. Your US stocks will be subject to 30% withholding tax and if you have more than $60,000 (including any cash in the US) then they will be subject to 40% estate tax.

  102. Some very sound advice, Steve. Thanks. Expats living in the Gulf really need this sort of detailed, well-informed financial advice, especially with so many unscrupulous financial advisors out there. I myself got rooked by a charming-seeming fellow Englishman in the UAE. He gets by selling grossly overpriced insurance policies as investment vehicles. In the 1990s and early 2000s, when the stock market was roaring with record highs, the insurance policy he sold me was only earning 7 per cent! This character, later on, branched out and started getting the international teachers who largely made up his clientele mired in an elaborate pyramid scheme. Fortunately, I started doing my own research, got out of my insurance policy, and opened an account with a reputable brokerage. No doubt, he continues to mislead trusting expats.

  103. Hi Steve,

    Thanks for your excellent article, I am a British Expat in Dubai and will follow your advice and also try and attend your upcoming seminar!

    I have a few questions in regards to IB’s monthly fees, you mentioned to trade monthly or quarterly. However if trading quarterly would I receive the monthly inactivity fee?

    “Monthly Activity Fee = 0 if monthly commissions are equal to or greater than USD 10.

    If monthly commissions are less than USD 10,
    Standard Activity Fee = USD 10 – commissions.”

    I am assuming the term commissions means each individual trade?

    Thanks

    Ben

    1. Hi Ben, yes commission is the fee you pay to trade. It is netted off the monthly platform fee, so all in all a passive investor should expect to pay about $10 per month whether they invest that month or not. Then when your portfolio gets bigger, you don’t pay the platform fee for portfolios above $100k.

      If you want to sign up for July’s workshop you had better be quick as we are running out of spaces!

      Thanks
      Steve

  104. Smart Skeleton, thank for this valuable information.
    is possible to open an account in Vanguard directly and avoid the IB account? I am US residence card holder, working in UAE .

    1. Only if you pretended you were still living in the US. They would still charge you a platform fee anyway probably, so it’s probably almost as cheap to go with IB.

  105. Richard Stacey

    Hi Steve- I just called the UAE exchange. The club exclusive program is only if you have transferred 300,000 AED plus in a certain time period- so not really free.. and certainly not for those on very high incomes.

    Are there any alternatives you could recommend?? Thanks Rich

    1. Talk to Rizwan, the Club Exclusive relationship manager – I’ll send you his details. Should be fine. If not, you could try Al Ansari, GCEN or just a direct transfer with your bank and try to haggle the fees or rate down.
      Edit: I am not using UAE Exchange anymore. We are busy creating guide for expats on how to transfer their money and you can check out this page to get notified when it is ready.

  106. I wanted to thank you again for the blog and your continued correspondence. So…I’ve managed to get everything set up and have sent my initial investment to IBKR. Now…which ETFs to buy? I know you suggested in the article an 80/20 in VWRD and IGLO. I really would like to keep it as simple as possible, but have seen some other more diverse options that look appealing. If I were to create a more diverse package of ETFs, what percentage of each of the following would you recommend?
    1. A total market U.S. core index (iShares Core S&P Total U.S. Stock Market ETF for example)
    2. A mid-cap value index (Vanguard Mid-cap Value ETF perhaps)
    3. A small-cap value index (Vanguard Small-cap Value ETF maybe)
    4. An international ex-US index (like FTSE All-World ex-UD Index ETF)
    5. An international small-cap index (like SPDR S&P Small Cap International ETF)
    6. A short term bond ETF (like Vanguard Short Term Bond ETF)

    Also, is there anything particularly wrong with any of the above ETFs? Any recommendations that could replace them?

    I’m a US citizen living in Dubai and only interested in long term investing for the goal of retirement (20 years or so).

    Thank you agian!
    Chris

    1. Every ETF that you add increases your hassle factor almost exponentially. You have to rebalance, you have to buy each one, there are extra trading fees. And the gains are likely to be minimal. You will also be tempted to tinker endlessly. Something like VWRD+IGLO will include all of those components except small caps. So you could allocate say 20% of your equity portion to small caps if you wanted, but remember small caps are volatile. Maybe allow yourself to add small caps as a reward in 3-5 years time for having invested consistently every month/quarter and not freaked out in downturns. Investing is one area where you really do gain from simplicity.

      1. Thanks for the useful article.Already set up the ibkr account and made the first investment through UAE exchange. How to register my bank account with them. Dividend date is due.
        Regards

        1. Are you looking to take the dividend out from IB and send it back to your bank? I would question why you want to do this unless you are retired. Better to reinvest your dividends. You can register your bank account in the Customer Portal of IB.
          Edit: I am not using UAE Exchange anymore. We are busy creating guide for expats on how to transfer their money and you can check out this page to get notified when it is ready.

      2. Thank you so much for getting back to me and I really appreciate the advice which I will heed. Keep it simple, silly is not lost on me. I’ll revisit my options after I’ve kept some skin in the game for a while. All the best and thanks again.

  107. Hi Steve,

    Thanks for such a clear and thorough article. Which broker would you recommend for investing a lump sum GBP 100k into the vanguard lifestrategy 80/20? All going well I will continue to top up with regular monthly/quarterly amounts too. NB. I’m a British expat in the Middle East. Thanks, Dan

    1. Hi Dan, Swissquote offers expats access to LifeStrategy though it’s not a particularly cheap platform. You need £100k minimum. Alternatively you can replicate it using e.g. VWRD + IGLO through IB or Saxo.

  108. Hello. Really appreciate the info in the article. I’ve set up an IBKR account and a UAE Exchange account as well. I’ve read through the comments, but I don’t see any info regarding US passport holders residing in the UAE. Do you know off hand or could you point me to information regarding what taxes I would incur, if any, for investing in non-US domiciled EFTs? I’m not looking to gain income, but rather reinvest any gains and keep it in for the long term. I’d likely start with about 10k USD, but would be willing to dump more in if I know I’m not getting taxed out the wazoo. Thanks again.

    1. If you’re a US citizen then you are subject to different taxes and estate tax isn’t nearly so bad. So for you I would recommend investing in US-domiciled ETFs like VT or VTI – they are cheaper also.

  109. Hello Steve,
    Any guidance for Indian expats with IBKR offshore trading accounts? In a probate scenario, how can the next of kin get ownership of VWRD & IGLO UCITS units in a single-named IBKR trading account? Does IBKR recognize a UAE-registered Will?
    Thank you,
    Ravi

  110. Great article thank you. I have read Hallam’s ‘Millionaire Expat’ and this detail ties up many loose ends I had

  111. Hello Steve, below extract from your article:
    “Unless you are a US citizen, you don’t want to invest in US-domiciled ETFs, i.e. those based in the US. These may be liable for estate tax if you die (up to 40% on amounts over $60,000) and a 30% withholding tax on dividends. Stick to ETFs domiciled in Europe (with ‘UCITS’ in their name) and you will be ok.”.
    If we use IBKR or Internaxx (non resident Indian nationals in UAE), will the Quarterly dividend of VWRD, IGLO and other non-US domicile ETFs come into our USD brokerage account without any 30% deduction?
    Your guidance is appreciated. Thank you!

    1. Irish-domiciled ETFs have to pay 15% withholding tax on the dividends from shares within them (certainly the US shares). As a non-resident you don’t have to pay any further tax on your dividend income.

  112. Thank you Smart skeleton for sharing this and for the priceless info. I believe that who is smart enough to follow your advice will become rich eventually.
    I have a question concerning your experience with the applicability of the 1% stamp taxes while investing in an Irish domiciled stock? (it’s mentioned on IB’s website that “Stamp taxes (UK=0.5%, Ireland=1%) are directly passed through to the clients.” ) I would appreciate your feedback.

  113. Hi Steve,
    For the “40% in bonds” strategy, what’s your take on Franklin Templeton emerging mkts bond fund (TEMEAUS:LX).. I know you prefer the IGLO for broader diversification (I was at the Dubai College seminar – great one btw and thank you for sharing so much).
    Kind regards,
    Ravi

    1. Emerging markets bonds are risky because the countries (and companies?) are more likely to default on their debt e.g. Argentina. So a fund like this does not perform the role you need in your portfolio of downside protection – gaining in value during a downturn. That’s why IGLO is good. A fund like TEMEAUS is for fun money really – it’s risky. Take your risk in equities instead.

  114. Hi Steve,
    You have the perfect info on this blog that I was looking for. If I open an account with IB and invest in USD. What will be your advice? To invest lumpsump in one go or to go for monthly investments. Do monthly investments incur more charges than one time lumpsump on the broker or the fund side?

    Also I came up with a company called Sarwa here in UAE which is also allowing to invest in the funds thru IB. have you compared their costs. Are they similar? looking forward to your advice.

    Thanks

    1. Hi Peeyush, it is always statistically better to invest a lump sum and you will have lower trading costs as a result. However, it is psychologically harder than dripping it into the market, so really it comes down to what you can handle.

      Sarwa is a decent company. Below about $26,000 they are cheaper than managing your own money but if you figure out how to do things by yourself then you may like the extra feeling of control that gives you.

  115. Hi Steve,

    Can you please give some feedback on IB versus TD Direct International as the brokerage houses? TD Direct is in Luxembourg which probably is a more neutral location rather than US, however appreciate your inputs?

    1. TDDI is now Internaxx which has been bought by SwissQuote. They are significantly more expensive than IB, especially if you have >$100k. Not sure what you mean by neutral location, US has excellent legal framework and asset protection from the SIPC.

      1. Hi there, a bit late but don’t non-US expats open themselves up to paying US estate taxes on accounts over $60K with IB because the brokerage is domiciled in the US (similar to the rule of not buying US domiciled ETFs)?

        In that way non-US domiciled (“neutral”) brokerages like SwissQuote (TDDI) or Saxo, even though they have higher fees, they would avoid this issue.

        This is something that came up in Andrew Hallam’s book that I struggle to clarify without consulting an international tax advisor!

        1. Hi Shane, the general understanding is that any ETFs/stocks you own which are domiciled in the US would be exposed to the US estate tax, no matter where your brokerage account is based(IB or Saxo, the same rule applies). If you hold cash on IB and pass away then anything over $60k would be subject to this tax (because it is cash domiciled in the US). If ever in doubt it is best to contact an international tax advisor.

  116. Hey Steve, waw finally am so relieved when I read this information, I’ve been searching for precise and clear information for expats living in UAE and thank u for this. However my question is I’m an African passport holder and opened an account in IB just yesterday and planning to wire some money soon. Am devoting to invest $500 every month expecting compounding and growth for the next 20 years may be, can u pls guide me which ETF is best for me and where can I find it on the IB platform and how to buy it. Or else expecting ur suggestions. Thank you.

    1. Sounds like a good plan Abraham. I use VWRD and IGLO, as they are globally diversified and low cost. I run private coaching sessions and workshops on these topics if you need to dig into all the details. Use the IBKR mobile app to invest in ETFs and add the ETFs to your watchlist.

  117. Hey Steve, thanks for the great article. I am a huge fan of your work! You mentioned that the ETF should have UCITS in the name to avoid tax in the US. So, is it better to invest in S&P 500 UCITS ETF (VUSA) rather than S&P 500 ETF (VOO)? Also, with the brexit issue going on, is it safe to invest in ETF traded on the UK stock market (as returns would be impacted by gbp to usd ratio). Thanks a lot!

    1. Thanks Mohit! Yes UCITS ETFs are much better for expats. ETFs traded on the London Stock Exchange can also be in USD and they can cover US stocks or UK stocks – those ETFs without UK exposure would be completely unaffected by Brexit, other than impacts on global share prices.

      I prefer a broader diversification and having fewer ETFs, which is why I like VWRD so much.

  118. Thanks. I’m eagerly awaiting your book in which you ‘flesh out’ all your thoughts on this niche area of investing

    Thanks again

  119. Dear All

    Is there a consensus about the ‘best’ ex-pat international broker. I’ve looked into IB , Saxo, Internaxx etc

    My main concern is security of title of my share portfolio. I realise in many of these accounts I’m the beneficial owner but I read that under these omnibus accounts the broker is the ‘owner’

    Little is written about the safety of various custodial arrangements

    1. You are protected with IB by the SIPC up to $500k in stocks/bonds. That’s good enough for me. Saxo charges extra for custody if that gives you additional comfort. No harm in splitting your portfolio across multiple brokers. I like IB because they are large and cheap, easy to open an account with and don’t block inward payments for no reason. I don’t include DEGIRO in my recommended list because of various whisperings of corner-cutting and not being straightforward. Such remours may well be unsubstantiated but why bother when there are decent alternatives.

  120. Thanks Steve, I was chewing over the different ETFs and decided to go with the ones you suggested as they were in USD. Now I can forget about it for a while! Thanks for all your advice, really all your help.

      1. Hi Steve

        Thanks so much for that article. It is really hard to find some decent information on how to invest from abroad. I am new to investing so this was helpful. Do you know where I can find information about how taxing works in different countries when investing? At the moment I am living in France (as a German passport holder) but that will change to the (most likely) US, Canada or UK soon. My husbands work will decide where we are going. Will the ETFs you suggested work while switching between countries? And what are your thoughts on using http://www.ig.com as an interactive broker? I do not need all of this information for free so simply drop me an email about private coaching if you want to. Thank you!

        1. Tax systems shift all the time so I would wait until you have a clearer idea of where you will go before digging into the details. The ETFs are fine but if you go to one of those countries (and start paying tax) you might want to consider selling your investments and rebuying in that country, especially opening a tax-free account for savings. The platforms in these countries tend to be easier and cheaper to deal with than sending money overseas. IG is significantly more expensive. You’re welcome to get in touch if you would like private coaching on assesing your financials, saving & investing.

  121. Smart S.
    This info is gold. I am a F.I.R.E fan and Chautaqua participant and cannot thank you enough for the info.
    I have been struggling with the investments and even made the mistake of opening an account with one of the friendly UAE brokers through an online broker and will be locked there for years….
    The good thing is that I have selected my own funds to a 60% Stocks -40% bonds with the lowest fee and will revisit in a few years
    As MMM follower , I have been trying to join Vanguard Spain, with no success( I am Spanish) and doing most of my FI investments through Reals State, so now a new era starts.
    I would love to catch up with you one day in Dubai.
    Cheers

    1. Hi Gonzalo

      Unfortunately you will probably still be better off getting out of the savings plan now, taking the hit and then reinvesting your money yourself. Otherwise the high fees will destroy your potential gains. If you are earning in AED, you might as well invest in USD via Interactive Brokers for now – the global stock market is mostly $-denominated anyway. Yes let’s swap Chautauqua stories! Steve

  122. Thanks for the feedback. Does IB charge custodial fees? If so can you outline the rates and any other issues for a buy and hold investor?

    Also do they need a tax file number when applying?

    Thanks in advance

    1. They charge a platform fee of $120 but that absorbs any trading commission up to $120 per year. They don’t charge custody fees. You will need to provide a tax number if you are resident in a country which has issued you a tax number or you are a US citizen.

  123. Is it necessary to buy the funds in dollars, or is it possible to buy the funds in pounds (British expat) through interactive brokers ? Also how would you rate the IB platform for ease of use , it appears complex.

    1. You can buy the funds in pounds e.g. VWRL instead of VWRD through Interactive Brokers, especially if you set up your account as a GBP account in the first place. If you are earning in AED or USD though, I would recommend investing in USD unless you are moving back to the UK in a year or two. For stocks it doesn’t matter which currency you invest in, as the currency sensitivity is driven by the income of the underlying companies rather than the currency the ETF is priced in.

      I use the IB mobile app – it is much easier to use than the desktop version, which I would avoid. I use the Order Wheel on the app to make trades.

  124. Great article.
    Do you also use an exchange house when transferring the funds from your brokerage account to your bank account?

    1. Thanks Keni. You should set up a local bank account in the same currency as your IB account. You can then send money directly from IB to that account. When/if you want to use the money locally, you can use a local exchange house to convert the money into local currency (likely to be cheaper than your bank, even after transfer fees but do check this first).

  125. As a Dubai expat. This is literally the gold mine I was looking for. I am concerned about the currency rates though. Do you have any particular positive experience with any particular bank?

    1. Thanks Sean! In the UAE I use UAE Exchange (Club Exclusive) as they seem to offer the best rates. Banks don’t give particularly good rates.

      Edit: I am not using UAE Exchange anymore. We are busy creating guide for expats on how to transfer their money and you can check out this page to get notified when it is ready.

      1. Hi Smart Skeleton. Thanks for all the good info. I’m looking for some details in using UAE Exchange for transferring funds from the UAE to my IBKR account. I’ve set up my UAE exchange account and it’s been activated. My IBKR account is ready to receive funds (as their friendly emails keep reminding me). I’m ready to pull the trigger. However, after looking at the options on the UAE Exchange app for transferring funds and the IBKR app for receiving funds, I’m a little confused about which process is best to use. I’m just not sure where the process begins for an initial deposit into my IBKR investment account. Do I start with the option to deposit funds with the IBKR app? If so, am I opting for electronic/direct transfer? Connect my bank account? Bank wire? Sorry if I’m overcomplicating things here. I just don’t want to have to pay more than I need to on a 5-figure transfer. Thanks for your help.

        1. In IB Account Management, select Wire Transfer and enter your bank details (not UAE Exchange). Best to use UAE Exchange CLub Exclusive if you can. Email the details Ib provides at the end of the wire transfer set up and then they will let you know to proceed (sending AED to their local account).

          Edit: I am not using UAE Exchange anymore. We are busy creating guide for expats on how to transfer their money and you can check out this page to get notified when it is ready.

  126. Great information thank you SS. I found your blog via Millennial Revolution. I am currently in China and sending money back home to invest through my brokerage thats in my home country. It works, but I would like something more international also. Maybe we can work together on a post for expats from China to get money out to invest. China is a different beast for getting money out of.

    Cheers,
    Colby @ That Charles Life

    1. Hi Colby, I hope life is good in China. Yes I would be interested to hear how you get money out of China and into USD/CAD. Once it’s out, I imagine everything is fairly straightforward again.

      1. Thanks very much for the post. I read somewhere that IB requires a tax registration number. I too am a UK expat in China. Just wondering if one would need to input the Chinese tax registration number or if one is needed at all?

        1. You will need to input a tax registration number from a country you reside in, if such number has been issued to you.

  127. Thank you for the great guide. I was looking for such guide to start my ETFs investing journey. The question I have How easy to take money out from my Portfolio in IB ? I am a non US expat I hold a Jordanina Passport

    1. Hi Mahmoud. Glad it’s been helpful for you! It should be as easy as putting money in… You arrange for the ETFs to be sold through your IB mobile app and then transfer the funds back to your bank account. Might be good to set up a USD bank account in your home country, so you have more control over exchange rates.

  128. Wonderful advice! This concurs with what I’ve been reading about estate taxes in the US, though I do get conflicting stories if you use a US broker even though the ETFs are Irish domiciled.

    Does Interactive Brokets charge custodian fees?

    We are waiting for the book! Perhaps more info in the future about the pros and cons of various international brokerages and safety of custodian arrangements

    1. Hi John, yes some people are wary of US brokers but from what I have researched the domicile of the fund determines the tax status rather than the broker location. IB does not charge separate custody fees. I think IB are safe though if you wanted to be more cautious you could divide your investment across two or more brokerages. IB offers a stock lending program to make a bit more money but that could go a bit pear-shaped in a big crunch, so you could avoid that feature.

  129. Hi,
    this rule that we as expats non-US citizen should not invest on EFTs domiciled in US to avoid taxation is also valid for normal stocks traded in US?
    Thank you for the comprehensive guide.

    1. Yes that seems to be right for US stocks purchased in the US – you would be liable for estate tax. Please do your own research on this though if you have a large exposure to such stocks.

      1. Just wondering if this is really correct, am canadian, i sold my stocks (company stocks) through one of the banks in the US, i didn’t get taxed. as i am leaving outside canada and the US. that’s what they said when i sold everything and cashed out. Are you guys sure there is a tax on foreigners leaving outside the US? do you have a link to this rule?

        1. Hi Samir, what you are talking about sounds like you weren’t taxed on capital gains when selling your stocks. The above comment related to Estate Tax.

          1. Hi,
            When you register with IB or other online broker you must fill Form W-8BEN “Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)”.
            This way IRS will not hold taxes if your country of residence has a “non double taxation” treaty with USA.

          2. Hi JArenas, this is theoretically true, but there is really only a handful of countries which have signed the Estate tax treaty with the US. Unfortunately, many of the treaties have significant ‘holes’ in the text, so in general, the presence of a country in this list of US estate tax treaties is often just the first step in uncovering whether or not your country is fully protected from US estate taxes. You would need to research thoroughly to be sure that the answer to the question above is really yes. In that case, I would rather stay away from the US domiciled ETFs.

  130. I have been looking for information about specifics on investing as an expat. Your blog is by far the best source I found. Please, keep the good work!

      1. Hello,

        This is very informative and hopefully, this will work for me.

        With regards to the offshore broker, what sort of fees would you expect to pay?

        Kind regards

        1. Hi Robert,
          IB is probably the cheapest broker out there. You pay 10 USD/ month for a portfolio below USD100k. Hope that helps!

  131. Good read. I wish to purchase berkshire hathaway class b stocks for long term investment $200k (20years). Doing the above method through interactive brokers, the shares would be in the street name. It is not recommended for the said amount as the spic protection is only upto $500k. Compounding my initial investment will definitely cross the $500k mark in a couple of years.
    My question to you is, is it possible for a foreigner (non us citizen)(I’m in Indian citizen, Dubai resident) to hold the stock in direct registration system (Drs) format. If yes, how do I go about it? Do I need to register at the sec? As brk shares do not pay dividends. Im assuming I will be liable only for capital gains tax at the time of sale. Your views appreciated. Thanks. AJ

    1. Not sure why you would want to invest such a large amount in one stock, I prefer diversifying across more than one index. It will take a while for $200k to become $500k, by which time consumer protection rules and amounts may have changed. I would wait until your investments get closer to the $500k mark and then investigate your options.

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