winpieTaiwan-focused

US Broker vs Sub-BrokerageTW-specific

Taiwan retail investors have two main ways to buy US ETFs: open an account at a US broker (e.g., Firstrade, Interactive Brokers, Charles Schwab) or use a Taiwan sub-brokerage (複委託). The cost structures differ dramatically — this tool finds your break-even trade size.

Inputs

Overseas broker (e.g. IBKR, Schwab) parameters

Includes Taiwan wire fee (about NT$750, ~US$25) plus FX spread.

Sub-brokerage (via Taiwan broker) parameters

Rates vary by broker; adjust to match your actual account.

Results
10-year cumulative cost difference
Roughly equal
Overseas brokerSub-brokerage
Cost per tradeUS$ 25US$ 25(minimum applied)
Cost per yearUS$ 100US$ 100
Cumulative costUS$ 1,000US$ 1,000
Break-even point
At a trade size of US$ 8,333.33 the two costs are equal (sub-brokerage rate 0.3% × trade size = wire cost).
  • Trade > US$ 8,333.33: overseas broker is cheaper.
  • Trade < US$ 8,333.33 (if above sub-brokerage minimum): sub-brokerage is cheaper.

Not included: overseas broker inactivity fees (usually none), US ETF expense ratios (same either way), dividend withholding tax (~30% either way), and US estate-tax risk (relevant to overseas brokers). Numbers compare costs only and do not prescribe a choice; consider your own risk tolerance and convenience.

Cost structure

  • US broker: usually 0% commission on US ETFs + US$25 per wire transfer + exchange rate spread
  • Sub-brokerage: 0.15–1% commission, US$15–35 minimum fee, no wire but internal FX spread 0.2–0.5%

Rule of thumb: large trades (US$5K+) tilt toward US broker. Small recurring trades (under US$2K) tilt toward sub-brokerage if they offer dollar-cost-averaging discounts.

Also consider estate tax risk: US broker accounts over US$60K are subject to US estate tax if the account holder dies — a frequently overlooked concern for Taiwan foreign nationals.

Frequently asked

Which is cheaper, US broker or sub-brokerage?
Depends on trade size and frequency. Large, infrequent trades (USD 5K+ once or twice a year) favor a US broker — 0% commission, only the wire fee matters. Small recurring trades (USD 500 monthly DCA) favor sub-brokerage — no wire each time, and some offer DCA discounts. The tool gives you the break-even based on your scenario.
What are the risks of using a US broker?
Three: (1) US estate tax — non-US-domiciled accounts above USD 60K are subject to 18-40% US estate tax on the excess if the account holder dies; family must navigate cross-border probate. (2) Cross-border wire logistics. (3) English-only interface, US time-zone customer service.
What hidden costs do sub-brokerages have?
(1) Internal FX spread of 0.2-0.5% (large brokers narrower, small ones wider) — an invisible 0.5% fee per round trip. (2) Minimum commission USD 15-35 per trade — on a USD 1,000 trade that's 1.5-3.5%. (3) Most don't help with US dividend withholding-tax recovery.
Where does the USD 25 wire fee come from?
Taiwan bank wire-out fee ≈ NT$750 + US-side intermediary bank fee USD 10-30. Net amount landed is typically USD 25-50 less than the amount sent. The tool defaults to USD 25 per outgoing wire — adjust to your bank's actual fee.
Are dividends taxed differently between the two channels?
No. US ETF dividends are subject to a flat 30% US withholding tax for non-resident-aliens regardless of channel. Sub-brokerages rarely help reclaim. With a US broker, you can self-claim foreign tax credit during Taiwan's May income tax filing.
Does the tool store my numbers?
No. All math runs locally in your browser.

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