Korean Job Discussion Forums

[hongdae2]

I am hoping that someone can give me some advice on online trading. I am a Canadian non-resident and would like get into some short term trading and stock investments.

Some of the questions I have are:

1. What is the easiest way to start investing into the American markets?

2.. What is the best online discount brokerage for someone in my position? (I am leaning towards Zecco)

3. How can I keep my investments away from revenue Canada?

4. Do I pay taxes for any gains that I've made? and to whom(ie. korean government)

4. How fast are transactions completed through discount brokerages?

5. What is the process of opening an online trading account with a discount brokerage from Korea?

6. If I use an American online brokerage (etrade, zecco), do I have to pay taxes to the IRS on my gains?

7. What is the W8-BEN form?

(the search function is very inconsistent)

thanks for any advice

[huffdaddy]

[michael5799042]

I have an account with Interactive Brokers. You can invest in American markets and other markets all over the world.
You should pay tax to the Canadian government on gains and your earnings in Korea. Unless, you request (and are approved for) non-residency status. I am pretty sure that stock market gains are not taxed in Korea, but I am not positive.
The transactions are very fast, but it was a pain to get the documentation for proof of address since the brokerage does not recognize the Korean alphabet they required government I.D. (alien card) and a notorized translation of your proof of address. I got the proof of address by getting a document from the immigration office stating my address (1000 won). They refused to write my address in the Roman alphabet, so I had to get it translated, then I brought the translation PLUS the translator to the Canadian embassy and they notorized the translation (50,000 won) with the translator in the room.

It was a hassle but I'm glad I have the account now.
Btw, to add funds to the account I now just wire US dollars to their bank in NY and it goes into my account.

[lowpo]

[michael5799042]

3. You make money in America you pay taxes in America.
4. If you made money in America you pay the taxes to the US goverment
and not the country your in.
6. Yes, if you make money in America you pay the IRS, but you can use
your expences to cut the taxes on gains.[/quote]

I don't think this is quite accurate. Just because you own American stock doesn't mean you have to file taxes in the U.S. Remember that the company you own stock in is already paying taxes there. However, sometimes they will tax your dividends. And as to which country you owe taxes in it depends on the country. When I was a Canadian resident taxes were not taken from dividends I received, now that I have declared myself non-resident taxes are automatically deducted (around 10% I think) from dividends I receive from Canadian stocks. In Canada you have to pay Canadian taxes on your global income, however you can declare yourself a non-resident. In the U.S. I think your overseas income is tax free up to $75,000 or something like that, but you do not have the non-residency option. In the U.K. I think your overseas income is tax free.
etc...

[huffdaddy]

[tob55]

We (my wife and I) have occasionally done some day trading through KOPSI and did okay, but it is very volatile. My wife literally spent hours researching the market and did find some US stocks that were listed. In the end we earned around $5K a month, but we decided to set back the majority of our earnings and use it on something more stable and sure. We have gone back frequently and looked for some purchases, but the market is really doing the yo-yo thing now so we are waiting. There are several services in Korea that charge very minimal fees and they only take 3.5% on the earnings as their fee when you bank out. There are no up front or transaction costs involved, and it has actually been fun. However, it is the stock market and livelihoods can be won or lost in a short period of time if you don't watch what you are doing.

In all I would say we spend about 2-4 months out of the year when the market moves in the right direction looking to make some quick in and out investments. That is the nice thing about the online services Korea has in place. They have live tickers that show information in real time so you never have to wait more than 30 seconds to see changes as they happen. this way we can make a quick sell if needed, or buy a bit more stock to wait it out and gain the most on our short term investment. Still, all in all it is pretty risky unless you have a good sense for how the market works.

[Soccerstar]

My wife and I just tried to open accounts with zecco, but their website and customer service are both VERY low quality.
1. The forms to fill out to join are very cumbersome.
2. They lost my form I filled out online. Apparently I was supposed to save it after I finished, even though they told me I was finished and sent me an e-mail saying it was being processed.
3. My wife (who is Canadian) had to fax some paperwork in to them.
4. It takes a long time for them to process the applications.
5. I called them up to ask about tax issues, but the customer service reps are not allowed to discuss it since "we know nothing about taxes."
6. I could overhear them in the background complaining to each other about their manager.
7. There are a lot of complaints about them on the internet.

Trade King has a lot of good reviews, and when you think of it, if you make 10 trades a month with them you are only spending $100/month. If you are into options, Trade King is much better than Zecco, plus you get all the free resources.

I also am a member of marketclub.com. They have a 2-month trial, so I will finish out my 2 months before I decide if I want to stay with them.

We also have an account with Mirae Asset, supposed to be the best investment company in Korea. We got lucky and invested just as the Korean economy bottomed out three weeks ago. Made about $10,000 so far. Not bad off of thirty grand.
Anyway, I am very interested in seeing how this thread progresses. I really want to hear success stories others have.

[mole]

It's nice you are optimistic enough to use term like gains and revenue.
Just spend a week or two in Vegas. You'll be out less coin and have fun.

Then again, I'm one of the doomsdayists predicting The Greater Depression 2008.

[bacasper]

I used www.easy-forex.com to trade currencies and metals. In my very first trade, I made $80 in about 5 minutes. In the second, $230 in about 15. In the third, I lost $250 in 40 seconds.

Have fun!

[Soccerstar]

Diversify, Be Disciplined, and research thoroughly. Uneducated investing is gambling- Buffet
Research is the name of the game, and we invest only what we can afford to lose. The stock market will go up eventually.

[hongdae2]

Thanks for all the information.

I hope more is to come and maybe this can be the thread to answer all questions pertaining to investing from Korea.

[bobbyhanlon]

also, avoid KOSDAQ stocks and don't buy anything based on what your friend's brother's girlfriend's dongsaeng who works for samsung tells you. there's plenty of action even in the blue chip end of the market so don't get involved with any kosdaq stocks or other companies you never heard of. there is rampant manipulation in the markets here.

you can see many stocks which go from something like 1,000 won to 10,000 won in a few weeks, bring in all the suckers, and then crash back to 1,000 again. the people who made 10 times their investment are the insiders.. i even used to know a guy who did that. the informal name for those stocks are '작전주', which means 'mission stock', implying that it goes up like a rocket. of course, they fall back to earth with even greater speed..

[hongdae2]

i took a look at tradeking and...

You cannot open an account if you are:
� a US citizen living in certain foreign countries listed above
� a foreign citizen not residing in the US
� a US or foreign citizen without a Social Security Number

[Soccerstar]

Yeah, it looks like Zecco might be our cheapest broker and the way to go in the end. I did find out that you can read the blogs and info off other broker websites (such as Tradeking) without being a member, so this is good for research.
I just got an e-mail from Zecco this morning that they didn't receive the fax we sent them so we need to send it again.
I also am trying to find out what we will owe Uncle Sam trading through an American brokerage. My wife is Canadian applying for non-residency, but I am American. We are trying to open an account in each of our names there, but from the research I have done so far, it looks like they will withhold money from each of our accounts for taxes. She faxed them a special for (W8 or something) but I don't think it qualifies her for full exemption.
I realize this isn't the ideal website to find successful investors, but at least it is neat to know that there are others like me trying to get into the business.