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Investing in Korea?
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MoneyMike



Joined: 03 Dec 2008

PostPosted: Mon Apr 11, 2011 11:20 pm    Post subject: Investing in Korea? Reply with quote

Hey guys,

Does anyone have any information about investing while in Korea? I want to start putting some money away, but I'm not sure what my options are while I'm living here.

If I was living in Canada I would probably just get in to some mutual funds, low risk and reasonable rate of return kind of stuff. Because I've declared as a non-resident, however, I don't want to invest in Canada, since the government will look at that investment and possibly use it to deny my non-residency and make me pay taxes.

So what are my options while I'm here in Korea? I'd prefer investments that aren't locked in for a large amount of time, as my current plan is to stick around for at least another 3 or 4 years, but things change.

Can I invest in American stocks from here? How about some investments in Asia? Recommendations?

I'm mostly looking for information about HOW I can invest while I'm here, rather than what I should invest in specifically, but really any thoughts are appreciated.
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jlb



Joined: 18 Sep 2003

PostPosted: Tue Apr 12, 2011 2:06 am    Post subject: Reply with quote

I'm in the exact same position as you, a Canadian looking to invest somewhere outside Canada. I found a US discount brokerage that allows international investors. I mostly buy Blue-Chip dividend paying stocks, which is quite a conservative way to go. You could also buy ETF's through Sogotrade (look at the Vanguard website...their fees are very low and they offer the major ones that you'd want in your portfolio).

https://www.sogotrade.com/s1/NewAccountSetup/Step1.aspx?rf=543925
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chungbukdo



Joined: 22 Aug 2010

PostPosted: Tue Apr 12, 2011 5:45 am    Post subject: Reply with quote

Did you apply and get accepted to the US brokerage from Korea?

Do you pay US capital gains and dividends taxes? How does that work.
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Wildbore



Joined: 17 Jun 2009

PostPosted: Tue Apr 12, 2011 9:15 am    Post subject: Re: Investing in Korea? Reply with quote

MoneyMike wrote:
Hey guys,

Does anyone have any information about investing while in Korea? I want to start putting some money away, but I'm not sure what my options are while I'm living here.

If I was living in Canada I would probably just get in to some mutual funds, low risk and reasonable rate of return kind of stuff. Because I've declared as a non-resident, however, I don't want to invest in Canada, since the government will look at that investment and possibly use it to deny my non-residency and make me pay taxes.

So what are my options while I'm here in Korea? I'd prefer investments that aren't locked in for a large amount of time, as my current plan is to stick around for at least another 3 or 4 years, but things change.

Can I invest in American stocks from here? How about some investments in Asia? Recommendations?

I'm mostly looking for information about HOW I can invest while I'm here, rather than what I should invest in specifically, but really any thoughts are appreciated.


Residency DOESN'T MATTER. Because of the Canada-Korea tax treaty you are treated as a non-resident for TAX PURPOSES anyways. Your only responsibility is to phone your financial institution to make sure they withhold 15% from your dividend income, as per the tax agreement.

You may need to pay capital gains in Korea. Invest in Canada all you want just talk to your Korean employer/advsior/accountant if you take any capital gains. Odds are if you are a long-term investor you won't take any capital gains, and even if you do, the Korean government doesn't give a rats ass and won't audit you anyways.

As for tax free accounts, Canada Revenue says you can have/open them but can't use them until your a resident again. It doesn't affect your status at all.

Read the revenue Canada website, it's all on there.

Going through a non-Canadian broker doesn't make you any more or less of a resident. Where you broker is located is pretty irrelevant. What matters are the laws, regulations, and treaties and how that relates to taxes on your capital gains and investment income.
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MoneyMike



Joined: 03 Dec 2008

PostPosted: Tue Apr 12, 2011 3:22 pm    Post subject: Reply with quote

Are you sure about that Wildbore? I've read some conflicting information in regards to non-residency, and one of the things I've read from a few different places is that when looking at my non-residency, it can be denied if they find too many ties to Canada, things like rental properties owned, bank accounts, medicare coverage, and I thought investments as well.

Admittedly, there is a ton of info and a lot of the time it contradicts itself.

Another question, when you say that my institution should be withholding 15% of my dividend income, is that money going to the Canadian government, or the Korean government? Sorry if that's a stupid question, I don't know too much about investing yet.
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jlb



Joined: 18 Sep 2003

PostPosted: Tue Apr 12, 2011 3:30 pm    Post subject: Reply with quote

Yes, I applied to Sogotrade and got accepted from Korea. You just need proof of address.

As far as taxes go: I get 15% taken off my dividend payments by the brokerage company. It goes to the US government (99% sure about that). The rate might go up when the Bush tax cuts expire next year (although they were set to expire in 2010, Obama extended them for one year).

I don't report the income on my Korean taxes (though in theory I should, I think). I haven't lived in Canada for 5 years and don't plan on moving back anytime soon, so don't file tax returns anymore.
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cyui



Joined: 10 Jan 2011

PostPosted: Tue Apr 12, 2011 4:25 pm    Post subject: Reply with quote

Non-Regulated exchange :shock:
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Poker



Joined: 16 Jan 2010

PostPosted: Tue Apr 12, 2011 6:08 pm    Post subject: Reply with quote

buy gold and silver
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cyui



Joined: 10 Jan 2011

PostPosted: Wed Apr 13, 2011 3:27 am    Post subject: Reply with quote

Don't waste your time with "small" divindents;go streight to the exchange and play with the "big"
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skk515



Joined: 10 Apr 2011

PostPosted: Thu Apr 14, 2011 3:06 pm    Post subject: Reply with quote

can you buy american stocks in korea?
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jlb



Joined: 18 Sep 2003

PostPosted: Thu Apr 14, 2011 6:20 pm    Post subject: Reply with quote

skk515 wrote:
can you buy american stocks in korea?


Yes, I do it through an American discount broker.
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Stan Rogers



Joined: 20 Aug 2010

PostPosted: Fri Apr 15, 2011 3:11 am    Post subject: Reply with quote

You should speak to a professional financial adviser. Dave's is hardly the place to be seeking investment advice.
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Wildbore



Joined: 17 Jun 2009

PostPosted: Mon Apr 18, 2011 9:40 am    Post subject: Reply with quote

MoneyMike wrote:
Are you sure about that Wildbore? I've read some conflicting information in regards to non-residency, and one of the things I've read from a few different places is that when looking at my non-residency, it can be denied if they find too many ties to Canada, things like rental properties owned, bank accounts, medicare coverage, and I thought investments as well.

Admittedly, there is a ton of info and a lot of the time it contradicts itself.

Another question, when you say that my institution should be withholding 15% of my dividend income, is that money going to the Canadian government, or the Korean government? Sorry if that's a stupid question, I don't know too much about investing yet.


Yes, I heard about this "too many connections" thing too. However, by investments I think they mean using tax shelters like RESP, RRSPs, and tax free accounts. Regular investments shouldn't be a problem.

On their website it even says non-residents can have a tax-free savings account, they just can't contribute to it. I'm assuming this implies non-registered accounts can be used by non-residents without any implications.

Makes less sense to make artificial connections to an American broker (sogotrade) or some random middle country, just to avoid some tax jerk-off trying to paint you as a resident. They might come after you harder, with more serious charges like evasion, if you started doing things that looked "dodgy."
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PRagic



Joined: 24 Feb 2006

PostPosted: Mon Apr 18, 2011 3:20 pm    Post subject: Reply with quote

I agree with the poster about this board not necessarily being the best place to seek advice about investing.

Having said this, I can tell you how I have my porfolio set up. You can at least then shop around with a professional and get their input. Remember that any performance statistics are not indicative of future potential.

1. Large cap US fund (I go with one weighted in sectors)
2. Medium cap US growth fund (same as above)

1 & 2 are up for the year in double digit percentages, down roughly 10% over the past 3 years given the recent crisis. Not a bad rebound, though, and their weighted in sectors that favour an economic turn about. Long term, they should do just fine. Reinvest all dividends.

3. Global growth fund: up roughly 25% (purchased in 2009)

4. Emerging market fund: up roughly 50% (purchased in 2009)

Again, these funds are weighted in sectors that I checked into. Not all funds of this type had this type of gain; some are doing even better.

5. Commodity fund (wheat, corn, cotton, soy, pork, beef...you get the idea). This fluctuates and will continue to do so, but it's a decent addition to any diversified portfolio

6. Some basic 'hold' accounts in bonds.


A decent manager could tell you whether or not this type of investment strategy is right for you. In our case, this account is just one of our investment activities. We have land, and we dabble in Korean stocks and IPOs (you have to be VERY liquid to take advantage of these; most people just getting into the market don't have the capital to make it worth while).

Take it slow. Korean banks are paying decent interest compared to many other countries. At least you're staying ahead of inflation here!
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Wildbore



Joined: 17 Jun 2009

PostPosted: Tue Apr 19, 2011 8:52 am    Post subject: Reply with quote

Your advice is garbage. Obviously he is Canadian, so he would not need a commodity fund, the TSX is already heavy in that area.

Right now I am buying uranium miners. They are down 30% after the Japan crisis, and should be poised to rebound gradually over this year.

Easy money.

Also, a lot of people are saying sell in May and go away should be a tactic this year, based on some analysis.
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