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Derrek
Joined: 15 Jan 2003
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 Posted: Mon May 23, 2005 8:19 pm Post subject: Investing in the stock market in Korea |
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How does one go about doing this? Can you invest in foreign stocks easily from here, too? What are the tax issues?
I have no clue about this... school me, please. |
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Wangja
Joined: 17 May 2004
Location: Seoul, Yongsan
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Derrek
Joined: 15 Jan 2003
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| Posted: Mon May 23, 2005 9:33 pm Post subject: Re: Investing in the stock market in Korea |
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Ugh.. they want me to install a bunch of stuff in my browser, and as a rule, I NEVER do that unless it's from Microsoft. |
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chance2005
Joined: 03 Apr 2005
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| Posted: Mon May 23, 2005 10:43 pm Post subject: Re: Investing in the stock market in Korea |
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| Derrek wrote: |
Ugh.. they want me to install a bunch of stuff in my browser, and as a rule, I NEVER do that unless it's from Microsoft. |
If you are from the U.S. have your relatives sign you up for Scottrade. Might be in Canada as well, not sure. Everything can be done over the internet. Minimum is $500. Just download an application form and send in the $500 check. Each trade is only $7 and other than there are no fees for maintaining an account. You can even wire money into your Scottrade accout from your bank. Though it probably helps to have a bank account in the U.S. You can even purchase all sorts of bonds via their website. I suppose you might need a bank account though in your home country. |
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Derrek
Joined: 15 Jan 2003
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| Posted: Mon May 23, 2005 11:51 pm Post subject: |
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Chance:
Yeah, i've been thinking about something like that. Just worried about what it might do to me tax-wise. My dad does my taxes, and I hate to make a lot of extra work for him, since he hates it that I'm in Korea anyway. |
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gmat
Joined: 29 Jan 2003
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| Posted: Tue May 24, 2005 5:10 am Post subject: |
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Hey Derrek,
I recommend Interactive Brokers (www.interactivebrokers.com) if you want to invest on your own, ie, without any hand holding by a "broker".
If you make your own decisions, this company (IB) is the best. Great execution and really low commissions. Access to all global markets.
I trade stock index futures with IB so execution and commission cost are critical and I recommend them without hesitation.
Not sure about US taxes, but if you are investing as a Korean resident, do you even need to pay US tax????? |
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chance2005
Joined: 03 Apr 2005
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| Posted: Tue May 24, 2005 6:47 pm Post subject: |
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| Derrek wrote: |
Chance:
Yeah, i've been thinking about something like that. Just worried about what it might do to me tax-wise. My dad does my taxes, and I hate to make a lot of extra work for him, since he hates it that I'm in Korea anyway. |
I am going to assume you are from the U.S..Number one, if you have been outside the country for one calendar year you can exempt $80,000 of income, therefore you should not have to pay taxes at all on your Korean income. However this does not apply to capital gains from selling stock. This would be taxed just as if you are living in the states. Basically if you sell stock in a particular tax year and realize a capital gain, you will pay tax on that stock plus an interest penalty to the IRS. However it might be better for you to simply buy and hold a stock, if you do so, and sell after holding for one full calendar year you will be subject to a mitigated tax rate of i think 15% versus something like 30% for short term holding, this encourages long term investing. Basically simply buying a stock has no tax ramifications, only when you sell. |
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chronicpride
Joined: 16 Jan 2003
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| Posted: Tue May 24, 2005 8:10 pm Post subject: |
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| I think the US exclusion limit is still a little upwards of $70,000, but will be fully adjusted to $80,000 beginning in 2008, for inflation. There are also some legal loopholes enabling US citizens to avoid US capital gains taxation on their Korean equities, if bought through a Korean broker over here, or even buying Korean mutual funds that are comprised solely of US holdings. For deeper advice and technicalities, I'd refer for one to make an appointment with the private investments dept of your bank or Samsung or LG Securities. |
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Son Deureo!
Joined: 30 Apr 2003
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| Posted: Wed May 25, 2005 1:26 am Post subject: |
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| chance2005 wrote: |
| Basically simply buying a stock has no tax ramifications, only when you sell. |
What about dividends? If I'm in Korea, but holding US stock would I have to pay US tax on the dividend income? |
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lunalilo
Joined: 11 May 2005
Location: somewhere in-between
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| Posted: Wed May 25, 2005 2:27 am Post subject: Re: Investing in the stock market in Korea |
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| Derrek wrote: |
How does one go about doing this? Can you invest in foreign stocks easily from here, too? What are the tax issues?
I have no clue about this... school me, please. |
If you know some specific companies you want to invest in, such as Hyundai, btw a good company, you can seek out investment brokers in the U.S who can probably assist you with... |
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chotaerang
Joined: 23 Mar 2004
Location: In the gym
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| Posted: Wed May 25, 2005 6:37 am Post subject: Re: Investing in the stock market in Korea |
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| Derrek wrote: |
| How does one go about doing this? Can you invest in foreign stocks easily from here, too? |
Buying non-Korean stocks through a Korean broker is impossible in my experience. If you want to to that, go through an American broker. If you do want to buy stocks here, try Mirae Asset(s) - commissions are low and they have a couple of offices around Seoul. Best of luck with it. |
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chance2005
Joined: 03 Apr 2005
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| Posted: Wed May 25, 2005 6:30 pm Post subject: |
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| Son Deureo! wrote: |
| chance2005 wrote: |
| Basically simply buying a stock has no tax ramifications, only when you sell. |
What about dividends? If I'm in Korea, but holding US stock would I have to pay US tax on the dividend income? |
Yes you would still pay US tax on the dividend income. Your on-line broker would keep a record of this and at the end of the year you would have to report it to the IRS. Please be aware that on-line tax filing is extremely easy even for filing the special forms for capital gains, dividend income, and foreign income tax exemption...extremely easy and cheap. I use www.taxact.com. To file federal taxes it is $7.95. You never even have to know about the forms. Taxact.com simply asks you plain English questions and the program fills in the applicable forms for you. |
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chance2005
Joined: 03 Apr 2005
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| Posted: Wed May 25, 2005 6:43 pm Post subject: |
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| chronicpride wrote: |
| I think the US exclusion limit is still a little upwards of $70,000, but will be fully adjusted to $80,000 beginning in 2008, for inflation. There are also some legal loopholes enabling US citizens to avoid US capital gains taxation on their Korean equities, if bought through a Korean broker over here, or even buying Korean mutual funds that are comprised solely of US holdings. For deeper advice and technicalities, I'd refer for one to make an appointment with the private investments dept of your bank or Samsung or LG Securities. |
Yes, the loophole is that the IRS could never know about capital gains you enjoy on your Korean investments through Korean brokers. Korean brokers do not report to the IRS, American brokers do. All of your capital gains from stocks are taxed the same no matter if they are Korean stocks or U.S. stocks, but in the case of Korean stocks through Korean brokers it is really up to you...do you want to report it or not? Of course I would advocate reporting it.
AS for Korean stock brokers, I really do not know, but in Korea do they have discount brokers like they do in the U.S.? How much per transaction at "discount" Korean brokers? The cheapest in the U.S. seems to be about $7 for market transactions via the internet with no human intervention. |
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gmat
Joined: 29 Jan 2003
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| Posted: Wed May 25, 2005 7:36 pm Post subject: |
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Chance:
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| The cheapest in the U.S. seems to be about $7 for market transactions via the internet with no human intervention. |
$7 is expensive. Why does anyone stay with eTrade, Scott, etc... when their costs are so high?
As I mentioned before Interactive Brokers (IB for short) - www.interactivebrokers.com - is the best online broker. It is the choice of almost all the professional day traders I know because the execution is great and the COST IS LOW.
IB was ranked by Barron's as the #1 Software Based broker and lowest trade cost in their 2005 rankings.
Here are commission cost for US stocks (all-in):
$0.01 per share (<= 500 shares)
$0.005 per share (> 500 shares)
Here are commission cost for Canadian stocks (all-in):
$0.02 per share (<= 500 shares)
$0.01 per share (> 500 shares)
NB: IB is for investors/traders who do not need hand holding |
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chance2005
Joined: 03 Apr 2005
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| Posted: Thu May 26, 2005 1:51 am Post subject: |
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| gmat wrote: |
Chance:
| Quote: |
| The cheapest in the U.S. seems to be about $7 for market transactions via the internet with no human intervention. |
$7 is expensive. Why does anyone stay with eTrade, Scott, etc... when their costs are so high?
As I mentioned before Interactive Brokers (IB for short) - www.interactivebrokers.com - is the best online broker. It is the choice of almost all the professional day traders I know because the execution is great and the COST IS LOW.
IB was ranked by Barron's as the #1 Software Based broker and lowest trade cost in their 2005 rankings.
Here are commission cost for US stocks (all-in):
$0.01 per share (<= 500 shares)
$0.005 per share (> 500 shares)
Here are commission cost for Canadian stocks (all-in):
$0.02 per share (<= 500 shares)
$0.01 per share (> 500 shares)
NB: IB is for investors/traders who do not need hand holding |
Looks interesting especially if you want to buy stocks internationally. As a non pro trader if I invested $3000 in U.S. stocks and just let it sit there with no trades for a year, are there any monthly minimum fees I must pay? |
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