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Canadians Can NOT buy Mutual Funds in Taiwan/Outside Canada

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Re: Canadians Can NOT buy Mutual Funds in Taiwan/Outside Canada

Postby BrentGolf » 03 Mar 2014, 14:53

Just a general comment... You hear people complain a lot about the lack of regulation in the financial industry and talk about how it's going to bring down the whole system, and then turn around and complain when a country like Canada institutes the exact types of financial regulation that those same people were hoping for in the first place. :loco: There may be some small inconveniences when it comes to what Canadians can and can't buy, but it's those same inconveniences that helped shelter our banking system during the last crash, and what will possibly save us when the next inevitable one comes.

Well, it looks like there is some truth to this. Canadians are now left out in the cold when it comes to investing outside Canada.


I'm an investor living outside Canada, no issues at all. Who wants to buy mutual funds these days anyway? ETF's do exactly the same thing at a fraction of the cost. Just saying... :lol:
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Re: Canadians Can NOT buy Mutual Funds in Taiwan/Outside Canada

Postby Taipan1975 » 11 Apr 2014, 11:29

I do invest in stocks regularly from outside Canada and I was deemed a non-resident years ago. However, I had already had my brokerage account set up before I left and once deemed a non-resident they changed the account type to non-resident. They don't allow me to buy mutual funds or buy on margin, and they take 25% off the top on dividend payouts, but as far as selling stocks it's all mine and I don't get dinged any capital gains tax.

I've looked into other non-residents setting up these accounts though and that seems significantly more difficult. I guess since mine was already open before I left I got lucky.
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Re: Canadians Can NOT buy Mutual Funds in Taiwan/Outside Canada

Postby BrentGolf » 12 Apr 2014, 02:36

Setting up a foreign brokerage account is no more difficult than setting one up as a Canadian. I have two, with TD Ameritrade and Interactive Brokers and it couldn't be simpler. I'm not sure why you can't trade on margin but it doesn't have anything to do with your residency. Margin requirements are determined by the strength of equity within the account and international accounts are just as eligible as any other for margin. As long as you meet the requirements, full margin and trading authority for options, futures, bonds, and mutual funds gets approved in minutes. My guess is you have either not applied and filled out the correct forms, or the brokerage house you are using is a bad one. If you stick with one of the more established ones, I've never heard of anybody getting denied a margin account.

If you want the best full service brokerage house and do dividend trading I'd suggest TD Ameritrade. Not only do they have nice looking software, but they offer DRIP plans that buy partial shares and don't charge commissions on dividend re-investments. If you have third party trading software already and only need to execute trades yourself, Interactive Brokers has much cheaper commissions. Both are a breeze to apply for as a non Canadian resident.

FYI, if you want to stop getting 'dinged' 25% for dividend payments, fill out a form called a W8-BEN. It will be available for download with whatever brokerage house you use. It's a form that states you are a tax payer in another jurisdiction and they can no longer withhold any of your dividend payments. ( And yes you get all the previous withholdings back once the form is signed ) Again, this isn't because your residency changed. Dividends are withheld for everyone in every country until you fill out that W8-BEN. So is a portion of sales from ETF trading so even if it's not related to dividends you'll have to fill out that form so your ETF disbursements are fully yours as well.
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Re: Canadians Can NOT buy Mutual Funds in Taiwan/Outside Canada

Postby Taipan1975 » 04 Jun 2014, 01:13

Brent, I just confirmed with TD Waterhouse that you are incorrect in your information concerning dividends and trading on margin if you have a Canadian brokerage account (if it's an international brokerage, well I don't know, but that wasn't what I was talking about anyway) - even if you fill out the W8-Ben (which I did, and the CRA is now asking all non-residents to do so). In fact, I even linked directly to this thread and the resource officer there indicated that "Taipan1975 is correct on all points" (and I hadn't even mentioned that was me).

Just so all the Canadians out there know...
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Re: Canadians Can NOT buy Mutual Funds in Taiwan/Outside Canada

Postby Brendon » 04 Jun 2014, 03:38

BrentGolf wrote:FYI, if you want to stop getting 'dinged' 25% for dividend payments, fill out a form called a W8-BEN. It will be available for download with whatever brokerage house you use. It's a form that states you are a tax payer in another jurisdiction and they can no longer withhold any of your dividend payments. ( And yes you get all the previous withholdings back once the form is signed ) Again, this isn't because your residency changed. Dividends are withheld for everyone in every country until you fill out that W8-BEN. So is a portion of sales from ETF trading so even if it's not related to dividends you'll have to fill out that form so your ETF disbursements are fully yours as well.


Are you sure about this? My understanding was that you owe tax in the US on US dividends no matter what, but that if the US has a tax treaty with your country of residence, it may be reduced or exempt -- so the purpose of W8-BEN is to establish whether that's the case. Taiwan has no tax treaty so I think anyone resident here is going to owe 30% to the IRS.

Please correct me if I'm wrong -- I'm avoiding US securities completely, on this basis.
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Re: Canadians Can NOT buy Mutual Funds in Taiwan/Outside Canada

Postby ski » 02 Sep 2014, 15:46

Q08. How can I perform mutual fund transactions at HSBC (Taiwan)? Are there citizenship restrictions?
A. Clients can invest in mutual funds in person at branches, via phone banking service and by personal internet banking at HSBC(Taiwan).
If clients want to invest in mutual funds through HSBC (Taiwan), they must meet the following conditions:
- Must have opened demand deposit and trust accounts at HSBC (Taiwan) (if the investor is a minor (under 20 years old), the investor requires approval from a legal agent and must open demand deposit and trust accounts at HSBC (Taiwan))
- Must not be a US citizen (please see HSBC (Taiwan)’s general agreement for the definition of a US citizen)*
- Must not have Canadian citizenship or reside in CanadA. *When aliens invest in mutual funds, they must abide by the tax laws of their respective countries. When necessary, they should pay taxes directly to their country of citizenship.
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Re: Canadians Can NOT buy Mutual Funds in Taiwan/Outside Canada

Postby ChewDawg » 03 Sep 2014, 12:27

ski wrote:- Must not have Canadian citizenship or reside in CanadA. *When aliens invest in mutual funds, they must abide by the tax laws of their respective countries. When necessary, they should pay taxes directly to their country of citizenship.


That doesn't seem right. You can have Canadian citizenship but be deemed a non-resident by being a resident of another country and by removing your attachments to Canada (freezing mutual funds, RRSPs, RESPs, selling houses, car etc.). If you are a non-resident of Canada and have residency in another country such as Taiwan, then you have no requirement to file taxes or report worldwide income in Canada, including capital gains in Taiwan. I think HSBC is wrong here.
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Re: Canadians Can NOT buy Mutual Funds in Taiwan/Outside Canada

Postby sergec » 18 May 2016, 22:58

Bumping up an old thread here.

I was surprised when I applied to open a trading account at HSBC today to get the same reply regarding HSBC's policy not to open trading accounts for Canadian citizens. I explained I've been a resident of Taiwan for over 20 years but I was told it had to do with my citizenship, not my residency. I'm still confused as to the reason behind it. If this is a Canadian gvt decree, then why have I been able to trade mutual funds from my HSBC Hong Kong account all those years.

On another note, Brent, are you sure the W8-BEN form allows me to retain the 30% tax on dividend income? I believe I have filled out and submitted that form, but still get the 30% tax withheld. I invest through etrade. Do you have any experience with them?
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Re: Canadians Can NOT buy Mutual Funds in Taiwan/Outside Canada

Postby BrentGolf » 20 May 2016, 23:39

Taipan1975 wrote:Brent, I just confirmed with TD Waterhouse that you are incorrect in your information concerning dividends and trading on margin if you have a Canadian brokerage account (if it's an international brokerage, well I don't know, but that wasn't what I was talking about anyway) - even if you fill out the W8-Ben (which I did, and the CRA is now asking all non-residents to do so). In fact, I even linked directly to this thread and the resource officer there indicated that "Taipan1975 is correct on all points" (and I hadn't even mentioned that was me).

Just so all the Canadians out there know...


I'm not sure it matters what tangent you were going off on with your already existing Canadian brokerage account and how they changed it on you when you left Canada. The thread was about buying Mutual Funds from outside of Canada. I couldn't have been more clear that I was talking about non Canadian residents opening international brokerage accounts, which I have. Also, things have changed dramatically in both Canada and the US in the past few years. Both countries have been introducing laws that make residents file things they never used to have to, and get money withheld that never used to. And far more than that. New laws defining what residencies of managers can invest for what residency of clients, for types of assets and funds that can and can't be purchased, how taxes both domestic and potentially across borders are treated, how dividends are treated and withheld, reporting and money laundering laws, updating your residency status and account settings more often, increases in confirmations of trade transactions, commissions and fees treated differently, even down to what data feeds non residents can pay for.
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