Table of Contents Hide
- What Are Offshore Stock Brokers?
- Why Are Investors Hungry For Offshore Stock Brokers?
- Best Offshore Stock Broker Firms
- Final thoughts
For those that are into stock investments, one topic of great interest is offshore stock brokers. They provide a level of flexibility in trading that you cannot find with brokers that can only operate within the jurisdiction of your home country.
It is difficult sometimes to decide on which offshore stock brokers to work with. This is especially true for newer investors. A profitable investing strategy using a brokerage service requires that they align with your investment goals. Choosing the right broker could mean the difference between promising new income streams and disappointing failure.
To try and help those who are just starting or even more experienced investors, here are some of the best offshore stock brokers in this article. You will find all their details and the benefits and drawbacks of investing with them. This is by no means a comprehensive list, but it should help you get your bearings and enter foreign investment territory.
What Are Offshore Stock Brokers?
Offshore stock brokers operate out of brokerage firms that perform international trading on exchanges outside of the investor’s home country.
A brokerage account is made with international brokerage firms. Once the funds have been deposited into this account, you may start trading in various investment securities that are available to you through your offshore stock broker.
Why Are Investors Hungry For Offshore Stock Brokers?
For the benefit of those who might be unfamiliar, let us go over some of the details of offshore stock brokers.
Just like other offshore investments, there are certain advantages to putting your funds into offshore stock brokers. For one, it allows the investor legal access to many offshore investment opportunities that they might not have in their home.
By acquiring these offshore brokerage accounts, it gives the investor the ability to trade in various major international markets like those in Singapore, Hong Kong, Europe, and more. Not only that but investors can conduct transactions In a plethora of different currencies, all from just one account.
A great advantage of investing in an offshore stock broker is that it places you in a position where you can immediately purchase stocks in foreign markets. Whereas, normally you would have to endure a two-week-long process of finding a brokerage firm in the country you want to trade in and open an account with them. This is not only convenient but also an edge that an investor can exploit in their trading, seizing foreign trade opportunities as soon as they arise.
Best Offshore Stock Broker Firms
Without any further wait, here is our list of the best offshore stock brokerage firms that you can consider opening an account with today. The information is just here for your reference, to help guide you in finding the right International brokerage.
US Offshore Stock Brokers
Surprisingly, the United States has relatively few stock brokers that will deal in foreign shares for retail investors. This is due to US tax laws and SEC regulations. Because of this, there are some offshore banks and brokerages that prefer not to deal with US clients. Despite this, there are some very notable international traders operating out of the US.
This Offshore Stock Brokerage firm covers a broad range of global markets. 15 to be exact. These include the following countries.
- Hong Kong
- United Kingdom
- United States of America
Based in the United States, Interactive brokers have offices in many different countries. It is one of only two genuine global brokerages. The other being significant, the Saxo Markets.
Interactive brokers are one of the cheapest firms to work in most of the markets due to their relatively low fees. It also operates with a presence online, with a robust trading platform. They are known for being very transparent with their costs, and pretty much every market data feed you could want is available at additional fees.
There are still some downsides though. For one the user interface of their website may have a bit of a learning curve. Not everyone will be able to navigate through the website easily. Additionally, the minimum account size is 10,000 USD, which is a steep price to pay for some investors. It also charges a minimum commission of 10 USD per month amounting to a minimum annual cost of 120 USD. Although the minimum deposit amount is considerably high, in the end, Interactive brokers is still a cheaper option compared to other International brokers.
Another noteworthy offshore stock broker based out of Florida in the US is Evertrade. They specialize in internet, telephone, and postal banking services. This brokerage firm offers seven more markets that are not offered by Interactive brokers. These include the following.
- South Africa
- New Zealand
You can maintain an account with them with only 35 USD plus some clearing charges.
Some of these markets, especially Russia, are unusual. Due to its low fee, it may be of interest for investors to put their money into Evertrade. Even traders who do not reside in the United States, as they have said that they accept foreign clients.
They also do not have any minimum account sizes leading to a lower barrier of entry for any new investors looking for Offshore stock brokers.
European Offshore Stock Brokers
Europe is known for having many good offshore stock brokers across the European Union and the United Kingdom. Although there have been a few firm mergers in recent years, there is still a wealth of brokerages to choose from, that cover wide amounts of desirable territories. Europe also has some of the best banking laws that may work in your favor as an investor.
Founded in the early 90s out of Denmark, Saxo bank is one of the two truly global investment firms. The other being the previously mentioned Interactive brokers. The name can confuse some as they are known as Saxo markets in other territories. Reflecting their status as an investment and brokerage bank, Saxo bank is not to be confused with a traditional retail bank.
Saxo Bank, an offshore stock broker mammoth has more territories available for online trading than any other brokerage on this list. Having 22 international stock markets in total where they trade. Saxo bank operates in the following countries.
- Hong Kong
- South Africa
- United Kingdom
- United States
The costs involved in investing with Saxo brokers are not as low when compared to Interactive brokers from the USA. But similar to Interactive, they have a wealth of different markets that they trade in making it a good opportunity for investors to diversify their portfolios.
Another European international brokerage is the UK division of TD Waterhouse. TD was bought off by Interactive Investor in 2017. They still operate out of the United Kingdom and offer a wide range of territories to trade-in.
They offer transactions at a reasonable rate of 12.50 GBP per trade. They also deal in 13 different countries available from their online trading platform which include the following.
- Hong Kong
- United Kingdom
- United States
Additionally, the markets in Switzerland and Sweden are available over the telephone as well making it a very convenient option.
There are a few cons to investing with TD Waterhouse. For one, they charge up to a 1.75% commission for currency conversions which can amount to a large sum if the transactions are in millions. Americans residing in the United States are also out of luck. The firm, although accepting foreign investors, does not accept investments from US citizens and residents.
Singaporean Offshore Stock Brokers
The international stock brokerages based in Singapore have some of the lowest commission paired with some of the highest market coverage in all of Asia. As such, Singapore is very popular among international investors that want to trade in Asia.
The Oversea China Banking Corporation or OCBC is a Singapore-based bank and brokerage that operates mostly in the region of Southeast Asia. The online division of this firm is relatively new in the grand scheme of things. However, they have developed a strong regional presence, and offer more foreign markets online than any other Singapore-based offshore stock broker. The only other firm that can compare, in terms of overall range, is Philip Securities.
Their fees are relatively low, and they have a good reputation for customer service. The minimum account size here is 3,000 SGD making it a reasonable proposition for all types of investors.
OCBC can trade across various territories. From their online trading platform, they operate in the following countries.
- Hong Kong
Through their broker-assisted trades they also have:
- Chinese B Shares
You can also trade in Australia, Canada, New Zealand, the UK, and the USA with OCBC. However, these markets have rates that are generally too high to be competitive making it a no-go territory for many investors.
Phillip Capital Singapore
Phillip Capital is another major player in the offshore stock brokerage industry in Singapore. They offer a wide range of markets across the Southeast Asian region. Their Asian markets have good prices, just like OCBC. Also like OCBC, they have been noted for their good customer service.
Among their offered markets, the ones available online are Malaysia, Singapore, Hong Kong, and Thailand. Then for broker-assisted trading, there are Chinese B shares, Korea, Indonesia, Japan, Sri Lanka, the Philippines, and Taiwan. Sri Lanka is an interesting one as many may not even think about this country when it comes to investing. Phillip Capital was the first multimarket stock broker to offer trades in Sri Lanka to retail investors. Currently, it is one of only two offshore stock brokers to operate in that market.
Like OCBC, Phillip Capital also caters to Australia, Canada, the UK, and the US. However, the rates are rather expensive and so make them uncompetitive. Especially when compared to other international brokerage firms that trade in those markets.
Hong Kong Offshore Stock Brokers
Hong Kong is another financial center that is home to firms with a broad reach across Asia. The country has established itself as one of the financial hubs in Asia.
Boom is a pioneer in the Asian region for connecting investors with opportunities in many countries across the world. The offshore stock brokerage house launched its online platform in 1997. In 2010, it was acquired by the Monex Group based in Japan. Boom Securities offers extremely good reach in markets across Asia on its online trading platform. As such it is a popular choice for international investors looking to get into regional multimarket accounts.
It offers trades in almost many major financial markets especially in Japan after the takeover.
Phillip Securities Hong Kong
This is a popular independent firm that offers a good range of markets across Asia through their online platform and by telephone. They have similar pros to their sister firm, Phillip Capital Singapore. However, they have a few key differences. For one, Phillip Securities Hong Kong offers a diverse range of markets than the one being offered at their Singapore brokerage house.
Investors can take their pick from all the traditional markets like Australia to Japan, Thailand, and more. Although their sister firm may offer more markets overall, it is still worth considering. Phillip Securities is one of the few offshore stock brokers around that offers access to various international markets. This is a great option in the sense that they are one of the few that provides investors the opportunity to invest in Japanese markets besides their capital, Tokyo.
This is by no means a comprehensive or even very exhaustive list. But it can help you explore some of the options of good offshore stock brokers around the world. As always, it is important to do your research and talk to people with experience in trading with international brokerages before making any decisions.
Also, be aware that this might not be for everyone. Many investors never open brokerage accounts abroad, and there are valid reasons not to. It can be a big challenge to step into unknown territory. This guide will help you build a good group of multimarket stock brokers to expand or diversify your portfolios with minimum hassle, and at reasonable costs.