It can feel like a huge leap to buy US equities from Malaysia, but it's actually simpler than it looks. Many assume that trading in the US market is difficult, but it's actually pretty easy if you follow these steps. Here's how to get a piece of huge names like Apple or Tesla, whether you want to spread your risk or just like to hold part of these giants.
To start, you'll need a trading account that allows global investing. tax on US stocks Malaysia
Some of the best platforms for overseas investors are Charles Schwab. The key is to select a platform that has reasonable charges and provides access to US markets. Most of the time, these brokers allow you to open accounts digitally, but you'll need to submit certain papers to prove who you are and where you live in Malaysia. So, remember to have ready your IC/passport plus address verification!
Next, you'll need to fund your account. At this point, things can get a little problematic. Most of the time, you'll be moving money from your Malaysian bank account, and some brokers accept MYR deposits. Some people might ask you to exchange your money to USD before sending it. In either case, the process can take some time, so don't rush it. Before you start trading, double-check your account is ready to use.
You can buy your first US stock as soon as you put money into your account. You can trade equities in the same way you would at a local store: search for the stock, decide the number of units you want to buy, and execute the purchase. Some brokers also let you buy fractional shares, which means you don't have to buy a whole share if you're a beginner or don't have large funds to invest.
When you start buying US equities, there are a few things you should keep in mind. First, you should be aware of how this would affect your tax obligations. Malaysia doesn't tax capital gains, but the US government might deduct taxes on returns. The tax rate is usually around 30 percent, but if you're a foreign investor, you can often lower it by sending a W-8BEN form to your broker. This form confirms that you live outside the US and helps you get a lower tax rate under the US-Malaysia tax treaty.
The time zone difference is another thing to keep in mind. If you wish to trade during peak periods, you'll need to change your schedule because the US stock market is open during US business hours. Just note the market hours, and you'll be good to go.
Lastly, the value of your equities will depend on the MYR-USD rate between MYR and USD. If the Ringgit loses value compared to the dollar, it can reduce your returns to acquire the identical stock. You should always monitor the conversion rate so you know when it's time to turn your Ringgit into dollars.
To sum up, it's simple to buy US stocks from Malaysia if you take the right steps. Simply choose a trading platform, add money to your account, buy the stock, and keep a watch on your taxes and the exchange rate. Happy investing!