How To Setup A Singapore Offshore Brokerage Account in 2022 – that will be the topic of today’s article.
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Table of Contents
Singapore Offshore Brokerage Account—Many international investors hold an account with a stockbroker in Singapore or Hong Kong. This enables people to invest cheaply and readily in Asian markets while conducting business in English with respectable firms in a sophisticated financial centre.
Singapore is the most straightforward alternative for offshore accounts, and it is on this topic that this article will concentrate. The international stock broker guide, on the other hand, provides a comparison of the finest Hong Kong stock brokers, and one of those would be an excellent choice as well.
The good news is that establishing a non-resident Singapore stock brokerage account is simple. Foreign clients of all sizes are welcomed by the majority of stock brokers. You don’t need to spend tens or hundreds of thousands of dollars — a few thousand will suffice.
If you’re a US citizen or resident wishing to open a financial account anyplace else in the world, read this article to learn about the additional challenges you’ll face. However, it appears that some Singapore brokerages will continue to work with you for the time being.
Choosing a Singapore Offshore Brokerage Account
Choosing a brokerage firm is, of course, the first step. In Singapore, there are eleven stock brokers who deal with retail investors, with the majority of them accepting non-residents (possible exceptions appear to be Citibank Brokerage and Standard Chartered).
The worldwide stock broker guide and Singapore stock broker comparison table have details on all of them, and you should shop around to find what suits you best. For many international investors, however, OCBC Securities or Phillip Securities will likely be the best option.
These two have the widest selection of markets, as well as the most reasonable fees and commissions. They also have good customer service and knowledgeable employees, while none of the Singapore brokers appear to be particularly terrible in this regard.
According to reports, OCBC Securities presently welcomes American nationals and residents, and some of the others may follow suit in the future (one exception is DBS Vickers, which explicitly states that it does not). Residents of the United States will not be able to trade US markets using their Singapore account, but they should have no limits on which markets they can access.
How to register a brokerage account in Singapore
In Singapore, the most convenient way to open a brokerage account is in person. If you’re planning a trip there anytime soon, it’s a smart idea to register an account before you travel.
If you haven’t planned a trip yet, you might want to do so for your next vacation. That may appear expensive, but it will save you a great deal of paper. When creating an overseas account, it’s also a good idea to go to the company and see an account representative in person to get a better sense of where your money is going.
You must go to one of the stock broker’s customer service centres. Most of the companies have offices in the financial area, near the Raffles Place MRT station.
Church Street is where OCBC is, Cross Street is where DBS Vickers is, Robinson is where Phillip is, and Market Street is where Kim Eng is. The odd example is UOB Kay Hian, which used to be located in the UOB building across from OCBC but has since relocated its broker centre to Anthony Road (Newton MRT stop).
You normally don’t need to make an appointment; simply show up and wait your turn. Your passport will be required for identification, as well as proof of your overseas address in some cases (eg bank statement or utility bill). Before going to Singapore, make sure to verify with the company you’ve chosen to see if their criteria have changed recently.
You should set out an hour or so to open the account, which entails filling out a variety of documents. You’ll also need a personal account with the Singapore Central Depository (CDP), which keeps track of who owns which shares, in addition to the brokerage account.
You’ll also need a personal account with the Malaysian depository if you wish to trade Malaysian stocks. You’ll almost certainly be required to fill out US form W-8BEN, which permits you to receive US dividend payments with a reduced withholding tax rate of 15% instead of 30%.
The account representative will assist you in simultaneously completing all of these forms. Be aware that if your everyday signature differs from the one on your passport, you should practise getting them to match before entering.
Firms are exceedingly cautious about ensuring that signatures match due to local requirements. It’s possible that you’ll be asked to sign some forms numerous times until the representative is satisfied that they’re comparable enough.
It is possible to open a Singapore brokerage account by mail for foreign investors. You should verify with the firm you intend to employ about their requirements, but the most important thing is to have all of your account opening forms and copies of your identification documents confirmed by a lawyer or notary.
Using Your Account With A Singapore Stock Broker
Some markets are available online at all businesses, but you will be assigned a trading agent. He or she will execute your orders if you want to trade a market that isn’t available online.
These broker-assisted orders can be placed over the phone or via email. For international clientele in different time zones, the latter is usually more convenient.
If you have any questions about your account, you should contact your trade agent first. A good one will also provide you a regular supply of Singapore market research notes.
Foreign clients are normally required to deposit a minimum amount of money in their account before they can trade. This provides some protection in the event that you buy a significant number of shares and then fail to pay by the settlement deadline.
You won’t have to pay this on the spot; you’ll be able to transfer it afterwards. However, you will not be able to trade until the deposit has been made.
The average deposit is S$2,000, which is not tradeable and must be kept in cash. Phillip Securities requires a minimum deposit of S$5,000, which can be invested in the market.
In Singapore, you need not need a bank account to open a brokerage account. You can send money straight to your stock broker, and you can keep spare cash in your trading account, which is normally in many currencies.
You should be able to transfer money from your home account to your bank account. However, as stated in this article, employing a specialised currency transfer service may result in a better exchange rate and reduced fees.
It is, however, straightforward to open a non-resident bank account in Singapore, and it makes sense to do so at the same time. When it comes to paying in and withdrawing money, having a bank account gives you more options.
The three local banks (DBS, OCBC, and UOB) as well as Citibank are members of the Electronic Payment for Shares (EPS) system, which allows you to transfer money from your bank account to your brokerage account the next day. If your stock broker is one of the three bank-owned firms, sticking with the same bank makes sense because transactions are faster and easier.
See the article on opening a Singapore bank account for further information. OCBC Securities is a good choice among banks, which is another incentive to use OCBC Securities for stock broking. OCBC’s broker centre and main bank client centre are conveniently located near the Raffles Place MRT station for visitors.
How To Keep My Money Safe And Secure In Singapore
When opening a foreign brokerage account, it’s critical to consider how secure your cash will be. The investor protection legislation of your home country will not apply to this account; instead, the rules of the nation where the stock broker is located will apply.
Singapore’s financial sector is complex and well-regulated, with high-quality financial institutions. The Singapore Exchange (SGX) and the Monetary Authority of Singapore (MAS), the country’s central bank, are in charge of stock market and stock broker regulation and monitoring.
If a stock broker goes bankrupt and your securities or money goes missing, the SGX’s Fidelity Fund will compensate you up to S$50,000 (covering trades done on the Singapore Exchange only). Obviously, this only applies to funds lost as a result of a business failure or fraud. Any investor protection scheme in the world will not reimburse you for losses you incur when trading the markets.
However, you shouldn’t rely on investor reward plans in the first place; instead, choose a reputable stock broker. Singapore banks hold DBS Vickers, OCBC Securities, and UOB Kay Hian, all of which are reputable and well-run businesses. In a worst-case scenario, the Singapore government’s assistance is quite likely.
Kim Eng and Phillip Securities are well-known independent brokerages with a lengthy history. Maybank, a Malaysian bank, has purchased Kim Eng, but Phillip remains independent.
All major credit rating agencies have given Singapore’s government the top AAA credit rating. It has a lengthy track record of fiscal discipline and sound financial management.
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