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  #101  
Old 30.09.2016, 15:32
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Re: Swissquote (online broker) - any good?

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They charge 0.12% for European ETF trades plus the Swiss stamp tax 0.075%. So investing 100 000 CHF would cost 100000*(0.12%+0.075%) = 195 CHF. Of course, if some day I would like to start withdrawing, then the same commission would apply to selling.

Alternatively, buying US ETFs costs 2 cents per share. So buying 1000 shares at 100 USD per share (or at any other price) would cost 20 USD.
Both are a bit worse than IB pricing: Europe - similar 0.1-0.12% but no swiss stamp tax at least, US - $0.005 per share.

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I didn't consider to go with IB, because I don't know if it does not have some FATCA implications and Swiss banks don't like that.
I'm sure there's FATCA in UK too, not only Switzerland, and as an US-origined company, IB is well aware of what they have to do to US citizens under it. I don't see where the swiss banks come into equation here at all.

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I wonder why do they sell US ETFs in Europe when in USA they are so much cheaper to buy? Why would anyone buy it in Europe? Withholding tax reasons?
At the end of the day it'll be the same security no matter through which exchange you've bought it. Why they sell it here - maybe because they can and have a way to derive profit from it. It doesn't cost anything if the sale doesn't go through. Also nore that European markets have different openings times from US.
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  #102  
Old 01.10.2016, 11:37
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Re: Swissquote (online broker) - any good?

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I'm sure there's FATCA in UK too, not only Switzerland, and as an US-origined company, IB is well aware of what they have to do to US citizens under it. I don't see where the swiss banks come into equation here at all.
I don't know why you mention UK. I thought IB was a US broker? FATCA is a US tool designed to make sure that all taxes due to US are paid. It works worldwide. Many banks will not accept clients who have anything to do with USA, like hold US citizenship, work permit, or even have an account there.

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At the end of the day it'll be the same security no matter through which exchange you've bought it. Why they sell it here - maybe because they can and have a way to derive profit from it. It doesn't cost anything if the sale doesn't go through. Also nore that European markets have different openings times from US.
That's not entirely true. I am speaking for example about Vanguard's ETF's which are domiciled in Ireland. They have billions of dollars invested in them. For S&P 500 you have VOO in USA and VUSA in Ireland. So maybe you mean that underneath they own the same stocks. Sure. But why are people buying the Ireland domiciled fund, when it is 10 times more expensive in fees?
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  #103  
Old 01.10.2016, 15:27
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Re: Swissquote (online broker) - any good?

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I don't know why you mention UK.
Their UK branch normally deals with Swiss customers. At least this is so for me

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Many banks will not accept clients who have anything to do with USA, like hold US citizenship, work permit, or even have an account there.
How's that a concern in opening an account with IB, especially if with IB US? They're a US broker, so presumably have substantial share of all kinds of US citizens and know exactly what to do

For your banking needs you presumably already have a Swiss bank that's happy to have you here.

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That's not entirely true. I am speaking for example about Vanguard's ETF's which are domiciled in Ireland.
I thought you were talking about buying the same security through different exchanges, US vs EU exchanges.

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For S&P 500 you have VOO in USA and VUSA in Ireland. So maybe you mean that underneath they own the same stocks. Sure. But why are people buying the Ireland domiciled fund, when it is 10 times more expensive in fees?
Taxes can be a reason.

Withholding tax is different from country to country. And whether you can claim it back and how much too. AFAIK for US dividends you can only claim 15% back, the rest stays in US. If you pay taxes to US probably this is however irrelevant to you anyway because your US taxes are much bigger than Swiss.

Then there's US estate tax an important consideration for retirees.

For reinvesting ETFs, the hidden taxable dividend amounts can also be different for different funds from the pov of Swiss tax authorities - they depend not only on holdings, but structure and actions of the fund.

Last edited by ivank; 01.10.2016 at 15:37.
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  #104  
Old 03.10.2016, 17:56
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Re: Swissquote (online broker) - any good?

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Withholding tax is different from country to country. And whether you can claim it back and how much too. AFAIK for US dividends you can only claim 15% back, the rest stays in US. If you pay taxes to US probably this is however irrelevant to you anyway because your US taxes are much bigger than Swiss.

Then there's US estate tax an important consideration for retirees.
US estate tax is something I didn't even have on my Radar. I guess it Needs a lot of reading to understand it.

Regarding FATCA: if you have an account in USA by IB, you might need to inform your Swiss bank about it. Then it might ask you to close your account. I'm not sure if it's like this, just thinking aloud.

Sure, IB seems to be extremely cheap, especially if you have more than 100 000 invested. But on the other Hand, with my investing plan, I should not spend more than 200 USD per year on my Swiss Broker. It's not the end of the world.
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  #105  
Old 03.10.2016, 18:21
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Re: Swissquote (online broker) - any good?

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Regarding FATCA: if you have an account in USA by IB, you might need to inform your Swiss bank about it. Then it might ask you to close your account. I'm not sure if it's like this, just thinking aloud.
Well, I'm not a US citizen, I hope to stay this way, so not really motivated to learn about FATCA... but I find it hard to believe that it would actually outlaw having accounts in whatever countries you please. Isn't FATCA supposed to be merely about the reporting of such accounts to the IRS?
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  #106  
Old 04.10.2016, 11:38
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Re: Swissquote (online broker) - any good?

IB in Europe is based in the UK not the US.
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