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Oct 18 2012

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Expatriate Investing Without Flying To Singapore





People working overseas are often left with a cesspool of investment options.

And most of them don’t realize how unfortunate most of those selections are.  They often get roped into paying high mutual fund costs.  Or worse, they get accosted by horrendous, costly commitments, thanks to salespeople representing firms like Zurich International and Friends Provident.

Through education, we can limit the exploitation, and ensure that people earn the investment results they deserve.

Overseas Americans can choose one of five options presented in this post.

Canadians, Australians, New Zealanders and Brits (along with any other non American nationality) can choose to invest in low cost exchange traded funds, as long as they can find a reasonably low cost brokerage.

Until recently, I presumed that if a non American expatriate wanted to open an investment account in Singapore, they would need to fly here to do so. 

Many expats working in Vietnam, Malaysia and Thailand did just that.  They opened accounts with DBS Vickers, and followed the instructions under one of my expat investing posts.

An expat named Harold explains:

If you reside outside of Singapore AND OUTSIDE OF CANADA you can set up a DBS Vickers account WITHOUT having to travel to Singapore if you get the signatures on your application (downloadable online) notarized.




As an Expat Canadian you have to request a special declaration form (just call them and they’ll send it to you by email) that confirms you are a permanent resident outside of Canada.

I spoke with them and they can accept telegraphic transfers from outside Singapore so I can electronically send money to DBS Vickers who will then credit my account with the appropriate funds. I suspect that it’s best to convert your funds (which ever currency you’re dealing with, in my case UAE dirhams) to the currency of the Stock Exchange you wish to trade in (CAD/USD/HK) before transferring so you don’t pay conversion charges twice.

Please open this link to read how an expat Canadian in Japan opened his DBS Vickers account without flying to Singapore.  

Cheers,

Andrew





About the author

andrew hallam

I'm a freelance finance writer, lucky enough to have been nominated as a finalist for two Canadian National Publishing Awards. I'm also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School, a book explaining how I became a millionaire on a teacher's salary, while still in my 30s. Working to empower people financially, I'm available to motivate and inspire people on basic retirement planning and index investing. I'm happy to comment on your questions, first, please read the Terms of Use.

Permanent link to this article: http://andrewhallam.com/2012/10/expatriate-investing-without-flying-to-singapore/

48 comments

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  1. avatar
    Leonardo Pabroquez J

    Noted. Will follow this one!

  2. avatar
    M

    me too. we live in china i was almost going to make that trip this winter break!

  3. avatar
    Andre Ooi

    HI. I'm a big fan of yours and big fan of index investing. I believe your method totally makes sense.

    I'm Malaysian residing in Malaysia.

    Recently i've enquired about setting up trading account with DBS vickers.

    However i understand that singapore ETF is specified investment product (SIP). and that not everyone can buy. One needs to pass exam online etc.

    How did you do it?

    1. avatar
      Hafiz

      Hi Andre, I was wondering if CIMB or MAYBANK trading accounts will not be suitable for trading ETF's in Malaysia? All this time I was wondering why DBS vickers? Thanks

      1. avatar
        Andre Ooi

        Hafiz,

        are you able to trade ETFs in SGX, NYSE using online platform and not through phone? using CIMB or MBB.

  4. avatar
    yannick thevenot

    hi,

    i'm a french national, living in Thailand. I can confirm that DBS Vickers is ready to open an account for me without visiting Singapore, as long as i don't want to trade on Singaporean market. (in that case you need a local bank account which seems to require a visit to Singapore).

    In addition to what is said before, you can your signatures on your firms certified by your local DBS Vickers office. I confirmed that in Thailand they have an office with a person authorized to certify your signatures (it is advised to make an appointment before).

    I'll update this again once i have my account open.

    kind regards,

    Yannick

  5. avatar
    Leonardo Pabroquez J

    Hi Andrew. Hi All!

    Which of these brokerage is better (in Singapore):

    DBS Vickers OR Standard Chartered

    Because from the other thread, you mentioned about Standard Chartered?

    Any of you guys here have tried these brokerages?

    Thanks a lot! More power to you Andrew! (reading now your "Nine Laws to Financial Freedom" pdf file)

    ———————————–

    Andrew Hallam says:

    August 31, 2012 at 5:29 am (UTC 8 )

    Reply

    Great stuff! I wish there were more options throughout SE Asia, but jmondejar is right. You’ll have to come to Singapore to do it. Give the Standard Chartered brokerage a close look. They charge less for smaller investment deposits.

    ———————————————

  6. avatar
    Hafiz

    You are right. You can not trade ETFs online, only through phone.

  7. avatar
    Chris

    Hi all,

    Is it possible to set up a brokerage account as mentioned here in Hong Kong instead of Singapore? I have bank accounts with Standard Chartered in HK already although I do not live there.

    Thanks for any advice.

    Cheers

  8. avatar
    Hafiz

    Hi Andrew

    Trading Vanguard ETF’s is only a phone call away, can’t trade online.

    Aside from this inconvenience, what are the other benefits of opening DBS Vickers account in Singapore? Here the brokerage fees are 0.60% (or min US$25), bank charges RM20, and stamp duty 0.1%(max RM 200). What are the fees and commissions at DBS Vickers? Are they cheaper?

    Secondly, are there any associated withholding taxes, such as dividend tax or capital gain tax for having Vanguard ETF’s for non US/Canadian citizens?

    Many thanks in advance.

    1. avatar
      Andrew Hallam

      Hi Hafiz,

      The trading costs are DBS Vickers are 0.35% for U.S. ETFs and 0.55% for Canadian ETFs.

      You want just want to invest where you are.

      There's one other very interesting component to fees, however, that I need (at some point) to do some research on for a comprehensive blog post. It relates to bid/ask currency spreads. Standard Chartered bank, in Singapore for example, charges a pittance in commissions for purchases. But when you convert money from Singapore dollars to U.S. dollars (this happens automatically when you purchase a U.S. ETF) the exchange rate spread is quite wide. So the question is…which brokerage is actually cheaper, DBS or Standard Chartered? When I have some time, I will find out. And this might be of interest to you as well. You could research your own bank and put it side by side with DBS Vickers,

      Cheers,

      Andrew

      1. avatar
        Hafiz

        Hi Andrew.

        It is much easier mow to make some comparison.

        My second questions is if there are any associated withholding taxes, such as dividend tax or capital gain tax for having Vanguard ETF’s for non US/Canadian citizens?

        Many thanks in advance.

  9. avatar
    albert

    Hi,

    Im interested to know how it's possible to set up a DBS Vickers brokerage account without being present in Singapore.

    I'm an Indonesian citizen & resident, and I have just got confirmation from DBS Vickers Singapore that I would have to be present when opening the account. I'd need to open a regular savings account (in SGD), and at the same time open the brokerage account with DBS Vickers.

    Can anyone confirm that we can open an account without being present in singapore?

  10. avatar
    albert

    I have contacted dbsvickers in sgp and they told me that i should be present in singapore to open an account.

    I have told them and i have read in an online forum thats its possible to open th account

    From outside sg, but they said its impossible.

    Can anyone let me know how you were able to do so?

    Cheers

    1. avatar
      Andrew Hallam

      Definitely call them back Albert. You will likely end up with a different representative. Check through the comments above for some specifics you can give them. It can be done! Others before you (as you'll read above) have been told "no" until they pressed the issue and/or spoke to a more knowledgeable rep.

  11. avatar
    Andrew Hallam

    As a Malaysian residing in Singapore, you may not need to take the exam if you plan to buy ETFs off the New York Stock Exchange, via DBS Vickers. Have you called DBS to ask them?

  12. avatar
    PJ

    Is DB Vickers still a good option in comparison to other trading houses considering the recent posts regarding their increase in costs

    1. avatar
      Andrew Hallam

      Hi PJ

      The true costs would be determined by figuring out the currency spreads. I haven't done that comparison yet, so I'm not sure. Currency conversion spread costs dwarf commissions, so the answer (as to the cheapest brokerage) isn't evident when simply comparing commissions. I have been busy doing research for my regular magazine/newspaper columns. But when I have breathing room, I will be tackling this question.

      If you are living outside of Singapore, however, DBS Vickers (I believe) is the only option available to you, so far.

      Cheers,

      Andrew

  13. avatar
    Drew Davis

    Hi Andrew,

    I am a Canadian teacher currently working in Malaysia. I saw your presentation at ISKL last year and read in your book that Vanguard was planning on expanding to Canada.

    As Vanguard now has online ETFs available in Canada, I thought there would be less fees in me sending my money from Malaysia to my bank account in Canada and purchasing the funds from Vanguard rather than going through DBS Vickers in Singapore. (Vanguard's fees seem to be 0.15 compared with 0.3 to 0.55 with DBS Vickers) Am I missing something obvious before I set this up?

    Thanks in advance.

    Drew

  14. avatar
    Hafiz

    Hi Andrew. Just heard about “commission free etfs”. There are several online brokers offering this. Any comments? If they are really “commission free”, then why DBS Vickers make a better choice. Many thanks,Hafiz

  15. avatar
    Hafiz

    Hi Andrew. Just heard about “commission free etfs”. There are several online brokers offering this, like Ameritrade. Are there any hidden fees? If they are really “commission free”, then why DBS Vickers make a better choice? Many thanks, Hafiz

    1. avatar
      Andrew Hallam

      I know that Vanguard won't charge for its own ETFs, but you need to be American to use the Vanguard brokerage. There are other providers doing similar things in Canada. But Singaporean brokerages are far behind their western counterparts. Brokerages are far more expensive in this part of the world. And when commissions in Singapore are low, you can bet that the exchange rate conversions make up the difference.

  16. avatar
    Stephen Maine

    Hi,

    I have recently set up an account with TD Waterhouse based in Belgium. I would like to begin index investing but am concerned that the indexes I want ( UK FTSE and S and P 500) are at their highs. Is this a sensible time to put a large investment into these? Also some of the ETF's are listed as Acc or Inc ( accumulation or income) does it matter which one you buy?

    One last question, you have mentioned before US withholding tax if shares bought on the US exchange, wouldn't it be better then to buy the same share on the UK exchange?

    Thanks

    Steve

    1. avatar
      Andrew Hallam

      Hi Stephen,

      If the expense ratios are low enough for those UK based ETFs, and the with-holding tax is minimal, then you could do that. But I have a feeling that you would have to pay capital gains taxes. If you’re British, living in the UK, there’s no way around that. But if you are a non American expat, you may consider investing where there are no capital gains taxes. An account based in Singapore would work.

      Cheers,
      Andrew

  17. avatar
    JP

    Hi Andrew and all,

    I’m a Canadian teacher living in Cambodia. I really enjoyed ‘Millionaire Teacher’ and I want to get into Index investing as soon as possible!

    Does anyone have any experience with investing from Cambodia?

    From reading various blog posts here I’m still a little confused about the best option for Canadian expats to open a trading account. It seems like DBS Vickers is the only option for expat Canadians not living in Singapore or Hong Kong. However, I read in a different post about DBSV raising their Trading Commissions…does that mean they are no longer a good choice? Do their higher fees make it cost prohibitive to use their services?

    Many thank for all your help,

    JP

    1. avatar
      Andrew Hallam

      They are still an excellent choice JP. I use them myself, and I recommend that you follow this thread to see how you can open such an account here in Singapore.

      Cheers,
      Andrew

  18. avatar
    Alain

    Hi Andrew,
    Transferring money for first time to my DBS online account, very excited. I have started studying which ETF and bonds I will buy. I am a Canadian expat. My question to you is: you are saying that you are investing in canadian ETF and bonds because of eventually you will be going back to live in Canada. So I guess you want to access the money in canadian dollars and not having to convert it from USD for example. But if, as are my plans, I will be outside of canada for another 10 years, why should I pay taxes on all the dividend from canadian investments during all those years? Why not just get US and international ETF and bonds? So that’s my interrogation. Why buy something that you have to pay taxes on dividends in canada. As much as you like low cost investments, I hate paying taxes!

  19. avatar
    Gayathri

    Hi Andrew,

    I am so glad I came by your website. I am an Indian national living in Doha now. Before that I lived in the US. I am looking for options to invest my money as in the middle east you are not paid a pension or do you get a retirement benefit. While in the US my retirement money is in a Schwab account and is invested in ETFs. Unfortunately, as I am not a US resident, I can't add to that pool. Do you know if an Indian expat can invest in DBS Vickers?

    Any ideas or information will be much appreciated.

    Thanks.

    Gaya

    1. avatar
      Andrew Hallam

      I'm glad you found the website too Gaya. Yes, an Indian expat can invest with DBS Vickers as easily as a Canadian (or any other non American) can.

      Let me know how it goes.

      Cheers,

      Andrew

  20. avatar
    JP

    Hi Andrew and all,

    I've followed this thread and have tried to open up a DBS Vickers account without making the trip to Singapore but haven't had much luck. Apparently you can open the DBS Vickers account if you already have a regular bank account in Singapore (and I do not – and can't seem to open one without making the trip).

    I just came across HWANGDBS, which seems like an associated company of DBS & DBS Vickers. Does anyone know anything about this company, ie. whether or not they are legitimate and can be used as a brokerage?

    I live in Cambodia and they have a branch here, so it would be easier for me to use them rather than through DBS Vickers in Singapore.

    Thanks for all your help,

    JP

  21. avatar
    JP

    Hi again,

    After several back and forths, I was able to open up a DBS Vickers account without going to Singapore after all. I had the forms signed and stamped at the DBSV in Bangkok.

    Now I’m a bit confused about the process of transferring funds into the account to get it started. I called them up and they said that I have to send in via Remittance to their HSBC bank account in New York, then email them my name and DBSV account #, then they’ll credit my account. Does this seem right? It seems weird to me that I can’t just TT money into my own account.

    Please advise.

    Thanks.

    1. avatar
      Andrew Hallam

      That does sound weird JP. I’m sorry you’ve had so much trouble with bank staff and their misinformation. Others have been able to wire the money directly to DBS Vickers Singapore from foreign countries. There’s no reason why you shouldn’t be able to do that too.

      1. avatar
        JP

        Thanks for your reply Andrew.

        Can anyone else who is in this boat (using DBSV online based outside of Singapore) please comment on whether or not they have to go through sending remittances to their New York HSBC to deposit funds?

        I refer to the line from their help menu:

        http://www.dbsvonline.com/english/help/Fdelivery.asp?SessionID=&RefNo=&AccountNum=&Alternate=&Level=Public&ResidentType=#3

        Many thanks!

        JP

  22. avatar
    Pamela

    Hi there,

    Just finished reading Millionaire teacher too and keen to start index investing. Great book – thanks.

    Similar to previous questions, I’m an UK ex-pat living in Vietnam – we are likely to go back to the UK in 2/3 years though for good. Would I be best to go with the DBS Vickers account in Singapore, or UK Vanguard account or another UK based platform?

    I think the benefit of doing it in Sing is to avoid the Cap Gains taxes, but since we are going back in 2/3 years, I guess we can’t get around that long-term, so better to start out in the UK?

    Thanks for your advice,

    Pamela

    PS. Also – can anyone recommend a reputable UK-based independent financial advisor, that charges by hourly rates rather than by commission?

    1. avatar
      Andrew Hallam

      Hi Pamela,

      Perhaps the best option for you might be a UK firm. Have you considered the HSBC tracker (index) funds? They’re very cheap, and you could build a portfolio much as I suggested in my book without a financial advisor.

  23. avatar
    Pamela

    Thanks for quick reply Andrew.

    I’ve just had a look at the HSBC tracker funds. Thanks for the tip.

    Looking at these against the UK Vanguard funds, I think Vanguard is still winning for the fees. e.g. 0.1% for the Vanguard FTSE 100 ETF – versus 0.25% for the HSBC FTSE 100 Index fund. I also don’t see an HSBC UK Government Bond Index Fund.

    Any reason not to go with Vanguard?

    I notice Vanguard offers ETFs and Index funds – which seem pretty similar. What’s the difference?

    Thanks again,

    Pamela

    1. avatar
      Andrew Hallam

      Hi Pamela,

      Vanguard’s funds sell through an advisor in the UK. To my knowledge, you can’t buy them directly. The advisor then usually earns an account wrap fee that he or she charges. Going with exchange traded funds will ensure that you have much lower costs overall, buy you would have to buy the ETFs off the stock exchange. As such, you would need a brokerage account. That’s not a big deal; I do it myself. But it does tend to be less flexible and you have to pay a small commission to buy and sell. It is, however, the cheapest option.
      Buying the tracker funds should be hassle free–but yes, the expense ratios are higher with HSBC (but still very reasonable). They do have a bond index as well. It might not say “bond” when you look it up. It might say something like “gilt”. I was confused by that at first (considering that I’m not based in the UK) as I looked on behalf of someone who lived in England.

      I hope this helps.

      Andrew

  24. avatar
    Pamela McGill

    Thanks again Andrew – I really appreciate you taking the time to reply on the specifics – it helps so much. Hey – if you are ever in HCM, dinner’s on me! :-) Are you still teaching in Singapore?

    You are quite right the bond fund is called the “HSBC UK Gilt Index Fund”…

    So what I need to do now is to set up a brokerage account / online trading platform account to get started. I found quite a helpful article on this ‘step’ of the journey:

    http://monevator.com/how-to-buy-index-trackers/

    Is there anything else to look out for when picking the online (execution only) broker or fund supermarket? 1) Fees, 2) Make sure it offers the funds I want to buy, 3) Decent online platform so I can see what I’m doing. What would happen if the broker went out of business?

    Thanks again,

    Pamela

  25. avatar
    Kelly

    Hi Everyone,

    I am a Canadian/Australian residing in the UAE and plan to open a DBS Vickers account in Singapore. I’m hoping to do it without having to fly there. Do I need to open a bank account with them, or just the brokerage account? And will they accept money transfers from any foreign bank? I am grateful for any advice you might have.

    And Harold, if you’re reading this, I would love to know how you went!

    Thanks!

    1. avatar
      Andrew Hallam

      Hi Kelly,

      Let me know if this helps: http://andrewhallam.com/2013/05/an-expat-canadian-in-japan-finds-a-way-to-invest/

      Cheers,

      Andrew

      1. avatar
        Kelly

        Hi Andrew,

        Thanks for that, I had read that article before :)

        I called DBS Vickers earlier today and the man I spoke to told me I needed to come to Singapore since they need a face to face meeting to open an account. I told him about Jon and that he opened an account late last year without coming to Singapore. The rep told me there had been some recent changes to their policies and that I couldn’t open an account without being there.

        So I called back again just now and spoke to a different rep. He helped me answer the few questions about the the application form I had, but he was unable to tell me whether I could open an account from overseas. He told me to call back during the day and to speak to the account opening people. He said there were 2 main questions I needed to ask: 1) whether I need a local bank account and 2) whether my nationalities (Canadian/Australian) are allowed to open accounts. Which I’m pretty sure we know the answer to those questions!

        Anyway, I will call back again tomorrow and try my luck with another rep!

        Thanks for your help :)

        Kelly

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