How can Taiwanese investors buy US stocks in the most cost-effective way? Re-entrustment vs. overseas brokerage commission fee comparison

Want to buy US stocks in Taiwan but get dizzy from the fees? Don’t worry, this article will clarify the two main investment paths and show you exactly where every dollar goes.

Two Ways to Buy US Stocks: Repurchase Authorization and Overseas Brokers

What is repurchase authorization? Simply put, it means you authorize a Taiwanese broker to purchase overseas stocks on your behalf. After opening an account with a domestic broker, the broker acts as an intermediary to buy and sell US stocks for you. Because it involves two layers of authorization, it’s called “repurchase authorization.” The biggest advantage is that you can deposit New Taiwan Dollars directly, without converting to USD yourself, saving a lot of hassle.

But everything has pros and cons. The transaction fee for repurchase authorization usually ranges from 0.15% to 1% of the transaction amount, which is relatively high. Common brokers offering repurchase authorization include Fubon, Cathay, Yuanta, CTCB, and KGI, each with different rates and minimum charges.

How about playing with overseas brokers? It’s like opening a brokerage account directly in the US, placing orders yourself to buy and sell US stocks without going through a Taiwanese broker. The advantage is lower fees, with many offering zero commissions. The downside is you need to exchange currency into USD yourself and transfer funds from Taiwan to overseas, which incurs currency exchange fees and remittance costs.

The True Cost of Buying US Stocks: Not Just Fees

Many people only look at the fee percentage, but there are also many hidden costs.

Cost components of repurchase authorization:

1. Transaction commission — This is the main part. The rate is usually between 0.25% and 1%, but the key is the minimum fee. For example, if you buy $1,000 worth of stocks, at 0.3% you’d pay $3, but if the broker’s minimum is $25, you actually pay 2.5%, which is much higher.

2. Exchange regulation fee — Collected by the US Securities and Exchange Commission (SEC), paid only when you sell, at a rate of 0.00051% of the transaction amount. Most repurchase authorization brokers include this fee in the total fee, so you don’t see it listed separately.

3. Transaction Activity Fee (TAF) — Collected by FINRA, also paid when selling, calculated at $0.000119 per share, with a minimum of $0.01 and a maximum of $5.95.

Cost components of overseas brokers:

1. Trading commissions — Most mainstream brokers now offer zero commissions, which is a big advantage.

2. Currency exchange fees — When converting NT dollars to USD, banks charge a fee. Usually around 0.05%, but watch out for minimum fee limits (typically NT$100 to NT$600).

3. Remittance fees — The cost of transferring funds from Taiwan to the overseas broker, varies by bank, roughly NT$100 to NT$900 per transfer.

4. Withdrawal fees — Some overseas brokers charge an additional fee of $10 to $35 when you withdraw funds.

5. Margin interest — If you buy stocks on margin, the broker charges interest.

6. Taxation — Regardless of the method, any cash dividends from US stocks are subject to a 30% withholding tax.

How do major repurchase authorization brokers charge?

According to the latest data in 2025, the fees are as follows:

• Fubon Securities: 0.25%–1%, minimum $25–$50
• Cathay Securities: 0.35%–1%, minimum $29–$39
• Yuanta Securities: 0.5%–1%, minimum $35–$100
• CTCB Securities: 0.5%–1%, minimum $35–$50
• KGI Securities: 0.5%–1%, minimum $35
• E.SUN Securities: 0.4%–1%, minimum $35–$50
• KGI Securities: 0.5%–1%, minimum $35

It can be seen that Fubon Securities has slightly lower rates, but the minimum charges are similar across brokers.

How do overseas brokers and banks charge?

Most major overseas brokers now have zero trading commissions. For example, IB, Futu Securities, First Trade, Charles Schwab, etc., all offer zero commissions. Withdrawal fees range from $0 to $25.

Regarding bank exchange and remittance fees, major banks like Bank of Taiwan, UnionBank, Taipei Fubon Bank charge similar rates: exchange fee of 0.05%, telegraph fees NT$100–NT$120, and handling fees usually capped at NT$800–NT$900.

Who is cheaper for buying US stocks: the fees comparison?

Let’s do a simple calculation with the cheapest options. Assume:

• Repurchase authorization with Fubon Securities (0.25% commission, no minimum fee)
• Overseas broker with zero commission plan
• Currency exchange via Taiwan Bank (0.05% fee, NT$200 telegraph fee)
• USD exchange rate at 1:30

Small transaction (buying $1,000):

• Repurchase authorization: $2.5 + approx. $6.67 telegraph fee = $9.17
• Overseas broker: remittance fee + telegraph fee ≈ $6.67

It seems overseas broker is cheaper, but add a one-time remittance fee (~NT$100 ≈ $3.33), total about $10.

Large transaction (buying $10,000):

• Repurchase authorization: $25 + telegraph fee + regulation fee ≈ $35
• Overseas broker: remittance fee + exchange fee + regulation fee ≈ $11.67

At this point, overseas broker is clearly cheaper.

Trading frequency matters: If you plan to trade 4 times (buy 2, sell 2), with $10,000 capital, the repurchase authorization costs $100 in fees (25×4), while the overseas broker only pays once for remittance, totaling about $11.67. The difference becomes obvious.

How to choose? Based on your trading habits

Use repurchase authorization if:

• Trading amount is small, under $6,000
• Trading is infrequent
• You prefer convenience and direct use of NT dollars
• You want the protection of Taiwan’s financial regulatory framework

Use overseas brokers if:

• Trading amount exceeds $6,000
• You plan frequent trading to lower per-trade costs
• You want the advantage of zero commissions
• You are willing to manage USD accounts yourself

Summary

The cost of buying US stocks doesn’t have an absolute winner; it depends on your trading scale and frequency. Repurchase authorization is convenient but has higher fees, suitable for small investors; overseas brokers are cheaper but more complex, suitable for frequent traders. Understand these fee details and choose according to your investment habits to truly save money.