Taiwan Investors Must Read: Proprietary Trading vs Overseas Brokers—The Big Reveal of US Stock Trading Fees

2025-12-24 17:08:02

Many Taiwanese want to trade US stocks but are stuck on two issues: “Should I choose a cross-border agency or open an account with an overseas broker?” and “Which method is the most cost-effective?” Today, we will address these questions once and for all, using real numbers to show you how to choose the most economical option.

Which path to take? The fundamental differences between cross-border agency and overseas brokers

Cross-border agency (also known as entrusted trading of foreign securities) means you open an account with a domestic broker (like Fubon, Cathay, Yuanta, etc.), and they act as your agent to place orders in the US stock market. Since your order passes through two layers—“domestic broker → US stock market”—it’s called “cross-border agency.”

The advantages are clear: deposit in TWD directly, no need to exchange currency yourself, and your account is protected by Taiwan’s Financial Supervisory Commission. The downside is higher fees, usually between 0.15% and 1% of the transaction amount, with significant variation among brokers.

Overseas brokers are straightforward—you open an account directly with a US broker (like Mitrade, Interactive Brokers, Futu, etc.), place orders yourself, skipping the domestic broker intermediary. Most overseas brokers now offer zero or very low commissions, making them friendly for frequent traders. The cost is that you handle currency exchange and remittance yourself, which can add up.

How are the costs of cross-border agency and overseas brokers calculated?

For cross-border agency, your costs are divided into two parts:

Part 1: Direct broker fees

Trading commission: usually 0.25% to 1% of the transaction amount, but almost all have a minimum fee ($25–$100 USD). For example, buying $1,000 worth of US stocks at 0.3% should cost $3, but if the minimum is $25, you pay 2.5%!
Other service fees: remittance fees, paper statement fees, etc. (usually negligible).

Part 2: Hidden costs

Exchange fee (SEC fee): charged only when selling, at 0.00051% of the transaction amount, collected by the broker and passed to the US SEC.
Trading activity fee (TAF): also only when selling, $0.000119 per share, with a minimum of $0.01 and a maximum of $5.95.
These two fees are usually included in the broker’s commission and not itemized separately.

Using an overseas broker involves more cost items:

Trading commissions: most mainstream brokers now offer commission-free trading, but confirm this.
Currency exchange fee: bank fee, usually 0.05% of the exchanged amount, with minimum fees ranging from $100 to $600 TWD.
Remittance fee: bank charges for transferring from Taiwan to overseas, ranging from $100 to $900 TWD.
Withdrawal fee: some brokers charge $10 or more per withdrawal.
Margin interest: only applicable if using margin accounts.
Exchange and activity fees: same as cross-border agency (charged when selling).

Additionally, for stocks paying dividends, a 30% withholding tax on cash dividends applies (partial tax refunds possible).

How do major cross-border agency brokers charge?

Below are the 2025 fee rates for major Taiwanese brokers (subject to change; confirm with customer service):

Broker	Order Fee	Minimum Price
Fubon Securities	0.25%–1%	$25–$35

Cathay Securities	0.35%–1%	$29–$50
Yuanta Securities	0.5%–1%	$35–$39
CITIC Securities	0.5%–1%	$35–$100
KGI Securities	0.5%–1%	$35–$50
E.SUN Securities	0.4%–1%	$35–$50
Yuanta Fubon Securities	0.5%–0.7%	$35–$50
KGI Securities	0.5%–1%	$50
Yuanta Securities	0.5%–1%	$35

What do overseas brokers’ fees look like?

Major overseas brokers have significantly reduced trading costs:

Broker	Order Fee	Minimum Price	Withdrawal Fee
Mitrade	$0 commission, $0 fee	No minimum	None
Interactive Brokers	$0.005/share	$35	None
Futu Securities	$0.0049/share	$0.99	None
First Trade	$0	$1	None
Charles Schwab	$0	$25	None

Bank currency exchange and remittance costs (using banks like Taiwan Bank, UnionBank, etc.):

Bank	Exchange Rate Fee	Telegraph Fee	Minimum Fee	Maximum Fee
Taiwan Bank	0.05%	$15	$120	-
UnionBank	0.05%	$200	$100	$800
Taipei Fubon Bank	0.05%	$300	$100	$800
Taishin Bank	0.05%	$300	$120	$800
Mega Bank	0.05%	$300	$120	$800

Which is cheaper? I’ve done the math for you

Comparing the cheapest options (cross-border agency with Fubon at 0.25%, overseas broker Mitrade with zero commission, and using Taiwan Bank for currency exchange):

Remittance Amount	Cross-border agency fee	Telegraph fee	Exchange fee	Total	Overseas broker total
$1,000	$2.50	$3.33	$3.33	$9.16	$300
$3,000	$7.50	$3.33	$10	$20.83	$10
$6,000	$10	$3.33	$15	$38.33	$20
$10,000	$10	$3.33	$25	$61.33	$11.67
$20,000	$33	$3.33	$50	$120.33	$16.67

(Note: USD to TWD exchange rate assumed at 1:30)

Key finding: When single transaction amounts exceed $6,000, overseas brokers become more cost-effective.

But there’s a hidden condition—this table assumes only one transaction. If you make 4 transactions per month (2 buys and 2 sells), the situation reverses: for $10,000, cross-border agency costs $100 (e.g., $25×4), while overseas brokers, having paid a one-time remittance fee of $11.67, will have no further commissions or remittance costs for subsequent trades. For frequent trading, overseas brokers are clearly better.

How to choose? A simple rule of thumb

Suitable for cross-border agency if:

Transaction amount is small (under $6,000)
Low trading frequency (less than 2 times per month)
Want simplicity, one TWD account handles everything
Need frequent access to funds

Suitable for overseas brokers if:

Large single transactions (over $6,000)
High trading frequency (active monthly traders)
Willing to spend more effort on currency exchange and remittance
Want more trading tools and leverage options

Overseas brokers often offer a wider range of investment products, faster execution, and real-time order placement—additional value for serious investors. Cross-border agency’s advantages are simplicity, fund safety under Taiwanese regulation, and no language barriers.

Summary

Taiwanese investors mainly have these two options for US stock trading. Cross-border agency suits beginners and small investors—simple process but higher fees. Overseas brokers are better for large and active traders—lower costs but require handling currency exchange. The core difference: cross-border agency uses domestic broker as an agent, overseas brokers allow direct order placement. From a pure cost perspective, overseas brokers are more advantageous for large and frequent trading, while cross-border agency is more economical for small, occasional trades. Choose based on your trading habits and capital size—don’t get stuck in endless choice—what matters most is to start investing, not to keep debating the perfect method.

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