Analysis of US Stock Investment Costs | Dissecting Custodial vs. Overseas Broker Fees, Who Profits More: Small Investors or Big Players?

How Much Do Taiwanese Investors Really Save When Buying US Stocks?

For those wanting to trade US stocks in Taiwan, most face a choice: place orders through domestic securities firms’ sub-brokerage accounts or open an overseas broker account directly. This decision impacts your wallet significantly, as the cost structures of these two methods differ greatly.

According to the latest data in 2025, transaction fees for sub-brokerage are generally between 0.25% and 1%, but hidden costs like currency exchange and remittance fees are often overlooked by investors. Although overseas brokers claim zero commissions, currency conversion and international wire transfer costs can eat into your profits. This article breaks down the complete cost structure of both methods to help you determine which is truly more cost-effective.

Two Paths to US Stock Investment: Sub-Brokerage vs Overseas Broker

Sub-Brokerage: Convenience with Hidden Costs

Sub-brokerage (Sub-Brokerage) operates simply — you instruct a domestic securities firm, which then executes buy/sell orders abroad on your behalf. Since the order passes through both domestic and foreign channels, it’s called “sub” brokerage.

The biggest advantage is low account opening barriers and hassle-free currency exchange. You just need to open an account with a domestic securities firm, deposit in TWD, and the broker automatically converts to USD for trading—no need to handle foreign exchange yourself. Plus, with Taiwan’s financial regulator overseeing, your funds are relatively secure.

But what’s the cost? Fees. Due to the complex process and multiple intermediaries, transaction costs naturally rise. Besides the 0.25%–1% commission, there are exchange fees (SEC’s 0.00051%), transaction activity fees (FINRA’s TAF, calculated per share), and these small charges are integrated into the overall fee.

Overseas Broker: Flexibility with Complex Procedures

Trading directly through US brokers (like Mitrade, Interactive Brokers, Charles Schwab, etc.) is akin to buying Taiwanese stocks through local brokers—eliminating middlemen and reducing costs. Many mainstream brokers now offer zero commissions, a huge boon for frequent traders.

But freedom comes at a price. You must handle currency exchange yourself (banks charge 0.05%, minimum NT$100–NT$600), perform international wire transfers (bank fees NT$100–NT$900), and some brokers charge withdrawal fees (e.g., $10–$35). When summed up, these costs can be higher than sub-brokerage in the short term.

Breaking Down Every Cent of US Stock Fees

Cost Details of Sub-Brokerage

Direct costs:

• Trading commissions are the main expense, with brokers starting at 0.25%, minimum charges ranging from NT$25 to NT$100.
• Example: Buying $1,000 worth of US stocks with a 0.3% commission costs $3, but if the minimum fee is NT$25 (~$0.83), your actual cost jumps to NT$25 (~$0.83).

Hidden costs:

• Exchange fees (SEC’s fee) are only charged on sell transactions, and are minimal (0.00051%).
• Transaction activity fee (FINRA’s TAF) is also only on sell, calculated per share at $0.000119, capped at $5.95.

Cost Details of Overseas Brokers

Basic trading costs:

• Commissions: most mainstream brokers now offer zero commissions.
• Margin interest: only incurred if using margin accounts; cash accounts are unaffected.

Hidden international costs:

• Currency exchange fee: banks charge 0.05% when converting TWD to USD, with a minimum NT$100–NT$600.
• Remittance fee: bank charges NT$100–NT$900 per wire transfer from Taiwan to overseas brokers.
• Withdrawal fee: some brokers charge $10–$35 per withdrawal. Third-party regulatory fees (same as sub-brokerage):
• SEC and FINRA fees still exist, but their proportion decreases with higher trading volume.

Additionally, for stocks with dividends, a 30% withholding tax applies regardless of the method, though partial tax refunds are possible.

Fee Comparison of Five Major Taiwanese Brokers and Banks

Sub-brokerage brokers (June 2025 data):

• Fubon Securities: 0.25%–1%, minimum NT$25–$35

• Cathay Securities: 0.35%–1%, minimum NT$29–$50

• Yuanta Securities: 0.5%–1%, minimum NT$35–$39

• CTBC Securities: 0.5%–1%, minimum NT$35–$100

• KGI Securities: 0.5%–1%, minimum NT$35–$50

Overseas broker commission structures:

• Mitrade: completely zero commission, zero fees
• Interactive Brokers: $0.005/share
• Futu Securities: $0.0049/share
• Charles Schwab: zero commission

Bank currency exchange and remittance standards:

• Taiwan Bank, Federal Bank, Taipei Fubon, etc.: 0.05% fee rate, telegraph fee NT$100–NT$120, maximum NT$800 per transaction.

Practical Comparison: How to Choose Between $1,000 and $20,000?

Using the lowest-cost combination:

• Sub-brokerage with Fubon (0.25%) + US broker with Mitrade (zero commission) + Taiwan Bank for currency exchange (0.05%)

Small transaction ($1,000):

• Sub-brokerage: NT$25 (~$0.83) commission + NT$3.33 remittance fee + NT$6.67 telegraph fee = NT$35 (~$1.17)
• Overseas broker: $0 commission + NT$3.33 remittance fee + NT$6.67 telegraph fee = NT$10 (~$0.33)
• Difference: overseas broker saves NT$25 (~$0.83), about 20%, but overall similar.

Medium transaction ($6,000):

• Sub-brokerage: NT$75 (~$2.50) + NT$3.33 remittance + NT$6.67 telegraph = NT$85 (~$2.83)
• Overseas broker: $0 + NT$3.33 + NT$6.67 = NT$10 (~$0.33)
• Difference: overseas broker saves NT$75 (~$2.50), about 60%, advantage clear.

Large transaction ($20,000):

• Sub-brokerage: NT$50 (~$1.67) + NT$10 remittance + NT$6.67 telegraph = NT$66.67 (~$2.22)
• Overseas broker: $0 + NT$10 + NT$6.67 = NT$16.67 (~$0.56)
• Difference: overseas broker saves NT$50 (~$1.67), about 75%, huge advantage.

How Trading Frequency Affects the Best Choice

The above comparison assumes only one transaction. But in reality, most investors trade multiple times.

Suppose you trade 4 times a year (quarterly buy/adjustments), with NT$300,000 (~$10,000) each time:

• Sub-brokerage: 4× NT$25 (~$0.83) = NT$100 (~$3.33)
• Overseas broker: only one remittance fee per year (~NT$11.67)

If you trade frequently, the advantage of overseas brokers is magnified.

Conversely, if you are a “set-and-forget” investor with small amounts, sub-brokerage may not be too costly. But given US stock volatility and frequent adjustments, most will end up making multiple trades.

Optimal Choices for Different Investors

Small investors, beginners: Start with sub-brokerage, trading NT$1,000–NT$5,000, 1–2 times, then evaluate switching to overseas brokers.

Dollar-cost averaging investors: Invest NT$3,000–NT$5,000 monthly; if fewer than 6 trades/year, sub-brokerage suffices; more frequent trading should consider overseas brokers.

Frequent traders: Skip sub-brokerage altogether; brokers like Mitrade or Charles Schwab with zero commissions are more cost-effective.

Large capital ($50,000+): Open an overseas broker account immediately; commission differences outweigh all currency exchange and remittance costs.

Final Cost Reminders

No matter which method you choose, watch out for hidden costs:

1. Dividend withholding tax: 30% fixed, unavoidable.
2. Withdrawal fees: Some overseas brokers charge additional when withdrawing funds—check carefully.
3. Exchange rate fluctuations: The rate at the time of currency conversion impacts actual costs; consider converting when USD is strong.

In summary, sub-brokerage and overseas brokers each have pros and cons. The key depends on your trading frequency and fund size. Frequent trading and large capital favor overseas brokers; infrequent, small amounts may be fine with sub-brokerage. After crunching the numbers, choosing the right tool ensures every dollar is well spent.