Key insights
- The post discusses the pros and cons of investing in US equities through a US vs. Singapore brokerage account, focusing on tax implications. The author is weighing the benefits of Singapore's lack of capital gains tax against the potential complexities of having parents manage the investments and their future residency status. The US market influence is slightly negative due to potential reduced investment in US equities.
Hello,
I'm debating whether to invest my money into US stocks and mutual funds through a Singapore vs US brokerage account. I came to the US for college 5 years ago and now work in California. I have a SSN and can easily open a brokerage account here, however, the US has strict capitals gains taxes and withholdings for dividends. My parents live/ work in Singapore under PEP (personalized employment pass) and have lived there for over 15 years so they have brokerage accounts in Singapore (with Tiger I believe). I used to be on a dependent pass under them but have no status in Singapore now. I have recently started full-time work in the US and am looking to invest $5-10k USD yearly instead of opening an IRA account here (not sure whether I will live in the US in the future and while my home country has a tax-treaty with the US, it doesn't recognize tax-free nature of Roth and I may need the money earlier to fund a home purchase, future education etc).
After some discussions with my family and days of going through US tax law, I am debating whether it is worth it to open a brokerage account here or simply wire the amount to my parents so they can invest it on my behalf given that Singapore has no capital gains tax. Given that I am in a unique situation, I can't find a clear answer online whether it is better to open and hold my own brokerage account here (which will result in taxes whenever I withdraw that amount for whatever reason) or to have my parents invest it for me. The big issue I see with letting my parents invest it for me is that since they are not Singapore PR/ citizen, when they retire (5-10 years from now), they will most likely return back to our home country at which point I am not sure whether they can continue holding/ contributing to the Singapore brokerage account.
I am very new to brokerages so please let me know if I am missing something in regards to ease of liquidity for these accounts/ transaction costs/ non-availability of certain securities that I would otherwise be able to purchase with a US brokerage account.
Any advise would be helpful, thanks in advance!