Buying US Stocks from Malaysia is No Longer a Struggle
There used to be a time, about a decade ago, when buying Apple stock from Malaysia involved dealing with a barely functional trading website of a broker, weeks of waiting for wire transfers to settle, and also hoping the currency conversion wasn't going to wipe out half your returns. This was off-putting to many Malaysians, and with good reason. However, it’s not the case any more, and the Malaysian investing community is largely oblivious of this shift. 
Account opening takes mere minutes in contrast to weeks in the past When you trade with brokers servicing Malaysian customers now, opening a US stock account entirely online is possible. All it takes is for you to upload your Identification Card, click a photo for identification purposes, and connect it with a local bank account. Some platforms offer instant or 1-day account activation. Compare this to mailing physical documents to brokers in the US or even Singapore – it is worlds apart. One of my cousins opened her account during her break during the workday and had it approved in time for her afternoon tea. Fractional shares eradicated the issue nobody talked about Buying an Amazon share that was worth more than USD 3,000 was no longer an option for those with a smaller capital. Fractional shares put an end to that entirely, and now Malaysian can invest for as low as RM 200 in Amazon or Google, in line with the proportional exchange amount to the US Dollar. The availability of fractional shares is probably why more and more young Malaysians took to investing in US stocks, unlike their parents and earlier generations. It is still silently eating into your profits with the currency conversion There are a few aspects that brokers tend to keep close to their chests. When you convert from MYR to USD, there’s a spread that is applied, and this rate can fluctuate between brokers drastically. It’s not uncommon for brokers to “bury” these costs in a,”0% commission” type marketing, where their margins come directly from the currency exchange rate. Do yourselves a favor and check the actual rate with your bank before deciding to go with any broker, especially if it looks too good to be true. A difference of 1 to 2% in FX conversion can have an impact over the years if you are making regular investments. Tax reporting requires a little more effort but not as much as you thought Most Malaysians will not be subject to capital gains tax since, broadly speaking, capital gains made outside of real property are not taxed in Malaysia. US dividend income received, however, is subject to a flat 30% US withholding tax, unless a W-8BEN form is filed with the broker that reduces the rate under a tax treaty. Failure to file this form can result in significant tax being paid on dividend income unnecessarily by new US investors. Market hours requires adjustments in your evening, not your life The US markets operate from 9:30 pm to 4 am in Malaysian time. Considering the majority of Malaysians investors in the US stock market aren’t actively trading, simply checking your portfolio before you sleep and again in the Institutional investors US stocks morning is sufficient for managing a portfolio using a buy and hold strategy.
Account opening takes mere minutes in contrast to weeks in the past When you trade with brokers servicing Malaysian customers now, opening a US stock account entirely online is possible. All it takes is for you to upload your Identification Card, click a photo for identification purposes, and connect it with a local bank account. Some platforms offer instant or 1-day account activation. Compare this to mailing physical documents to brokers in the US or even Singapore – it is worlds apart. One of my cousins opened her account during her break during the workday and had it approved in time for her afternoon tea. Fractional shares eradicated the issue nobody talked about Buying an Amazon share that was worth more than USD 3,000 was no longer an option for those with a smaller capital. Fractional shares put an end to that entirely, and now Malaysian can invest for as low as RM 200 in Amazon or Google, in line with the proportional exchange amount to the US Dollar. The availability of fractional shares is probably why more and more young Malaysians took to investing in US stocks, unlike their parents and earlier generations. It is still silently eating into your profits with the currency conversion There are a few aspects that brokers tend to keep close to their chests. When you convert from MYR to USD, there’s a spread that is applied, and this rate can fluctuate between brokers drastically. It’s not uncommon for brokers to “bury” these costs in a,”0% commission” type marketing, where their margins come directly from the currency exchange rate. Do yourselves a favor and check the actual rate with your bank before deciding to go with any broker, especially if it looks too good to be true. A difference of 1 to 2% in FX conversion can have an impact over the years if you are making regular investments. Tax reporting requires a little more effort but not as much as you thought Most Malaysians will not be subject to capital gains tax since, broadly speaking, capital gains made outside of real property are not taxed in Malaysia. US dividend income received, however, is subject to a flat 30% US withholding tax, unless a W-8BEN form is filed with the broker that reduces the rate under a tax treaty. Failure to file this form can result in significant tax being paid on dividend income unnecessarily by new US investors. Market hours requires adjustments in your evening, not your life The US markets operate from 9:30 pm to 4 am in Malaysian time. Considering the majority of Malaysians investors in the US stock market aren’t actively trading, simply checking your portfolio before you sleep and again in the Institutional investors US stocks morning is sufficient for managing a portfolio using a buy and hold strategy.