How to Save the Most Money When Buying US Stocks? Full Analysis of Sub-Brokerage vs Overseas Brokerage Fees

Taiwanese investors looking to enter the US stock market face the first challenge of choosing a trading channel. Different investment methods hide completely different cost structures. This article provides a detailed breakdown of the fee components for the two main paths to buy US stocks, helping you find the most cost-effective trading solution.

Two Ways to Buy US Stocks: Sub-Brokerage vs Overseas Brokers

There are mainly two ways to buy US stocks in Taiwan. One is through domestic brokerages’ sub-brokerage services, and the other is by opening an overseas brokerage account for direct trading. Each has its pros and cons, depending on your trading habits and capital size.

What is sub-brokerage trading?

Sub-brokerage (Sub-Brokerage) officially called “Foreign Securities Business of Entrusted Buying and Selling.” Simply put, you open an account with a domestic broker and entrust them to buy and sell US stocks or ETFs for you. Since the order must go through two layers—first to the domestic broker, then transferred abroad—it’s called “sub-brokerage.”

The biggest convenience of this method is that you can trade directly in New Taiwan Dollars (NTD), without converting currency yourself; the domestic broker handles it automatically. It is also regulated by Taiwan’s Financial Supervisory Commission, ensuring fund safety. The trade-off is that the fees tend to be higher, usually between 0.15% and 1% of the transaction amount.

What is overseas broker trading?

Overseas brokers are similar to local Taiwanese brokers, but they trade US stocks. You open an account directly, place orders, and trade without intermediaries. Most mainstream brokers now offer zero commissions or very low fees, which is friendly for frequent traders. The downside is you need to handle currency exchange and remittance yourself, which can be relatively cumbersome.

What exactly do the fees for buying US stocks include?

Cost structure of sub-brokerage trading

Using the sub-brokerage method to buy US stocks involves two main types of costs:

1. Brokerage fees directly charged by the broker

   • Transaction commission is the main cost, usually between 0.25% and 1%, but each order has a minimum threshold (USD 25–USD 100). For example, buying USD 1,000 worth of US stocks at 0.3% would be USD 3, but if the minimum fee is USD 25, your actual fee rate becomes 2.5%.
   • Other service fees (remittance fees, account management fees, etc.) are relatively minor.

2. Hidden third-party fees embedded in the transaction

   • Exchange fees: The US SEC charges only on sell transactions, at a rate of 0.00051%
   • Trading Activity Fee (TAF): imposed by the US Financial Industry Regulatory Authority (FINRA), also on sell transactions, calculated at USD 0.000119 per share, with a minimum of USD 0.01 and a maximum of USD 5.95.

These third-party fees are usually integrated into the overall fee and are not visible as separate line items to most investors.

Cost structure of overseas broker trading

Trading US stocks directly through an overseas broker involves more varied costs:

1. Costs from the broker

   • Trading commissions: most mainstream brokers now offer commission-free trading, but some still charge fees.
   • Margin interest: if using a margin account, the broker charges interest.
   • Currency exchange fees: banks charge around 0.05% when converting TWD to USD, with minimum fees of about NT$100–NT$600.
   • Remittance fees: banks charge NT$100–NT$900 for transferring funds from Taiwan to the overseas broker.
   • Withdrawal fees: some brokers charge USD 10–USD 35 when withdrawing funds.

2. Third-party fees

   • Same exchange fees and TAF as in sub-brokerage.

Dividend tax considerations

Regardless of the method, any US stock with dividends will have a 30% withholding tax on cash dividends (some can be refunded).

Main sub-brokerage brokers’ fee standards

Here are the fee standards for major sub-brokerage brokers in 2025:

Mainstream overseas broker fee comparison

Currency exchange and remittance fee references

Mainstream bank remittance costs (unit: TWD):

How to buy US stocks most cost-effectively? Practical case calculations

Choosing the lowest-cost combination:

• Sub-brokerage with Fubon Securities (0.25% commission)
• Overseas broker with Mitrade (zero commission)
• Currency exchange and remittance via Bank of Taiwan (0.05%)

(Exchange rate reference: 1 USD ≈ NT$30)

From the above table, it’s clear that: when a single transaction exceeds US$6000, using an overseas broker is significantly cheaper.

But there’s an important premise—this is the cost for a single transaction. What if you trade frequently?

Suppose you make 4 transactions of US$10,000 each (2 buys and 2 sells):

• Sub-brokerage: minimum fee of US$25 per transaction, total US$100
• Overseas broker: zero commission, and currency exchange/remittance are one-time costs, still only about US$11.67

In this case, frequent traders can save a lot by choosing overseas brokers.

How should different investors choose?

Small capital, infrequent trading? Choose sub-brokerage

• Investment under US$3000, occasional trades
• Don’t want to bother with currency exchange and remittance
• Prefer regulation protection and local service

Large capital, frequent trading? Choose overseas brokers

• Single trades over US$6000, high trading frequency
• Willing to handle currency exchange yourself
• Want more investment options

Moderate capital, periodic investing? Both options work

• Depends on your trading frequency and fee sensitivity
• For regular dollar-cost averaging into US stocks, overseas brokers have a clear advantage

Summary

Buying US stocks may seem to offer many choices, but the core is balancing convenience and cost. Sub-brokerage is simple and convenient, suitable for investors who want easy trading; overseas brokers excel in low fees, ideal for experienced traders with frequent transactions. Match your investment style and capital size to choose the truly cost-effective solution.