## The Road for Taiwanese Investors in U.S. Stocks: Overseas Brokers vs. Replication Delegation, Which One to Choose?

For Taiwanese investors, entering the U.S. stock market may seem straightforward, but behind the scenes lies a multi-dimensional trade-off involving costs, risks, and trading flexibility. If you want to invest in Amazon, Apple, S&P 500, and other U.S. stock products, should you go through domestic replication delegation or open an account directly with an overseas broker? This question troubles many.

### Two Paths to U.S. Stock Investment: Cost and Operational Choices

Taiwanese investors typically face two routes into the U.S. stock market: one is entrusting domestic brokers to place orders (replication delegation), and the other is trading independently on overseas broker platforms. Both methods have their pros and cons, with key differences in handling fees, trading flexibility, time costs, and regulatory protections.

#### Features of Replication Delegation: Stable but Expensive

**Domestic replication delegation** operates by Taiwanese brokers acting as intermediaries, helping investors purchase stocks in overseas markets. The advantage of this model is simplicity—investors do not need to handle currency exchange, international transfers, or complex operations, as everything is assisted by professionals.

However, this convenience comes at a price. The handling fee for replication delegation is usually around 0.5%, significantly higher than overseas brokers. Additionally, it adopts T+1 for buying and T+3 for selling, meaning investors seeking quick responses to market fluctuations may face trading delays. For large single investments or low-frequency trading, this method may still be acceptable, but for short-term traders, it can become a heavy burden.

#### Advantages of Overseas Brokers: Flexibility and Low Cost

In contrast, **overseas brokers** offer a more open trading environment. Most have achieved zero trading fees, with only currency conversion costs (usually below 0.1%) and withdrawal fees. More importantly, settlement is shortened to T+1, with real-time order execution, allowing investors to seize market opportunities immediately.

Overseas brokers also provide trading tools that replication delegation cannot—margin trading, short selling, options, futures, and other derivatives, which are crucial for advanced traders.

### Overseas Broker Security and Regulation: How to Avoid Pitfalls

Before choosing an overseas broker, understanding its regulatory background is vital. Major U.S. brokers are regulated by FINRA (Financial Industry Regulatory Authority) and SIPC (Securities Investor Protection Corporation), meaning client funds and company assets are kept separate, minimizing the risk of bankruptcy. Platforms regulated by FCA or ASIC (like eToro, Mitrade) in Australia or the UK also adhere to strict standards.

Selecting brokers with large market capitalization, substantial scale, and strict regulation is the primary way to reduce risk. Leading brokers with assets exceeding hundreds of billions of dollars have almost zero chance of insolvency, which must be emphasized.

### Comprehensive Comparison of Seven Selected Overseas U.S. Stock Brokers

Based on safety, costs, trading varieties, and user experience, here is a summary of seven overseas brokers suitable for Taiwanese investors:

| Broker Name | Regulator | Listing Status | Trading Fees | Withdrawal Fee | Minimum Deposit | Core Features |
|--------------|--------------|----------------|--------------|----------------|----------------|--------------|
| Charles Schwab | FINRA, SIPC | NYSE | 0 | $25 | $25,000 | Largest asset scale, offers VISA card |
| Interactive Brokers | FINRA, SIPC | NASDAQ | $0.005/share (min $1) | $10 | 0 | Most international, professional trading tools |
| TD Ameritrade | FINRA, SIPC | Merged into Charles Schwab | 0 | $25 | 0 | Rich product variety, merged with Charles Schwab |
| Firstrade | FINRA, SIPC | None | 0 | $25 | 0 | Longest Chinese service experience, quick account opening |
| Fidelity | SEC, FINRA, SIPC | None | 0 | $10 | 0 | Strong in mutual funds, 401(k) services |
| eToro | FCA, ASIC | None | 0.09% (spread) | $5 | $50 | Unique social trading, copy trading supported |
| Mitrade | ASIC, CIMA | None | 0.01-0.015% (spread) | 0 | $50 | User-friendly platform, comprehensive risk tools |

### In-Depth Analysis of the Seven Brokers

#### 1. Charles Schwab: Industry Benchmark with Comprehensive Strength

Founded in 1971, Charles Schwab is the largest stock broker in the U.S., with assets exceeding $3.8 trillion and a market cap of $57.5 billion. After acquiring TD Ameritrade, its market position was further solidified. Schwab’s unique advantage is offering a VISA card, allowing cardholders to withdraw local currency worldwide—extremely convenient for frequent international traders.

However, the account minimum is high at $25,000, suitable for well-funded investors. Accounts can be opened online or in physical branches, with some Chinese interface support.

#### 2. Interactive Brokers: The Professional Choice for Global Investors

Founded in 1978, Interactive Brokers is one of the most active global brokers, handling nearly 2 million trades daily with client assets over $296 billion. Its platform supports trading in over 135 international markets across 33 countries, covering stocks, ETFs, options, bonds, futures, and forex.

IB’s commission structure is $0.005 per share (minimum $1), economical for high-frequency traders. The platform offers powerful features with 60 order types, ideal for professional traders. Account opening is low-threshold at $0, with no minimum deposit, but withdrawal fee is $10.

#### 3. TD Ameritrade: The Most Complete Product Ecosystem

With over 24 million clients, TD Ameritrade was one of the most popular platforms for U.S. stock investing before being acquired by Schwab in 2019. Its trading software, thinkorswim, remains in use, with no fee or service changes. It offers stocks, ETFs, mutual funds, futures, and more, including over 100 commission-free funds, suitable for long-term low-frequency investors.

Note that for short-term or high-frequency trading, fees can increase significantly, making it less suitable for such styles.

#### 4. Firstrade: Pioneer in Chinese Service

Founded in 1985, Firstrade has served the North American Chinese investment community for decades and was among the first to offer Chinese-language interfaces. Account opening is quick and fully online, with no minimum balance requirement, and stocks, ETFs, options are commission-free.

However, note that Firstrade has canceled online customer service, so investors may not get immediate help when issues arise. Withdrawal fee is $35 per transaction, relatively high among peers.

#### 5. Fidelity: The Index Fund Investor’s Paradise

Founded in 1946, Fidelity is a comprehensive financial services giant. Its main strengths are a wide selection of mutual funds and ETFs, and it is the largest provider of 401(k) retirement plans in the U.S. However, Taiwanese investors can only purchase overseas funds via Fidelity Taiwan’s website and cannot open stock accounts directly—this is important to note.

Minimum initial deposit for stock and fund accounts is $0, with zero trading commissions and a $10 withdrawal fee.

#### 6. eToro: Innovation in Social Trading

Founded in 2007, eToro is a global social trading platform offering CFD trading. Its unique feature is social functionality—investors can observe others’ strategies and copy trades. This lowers the decision barrier for beginners but also carries copy trading risks, as timing and judgment are not always perfect.

Trading costs mainly come from spreads (0.09%), with a minimum initial deposit of $50 and a $5 withdrawal fee. Regulated by FCA and ASIC, security is assured.

#### 7. Mitrade: Simple and User-Friendly Mobile Platform

Founded in 2011 and registered in Australia, Mitrade is headquartered in Australia. Its biggest feature is a simple, intuitive trading platform, especially suitable for mobile use. The platform integrates TradingView charts, economic calendar, sentiment index, and supports trading in U.S. stocks, Hong Kong stocks, forex, indices, commodities, and cryptocurrencies via CFDs.

Main trading costs are spreads (0.01-0.015%), with zero commissions, and a $0 withdrawal fee. The minimum deposit is $50, supporting bank transfers, credit cards, e-wallets, and offering negative balance protection and stop-loss/take-profit features.

### Three Core Considerations When Choosing a Broker

#### Compatibility of Trading Products and Methods

Different investment styles require different trading tools. For long-term holdings of stocks and ETFs, Firstrade or Fidelity suffice; for options, futures, or margin trading, TD Ameritrade or Interactive Brokers are better; for simple CFD trading, Mitrade or eToro are most suitable.

#### Transparency of Fee Structure

Brokers claiming zero commissions may hide costs in spreads, withdrawal fees, or currency conversion charges. When calculating actual costs, consider all aspects rather than just trading commissions.

#### Certainty of Regulation and Security

Choosing brokers regulated by FINRA/SIPC or strictly by ASIC/FCA offers the best fund safety. Avoid platforms with unclear regulation or low regulatory authority.

### Hidden Risks of Investing with Overseas Brokers

#### Language and Regulatory Barriers

Many investors lack language advantages and have limited understanding of overseas legal systems, making them vulnerable to false information or investment communities. Be cautious in verifying sources, prioritize official documentation.

#### Account Succession Issues

With domestic replication delegation, heirs can directly contact the broker upon the investor’s passing. Overseas broker accounts have complex inheritance procedures, requiring substantial time and documentation, risking asset freeze.

#### Tax Filing Complexity

Replication delegation handled by brokers relieves investors of tax reporting. Opening accounts with overseas brokers requires investors to handle tax declarations themselves, including 30% withholding tax on U.S. dividends and annual tax reporting, which can be challenging for ordinary investors.

#### Exchange Rate Fluctuations and Conversion Costs

USD to TWD exchange rate fluctuations directly impact investment costs and returns. Cross-border remittances incur bank fees, and some brokers’ currency conversion fees may be higher than expected.

### Which One Should I Choose?

**Scenario for Replication Delegation:** Large capital (e.g., over 500,000 RMB per transaction), low trading frequency (less than 10 times a year), no patience for complex operations, seeking full guidance from professionals.

**Scenario for Overseas Brokers:** Moderate to large capital, medium or higher trading frequency, need to respond quickly to market changes, require advanced tools like margin trading, and prefer mobile experience.

Ultimately, the choice depends on individual capital size, trading style, technical proficiency, and risk tolerance. For most Taiwanese investors, the low costs, high flexibility, and rich tools of overseas brokers give them a competitive edge over replication delegation. However, this relies on selecting safe, well-regulated platforms and fully understanding relevant legal and tax responsibilities before investing.