In-Depth Analysis of US Stock Investment Costs | Which is More Cost-Effective: Custodial Agency vs Overseas Broker Fees? The Latest 2025 Comparison

For Taiwanese investors, the threshold for investing in US stocks may seem high. From choosing trading channels to calculating each transaction fee, thorough research is required. This article details the two main pathways for US stock investment, and through actual data and case studies, helps you quickly grasp the full picture of US stock transaction costs.

Two Ways for Taiwanese People to Invest in US Stocks

If you want to enter the US stock market in Taiwan, there are mainly two approaches: using a domestic securities firm’s sub-brokerage account, or directly opening an overseas broker account.

Sub-Brokerage: Local securities firms as intermediaries

Sub-brokerage (Sub-Brokerage) officially called “Foreign Securities Business with Trust Purchase and Sale,” simply means you open a sub-brokerage account through a domestic securities firm, which then places orders on your behalf to buy or sell US stocks or ETFs overseas. Because the order passes through both domestic and overseas intermediaries, it is called “sub-brokerage.”

The biggest convenience of this method is direct deposit in TWD for trading, avoiding the hassle of currency exchange. The downside is that due to the more complex process, US stock transaction fees are generally higher, usually ranging from 0.15% to 1%.

Main advantages of sub-brokerage include:

• Avoiding the cumbersome process of opening an overseas account and language barriers
• Accounts are settled in TWD, with domestic brokers automatically handling currency exchange
• Protected by Taiwan’s Financial Supervisory Commission, disputes can be appealed to financial institutions

Overseas broker: Directly trading on international markets

Compared to sub-brokerage, the concept of overseas brokers is more straightforward—just like trading Taiwan stocks through a Taiwanese broker, but the target is US-listed companies. You skip the domestic intermediary and place orders directly yourself.

Overseas brokers have a clear competitive advantage: very low or zero commissions for US stocks, very friendly to frequent traders. But correspondingly, you need to handle currency exchange into USD, manage remittances, and other administrative tasks, making the process more complicated than sub-brokerage.

Main features of overseas brokers:

• Low or zero commission fees for US stocks
• Fast order execution, supporting real-time trading
• Rich selection of investment targets

How Much Does Investing in US Stocks Cost?

Using sub-brokerage to invest in US stocks involves roughly two types of costs: direct broker charges and hidden costs.

Cost structure of sub-brokerage

Broker charges:

• Order commission: approximately 0.25% to 1% of the transaction amount, but most brokers have minimum charges (per trade $25 to $100). For example, buying US$1,000 worth of stocks with a 0.3% fee costs only US$3, but with a minimum of US$25, the actual fee rate becomes 2.5%!
• Other service fees: including remittance fees, paper statement fees, dormant account fees, etc. (varies by broker)

Hidden costs:

• Exchange fees: charged by the US SEC, only when selling, at a rate of 0.00051%
• Transaction Activity Fee (TAF): charged by FINRA, also only on sell, calculated per share at US$0.000119, with a minimum of US$0.01 and a maximum of US$5.95

These fees are usually integrated into the sub-brokerage’s overall fee and not itemized separately.

Overseas broker fee structure

Trading through overseas brokers involves:

Broker part:

• Trading commissions: most mainstream brokers now offer zero commissions, but some still charge fees
• Margin interest: incurred when using margin accounts
• Currency exchange fees: banks charge about 0.05% when converting TWD to USD, but watch out for minimum fee restrictions
• Remittance fees: bank charges NT$100 to NT$900 per transfer from Taiwan to overseas broker
• Withdrawal fees: some brokers charge around US$10 to US$35 per withdrawal

Exchange-related fees and sub-brokerage costs are similar, including SEC fees and FINRA’s TAF.

Additionally, regardless of the method, if you buy dividend-paying stocks, you need to pay a 30% withholding tax on cash dividends (some can be reclaimed via tax refund).

Complete Cost Comparison Table

Major Sub-Brokerage US Stock Fees in 2025

Below is the fee table for major Taiwanese brokers (based on June 2025 data, please confirm latest standards with customer service):

Comparison of US Stock Fees for Overseas Brokers

Currency Exchange and Remittance Cost Overview (Unit: NTD)

Practical Comparison: Sub-Brokerage vs Overseas Broker Which Is More Cost-Effective?

Using the lowest fee institution as an example, let’s do a real case calculation:

Sub-brokerage plan: Fubon Securities 0.25% commission + no minimum fee
Overseas broker plan: Mitrade 0 commission + remittance via Bank of Taiwan (0.05% + NT$120 telegraph fee)

Cost comparison table at different amounts (USD to TWD 1:30)

Key finding: When a single transaction exceeds US$6000, overseas broker’s US stock transaction costs start to have an advantage.

But there’s an important premise—this table assumes only one trade. If you trade 4 times (2 buys and 2 sells), with the same US$10,000 amount:

• Sub-brokerage total fee: US$100 (US$25×4)
• Overseas broker, due to zero commission and one remittance fee, still costs about US$11.67

Conclusion is clear:

• Small, low-frequency trades → more cost-effective with sub-brokerage
• Large, high-frequency trades → more savings with overseas brokers
• Investors with large capital → consider overseas brokers directly for the lowest long-term costs

Final Recommendations

• US stock investment mainly has two routes: sub-brokerage via domestic agents, or direct overseas account opening
• Sub-brokerage is convenient but has higher fees; overseas brokers have low commissions but require self-handling of currency exchange
• Suitable for small amounts and infrequent trading: overseas brokers are better for substantial, active trading
• When calculating total costs, consider not only per-trade fees but also trading frequency, capital scale, and overall liquidity needs