Analysis of Investment Costs in U.S. Stocks in 2025 | Using Custodian Delegation or Overseas Brokers? Where Exactly Do the Fees Differ

Looking to invest in US stocks from Taiwan but confused about fees and trading methods? This article breaks down the cost differences between sub-brokerage and overseas brokers, helping you understand what is included in US stock transaction fees and how to choose the most economical trading route.

Two Paths for US Stock Investment: Sub-Brokerage vs Overseas Broker

Taiwanese investors mainly have two ways to trade US stocks. One is opening a sub-brokerage account through a licensed domestic broker, which places orders on their behalf to overseas markets; the other is opening an account directly with an overseas broker and trading independently. Both methods have their advantages and disadvantages, with key differences in process convenience and cost structure.

How Sub-Brokerage (Sub-Broker) Works

Sub-brokerage, officially known as entrusted buying and selling of foreign securities, allows investors to avoid dealing directly with foreign brokers. Instead, they delegate domestic brokers to handle transactions. Since orders pass through two layers of delegation, it’s called “sub-brokerage.” The biggest convenience is that transactions can be settled directly in New Taiwan Dollars (NTD), with the domestic broker automatically handling currency exchange, eliminating the need for investors to convert USD themselves. However, the trade-off is higher fees, typically ranging from 0.25% to 1% of the transaction amount.

Features of Overseas Brokers

Trading directly with overseas brokers is as simple as buying Taiwan stocks through a local broker—eliminating middlemen and enabling faster transactions. Currently, mainstream overseas brokers often offer zero or very low commissions. However, this method requires investors to convert NTD to USD themselves and handle remittance to the overseas account, adding initial complexity.

Breakdown of US Stock Transaction Costs

Cost Structure of Sub-Brokerage

Using sub-brokerage to trade US stocks involves direct broker charges and hidden costs.

Direct Charges:

• Transaction fee is the main cost, with rates from 0.25% to 1% of the transaction amount, varying by broker. Note that almost all brokers set a minimum fee per order, ranging from $25 to $100 USD. For example, buying $1,000 worth of US stocks with a 0.3% fee would cost $3, but if the minimum fee is $25, the actual cost becomes 2.5%.
• Other service fees include remittance fees, account management fees, etc. (according to broker policies), usually negligible.

Hidden Costs — Third-Party Regulatory Fees:

• Exchange fees collected by the U.S. Securities and Exchange Commission (SEC), at 0.00051% of the transaction amount, charged only on sell orders, collected by the broker and transferred to the SEC.
• Transaction Activity Fee (TAF) by FINRA, also only on sell orders, calculated as 0.000119 USD per share, with a minimum of $0.01 and a maximum of $5.95.

These third-party fees are typically integrated into the broker’s fee and not shown separately.

Cost Structure of Overseas Brokers

Trading via overseas brokers involves more cost components:

Trading-related:

• Commission: Most mainstream brokers have eliminated commissions, but some still charge fees.
• Margin interest: If using margin accounts, interest is paid on leverage.

Currency Exchange and Fund Transfers:

• Currency conversion fee: When converting NTD to USD, banks charge about 0.05%, with minimum fees ranging from NT$100 to NT$600.
• Remittance fee: Banks in Taiwan charge NT$100 to NT$900 per transfer to overseas brokers.
• Withdrawal fee: Some brokers charge $10 to $35 USD when withdrawing funds.

Third-party regulatory fees: Same as with sub-brokerage, including exchange and activity fees.

Additionally, for dividend-paying stocks, a 30% withholding tax on cash dividends applies regardless of method.

Cost Comparison Table

Major Broker and Bank Fee Lists

Domestic Sub-Brokerage Fees:

Main Overseas Broker Fees:

Currency Exchange and Remittance Fees (Major Banks):

Actual Cost Comparison: When Is Which Method More Cost-Effective

Assuming the lowest-cost combination—Fubon Securities sub-brokerage, Mitrade overseas broker, Taiwan Bank currency exchange—for cost comparison:

(USD to TWD exchange rate assumed at 1:30)

Analysis Result: When a single transaction exceeds $6,000, choosing an overseas broker is clearly more economical. For smaller transactions, sub-brokerage has a cost advantage.

However, this comparison assumes only one transaction. If an investor trades frequently—say, four times with the same capital—the sub-brokerage fee doubles ($25×4=$100), while the overseas broker’s total remains around $11.67 due to zero commission and a one-time remittance fee, significantly improving cost efficiency.

Recommendations

• Small amount + low frequency trading: Sub-brokerage is more cost-effective. Direct NTD deduction simplifies operations, and costs below $6,000 are competitive.
• Large amount + high frequency trading: Overseas brokers are more advantageous. Zero commissions mean costs per trade decrease with volume, making them ideal for large, frequent transactions.
• Need leverage (margin trading): Only overseas brokers support margin trading; sub-brokerage does not.
• Frequent deposits/withdrawals: Sub-brokerage is more convenient, avoiding repeated currency exchanges and remittance steps.

Latest Reminder for 2025: The above fee standards are based on current data; institutions may adjust rates at any time. Always confirm the latest rates with customer service before trading to ensure accurate cost assessment.

Ultimately, the cost of US stock trading depends on your investment habits and transaction volume. There is no absolute best choice—only the most suitable one for you.