How is the partial delegation fee calculated? A list of US stock trading costs that Taiwanese investors must know

Costs to Consider Before Trading: Sub-Brokerage vs Overseas Brokers

If you want to trade US stocks in Taiwan, you face two key questions: which route to take, and how much will it cost? This is no small matter—buying $1,000 worth of US stocks through the wrong method could double your costs.

Investors typically have two options: using domestic sub-brokerage services or directly opening accounts with overseas brokers. But these two approaches have completely different fee structures, and hidden costs can vary greatly. This article uses real numbers to clearly explain the true differences in transaction fees between sub-brokerage and overseas brokers, so you can quickly understand which is more cost-effective.

What is Sub-Brokerage? Why Are Its Fees Higher?

Sub-Brokerage (Sub-Brokerage) officially called “Agency Trading of Foreign Securities Business,” simply means you entrust a domestic broker to buy US stocks for you. Since your order must go through a domestic broker before reaching the US market, it involves an extra step, hence the name “sub” brokerage.

The advantages of this method are clear:

• Pay directly in New Taiwan Dollars (NTD), no need to exchange USD yourself—your domestic broker handles it
• Regulated by Taiwan’s Financial Supervisory Commission, providing dispute resolution and protection
• Easy account opening without dealing with complex overseas banking procedures

But there are downsides—more complex processes mean higher costs. The transaction fee for sub-brokerage usually ranges from 0.15% to 1% of the trading amount, which is several times higher than overseas brokers.

The Logic of Overseas Brokers: Direct Trading, Lower Fees

In contrast, overseas brokers operate like domestic brokers in Taiwan—you open an account directly and buy US stocks without intermediaries. The process is shorter, so transaction fees can be kept very low—most mainstream brokers now offer zero commissions or close to zero.

But nothing is free. The savings on trading commissions are offset by costs for currency exchange and remittance, which can be significant. Transferring money from Taiwan to an overseas broker can cost between 100 and 900 NTD, plus currency exchange fees. For small trades, these hidden costs can eat into your advantages.

What Do Sub-Brokerage Fees Cover? Know Them to Avoid Being Overcharged

When trading via sub-brokerage, your costs fall into two categories:

1. Directly Charged by the Broker

• Trading commissions are the main expense, usually between 0.25% and 1%, with minimum charges typically ranging from $25 to $100 USD. For example, buying $1,000 worth of stocks with a 0.3% fee costs only $3, but if the minimum fee is $25, your actual cost jumps to 2.5%—a tenfold difference!
• Other miscellaneous fees such as remittance charges, paper statement fees, etc. (depending on each broker’s policies)

2. Hidden Costs This is the often-overlooked part. Exchange fees charged by the US SEC are only paid when you sell, at a rate of 0.00051% of the transaction amount. Transaction Activity Fees (TAF) from FINRA are also only paid when selling, at $0.000119 per share, with a maximum of $5.95. These two fees are usually embedded directly into the broker’s fee structure.

Additionally, if the stocks you buy pay dividends, a 30% withholding tax applies regardless of the method (some can be reclaimed).

Overseas Broker Trading Costs: Currency Exchange and Remittance Are Major Factors

The cost structure for overseas brokers is quite different:

• Trading commissions: Most mainstream brokers now charge zero or near-zero fees
• Margin interest: Only incurred if you borrow to buy stocks
• Currency exchange fees: Charged by banks when converting NTD to USD, usually around 0.05% of the remittance amount, with minimum fees of 100–600 NTD
• Remittance fees: From Taiwan to the overseas broker, typically 100–900 NTD per transfer
• Withdrawal fees: Some brokers charge around $10 or more per withdrawal

When trading small amounts, these costs can be higher than using sub-brokerage services.

The table below summarizes the fee comparison:

Main Sub-Brokerage Fee Table (2025 Standards)

Below are the fee standards for major sub-brokerage services in 2025 (subject to change; always check official sources):

Overseas Broker Cost Comparison

Bank currency exchange and remittance fee references (in NTD):

Real-World Example: When Is Sub-Brokerage More Cost-Effective, and When Is Overseas Better?

Calculating with the cheapest options:

• Use Fubon Securities (0.25% commission, minimum $25)
• Use Mitrade (zero commission)
• Use Bank of Taiwan for currency exchange (0.05%, minimum NT$100, telegraph fee NT$200)

Assuming an exchange rate of 1 USD = 30 NTD:

Key takeaway:

• Under $6,000: sub-brokerage is cheaper (or about the same)
• Over $6,000: overseas brokers become more cost-effective

This conclusion assumes only one transaction. If you trade 4 times (buy and sell twice), for a total of $10,000:

• Sub-brokerage costs $100 (4 × $25)
• Overseas broker costs about $11.67 (remittance is one-time, subsequent trades are free)

Clear conclusion:

• Small amounts, infrequent trading → sub-brokerage is more economical
• Frequent trading → overseas brokers have a decisive advantage
• Large sums → direct overseas broker accounts save significantly on fees

Which Route to Choose? The Most Rational Decision

Advantages of sub-brokerage:

• Small capital (e.g., $1,000–$5,000)
• Infrequent trading (a few times a year)
• Don’t want to handle currency exchange yourself
• Prefer Chinese-language support

Advantages of overseas brokers:

• Larger capital base (over $6,000)
• More frequent trading
• Willing to handle currency exchange and remittance yourself
• Want to leverage margin trading

Mitrade, a representative overseas broker, is regulated by the Australian Securities and Investments Commission (ASIC) (license number 398528). Opening an account is simple—just 3 steps:

1. Register: Fill out info and submit application
2. Deposit: Minimum $50 USD (supports TWD trading)
3. Trade: Discover opportunities and place orders instantly

Whichever route you choose, remember this logic: understand the cost structure, calculate total expenses, and select based on your trading habits and capital size—this is the most cost-effective approach.