The Hong Kong stock exchange has seen some turbulent times of late. The recent Evergrande crisis saw the Hang Seng Index drop by 3.3% in September this year as several stocks on the Hong Kong stock exchange suffered badly as a result.
Where many investors are fearful, others see an opportunity. The recent pull-backs have led many to consider investing in Hong Kong stocks. But exactly how do you go about investing in Hong Kong stocks and what’s the best trading platform for the Hong Kong Stock Exchange?
If you’re thinking about investing in the Hong Kong stock exchange, but aren’t sure where to start, then we’ve got you’ve covered. Let’s dive straight in.
How to Invest in the Hong Kong Stock Exchange
The economic downturn brought on by the Coronavirus pandemic has scared several investors away from the stock market. But, if you have a high tolerance for the risk the underperformance of Hong Kong stocks could be coming to an end.
One of the biggest advantages to investing in Hong Kong stocks is the 0% tax paid on capital gains. Keep in mind that US taxpayers have to pay 15% capital gains tax once they earn over $40,000 and 20% on $248,300 or more.
If you want to take advantage of that, here’s how to get started.
Open a Trading Account
First of all, you need to open a trading account with a reputable broker. For a local broker in Hong Kong to accept US clients they need to be registered with the SEC and fall in line with the Foreign Account Tax Compliance Act.
There is a certain amount of searching necessary to find a compliant local broker, but it is worth the hurdle jumping. Trading on the Hong Kong stock exchange through an international broker can cost you an additional $30 per trade. A Hong Kong broker will charge you around $1 per trade.
Funding Your Account
If you’re based in Hong Kong then this is simple. You can just transfer funds from your Hong Kong bank account directly to your trading account. If you’re not based in Hong Kong then there’s no need to panic.
Hong Kong brokers will let you open the account providing you meet a minimum transfer deposit to get you started.
Access a Trading Platform
To trade online, as supposed to go through your broker every time you want to trade, you’ll need to access a trading platform that’s supported by your broker.
Finding the best trading platform for the Hong Kong stock exchange might seem daunting at first, but with websites such as monexsecurities.com.au, you can get trading in no time. All that’s left to do now is buy your first Hong Kong stock.
Ready to Invest in the Hong Kong Stock Exchange
This is everything you need to know about investing in the Hong Kong stock exchange. Keep in mind, as with any investment, that stocks can go up just as much as they can go down. Volatility is something that can be taken advantage of when trading, but it can also work against you. Only ever trade what you can afford to lose.
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