It may seem like a huge leap to buy US equities from Malaysia, but it's not as hard as you think. Plenty of beginners believe that trading in the US market is difficult, but it's actually pretty easy if you follow these steps. Here's how to get a piece of huge names like Apple or Tesla, whether you want to diversify your portfolio or just want a piece of them.
To start, you'll need a trading account that supports international stock trading. https://www.tradu.com/my/invest-in-stocks/
Some of the popular choices for overseas investors are Interactive Brokers. The key is to pick one that has cheap fees and allows direct stock purchases in the US. In most cases, these brokers enable online sign-up, but you'll need to submit certain papers to prove who you are and where you live in Malaysia. So, remember to prepare your identification documents!
Next, you'll need to put money into your account. At this point, things can get a little problematic. Most of the time, you'll be transferring funds from Malaysia, and some brokers accept MYR deposits. Some platforms might want you to change your money to USD before sending it. In either case, the process can take some time, so don't expect it instantly. Before you start trading, ensure sure your account is set up.
You can buy your first US stock the moment you put money into your account. You can trade equities in the same way you would at a local store: look up the company, decide the number of units you want to buy, and execute the purchase. Some brokers also support buying partial shares, which means you don't have to buy a complete share if you're a beginner or don't have much capital to invest.
When you start buying US equities, there are a few things you should keep in mind. First, you should consider how this would affect your taxes. Malaysia doesn't tax capital gains, but the US government might withhold tax on dividends. The tax rate is usually roughly 30, but if you're a foreign investor, you can often lower it by sending a W-8BEN form to your broker. This form proves that you live outside the US and helps you get a better deal under the US-Malaysia tax treaty.
The time zone difference is another thing to keep in mind. If you want to trade live during market hours, you'll need to change your schedule because the US stock market is open during US business hours. Just keep track of the market hours, and you'll be OK.
Lastly, the value of your equities will depend on the currency rate between MYR and USD. If the Ringgit weakens against the USD, it can reduce your returns to acquire the identical stock. You should always monitor the conversion rate so you know when it's time to turn your Ringgit into dollars.
To sum up, it's quite straightforward to buy US stocks from Malaysia if you take the right steps. Simply pick a broker, add money to your account, place your order, and keep a watch on your taxes and the exchange rate. Have fun trading!