CITIC Co-Trust Commission Fee Deep Dive | US Stock Investment Cost Comparison Guide

How Can Taiwanese Investors Save the Most Money When Trading US Stocks?

Many Taiwanese investors want to enter the US stock market but are confused about fee structures and trading methods. Should they place orders through domestic brokers or trade directly with overseas brokers? This article breaks down the cost structures, comparing the fees of sub-brokerage and overseas brokers, helping you make the most informed investment decisions.

Two Main US Stock Trading Models: Sub-Brokerage vs Overseas Brokers

Sub-Brokerage: The Cost of Localized Service

Sub-brokerage refers to investors entrusting domestic brokers to purchase overseas securities on their behalf. The process involves two layers of delegation—first placing an order with a domestic broker, then the broker executing the trade in the US market—hence the name “sub-brokerage.”

Core Advantages of Sub-Brokerage:

• One-stop service: Trade directly in TWD, no need for currency exchange
• Regulatory protection: Supervised by Taiwan’s Financial Supervisory Commission, with legal safeguards for investors
• Simplified process: Avoid the hassle of opening overseas accounts and language barriers

Cost Implications: Because of the intermediary role of domestic brokers, transaction fees are generally higher, typically ranging from 0.25% to 1% of the trade amount. Mainstream sub-brokerage firms like CTBC Securities have competitive fee standards but are still much higher than overseas brokers.

Overseas Brokers: Cost-Effective and Efficient Choice

Placing orders directly with overseas brokers is similar to trading listed stocks in Taiwan—investors skip domestic intermediaries and operate independently. Most major overseas brokers now offer zero or very low commissions, making them highly friendly for frequent traders.

Advantages of Overseas Brokers:

• Very low or zero commissions
• Fast trade execution, supporting real-time orders
• Broader range of investment products compared to domestic channels

Hidden Costs: Investors must convert their funds to USD and transfer them overseas, incurring currency conversion fees, telegraph fees, remittance charges, and other additional costs.

Fee Overview: Composition of Sub-Brokerage Costs

When trading via sub-brokerage, investors pay:

Broker’s Direct Fees:

• Transaction Commission: The main cost, usually 0.25%–1% of the trade amount (varies by broker), with minimum charges typically between $25 and $35 .
  Example: Buying $1,000 worth of US stocks at 0.3% would cost $3, but if the minimum fee is $25, the actual cost rate jumps to 2.5%.
• Other Service Fees: Wire transfer fees, account management fees, paper statement fees, etc. (vary by broker, often negligible)

Third-Party Regulatory Fees (included in transaction fees):

• SEC Trading Fee: Collected by the US SEC, only on sell transactions, at 0.00051%
• FINRA Trading Activity Fee (TAF): Collected by the Financial Industry Regulatory Authority, only on sell transactions, at $0.000119 per share, with a minimum of $0.01 and a maximum of $5.95

Fee Overview: Overseas Broker Cost Structure

Overseas brokers have a more transparent and complex fee structure, especially involving international currency exchange:

Trading-Related:

• Commission: Most now offer zero commissions
• Margin Interest: Only incurred when using margin accounts

Currency Exchange and Transfer:

• Currency Conversion Fee: Banks charge a spread, usually about 0.05% of the exchanged amount, with minimum fees ranging from NT$100 to NT$600
• Remittance Fee: Banks charge for transferring funds from Taiwan to overseas brokers, typically NT$100–NT$900
• Withdrawal Fee: Some brokers charge NT$10–$50 per withdrawal

Third-Party Regulatory Fees: Same as sub-brokerage, including SEC and FINRA fees

Additionally, for dividend-paying stocks, a 30% withholding tax on cash dividends applies (some may be refundable via tax treaties).

Comparison of Major Sub-Brokerage Firms’ Fees

Based on 2025 standards, here are the fee rates for major sub-brokerage firms:

CITIC’s sub-brokerage fee is mid-range in the industry, with advantages in service quality and customer support.

Comparison of Major Overseas Brokers’ Fees

Bank Currency Exchange and Remittance Fee Comparison

Practical Cost Calculation: Sub-Brokerage vs Overseas Broker

Using the most cost-effective setup:

• Sub-brokerage with Fubon Securities (0.25%)
• Overseas broker with Mitrade (zero commission)
• Taiwan Bank for currency exchange

(Assuming exchange rate: 1 USD = NT$30)

Key Insights: When to Choose Which Method

When to choose sub-brokerage:

• Small trading amounts (less than $6,000)
• Low trading frequency
• Prioritize fund safety and regulatory protection
• Prefer to avoid currency exchange hassles

When to choose overseas brokers:

• Single trades exceeding (e.g., over $200)
• Frequent trading (multiple transactions, where low per-trade fees matter)
• Pursuit of minimal transaction costs
• Willing to manage USD accounts independently

Additional considerations:
If frequent withdrawals of TWD are needed, sub-brokerage is more convenient. For long-term holdings and multiple trades, the cumulative savings with overseas brokers can be significant. For example, with CITIC sub-brokerage, four trades of $10,000 each incur about NT$100 in fees, whereas overseas brokers might only cost NT$11.67, a difference of over 8 times.

Summary Recommendations

• Choose trading method based on capital size and trading frequency — small, infrequent trades favor sub-brokerage; large, frequent trades favor overseas brokers.
• CITIC’s sub-brokerage fees are competitive but not the lowest — Fubon’s 0.25% rate is more advantageous.
• Don’t just look at commissions; consider currency exchange and remittance costs — total cost of overseas trading should be comprehensively evaluated.
• Trading frequency is decisive — frequent traders should consider overseas brokers even for small amounts.