RetireJapan

Hi there!

Sorry for the dumb question.

EU citizen, I started investing in ETF via Firstrade - long term play. I tried with $10k to see how it works, and now feel comfortable putting more of my savings in (i.e. ~100-200k).
The firs steps process were very easy. But want to make sure I'm covered in the long term. So I'm wondering if there's a catch somewhere in the long run, e.g.

• What happens when I want to cash-out? Assume I make millions and I want to transfer $1mn to Japan from that firstrade account, I assume It wont be that easy?
• Will US government tax me when I withdraw? I understand it will be my duty to file gains in my tax filing in Japan or wherever I live - but will the US government tax me when I transfer the cash out of the broker account to Japan?
• What if Firstrade goes bankrupt, what happens to my money?

Before you ask!:

Why don't you open Nisa/Ideco first：
I'm out of Japan for a few months, and haven't opened Ideco/Nisa yet, will do so when Im back.

Why don't you trade everything on SBI/Rakuten or other JP platform：
Most of my assets are in Taiwan, I am unsure whether I will be in Japan for long, but have accumulated a bit too much savings that I need to invest.

Why don't you use IKBR it's much better：
Opened a Firstrade account, after some friends recommneded it (non-Japan based friends). Since IKBR is recommended everywhere on the internet, I opened both at the same time. Honestly I didn't enjoy the experience with IKBR so much, Firstrade felt more pro, transparent and responsive -that's a very personal feeling but it makes me more comfortable to put my money there. Also heard Firstrade has better rates. But if there is a significant reason to prefer IKBR beyond this, please share, I can make the switch before I involve too much assets

Hello! I am a user of both FT and IB (interactive broker ) but I am based in Hong Kong,I can share my experience.

1. When you cash out, FT charges a fee ( $ 35 usd as I rmb , please check the most updated fee) and whatever your receiving bank charges you. It would take a while but it wouldn't be difficult in my opinion.

2. I don't pay US capital gain tax as a non-US citizen. And simple transferring money out from a broker shouldn't generate any tax. (Not sure about EU citizen on the capital gain tax part)

3. You could claim up to $500K USD if FT goes bankrupt. check this https://www.firstrade.com/content/en-us ... rotection/

From my experience FT VS IB

FT doesn't have minimal fee while IB charges 10USD / month if you have less than $100K (Edit: IB canceled 10USD fee since 1 july 2021)
FT have cheaper commissions for stocks and also latest market data. For IBHK, market data ( price ) is delayed 15 min unless you subscribe ( pay)
Customer service, IB is more responsive for me so far, and more secure. IB has two factor authentication while FT only requires a passcode to log in + trade. IB is a larger company than FT so I would be more comfortable putting my money in IB than FT, however , both are covered by SIPC and is unlikely to go bankrupt.


IB allows free withdrawal once a month, FT doesn't have it. It has better margin rate, interbank exchange rates for forex.
Most importantly, IB allows you to buy products from more markets including HK/ singapore/ canada / etc

I would recommend FT if you mainly invest in US stocks / options and doesn't need margin. Also long term investment without frequent need of withdrawing money. Also interface is easier to use.

I would choose Interactive Broker if you invest in bonds / markets mentioned above / forex and use margin. I prefer IB myself for these reasons but use FT for my US stocks to minimise fees. Tip: if you use tradeworkstation of interactive broker, use classic mode instead of mosaic, it is easier.

Thanks a lot for your answer!!

In the meantime I managed to do a bit of research, I also cashed out 100 bucks from Firstrade to see what happens
1. Indeed FT takes $35 per transfer, it seems (while IBKR would be free once a month) - not to concerned here, as I don't plan to transfer money in the next decades, so things could change a lot here.
I did also get charged 12bucks by some "intermediary bank" but here I am not sure if this is a fixed fee or a variable fee.

2. Yes I won't pay capital gain tax, but I learned that I would pay US dividend tax (30%) - I heard if I switched to IBKR and bought VUSD instead of VOO, that tax would go down to 15% - is it true? Trying to find a reliable source on this.

3. Thanks! This is clear. Now I see on reddit and other forums, that since Brexit, IBKR migrated people from their UK account to a Hungary account, and that the protections on IBKR goes down from 500k to 20k. Is that true for people opening an account from Japan? If so that's enough for me to 100% comfort me in staying with Firstrade.

1. Both IB and FT offers debit card, you can look into that, if you need small amount of money from time to time, you don't have to pay $35 each time to FT

2. https://thefipharmacist.com/vusd-vs-voo/ I think this website has some info, looks like it is as you said 15% for ETF domiciled in Ireland because of the tax treaty.

3. If your account is IBLLC I believe it is still under SIPC. To open interactive broker in Japan, you will have to see if your account is IBLLC or IBSJ
https://www.interactivebrokers.co.jp/en ... &p=english Search " SIPC" in this website, there is a list of IB in different countries and under what kind of regulations. For example my IBHK is regulated in HK so it is not under SIPC instead under local protection.

If you have more than $500K , why not having both account? With IBLLC + FT account, your total protection is up to $1M, also it's a spread of risk, getting best of both worlds