In-Depth Breakdown of 2025 US Stock Trading Fees | Custodial Delegation vs Overseas Brokers, Who Has Lower Investment Costs?

As a Taiwanese investor, entering the US stock market may seem simple, but in reality, it is full of cost traps. Many people unknowingly pay unnecessary fees due to a lack of understanding of the fee structures of various investment channels, resulting in paying unnecessary commissions. This article will thoroughly reveal the hidden costs of sub-brokerage and overseas brokers, helping you choose the most cost-effective path based on your trading habits.

Two Ways for Taiwanese Investors to Invest in US Stocks: Sub-Brokerage vs Overseas Brokers

If you want to buy US stocks in Taiwan, there are basically two options.

Sub-Brokerage: Domestic Broker Agency Model

Sub-brokerage (Sub-Brokerage) officially refers to “Foreign Securities Business via Agency Trading.” Simply put, you open a special account with a domestic broker, which acts as an intermediary to buy stocks on your behalf in overseas markets. Since your order goes through two layers (you → domestic broker → overseas market), it’s called “sub-brokerage.”

The advantages of this method are: simple account opening process, direct deduction in New Taiwan Dollars, no need to exchange currency yourself, and protection under Taiwan’s Financial Supervisory Commission. The downside is that due to the complex process, the transaction fees are generally higher (usually 0.15%～1%), and each order incurs a minimum fee.

Overseas Broker: Direct Trading Model

Overseas brokers are like the securities firms you use in Taiwan, but the stocks traded are in the US market. You skip the domestic broker and place orders directly yourself.

The obvious advantages are: lower or zero commissions, fast trading speed, and a wide range of investment options. The inconvenience is that you need to handle currency exchange, remittance, and other procedures yourself, making the process relatively more complicated.

What Exactly Do US Stock Transaction Fees Include? Hidden Costs Investors Often Overlook

Structure of Sub-Brokerage Fees

When trading US stocks via sub-brokerage, your costs are divided into two layers: Direct Fees and Hidden Fees.

Part directly charged by the broker:

• Transaction Commission/Handling Fee: This is the main cost. Each broker’s fee rate varies between 0.25%～1%, but all have minimum charges (usually $25～$100). For example, buying $1,000 worth of stocks at a 0.3% rate should cost $3, but if the minimum fee is $25, the actual cost suddenly jumps to 2.5%! Small investors should pay special attention to this.

• Other Service Fees: Remittance fees, paper statement fees, dormant account fees, etc. (varies by broker, generally negligible).

Hidden costs embedded in the fees:

• Exchange Fees: Charged by the US SEC, only when selling, at a rate of 0.00051% of the transaction amount.
• Transaction Activity Fee (TAF): Collected by FINRA, also only when selling, calculated at $0.000119 per share, with a minimum of $0.01 and a maximum of $5.95.

These two fees are usually hidden within the handling fee by sub-brokerage firms and are not listed separately.

Structure of Overseas Broker Fees

Overseas brokers have more and more complex fee items.

Trade-related fees:

• Trading Commission: Most mainstream brokers now offer 0 commission, but some still charge.
• Margin Interest: If you use a margin account to buy stocks, the broker charges interest.
• Exchange Fees + Activity Fees: Same as sub-brokerage, with identical rates.

Currency exchange and remittance fees:

• Currency Exchange Fee: When converting TWD to USD, banks charge a fee, usually 0.05% of the exchanged amount, but watch out for minimum fee limits (ranging from 100 to 600 TWD).
• Remittance Fee: Banks charge when transferring money from Taiwan to overseas brokers, approximately 100～900 TWD per transaction.
• Withdrawal Fees: Some brokers charge an additional $10～$35 when withdrawing funds.

Dividend Taxation:

Regardless of the method, any US stock with dividends will have a 30% withholding tax on cash dividends (some can be reclaimed).

Cost Comparison Table: Clear View of Sub-Brokerage vs Overseas Brokers

Major Sub-Brokerage Fees of Leading Brokers in 2025

Below are the sub-brokerage US stock handling fees of major Taiwanese brokers (as of June 2025). Please verify the latest rates before actual trading.

List of Fees for Major Overseas Brokers

Bank Currency Exchange and Remittance Fee References

Actual Cost Comparison: Which is Cheaper — Sub-Brokerage or Overseas Broker?

Using the lowest-cost combination:

• Sub-brokerage plan: Fubon Securities (0.25% commission, no minimum fee) + Bank of Taiwan for currency exchange
• Overseas broker plan: Mitrade (0 commission) + Bank of Taiwan for currency exchange and remittance

(USD to TWD exchange rate assumed at 1:30)

From the table, it’s clear: When a single transaction exceeds $6,000, overseas brokers become more cost-effective.

But here’s an important assumption: the table assumes only one transaction. What if you trade frequently?

Suppose you make 4 trades (2 buys and 2 sells), same $10,000:

• Sub-brokerage: each time $25 × 4 = $100 in handling fees
• Overseas broker: remittance fee remains one-time at $11.67, trading commissions $0

The conclusion flips instantly.

How to Choose the Most Cost-Effective Method? A Scenario-Based Guide for Investors

1. Small capital, infrequent trading
Use sub-brokerage. Save the hassle of currency exchange, and the per-transaction cost isn’t too high.

2. Large capital, frequent trading
Use overseas brokers. Complete currency exchange and remittance once, then save on commissions per trade, making it more cost-efficient in the long run.

3. Need frequent fund in/out
Sub-brokerage is more flexible, directly deduct in TWD, no need to remap funds each time.

4. Want margin trading and short selling
Only overseas brokers support margin trading; sub-brokerage cannot provide margin services.

Mitrade Overview: Quick Start with Overseas Brokers

Mitrade is a licensed broker authorized by the Australian Securities and Investments Commission (ASIC) (license number 398528), offering 0 commission US stock trading.

Account opening in 3 steps:

1. Register: fill in information and submit application
2. Deposit: minimum $50 (supports TWD trading)
3. Trade: start trading US stocks immediately

Final Reminder

When choosing a US stock investment channel, don’t just look at a single fee item. Add up all costs including currency exchange, remittance, commissions, and withdrawal fees for the total cost. For small test trades, sub-brokerage’s convenience is suitable; once you accumulate enough capital, switch to overseas brokers to enjoy zero commissions. Remember: the cheapest option is often not the one with the lowest rate, but the one that best fits your trading habits and capital scale.