When you invest in US ETF, there’s a withholding tax that takes away 30% of your dividends. Instead, you will only have to pay 15% withholding tax by investing in Ireland Domiciled ETFs. In this video, I’ll discuss what what are Ireland Domiciled ETFs, and how you can invest in them.
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0:00 – Intro
0:57 – What is Ireland Domiciled ETFs?
US and Ireland has a tax treaty, as such, you will only have to pay 15% withholding tax on your dividends when you invest in Ireland Domiciled ETFs. So instead of VOO from US, you could invest in VUSD from the London Stock Exchange. Another example is instead of XLK from US, you could invest in SXLK.
3:13 – Differences between US ETFs and Ireland Domiciled ETFs
1. Performance. Generally the Ireland Domiciled version has similar holdings, as such their performance are almost identical.
2. Expense ratio. Ireland Domiciled version has slightly higher expense ratio, but its very cheap considering that you will be saving 15% on dividends.
3. Liquidity. US ETFs has higher liqudity compared to the Ireland Domiciled version. That means the Ireland Domiciled ETFs have a higher bid ask ratio. As such you may not get the best possible price when buying or selling. But it doesn’t really matter as it doesn’t make that much difference.
6:49 – How to find Ireland Domiciled ETF
You can go to to look for Ireland Domiciled ETFs. Another way is just to Google search for it.
8:10 – How to buy Ireland Domiciled ETF
There are only 2 best broker in Singapore, Interactive Broker or Saxo. Personally I prefer Interactive Brokers as it has lower fees. Even though it has a monthly $10 maintenance fee, when your account exceeds $100k, there’s no more fee, making Interactive Broker cheaper in the long run.