Author Topic: Where to invest from EU (Croatia)?  (Read 2717 times)

shimrod

  • 5 O'Clock Shadow
  • *
  • Posts: 16
Where to invest from EU (Croatia)?
« on: March 14, 2016, 10:29:19 AM »
Hi, I'm new here.

At 34, I've only started considering financial independence, and I seem to have hit an obstacle in that the two core principles seem to be: save a significant part of your income, and invest in investments with a moderate but dependable yield, requiring minimal hands-on involvement (like Vanguard).

But Vanguard, Betterment, and other companies I see recommended here are not available for me, and funds I can easily invest in like ones offered by local banks' investment services have yields closer to 4% before inflation, than 5% after inflation.

Is there a default answer for EU residents, like Vanguard seems to be for US residents, that might be available even in my Johnny-come-lately non-Eurozone country?

zz_marcello

  • 5 O'Clock Shadow
  • *
  • Posts: 53
Re: Where to invest from EU (Croatia)?
« Reply #1 on: March 14, 2016, 10:40:18 AM »
- Open a brokerage account from Interactive Brokers (available in nearly every country in the world; incl. Croatia)
- Buy Vanguard Index Funds (Use Ireland based ETF versions)

Done
« Last Edit: March 14, 2016, 10:42:37 AM by zz_marcello »

shimrod

  • 5 O'Clock Shadow
  • *
  • Posts: 16
Re: Where to invest from EU (Croatia)?
« Reply #2 on: March 14, 2016, 09:16:21 PM »
So it is! Thanks.

After this got me started, I now see that TD Ameritrade and Saxo Bank also allow Croatia on the application. Is there a reason why you mentioned Interactive Brokers, but not those?

Why Ireland based?

I've been reading

http://jlcollinsnh.com/2014/01/27/stocks-part-xxi-investing-with-vanguard-for-europeans/

and it seems to be saying that the Ireland-based and the American-based funds both have their dividends taxed, but that a non-resident investor can reclaim the U.S. tax, but not the Irish one:

"See, the U.S. government will charge up to 30% dividend withholding tax. However, that depends on your countryís dividend tax treaty with the U.S. My country has a cool deal with the U.S. and thus my dividends will be charged with a 15% withholding tax instead of 30%. The remaining 15% withholding tax can be reclaimed by filling in a W-8BEN form."

"A (non-Irish) European investor is charged dividend withholding tax by the Irish government. Whereas the Irish investor can claim this dividend withholding tax back from their government, the rest of us (in most cases) canít."

Is this correct?

Micks

  • 5 O'Clock Shadow
  • *
  • Posts: 6
  • Location: the Netherlands
    • TrackerBelegger
Re: Where to invest from EU (Croatia)?
« Reply #3 on: March 16, 2016, 08:26:16 AM »

Why Ireland based?

I've been reading

http://jlcollinsnh.com/2014/01/27/stocks-part-xxi-investing-with-vanguard-for-europeans/

and it seems to be saying that the Ireland-based and the American-based funds both have their dividends taxed, but that a non-resident investor can reclaim the U.S. tax, but not the Irish one:

"See, the U.S. government will charge up to 30% dividend withholding tax. However, that depends on your countryís dividend tax treaty with the U.S. My country has a cool deal with the U.S. and thus my dividends will be charged with a 15% withholding tax instead of 30%. The remaining 15% withholding tax can be reclaimed by filling in a W-8BEN form."

"A (non-Irish) European investor is charged dividend withholding tax by the Irish government. Whereas the Irish investor can claim this dividend withholding tax back from their government, the rest of us (in most cases) canít."

Is this correct?

You are usually taxed on dividends you receive yourself. The taxes paid by a fund are generally not reclaimable. Differences between countries in terms of taxes are big.

The two quotes are plainly incorrect. The W-8BEN form is filled in to be able to apply the treaty rate of 15% on US dividends and does not further reduce it. Non-Irish residents are not taxed by the Irish government on ETF dividends. This differs from dividends from US domiciled ETFs, which are taxed at 30% (or 15% if your country has a treaty with the US).

I think this page from the bogleheads wiki would be helpful to you.