Interactive Brokers

This guide introduces the types of brokerage accounts offered by Interactive Brokers and why they are an excellent choice for people moving between countries. We also discuss tax issues to consider and give some general advice on using Interactive Brokers.

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General information

There are many services that allow the purchase of stocks. Deciding on a specific service requires a careful consideration of tax laws and legal conditions. For example, German banks are required to deduct a flat tax rate (Abgeltungssteuer) of ca. 25% on investment income (capital gains and dividends), such that a further tax filing is not necessary and thus reducing administrative work significantly.

However, for people who do not know where their long term tax residence will be, there appears to be a single natural choice of a broker. After intense research and comparison of different services, we believe that this choice is Interactive Brokers, which is a US financial service firm which caters to both professional traders and private customers. Let us mention the key advantages:



Before you decide to open an Interactive Brokers account, you should also consider the following disadvantages and drawbacks.

In summary, you should be aware of potential drawbacks, the exact requirements and the associated fees of using Interactive Brokers. We continue to believe that it is the best available product with very low fees, if you regularly move between different countries (such as postdocs or young professionals) and would like to invest into the stock market or exchange and transfer currency internationally.

Account types

Interactive Brokers offers the following account types for US residents (for everybody else, IBKR Pro is your only option):

To decide which account you should open, you can just go through the following list:

In summary, IBKR Lite is best for people who can open their account based on their US address. For anybody else, IBKR Pro is the only option, but as they recently removed monthly fees and there is no requirement of a minimal account value, it is still an excellent choice. If you are an international person who regularly moves country or if you want to trade advanced products (units, warrants, options) on international markets, this may still be the best option considering that Interactive Brokers will also save you on exchanging currency as explained here. Otherwise, we discuss other alternatives for different countries below.

Special comment for US persons (citizens / permanent residents etc.) in Europe: If you open an Interactive Brokers account with a European address, you will not be able to trade US-domiciled ETFs, as explained here. In this case, you should consider opening an account with a US address (which also gives the option of choosing IBKR Lite).

Regarding the opening bonus

Currently, Interactive Brokers runs a promotion* where you receive a bonus equal to 1% of the money that you deposit / stocks that you transfer and keep for one year (maximal bonus is 1000 USD). Please read the terms & conditions* carefully: The bonus is paid out in the form of "award shares" of IBKR, i.e., you receive Interactive Brokers stock. If you withdraw money within the first year, the award shares are reduced. Most importantly, you cannot sell these shares for one year after you received them. In summary, you essentially get a bonus of 1% of the amount that you deposit.

This bonus is very attractive if you intend to manage your retirement / stock investments with Interactive Brokers. You can transfer your stocks/ETFs/assets from many countries with little to no fees. You can also deposit money in most major currencies (see above) without additional fees. The main advantages of IBKR for expats were already discussed above, namely that it is easy to deposit from different countries (depending on where you currently work / make money), but you can also withdraw money when needed without needing additional transfer services (and with almost zero exchange fees).

If you only intend to use Interactive Brokers to exchange and transfer money internationally, you will probably not benefit from this bonus, as you would likely not leave the required amount in assets and/or currency in the account for one year. You may still benefit from the bonus, in case you keep some funds in the account for later currency conversion or as emergency funds (which can be easily accessed from different countries).

Frequently Asked Questions