HOW TO INVEST IN THE NEW YORK STOCK EXCHANGE & NASDAQ WITH CFDS FROM MALTA
Large North American companies are listed on both Stock Exchanges and you can learn how to trade their shares from here.
Best Brokers for American Shares Trading available in Malta
Can I Buy US Shares from Malta?
Many Maltese residents ask us if it is possible to buy US stocks being a non-US citizen. Stocks and bonds are indeed regulated by US law, yet, you do not have to be a US citizen to trade in the US stock market, in other words, you may buy US shares being a Maltese resident. No specific laws prohibit non-US citizens from investing in the different US stock markets like NYSE (New York Stock Exchange) or Nasdaq. Many investment firms cater to international clients.
New York Stock Exchange and Nasdaq: The two most popular markets for investors in Malta
Based on the mythical Wall Street, the New York Stock Exchange (NYSE) is the most extensive in the world by market capitalization where shares and bonds of the titanic North American corporations are traded. Suppose a saver from Malta invests in stocks or bonds listed on the New York Stock Exchange. In that case, he is investing in the historically strong US Dollar and diversifying his investments with the most traded financial instruments worldwide.
Shares of giant American Corporations are the most sought after financial assets by the general public. Below we list [Some of] the most popular stocks of these two Stock Markets, starting from the ones that trade on NYSE:
Berkshire Hathaway: An investment corporation owned by the legendary investor Warren Buffet.
Alibaba Group: China's e-commerce giant, owned by Jack Ma.
Visa: Largest provider of credit cards in the world.
Johnson & Johnson: An industrial colossus that produces articles of mass consumption.
J.P. Morgan Chase: Diversified Financial Group.
Exxon Mobil: World's largest oil and gas producer.
Walmart: Number 1 supermarket chain worldwide.
Procter & Gamble: Another mass consumption industrial giant.
Mastercard: Provider of credit cards worldwide.
Walt Disney: The well-known entertainment and content company is also listed on the NYSE.
Among the Nasdaq's most popular stocks are the tech giants:
Apple: The company that revolutionized the mobile business by creating the iPhone, needs no further introduction.
Facebook: Another one that doesn't need an introduction: The largest social network worldwide.
Amazon: The most popular eCommerce platform in the United States and the world.
Netflix: Application of series and movies with the largest number of subscribers worldwide.
Google (Alphabet): The Well-known tech giant, we only need to mention that Google's shares are called "Alphabet" on Nasdaq.
Tesla: Elon Musk's vision.
These are unfinished lists of the most well-renowned shares; there's a significant number of internationally recognized companies and brands available to invest. A rounded way of investing is to invest in the S&P500 index, which groups the top 500 companies that are part of both the New York Stock Exchange and the Nasdaq.
S&P500: The Index that Best Expresses the two largest Stock Exchanges jointly
Standard & Poor's 500 Index, also known as S&P500, is one of the most extensively respected stock market indices in the United States (The other one is the Dow Jones). The S&P 500 is considered the most representative index of US' real economy.
The index is based on the market capitalization of 500 large companies that issued shares on either the NYSE or the NASDAQ markets. The S&P500 represents approximately 80% of the entire capitalization of the United States Stock Market. The S&P500 index components and their weighting are determined by the S&P Dow Jones Indices rating agency. It differs from other indexes in the United States' financial markets, such as the Dow Jones Industrial Average or the Nasdaq Composite index, in the diversity of the items that make it up and its weighting methodology. It is by far the most invested stock index globally. Many people consider it the trend marker of the North American economy; that is, if the S&P500 goes up, the economy is doing well.
Investing in a financial instrument that replicates the S&P500 Index is (the best?) an excellent way to invest in a good portion of the North American economy through the shares of its corporate giants.
US Stock Markets Trading Hours
Regular trading hours for the US stock market, including both the New York Stock Exchange and the Nasdaq Stock Market, are 9:30 AM to 4:00 PM Eastern time (ET) on weekdays (except stock market holidays). On early-closure days, typically right before or right after a market holiday, regular stock trading ends at 1:00 PM ET. In terms of Maltese time, or Central European Time, then, Trading hours range:
from 4:30 PM to 11:00 PM during Winter Time (November to April), and
from 3:30 PM to 10:00 PM on 'Daylight Saving' Time (rest of the year).
Brokers like eToro have Online Apps that allow you to buy US Shares in a straightforward way
What is the minimum amount to invest in US Shares from Malta?
Unlike most general public thinks, the answer to this question is that many stockbrokers do not have a minimum deposit (or a tiny amount of cash); which means no minimum amount. Also, to gain more clients, many brokers do not charge a commission to acquire American companies' shares.
How to Open a Trading Account to Invest in the New York Stock Exchange from Malta
Opening an investment account with an Online Broker is a process that is completed online and requires:
First, choose the broker that best fits your investment goals.
Upload an ID and a proof of address (electricity, water bills, etc.), through the Broker's App or via email.
Make sure to choose the right base currency of the account. With some brokers, changing it once you open the account can be painful. Trading Accounts may be based in US Dollars (USD), Euros (EUR), Pound Sterling (GBP), Swiss Franc (CHF), Australian Dollar (AUD) as the base currency. Practically all of them offer the option in US Dollars or Euros.
Once the account has been approved by the Broker, it's time to deposit cash. The depositing and withdrawing money methods are usually Credit Cards, Bank Transfers or eWallets (PayPal, PaySafe, Skrill, SafetyPay, Neteller, among many others). The available options to deposit funds will depend on each Broker. A vital fact to mention is that all of the Brokers presented above allow you to use a simulator on their platform, that is, they allow testing their Demo account, which is totally Free. In other words, you can open a Demo account, try the platform, and then decide whether to deposit money or not.
But I am not an Investment Banker... Is it easy to invest?
Online Brokers allow investing in the New York Stock Exchange straightforwardly through optimized apps that grant easy and fast access to the US financial markets. In fact, most platforms resemble a social network or any other phone app: They are designed so that the investor can learn and start trading very quickly, without the need for much prior knowledge. Literally, to buy shares of, for example, Apple, or to invest in a financial instrument that replicates the S&P500 index, you have to:
open a trading account as explained before,
Search for "Apple" or "SP500" on the Broker's Trading platform, and
press the "Buy" button.
And, done, you are officially investing in American related financial assets. If you wish to move forward, check out the 4 options that we have presented initially, which are, in our opinion, the best ones to deal with in Malta.
Do Maltese Pay Tax on US Stock Trading?
While helping to write the US Constitution, Benjamin Franklin said: "Our new Constitution is now established, everything seems to promise it will be durable; but, in this world, nothing is certain except death and taxes."
However, things aren't that bad. Since you would be classified as a non-resident alien (you are a foreigner, and you don't live in the US) by the IRS (the US tax watchdog), so, you wouldn't be subject to US Capital Gains Tax, but only to the Dividend Tax of 30%. For the record, we won't comment about how that will affect your local tax bill, because it does affect your Capital Gains position on the FS3.
How do you pay the US dividend tax? Your broker would withhold the amount, whenever the company you invested in pays dividends to your trading account. For example, if you invest in 100 Apple shares and pay dividends for $0,20 per share, you would get $20 minus $6, that is, a net amount of $14.
The US Stock Market is by far the largest in the World. When investing there, you are technically investing with the US Dollar, the most sought after currency. If you are going to place your savings anywhere, the bottom line is the #1 Economic Superpower perhaps it's not the wrong place.