hTTi

Hello everyone,
I am a german citizen, living in Germany. I wanted to invest in US ETFs , when I learnt that in Germany we are not allowed to invest in US ETFs due some legislations. The only way to invest in the US ETS is through UCITS.
However here could someone recommend trusted , reliable platforms as I intend to invest for the long term ?
How does the Vorabpauschale work for these type of investments ? and most importantly in these platforms the names of the UCITS is cryptic and how does one know which US ETF a specific UCITS is mimicking ?

I think we need to start with some definitions.

UCITS: https://www.ig.com/en/trading-strategie ... tf--220428

• What is a UCITS ETF?
  A UCITS ETF is an exchange traded fund that follows a system of safety measures in accordance with UCITS regulations. This means that its holdings must be diversified, with no single holding above 10% of the fund’s net asset value (NAV).
  
  It must be liquid, allowing investors the flexibility to sell their shares at any time. Further, UCITS ETFs must be held separately from those of the fund provider and supervised by an independent custodian, to safeguard investors’ assets if the provider runs into financial trouble.

And here an introduction to ETF in general (in step 4, you get to choose the ETF you like, all of the "World" ETF invest around 60% to 70% in US stocks): https://www.justetf.com/en/academy/etf- ... html#intro

You can look up an ETF on the above JustETF.com website by entering its ISIN (international securities identification number).
Since you want an ETF with US assets, choose an ETF whose ISIN starts with IE, i.e. one that has its seat in Ireland, since Ireland has an advantageous double taxation agreement with the USA with regards to source tax on dividends, which means a better return on investment for you.

For this reason, avoid ETF headquartered in Luxemburg, i.e. ones whose ISIN starts with LU, since you risk it being moved into an Irish one and you suddenly having to tax its profit despite not selling it, just like recently happened with this Amundi ETF: https://www-spiegel-de.translate.goog/w ... r_pto=wapp

Since you are not a US citizen, you should simply open a free brokerage account (Depot) at one of the German discount brokerages that offer an interface in English (if your native language were German, you wouldn't be posting here, so you need that interface in English):

• TradeRepublic: https://traderepublic.com/en-de
• Scalable Capital: https://de.scalable.capital/en

Since these are German brokerages, they will deduct the tax on the Vorabpauschale for you, i.e. you will not have to declare your investment into these ETF in your German tax return, like you would have to if you chose a brokerage from outside Germany.

Hello Panda Munich,

Before I dive deep into your message and understand all the links, I just wanted to say something. You are really a god send. Ever since I moved to Germany as an expat almost 13 years ago and discovered you on Toytown, I have truly felt grateful to you. You guide and share information like no one else. Feel's like you've got out backs. I just can't thank you enough. If ever we cross paths with each other in real life, I owe you big time ! Thanks a million.

My doubts will follow
Thanks a million!