Last updated April 21st, 2024.
The Hong Kong Stock Exchange is only Asia’s third largest in terms of market cap. Yet it’s the most internationally-focused trading platform in the whole region.
When it comes to secondary listings, foreign companies list themselves in Hong Kong more frequently than anywhere else in Asia.
You can trade shares of Microsoft, Prada, Prudential, and countless other multinational firms on Hong Kong’s stock exchange.
Indeed, Hong Kong is arguably home to a greater variety of stocks than any other other equity exchange on the Asian continent!
Considering the opportunities available, it’s understandable why investors from all over the world are keen to invest in Hong Kong’s stock market and open a brokerage account in “Asia’s World City”.
Below, we’ll give a complete overview of how to buy stocks in Hong Kong including the accounts you’ll need and the process.
It’s possible to get a local account as well, and you’ll also learn how to open a brokerage account in Hong Kong as a foreigner.
How to Trade Stocks in Hong Kong
Opening a brokerage account and buying stocks in Hong Kong is easy if you’re a resident. Simply take your ID card, along with a few other papers, down to practically any bank in the whole city.
The harder question is: what’s the best way to trade Hong Kong stocks as a foreigner?
You have several different ways to buy stocks on the Hong Kong Exchange if you’re aren’t a resident here.
The easiest method is, unsurprisingly, through a brokerage based in your home country.
But the easiest way doesn’t always mean it’s the best or lowest-cost method, though. The better way in our opinion? Opening a brokerage account in Hong Kong directly.
You can remotely set one up without getting on a plane or leaving home; all it requires are a bit of time and patience.
People usually buy foreign shares through a brokerage based in their home country. The problem is, brokers outside of Asia charge substantial fees for international trades in the region.
For example, top US brokerage Fidelity Investments charges HK$250 (US$32) per trade on the Hong Kong Stock Exchange. A brokerage based in Hong Kong will charge you as little as HK$8 (US$1) as a comparison.
We suggest setting up a local account in Hong Kong partially because of this. You may not care about a US$64 round trip transaction cost if you’re making larger trades. Lots of investors might wince at paying such a commission at least a bit though.
Plus, there are many other reasons you should open a stock account in Hong Kong as a foreigner.
A table showing international trading fees from Fidelity, a major broker in the US. You’ll pay anywhere from 3 to 10 times the commission buying Hong Kong stocks as you would with a local account.
Why Buy Stocks in Hong Kong?
Hong Kong is Asia’s de-facto financial center. Because of its status, foreign traders enjoy ample opportunities to profit from the whole region’s growth by owning stocks in Hong Kong.
Obviously, public companies based in Hong Kong are listed on the city’s stock exchange. Yet you aren’t merely limited to buying shares of local companies either.
You can trade equities from Malaysia, Japan, the United Kingdom, and other nations too. These are often dual-listed stocks of large multinational firms.
For example, Starbucks and Intel are both listed in the US. But they’re listed in Hong Kong as well. Having a secondary listing on the Hong Kong Stock Exchange lets them easily raise funds from investors who are based in Asia or Greater China.
In addition, opening a brokerage account in Hong Kong is one of few ways to buy stocks in mainland China as a foreigner.
The Shanghai-Hong Kong Stock Connect allows anyone with a brokerage account in Hong Kong to trade shares listed in Shanghai – or those in Shenzhen for that matter, which was also added to the initiative.
How to Open a Brokerage Account in Hong Kong
If you don’t already live in Hong Kong or have an account here, we’ll clarify things.
There are limited ways to open a Hong Kong brokerage account if you don’t make a trip to the city, which is something we highly recommend doing at some point in your life.
Even if you don’t travel here, you still have several options if you’d like to get a brokerage in Hong Kong though. Three methods stand out in particular.
Boom Securities is a brokerage in Hong Kong that lets foreigners, including US citizens, open an account with relative ease. You can start the process online, and then mail them some documents.
Everything can be done remotely. From start to finish, opening a Hong Kong brokerage account often takes up to two or three weeks.
You can also trade stocks in Thailand, South Korea, Indonesia and other difficult-to-access markets with a Boom account.
Having a broker in Hong Kong is indeed a great way to start investing all across Asia.
Trade commissions are much higher than if you were to open a local account in each of these countries individually. Nonetheless, it can be difficult to access Asia’s smaller, niche markets. Keeping all your Asian stocks in one place is convenient too.
A good second option is through the trading app “moomoo“, which is a stock investment platform backed by Futu Holdings and Chinese tech giant Tencent.
It’s worth mentioning that moomoo is registered in the United States and Singapore as well. Thus, in addition to a Hong Kong brokerage account, you can easily open a Singaporean or US trading account if you’re based in any of those jurisdictions.
The only negative aspect of moomoo compared to the other brokers mentioned in this article is that you’re locked out from more exotic markets like Thailand and Vietnam. But if you’re only interested in trading stocks in Hong Kong, then that shouldn’t matter.
Your third option is using Saxo Bank, which is a Danish brokerage with an office in Hong Kong. They offer services similar to Boom Securities and are frequently recommended by foreign expats.
In summary: opening a Hong Kong brokerage account isn’t just a superb way to invest in greater China. Hong Kong also serves as a hub for the entire Asia-Pacific region.,
By setting up roots in Hong Kong and having a brokerage in the region, you’ll have unique access to stocks that most other traders simply can’t buy.
FAQs
How Can I Trade Hong Kong Stocks?
Large international brokerage firms, such as IBKR and Fidelity, support trading on the Hong Kong stock exchange.
However, if you're looking for lower fees and wider access, it's better to open a local brokerage account in Hong Kong.
Can Foreigners Open a Brokerage Account in Hong Kong?
Yes, in some cases it's possible to open a brokerage account as a non-resident foreigner either online through the mail.
How Many Stocks are Listed in Hong Kong?
As of 2024, there are more than 2,600 public companies listed on the Hong Kong Stock Exchange.
This number doesn't several thousand other stocks listed in Shanghai and Shenzhen which can be accessed through the Hong Kong Stock Connect.
