How to invest in Australian shares as an Australian Expat

If you're living overseas as an Australian expat, it's natural to want to keep one foot in the Australian economy. Many Australians overseas are interested in building wealth through Australian shares but are often unsure about the tax implications, legal restrictions, or access challenges involved.

In this blog, we’ll explore how to invest in Australian shares as an Australian expat, including key considerations, choosing the right platform, and how to structure your investments to remain compliant and efficient.

Why Australian Expats Invest in Shares

There are many reasons why expats continue to invest back home.

Firstly, Australian shares tend to pay high dividends compared to shares in other international markets. This can accelerate the growth of your investments, particularly where dividends are reinvested to buy new shares.

Many expats also feel more confident investing in companies they know, like the major banks, mining giants, and well-known ASX-listed businesses. Another key reason is currency. If you plan to return to Australia or have future expenses in Australian dollars, it makes sense to hold part of your portfolio in AUD.

Can Expats Invest in Australian Shares?

Yes, you absolutely can invest in Australian shares while living abroad. But your tax status, brokerage access, and local regulations will impact how you go about it.

The most important step is understanding your residency for tax purposes. Even if you’re still an Australian citizen, you might be considered a non-resident for tax.

As a non-resident, you’ll face different tax treatment on dividends and capital gains. Dividends are generally subject to a 15% withholding tax if you live in a country that has a tax treaty with Australia.

While most listed shares are exempt from capital gains tax in Australia for non-residents, there are some exceptions. For example, if you purchased the shares while you were still an Australian tax resident and did not apply the deemed disposal rules when you left, capital gains tax may still apply.

You also won’t receive franking credit refunds as a non-resident. However, the credits can still reduce the withholding tax on your dividends, so they’re not entirely wasted.

Choosing a suitable Investment Provider as an Expat

Not all Australian brokers and investment providers allow overseas residents to open accounts. You may need to use a platform that caters to expats specifically.

While some international brokers provide access to the ASX and accept non-resident investors, they may not be subject to the same regulatory oversight as Australian-based providers. Additionally, these brokers often require supplementary documentation, such as evidence of overseas residency.

Before you open an account, you will need to assess if the provider supports your non-resident tax status in Australia, your overseas country of residence, and whether they have any restrictions on foreign investors.

Transferring Funds from Overseas

Once your investment account is open, you’ll need to fund it. If your income is in a foreign currency, look for competitive exchange rates and low fees.

International money transfer services like Wise or OFX are often more cost-effective than banks. This can make a noticeable difference if you're investing large sums or transferring funds regularly.

What to Invest In

On the ASX, you can choose to invest in individual shares, which provide you with voting rights in the company and participation in corporate actions, or you can go for exchange-traded funds (ETFs), which offer instant diversification. ETFs can give you exposure to a basket of underlying shares, and often track the broader Australian market. They’re low-cost, tax-efficient, and a simple way to gain exposure to the ASX.

Which option is right for you will depend on your investment goals, risk tolerance, and how hands-on you want to be. It’s important to seek professional advice and read the PDS before making any financial decisions.

How a Financial Adviser Can Help

Working with a Financial adviser who specialises in Australian Expats can make the entire process much smoother. An experienced adviser can help you find an investment platform that accepts expats and complies with both Australian and international regulations, saving you time and avoiding costly setup mistakes.

They’ll also assist in designing a diversified portfolio of shares or ETFs that matches your financial goals, risk profile, and future plans. Most importantly, a good adviser will help you stay on top of your tax obligations in both Australia and your country of residence, ensuring you remain compliant and efficient.

Conclusion

To invest in Australian shares as an Australian expat, you need the right setup, a clear understanding of the rules, and a strategy tailored to your unique situation. It can be a powerful way to grow your wealth while staying financially connected to Australia. But without the right advice, you may run into unnecessary tax or legal issues.

If you’re an Australian expat and need help structuring your investments, we’re here to assist. As a Financial Adviser who works specifically with expats, we can help you invest with clarity and confidence, no matter where in the world you live.

Runway Wealth Management is the trusted Financial Adviser to the Australian Expat community. Our tailored advice is backed by expertise, education and experience, which allows us to be at the forefront of Australian Expat Financial Planning.

If you would like to speak to one of our Expat Financial Advisers about this blog or if you have other queries, we would be more than happy to speak with you. Feel free to send us an enquiry through the ‘Contact Us’ tab provided in the link below:

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General Advice Disclaimer: The information contained herein is of a general nature only and does not constitute personal advice. You should not act on any recommendation without considering your personal needs, circumstances, and objectives. We recommend you obtain professional financial advice specific to your circumstances.