Many South African online trading sites provide CFDs on Netflix. But don’t be deceived—I had to learn that holding CFDs is not the same as owning the stock. A U.S. broker is the only place you can acquire and own Netflix shares, which are traded on the NASDAQ. After some research, we eventually found out how to deal with a U.S. broker in South Africa.
What Amount Can South Africans Invest Abroad?
Unfortunately, SARS is not too keen on letting us withdraw money from our country, making things challenging for South Africans attempting to send money abroad. SARS is quite glad to accept foreign investments into our country.
You might be interested in the following two categories of foreign investment:
- Single discretionary allowance for annual investments under R1 million. Your single discretionary allowance, or R1 million, is the amount SARS permits each South African resident to invest overseas yearly. You will instantly be eligible for this; no administrative work is required.
- Allowance for foreign investments for sums less than R11 million and greater than R1 million per year. Unfortunately, you will need to apply for a foreign investment allowance if you plan to invest more than R1 million. Contrary to your single discretionary allowance, you must apply for this, so getting it can be challenging.
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- Open a trading account overseas. Use EasyEquities; there is a comprehensive instruction online that explains how to open a trading account as a citizen of South Africa step-by-step.
- Search for the Netflix stock ticker. Log onto your EasyEquities account after it has been funded and your account has been approved, then use the search option to find the Netflix stock ticker (NFLX.)
- The transaction should be completed instantly if you place a buy order within trading hours.
Now that you know how to invest in Netflix, you may wonder how much money you can put into foreign stocks in South Africa and whether you’re even permitted to hold American companies!
According to Investopedia.com, you are permitted to purchase American securities like Netflix. You will need to send additional papers to the foreign exchange, which is the only little obstacle you might encounter.
Why Purchase Stocks Rather Than CFDs?
Purchasing stocks is entirely different from acquiring CFDs.You essentially purchase a tiny portion of a firm when you purchase a stock, which entitles you to dividend payments and other stockholder privileges. However, when you buy a CFD, you are essentially just wagering on whether the price of a stock will increase or decrease. You are merely a participant with some stake in the outcome; you are NOT a shareholder in the true sense.
