Brother Chen, who runs a cross-border e-commerce business in Shenzhen, earned $500,000 on Amazon’s U.S. site in 2025. He wanted to invest this money in U.S. stocks, but discovered that: domestic brokerages don’t allow him to buy U.S. stocks; Hong Kong brokerages require a Hong Kong bank card; and U.S. brokerages require an ITIN and an SSN. After three months of hassle, he finally opened an account in early 2026—but his dividends were subject to a 30% tax withholding, which was 20 percentage points higher than what investors with an ITIN paid.

In 2026, an increasing number of Chinese investors are turning their attention to the Hong Kong and U.S. stock markets. But opening an account is just the first step; the real costs lie in the details: choosing a brokerage, commission structures, tax status, dividend taxes, and capital gains taxes. In this article, we’ll take a practical approach to help you map out the best path for opening a Hong Kong and U.S. stock trading account in 2026.

Key Takeaway: In 2026, Chinese citizens with an ITIN who open U.S. stock accounts will see their dividend withholding tax reduced from 30% to 10%; those without an ITIN will simply have to pay 30%. This 20% difference is far more important than agonizing over which brokerage offers a $5 lower commission.

01

Opening a Hong Kong Stock Trading Account: Hong Kong Brokerage Firms vs. Mainland China's Stock Connect Program

Option 1: Mainland-Hong Kong Stock Connect.Activate Hong Kong Stock Connect access through an A-share brokerage to buy Hong Kong stocks directly with RMB. Advantages: Simple account opening process, no need for currency exchange, and funds do not leave the country. Disadvantages: You can only buy stocks included in the Stock Connect program (approximately 500+), cannot participate in initial public offerings (IPOs), cannot engage in margin trading, and trading costs are high (commissions + stamp duty + levies totaling approximately 0.31%–3%).

Option 2: Hong Kong brokerage firms.Open an account with a licensed Hong Kong brokerage (such as Futu, Tiger, Interactive Brokers, or Huasheng Tong). Advantages: Access to the entire Hong Kong stock market, the ability to participate in initial public offerings (IPOs), margin trading, and support for U.S. stocks at some brokerages; the entire account opening process is online. Disadvantages: You need a Hong Kong bank card or an overseas bank card to deposit funds, and funds must be transferred across borders.

Recommendation for 2026: Open an account with a Hong Kong brokerage firm.The reason is simple: the eligible stock pool for the Hong Kong-China Stock Connect program is too narrow, and many high-quality Hong Kong stocks (such as certain biotech and new consumer sector stocks) are not included on the program’s list. Furthermore, commissions at Hong Kong brokerages have now dropped to 0.031 TP3T or even lower, so the cost advantage of the Hong Kong-China Stock Connect program is no longer significant.

Account Opening Requirements: Hong Kong brokerage firms typically require applicants to be at least 18 years old and to provide valid identification (ID card or passport) and proof of address. Most brokerage firms now support account openings with a Mainland ID card, but deposits require a Hong Kong bank card or a U.S. dollar account. If you do not have a Hong Kong bank card, you can first open an account with a digital bank (such as ZA Bank or Livi Bank) or a traditional bank (such as HSBC or Bank of China (Hong Kong)), and then link it to your brokerage account to make a deposit.

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02

Opening a U.S. Stock Trading Account: A Comparison of Three Types of Brokers

Category 1: Traditional U.S. brokerage firms (Interactive Brokers, Schwab, Fidelity).Advantages: Strictest regulation, secure funds, and the most comprehensive product lineup (stocks, options, futures, forex, and bonds). Disadvantages: Complex account opening process, unfriendly user interface, slow customer service response, and limited Chinese language support. Suitable for investors with substantial capital and extensive trading experience.

IB’s integrated account for Hong Kong and U.S. stocks is the top choice for many professional investors in 2026. It offers extremely low commissions (US$0.0035 per share for U.S. stocks and 0.031 TP3T for Hong Kong stocks), supports multiple currencies, and features low margin rates. However, opening an account requires some investment experience, and the interface has a steep learning curve.

Category 2: Chinese online brokerages (Tiger Brokers, Futu Securities, Huasheng Tong).Advantages: The entire account opening process is online; the app offers a great user experience; Chinese-language customer service is available; and there are community features (Futuhui’s “Niuniu” community is an important source of information for Chinese investors). Disadvantages: With stricter regulations expected in 2026, some brokerage firms have tightened their account opening reviews for mainland clients, and deposits require a Hong Kong bank card or an overseas account.

Category 3: Digital banking and brokerage firms (Revolut, Wise, Webull).Advantages: Quick account opening, zero or low commissions, and a streamlined app. Disadvantages: Relatively limited functionality, regulatory licenses that may not be as comprehensive as those of traditional brokerage firms, and limited protection for client funds. Suitable for investors who want to test the waters with small amounts and have low trading frequency.

Recommended Portfolio for 2026: Use a Hong Kong brokerage for Hong Kong stocks and select U.S. stocks (IPO subscriptions, community insights); use Interactive Brokers (IB) as your primary broker for U.S. stocks (low commissions, full range of securities); and use a traditional bank for fund custody (security).

03

ITIN: The Key to U.S. Tax Cuts

If you are a non-U.S. resident (without an SSN), you will automatically be classified as a ”non-resident alien” when opening an account with a U.S. brokerage firm. This means:

Withholding tax on dividends: 30%.When the U.S. stocks you hold pay dividends, your brokerage firm will automatically withhold 30% on your behalf for the IRS. For example, if Apple pays a dividend of $0.24 per share, you’ll only receive $0.168. Over the course of a year, if your dividend income totals $10,000, $3,000 will be withheld.

Capital Gains Tax: For non-resident foreigners investing in U.S. stocks, capital gains (the difference between the purchase and sale prices) are generally tax-exempt.This is one of the major attractions of U.S. stocks for nonresidents. But please note: This tax exemption applies only if you are a ”nonresident alien” and the assets you hold are not U.S. real estate investment trusts (US REITs).

However, if you have an ITIN and file Form W-8BEN, the withholding tax on dividends can be reduced to 10%.How does it work? There is a tax treaty between China and the United States, which sets the tax rate on dividends at 10%. However, to qualify for the treaty rate, you must prove that you are a Chinese tax resident—the W-8BEN form is used for this purpose, and an ITIN is a required field on the form.

ITIN Application Process: 1. Prepare your passport (or visa + ID) → 2. Fill out Form W-7 → 3. Submit a federal tax return (or a statement explaining the reason for your application) → 4. Mail or submit in person to the IRS. As of 2026, the IRS processing time is approximately 7–11 weeks. Once you receive your ITIN, update the W-8BEN form in your brokerage account’s online portal; the dividend tax rate will decrease from 30% to 10%.

04

Practical Steps for Opening an Account in 2026

Step 1: Open a Hong Kong bank account.This is the key step in the entire process. In 2026, the Hong Kong Monetary Authority (HKMA) prohibited banks from refusing to open accounts on the grounds that an applicant is a ”non-resident,” but the screening process remains rigorous. Recommended documents to prepare: Mainland ID card, Hong Kong-Macau Travel Permit, proof of address (utility bills or bank statements), and a statement of purpose for opening the account (investment and wealth management). Recommended banks: HSBC (multi-currency options, robust online banking), Bank of China (Hong Kong) (strong ties to the mainland), and ZA Bank (digital bank, fast account opening).

Step 2: Open a Hong Kong brokerage account.Deposit funds using a Hong Kong bank card. We recommend Futu or Tiger Brokers; the entire account opening process can be completed via the app, with verification taking 1–3 business days. Activate trading permissions for Hong Kong Stock Connect and U.S. stocks.

Step 3: Open a U.S. brokerage account (optional).If you need to trade U.S. stock options or futures, or if you’re looking for lower margin rates, we recommend opening an IB account. IB supports deposits in multiple currencies, allowing you to directly convert Hong Kong dollars into U.S. dollars for trading.

Step 4: Apply for an ITIN.Fill out Form W-7, attach a copy of your passport, and mail it to the IRS. Once you receive your ITIN, update Form W-8BEN with all your brokerage firms to qualify for the 10% dividend tax rate.

Step 5: File a tax return.Chinese tax residents are required to file personal income tax returns on their worldwide income. Capital gains from U.S. stocks are tax-exempt in mainland China (since capital gains are not subject to mainland individual income tax), but dividend income must be reported. Dividends and capital gains from Hong Kong stocks are also currently exempt from individual income tax. However, please note: With the regular exchange of information under the Common Reporting Standard (CRS) set to begin in 2026, information on overseas accounts will be reported back to mainland China; therefore, it is essential to report all income accurately.

05

Tips to Avoid Pitfalls: Three Common Mistakes

Mistake #1: Using a mainland brokerage firm’s ”U.S. stock trading channel.”Some mainland brokerage firms offer QDII funds or U.S. stock derivatives, but these do not involve direct ownership of U.S. stocks—rather, they are fund shares or contracts for difference (CFDs). They come with high costs, low transparency, and no shareholder rights. If you really want to invest in U.S. stocks, it’s better to open an account with an overseas brokerage firm.

Mistake #2: Neglecting tax filings.Many people believe that ”the money I earn overseas is beyond the reach of mainland authorities.” As of 2026, the CRS has made this notion a thing of the past. Information on overseas brokerage and bank accounts will be automatically exchanged with China. If you fail to report this accurately, the cost of late payment penalties and fines—once back taxes are assessed—will far exceed the tax amount itself.

Mistake #3: Frequently switching brokers.Every time you switch brokers, you have to go through the KYC process again, re-link your bank card, and reapply for tax benefits. It’s best to choose a broker you plan to use long-term right from the start and organize your account structure properly.

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