Foreign residents living long-term in Germany often face confusion when looking at Germany’s mature ETF investment market: which German investment platforms are reliable? How is ETF investing taxed in Germany? What account opening restrictions apply to foreign nationals? This article practically compares three mainstream platforms and answers common questions.
Three Platform Comparison
Trade Republic (Most popular zero-commission platform)
– Fees: €1 flat fee per trade (lowest available, ideal for small regular investments)
– ETF selection: 3,500+ ETFs covering major indices
– Regular investing: Savings Plan, minimum €10/month, automatic investment free
– Foreign account opening: supports EU residents, requires German address and EU bank account
– Limitations: doesn’t support US ETFs (regulatory reasons); interface is simple but liquidity sometimes limited
Scalable Capital (More powerful professional features)
– Free plan: €0.99/trade; Prime plan €4.99/month with unlimited free trades
– ETF selection: 7,500+, most comprehensive
– Additional features: Robo-Advisor, automatic rebalancing
– Best for: users with higher trading frequency or needing advanced analysis features
DKB (Deutsche Kreditbank)
– Online brokerage account from an established bank with strong security perception
– Fees: approximately €9.90/trade (traditional bank level, higher cost)
– Foreign account opening: via online video identification (VideoIdent), accepts non-German citizens holding German residence permits
– Best for: long-term investors who prefer the security feeling of traditional banking and trade infrequently
Complete German ETF investing guide.
German ETF Taxes: Abgeltungsteuer (Capital Gains Tax)
Germany levies Abgeltungsteuer (withholding/capital gains tax) on investment income at a flat rate of 25% + solidarity surcharge (5.5% on top) + church tax (optional) = effectively approximately 26.375%.
Good news: each person enjoys an annual €1,000 tax-free allowance (Sparerpauschbetrag), or €2,000 for married couples. This means annual capital gains under €1,000 are completely tax-free. Submitting a Freistellungsauftrag (tax exemption instruction) to the platform automatically applies the exemption, with no annual declaration needed.
Account Opening Notes for Foreign Residents
Most German platforms require: valid EU residence permit; German address (can be temporary, but must be able to receive bank mail); tax identification number (Steueridentifikationsnummer, automatically mailed approximately 4 weeks after registering residence in Germany). Chinese passport + German residence permit can open accounts on most platforms, but US citizens face difficulties opening German platform accounts due to FATCA compliance requirements.
Recommended German ETF Regular Investment Portfolio (Reference)
MSCI World ETF (e.g., iShares Core MSCI World, ISIN: IE00B4L5Y983) covering developed markets; add EM ETF (emerging markets) for diversification; optional: bond ETF for risk balance. Reference allocation: MSCI World 70% + EM 20% + Bonds 10%.
