There’s quite a lot of South African online trading platforms that offer Tesla CFD’s. But don’t be fooled, owning CFD’s is not the same as owning the stock, this is something I had to learn the hard way.
The only way you can buy and own Tesla shares, which trades on NASDAQ, is through a U.S broker. With some trial and error, I finally figured out how trade with a U.S broker in South Africa.
Here’s how to buy REAL Tesla shares online in South Africa:
- Open an international trading account. I use Firstrade, I wrote a full guide that shows you how you can open an account as a South African citizen step-by-step.
- Find the Tesla stock ticker. Once your account has been approved and funded, log in to your Firstrade account, use the search feature and find the Tesla stock ticker, (TSLA.)
- Place your buy order, and the transaction should go through immediately if it’s during trading hours.
Now that you know how to invest in Tesla, you’re probably thinking how much money you’re allowed to invest in overseas stocks in South Africa, and if you’re even allowed to own U.S stocks at all?!
Keep reading! I’ll cover that next.
How Much Money Can South African’s Invest Overseas?
SARS is very happy to take foreign investments into our country, but unfortunately, they’re not too fond of letting us take money out, which can make things a bit difficult for South African’s trying to take their money abroad.
There are two foreign investment categories that you would be interested in:
Single discretionary allowance for investments below R1milion per calendar year. SARS allows each South African citizen to invest up to R1million in overseas investments per year, which is known as your single discretionary allowance. You will qualify for this automatically, there’s no admin that you’d need to do.
Foreign investment allowance for investments below R11million, and more than R1million per calendar year. If you would like to invest more than R1million rand then unfortunately you’ll need to apply for a foreign investment allowance. Getting this can be difficult because unlike your single discretionary allowance, you’ll need to make an application.
Are South African Citizens Allowed To Own American Shares?
You’re allowed to buy American shares such as Tesla according to Investopedia.com.
The only minor hurdle you might face is you’ll have to send in extra documentation to the foreign exchange. That said, to be honest when I opened an account with Firstrade. (my favorite U.S based trading platform )and they didn’t request anything that I felt was unusual.
In-fact, I felt like they requested fewer documents than some of our local trading platforms that need to take you through KYC verification.
Why Buy Stocks Instead of CFD’s?
Buying stocks is completely different to buying CFD’s.
When you buy a stock, you essentially buy a very small part of a company which means you’ll get paid dividends, and you’ll enjoy other stockholder benefits.
On the other hand, when you buy a CFD, you’re essentially just betting that the price of a stock will either go up or down. So you’re NOT an actual shareholder, you’re just an observer with some skin in the game.
This is exactly why I like to buy stocks. I treat each investment as if I’m buying into an actual company, and I just can’t get that with CFD’s. Apart from all the abovementioned benefits of owning a stock, the more real it feels to me, the more time and effort I put into selecting the stocks because I know I’ll be holding on to them for at least 5 years.
Did I miss something? Or do you know of a better way to invest in Tesla? Let us know in the comments below so we can start learning from each other.