How To Buy Samsung Shares

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How to Buy Stock

Notice

Contents are provided for general information purposes only and do not constitute an offer to sell or a solicitation of an offer to buy any security of Samsung Electronics Co., Ltd. (“SECL”) or its affiliates (“Security”) in any jurisdiction. SECL does not intend to solicit and is not soliciting, any action with respect to any Security or any other contractual relationship with SECL. Nothing in this website or the Contents thereof, individually or taken in the aggregate, constitutes an offer of securities for sale or a solicitation of an offer to buy any security in the United States, the United Kingdom, Hong Kong, Singapore, Japan, or in any other jurisdiction in which such an offer or solicitation is unlawful, or to US persons.

The Contents of this section have not been approved or disapproved by any securities commission or regulatory authority in Republic of Korea (hereinafter, “Korea”) or any other jurisdiction, and SECL expressly disclaims any duty on SECL to make disclosures or any filings with any securities commission or regulatory authority, beyond that imposed by applicable laws. The Contents of this section are neither sufficient, nor intended by SECL to be used in connection with, any decision relating to the purchase or sale of any existing or future Securities. SECL does not, does not intend to, and will not provide financial, investment, tax, legal, or accounting advice. Investors considering the purchase or sale of any Securities should consult with their own independent professional advisors.

The Contents of this section and the certain pages of the website contain information and documents that relate to securities that have not been registered, and will not be registered, for sale in the United States, or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered, sold, resold, or pledged in or delivered into the United States, or for the account or benefit of U.S. persons (as defined in Regulation S under the U.S. Securities Act of 1933 [the “Securities Act”], as amended) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Such securities may also be subject to US tax law requirements. There will be no public offering of the Securities referred to in this section or any other page of the website in the United States. The Contents of this section, information contained in these pages, any opinion expressed therein and Other Contents of this website are provided solely for general information purposes, and do not constitute a sale of, offer for sale of, or solicitation of an offer to buy any securities in any jurisdiction.

Introduction

Individuals of foreign nationalities can invest in Samsung Electronics shares either directly or indirectly. Samsung Electronics shares consist of original shares listed on the Korea Stock Exchange (KRX) and global depository receipts (GDRs) listed on London Stock Exchange (LSE) and Luxembourg Stock Exchange (LuxSE).

GDRs on the LSE and LuxSE

Individuals residing in foreign countries other than the US may trade Samsung Electronics GDRs listed on the LSE and LuxSE.

European Union residents

Investors in the EU can trade Samsung Electronics GDRs the same way they trade stocks listed on their local stock exchanges.

Residents of other regions

Non-EU residents, excluding US residents, have no special limitations for trading Samsung Electronics GDRs listed on European stock exchanges.

Investors simply open an account at a securities firm eligible to trade GDRs on the LSE or LuxSE—eg, in Singapore through Phillip Securities or Kim Eng Securities or in Hong Kong through HSBC.

US residents

Individuals are prohibited from trading GDRs in accordance with Rule 144A of the US Securities Exchange Act.

Shares on the KRX

Method I

Foreign investors can buy Samsung Electronics shares directly on the KRX.

Procedure
  • 1) Register with the Financial Supervisory Service and obtain an investor registration certificate (IRC)
  • 2) Open a stock trading account at a Korean securities firm
  • 3) Transfer funds
  • 4) Trade shares in real time

Requirements

  • Standing proxy agreement
  • Investment ID application
  • Registration of signature
  • Determination of resident status
  • Copy of passport

Method II

Foreign investors can buy Samsung Electronics shares through a local securities firm or bank.

Procedure
  • 1) Open an account at a local securities firm or bank eligible for trading Korean stocks
  • 2) Deposit funds into the account
  • 3) Place trade orders

Some securities firms have a minimum balance requirement

Local financial institutions eligible for trading Korean stocks

Local financial institutions eligible for trading Korean stocks
Country or region Securities firm
UK HSBC, Morgan Stanley, UBS, Smith & Williamson
Hong Kong HSBC, BNP Paribas, Credit Suisse
Singapore HSBC, Phillip Securities, Kim Eng Securities
Japan Okasan, Aizawa, SBI

Process

  • Brokerage firm: MLPF&S with affiliate Merrill Lynch International (MLID Seoul)

These procedures and requirements for Merrill Lynch, Pierce, Fenner & Smith Incorporated are not intended to be a solicitation or recommendation to purchase or sell Samsung Electronics securities.

How to Buy Samsung Stock

Samsung phones, TVs, laptops and appliances are easy to find and purchase right here in the USA.

Samsung stock, not so much: Because it’s a foreign company, American investors can’t buy Samsung stock shares the way they typically buy stock — through major U.S. exchanges like the Nasdaq and NYSE. Instead, individual shares of Samsung stock must be purchased either over-the-counter as a “pink sheet” stock — which means your purchase isn’t regulated — or on the Korea Exchange (KRX), which entails opening a South Korean brokerage account.

If neither of those sound appealing, there’s a third, easier way: Buy Samsung stock through an exchange-traded fund, which may offer additional benefits over simply buying the stock alone.

Buying Samsung stock in an ETF

For U.S. investors, the easiest and most cost-efficient path to Samsung stock ownership is to buy shares in a South Korea-focused exchange-traded fund. Like a mutual fund, an ETF is a single investment that holds a variety pack of stocks that all share some common trait, such as industry type, market cap or country of origin.

There is a handful of ETFs that count Samsung among their major holdings, including iShares MSCI South Korea ETF (which trades by the ticker symbol EWY), Xtrackers MSCI South Korea Hedged Equity Fund (DBKO) and Franklin FTSE South Korea ETF (FLKR).

» Interested in one of these funds? You can buy them through a broker that offers ETFs.

Even though Samsung is just one of many stocks held in these ETFs, your exposure to the company isn’t as watered down as you might think: In the ETFs above, the company makes up 18% to 22% of each fund’s total value.

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5 steps to buying Samsung stock

If Samsung stock were as simple to purchase as, say, its archrival Apple, we’d simply point you this brief guide on how to buy a stock and call it a day.

But there are a few nuanced differences between buying Apple stock and buying Samsung stock — or rather, exposure to Samsung stock.

1. Understand the differences between an ETF and a stock

Although ETFs trade just like stocks via individual shares, their mutual fund-like traits require taking a slightly different approach to analyzing whether they should have a place in your portfolio.

Because the holdings are curated, there is a management fee, which is called an expense ratio, to consider and compare to the competition. The ETFs above currently charge expense ratios that range from 0.09% (Franklin FTSE) to 0.62% (iShares MSCI).

Also, take a look at the ETF’s holdings to be sure that the investments adhere to your investment objective. In this case, check that the Korea-focused ETF you choose has a meaningful weighting in Samsung stock. Here’s more on how ETFs work.

A lot of this research is easy to do via your brokerage’s website, which brings us to the next step …

2. Pick an investment account

If you don’t already have a brokerage account, you’ll need to open one. Although ETFs are standard fare among online discount brokers, trading commissions and ETF offerings vary by provider. It’s also worthwhile to check that a broker carries or provides access to any specific ETFs you’re after. (See our analysis of the best brokers for ETF investing for some suggestions. Some of the winners from that analysis are also highlighted below.)

How to Buy Samsung Stock

Although widely recognized as solely a technology brand, Samsung is actually more of a conglomerate. The South Korea based company extends into the financial services, tourism, science and machinery businesses as well. But tech is what Samsung does best, as Forbes ranks it 94th on its list of the top 100 digital companies for 2020. Unfortunately for American investors, Samsung stock is difficult to get your hands on without a bit of legwork and fees.

How to Buy Samsung Stock

Purchasing Through the KRX

Because Samsung’s securities are not readily available on the U.S. investment market, Americans must buy them through the Korea Exchange (KRX). This, as you might imagine, is located in South Korea, which complicates matters for foreign investors. In order to trade on the KRX, you’ll need to gain authorization from South Korea’s Financial Supervisory Service to trade directly or open a brokerage account with a local firm or bank.

To become eligible as a non-resident investor on the KRX, you’ll need to file specific paperwork. This includes a copy of your passport, an investment ID application, a registration of signature, a standing proxy agreement and a resident status determination document. Only after this will the Financial Supervisory Service afford you an investor registration certificate (IRC). Once you receive your IRC, find a South Korea-based brokerage firm or bank with broker services and fund your account. You can then purchase Samsung stock as you please.

Merrill Lynch is one of the premier brokerages that trades on an international basis. It currently operates one branch in Seoul, South Korea. This could be an especially beneficial option for Americans who either already have a relationship with Merrill or want to deal with a firm that has locations in the U.S. However, be wary, as the KRX began keeping close tabs on Merrill in August 2020. Officials felt this was necessary as there were claims that the firm’s “high-frequency trading system” could violate local laws.

South Korea-Focused ETFs

Although a more indirect method, investing in exchange-traded funds (ETFs) that center around the South Korean market allows you to buy into Samsung. ETFs consist of a large number of equities or other investments that center around a particular theme or sector of the market. Furthermore, investing in ETFs is significantly cheaper than investing directly in Samsung’s foreign stocks.

Because Samsung makes up such a large portion of South Korea’s economy, many of these ETFs include its shares within their makeup. Some common versions of these funds are the iShares MSCI South Korea ETF (EWY) and the Xtrackers MSCI South Korea Hedged Equity Fund (DBKO). For each of these ETFs, about a fifth of their holdings reside in the electronics division of Samsung.

Overview of Samsung

Smartphones and TVs are how most Americans recognize the Samsung brand. This notion, however, does a gross disservice to the wide array of businesses that Samsung claims a stake in. In fact, a report out of CNBC states that Samsung Electronics and Samsung Life Insurance rank as the number one and eight companies in its list of the largest businesses in South Korea. Take a look here to see Samsung’s various branches:

Samsung Overview
Technology – Samsung Electronics
– Samsung Display
– Samsung Electro-Mechanics
Machinery – Samsung Heavy Industries
– Samsung Engineering
Financial Services – Samsung Life Insurance
– Samsung C&T Trading & Investment Group
– Samsung Securities
– Samsung Asset Management
– Samsung Venture Investment
– Samsung Card
Tourism – Samsung Resort
– The Shilla Hotels & Resorts
Science/Medical – Samsung Medical Center
– Samsung Economic Research Institute
– Samsung Biologics
– Samsung Bioepis

Samsung’s Financial Profile

As you can see from the table above, Samsung is a juggernaut of a company. So while TVs, mobile phones and other electronic devices are its largest money-maker on an international scale, Samsung’s presence in other areas of the market gives it ample internal diversification. When you take this information and combine it with the impressive past growth Samsung has experienced, the company establishes itself in blue-chip stock territory.

Past performance does not guarantee future results. All prices above are in South Korean won. (Chart from November 2020)

Should You Buy Samsung Stock?

The fees and other stipulations associated with investing via the KRX could be substantial. For example, you will incur standard trading costs and minimum order requirements, as well as possible U.S. dollar to South Korean won currency conversion fees. On the other hand, investing in stocks on the American market is typically much cheaper. This reason alone makes investing in Samsung a risky venture, as extraneous charges could diminish strong returns.

It’s worth noting, though, that Samsung’s stock has performed admirably, especially in recent years. But because of the aforementioned fees, these returns are usually most accessible to high-end U.S. investors. In turn, ETFs that include equity in Samsung might be the more beneficial investment for the average trader that doesn’t have the time or resources to file for an IRC and work with a local South Korean broker.

Tips to Help You Invest

  • It can be difficult to figure out exactly what level of returns you’ll need to reach your ultimate financial goals. The rule of 72 is a shortcut that can aid you with this, and all it requires is simple math.
  • If you feel unsure about how to create a well-diversified investment portfolio, perhaps a financial advisor could help. SmartAsset’s financial advisor matching tool will pair you with up to three local fiduciary advisors who can get your investments on the right track.
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