eToro Review Malaysia

eToro is an online brokerage that has been around for a very long time. Back when I was still a teenager, I remembered it being one of the more unique forex brokers that has social trading (i.e. copying the best traders’ trades) at its core. After all these years, I think eToro has finally gained a foothold in the local markets.

I’ve recently joined eToro to build up my US stocks portfolio. Here’s my honest eToro review Malaysia article, do read on if you’re still on the fence about it.

eToro Review Malaysia

7.3 Total Score
Good for social trading

Makes trading a social affair. Get ideas, see trending stocks and copy from successful investors all on one platform

Features
7.5
Ease of Use
8.5
Deposit & Withdrawal
6
PROS
  • Easy to register
  • Commission-free US stocks trading
CONS
  • US stocks selection not complete
  • Not registered & regulated under Securities Commission of Malaysia
Add your review  |  Read reviews and comments

How to Open Account with eToro in Malaysia

Registering an account is relatively straightforward. Click the button below to start.

After opening the account, your initial status will show as “unverified”. Until you get verified, you won’t be able to make any live trade.

Verification requires confirming your mobile phone number and uploading a few documents such as your NRIC and utility / bank statement to confirm address.

My experience was bad in this aspect – I had an account previously but had already closed it. I couldn’t proceed with verification because my phone number is still tied to that old account and the system wouldn’t let me proceed. Customer support wasn’t very responsive. I created my account on 19th December 2020 and only got verified on 31st December 2020.

To be fair it was the holiday season so maybe they had shortage of staff.

Is eToro legal in Malaysia?

Let’s talk first about regulations and licensing as many people would be rightfully wary about eToro’s legality as it has been placed on SC’s Investor Alert list.

First off, stock trading is a regulated activity that falls under the jurisdiction of Securities Commission Malaysia. eToro is not registered in Malaysia and does not have a trade office in Malaysia.

That being said, if you’re a Malaysian and register an account with eToro, you’ll automatically be registered under eToro AUS Capital Pty Ltd which is authorised by Australian Securities and Investments Commission (ASIC). This company is licensed by ASIC to provide financial services. In fact, users in Asia are placed under eToro Australia. Check eToro Australia registration here.

What does this mean for you as an investor? This means that trading via eToro is NOT illegal under Malaysian law.

However, you should know why Securities Commission raised this issue. According to a spokesperson from SC, the concern is this:

Malaysian investors who deal with unlicensed persons, especially entities operating offshore are not protected under Malaysian securities laws. They are also exposed to various risks including fraud and money laundering and may not have access to legal recourse in the event of a dispute.

Read the article from The Edge here

If you trade via eToro, it simply means you are not protected under the Malaysian law if anything happens, say if eToro goes bankrupt. However, it might be possible to get legal recourse under the Australian law system.

What I like about eToro

eToro gives commission-free trading for US stocks. You can get in and out of trades quickly without worrying about commissions eating into your profits. Do note that this only applies to cash positions and not leveraged trading such as CFD.

You can also buy fractional shares, i.e. 0.01 share of a stock. This will come in handy if your initial starting capital is small.

What I dislike about eToro

The stock selection for US market is quite limited. Not every company is listed there. For example, you won’t be able to find Taiwan Semiconductor on eToro.

For the stocks that are not listed on eToro, I use Trading212 to buy instead.

Verdict: Good As Starting Broker

Opening an account with eToro is really easy. Coupled with its commission-free trading for US stocks, it’s a good platform for beginners to get their feet wet trading foreign markets.

Click the button below and get FREE USD50 when you trade USD100 and above.

4 Comments
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  1. Hi Ian, thanks for the article. I am trying to look for more info about eTora and online investment platform, appreciate if you can share your knowledge and experience:

    (1) eToro seems good, but for further comparison what is your suggestion of alternative platform?

    (2) I am thinking to pump in money via my Debit Card, does it mean when i withdraw it will go back to same Debit Card account?

    (3) Any constraint/limit set byBank Negara or Bank of debit card for money in/out to/from eToro?

    (4) What is your advice on tax declaration to our country if there is any profit from eToro.

    Thank you very much

    • 1) I have stopped using eToro and shifted to Trading212. Main reason: more stocks selection
      2) Yes, it will go back to your same card
      3) I’m not sure. But any foreign transactions would be subject to scrutiny if the amount is really large.
      4) It depends – if holding for long-term, there is no capital gains tax. But if you trade for a living then the income is taxable.

  2. Great review ! However, I am wondering if you could give any feedback on the following:-

    1. Currency exchange on your deposit method

    2. I’ve heard from others that you are only able to withdraw through your deposit method. (E.g. if you deposit through credit card, your withdrawal has to be through credit card as well).

    • 1. I used credit card to fund my account. The currency exchange rate is based on whatever charged by the credit card company.
      2. Yes, this is correct. If you deposit $250 through a credit card, you can withdraw $250 back to the same credit card only.

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