About a handful of countries have no withholding tax at all or levy one so low that it is almost unnoticeable.
"These countries in which private investors in Germany are not subject to withholding tax include Ireland, Liechtenstein, Hong Kong and Singapore," says Stefanie Dyballa, Portfolio Manager at KSW Vermögensverwaltung in Nuremberg.
However, the Irish withholding tax is only low if the company is based in the country. Other countries with investor-friendly regulations are Bermuda, Brazil, Canada and Thailand.
However, the most important economy that leaves German shareholders untouched is the United Kingdom. "The UK has many attractive dividend payers to offer, especially in the energy and financial sectors," says the asset manager, naming the likes of $SHEL (-0,81 %) Shell, $BP. (-0,17 %) BP and $HSBA (+2,23 %) HSBC.
Hermann Ecker, authorized signatory and portfolio manager at Bayerische Vermögen in Bad Reichenhall, also immediately thinks of reliable dividend payers from the island, including $DGE (-0,13 %) Diageo, $RKT (+0,69 %) Reckitt Benckiser, $RIO (+2,53 %) Rio Tinto, $IMB (+1,75 %) Imperial Brands, $SGE (+1,55 %) Sage Group and $ULVR (+1,33 %) Unilever. The selection shows just how diverse the withholding tax-friendly UK capital market is.
However, it is worthwhile for investors to consider other companies in addition to the well-known names: Sometimes they offer even higher dividend yields. WELT has compiled a list of 19 shares that are listed in countries with zero or low taxes and have also shown a stable performance over the past twelve months.
The last criterion is intended to protect investors from falling into a value trap, i.e. investing in a company with an eroding business model. The British drinks group Diageo, for example, is regarded as a solid dividend payer, but its share price has fallen by a third over the past year. The Diageo dividend yield of just under five percent is little consolation.
By contrast, the British insurance giant $AV. (+4,71 %) Aviva. The London-based company has roots dating back to 1696 and is one of the leading providers of pensions and insurance in its core markets of the UK, Ireland and Canada. Thanks to a focus on cash generation, Aviva is considered a solid basic investment that currently offers its shareholders a dividend yield of around 5.5%, which is only reduced by the German capital gains tax plus solidarity surcharge.
The financial services provider Legal & General, founded in 1836, can also look back on a long tradition. $LGEN (+1,94 %) Legal & General can also look back on a long tradition. As a heavyweight in the areas of asset management and pension insurance, the London-based group has a comparatively cyclically resistant business model that benefits from long-term demographic trends. Shareholders receive a current yield of 8.5 percent, making Legal & General one of the highest-yielding stocks in the UK index. The same can be said of the $PHNX (+1,09 %) Phoenix Group, whose yield is an impressive 7.8 percent.
The mining group $RIO (+2,53 %) Rio Tinto. However, the company is benefiting from the global appetite for raw materials. Rio Tinto is one of the world's largest producers of iron ore, aluminum and copper. Investors are betting on the indispensable role of metals in the global energy transition. The dividend payout is four percent.
The yield is more than twice as high for the Brazilian competitor $VALE3 (+0,86 %) Vale. Founded in 1942, the Rio de Janeiro-based mining group is the largest nickel and iron ore producer in the world. Experience shows that the size of the dividend depends on the ups and downs of commodity prices. As these are currently pointing upwards, shareholders have a good chance of achieving a dividend yield of almost ten percent on their capital investment this year. There is no withholding tax.
More speculative are investments in Greek financial institutions such as $TELL (+0,74 %) National Bank of Greece. The bank was on the brink of collapse during the euro debt crisis and had to be rescued with state aid. However, business is now flourishing again. Thanks to this economic comeback and the adjusted balance sheet, shareholders of National Bank of Greece should be hoping for a dividend yield in the region of four to five percent.
Financial institutions are also among the most interesting investments in Asia. The city state of Singapore, which does not levy withholding tax and is considered one of the most stable financial centers in the world, is home to the $D05 (+0,03 %) DBS Group. Founded in 1968, the institution is considered one of the best banks in the world and has already been described as the "Fort Knox" of the Asian banking world. Investors appreciate the quarterly distribution, which amounts to four percent per year, and the conservative balance sheet management of the DBS Group.
The Oversea-Chinese Banking Corporation, founded in 1932, also offers a return of around four percent. $OVCHY Oversea-Chinese Banking Corporation, founded in 1932. It is the longest established bank in Singapore and offers a mix of banking, asset management and insurance, which speaks for diversified earnings. However, the Oversea-Chinese Banking Corporation is not quite as dynamic as the DBS Group.
The conglomerate $J36 (+2,99 %) Jardine Matheson has its roots in Hong Kong, but the shares are now listed in Bermuda. Founded in 1832, the company is a legend in Asian economic history with a broadly diversified portfolio ranging from real estate to retail. Little known: The financial services provider $IVZ (+0,96 %) Invesco, which stands for the most popular Nasdaq ETF QQQ. The investment company's shares have risen by almost half over the past twelve months and also offer a dividend yield of three percent.
If you want to invest specifically in Hong Kong, you can stick with the infrastructure group $1038 (+1,34 %) CK Infrastructure. Founded in 1996, the company belongs to the empire of tycoon Li Ka-shing. It invests globally in energy suppliers, waterworks and transportation infrastructure, which ensures stability. Investors receive a return of around four percent.
As far as the former British crown colony is concerned, Dyballa has other ideas: "Financial and telecommunications stocks listed in Hong Kong, such as the $3988 (+0,04 %) Bank of China and $941 China Mobile often offer stable and attractive dividends." And she also has a tip for Singapore: "Real estate stocks or REITs that are less well-known in this country also offer stable cash flows and high dividend yields," says the portfolio manager.
Source: Text (excerpt) WELT, 24.01.26
