How to Invest in US Stocks Through an ISA Account in 2026 (Using Domestic-Listed Overseas ETFs)
A complete guide to investing in US stocks through an ISA (Individual Savings Account) account. Includes a brokerage-type ISA comparison, how to use domestic-listed overseas ETFs, and a tax-savings calculator. A beginner's guide leveraging the KRW 2 million tax exemption + 9.9% separate taxation benefits.
"I want to invest in US stocks, but is there any way to pay less in taxes?" — If you have ever had this thought, an ISA (Individual Savings Account) could be the answer. By using an ISA account, you can invest in the U.S. S&P500, Nasdaq 100, and others through domestic-listed overseas ETFs while enjoying tax exemption up to KRW 2 million (KRW 4 million for the low-income type), with any excess gains taxed at a low separate rate of 9.9%. However, you must keep in mind that you cannot buy U.S. stocks directly within an ISA. This article covers everything from the basic concept of an ISA account, type comparisons, eligible ETFs, account opening procedures, and precautions — a beginner's A-to-Z guide on indirectly investing in U.S. stocks through an ISA.
Table of Contents
1. What Is an ISA Account?
ISA stands for Individual Savings Account. Simply put, it is an all-purpose investment account with tax benefits. A single account can hold deposits, funds, ETFs, ELS, REITs, and other financial products, and gains generated within the account are tax-exempt up to a set amount, with any excess subject to a low separate tax rate.
The ISA originated in the United Kingdom and was introduced in South Korea in 2016. At first, limited product offerings meant it struggled to gain traction, but after the launch of the brokerage-type ISA in 2021, which allowed individuals to trade stocks and ETFs directly, subscriptions exploded. As of 2026, the ISA has become one of the go-to tax-saving tools for Korean investors.
ISA's Core Tax Benefits
In a nutshell, here is how ISA tax benefits work. In a regular account, investment gains are taxed at 15.4% (income tax 14% + local income tax 1.4%), but in an ISA account, gains up to the tax-exempt limit (KRW 2 million for the standard type, KRW 4 million for the low-income type) are taxed at zero, and only the excess is subject to 9.9% (income tax 9% + local income tax 0.9%) separate taxation. Because it is separate taxation, ISA gains are not aggregated under the comprehensive financial income tax.
Compare the tax treatment of a regular account versus an ISA account at a glance in the flow chart below.
Example: When KRW 5 Million in Gains Are Generated (Standard Type)
Regular Account: KRW 5 million x 15.4% = KRW 770,000 in tax
ISA Account: KRW 2 million (tax-exempt, KRW 0) + KRW 3 million x 9.9% = KRW 297,000 in tax
Tax Savings: KRW 770,000 - KRW 297,000 = KRW 473,000 saved!
ISA Basic Conditions at a Glance
| Item | Details |
|---|---|
| Eligibility | Korean residents aged 19 or older (15 or older for earned-income individuals) |
| Contribution Limit | KRW 20 million per year (up to KRW 100 million over 5 years; unused amount can be carried over) |
| Mandatory Holding Period | 3 years (All tax benefits forfeited if not met) |
| Tax-Exempt Limit | Standard type KRW 2 million / Low-income type KRW 4 million |
| Excess Tax Rate | 9.9% separate taxation (income tax 9% + local income tax 0.9%) |
| Number of Accounts | 1 account per person (Only 1 across all financial institutions) |
Key Takeaway: Think of an ISA as "an account that trims the tax on your investment gains." Up to the tax-exempt limit, you pay zero tax, and on anything beyond that, you pay only 9.9%, far lower than the 15.4% in a regular account. The longer you invest, the bigger your gains grow — and the bigger your tax savings become.
2. ISA Type Comparison (Brokerage vs. Trust vs. Discretionary)
ISAs come in three types based on how they are managed. The biggest differences come down to "who makes the investment decisions" and "what products you can invest in." Bottom line: if you want to invest in U.S. stocks (overseas ETFs), the brokerage-type ISA is your only option.
| Type | Investment Method | Eligible Products | Fees | Recommended For |
|---|---|---|---|---|
| Brokerage Type (Most Popular) | You trade directly | Domestic stocks, domestic-listed ETFs, funds, deposits, ELS, RP | Trading commissions only (varies by broker) | Those investing in U.S. stocks! |
| Trust Type | Choose from products offered by the financial firm | Funds, deposits, ELS, RP (No direct stock trading) | Trust fees (0.1–0.5% annually) | Fund-focused investors |
| Discretionary Type | Managed by the financial firm (robo-advisor) | Portfolio selected by the financial firm | Discretionary fees (0.3–1.0% annually) | Those who want to delegate investing |
Why the Brokerage Type? To invest indirectly in U.S. stocks, you need to buy domestic-listed overseas ETFs directly. Trust and discretionary types do not allow direct ETF trading, so to trade products such as TIGER U.S. S&P500 or KODEX U.S. Nasdaq100, you must open a brokerage-type ISA. In fact, over 80% of ISA subscribers choose the brokerage type.
Low-Income Type vs. Standard Type — Tax-Exempt Limit Differences
ISAs are split into the standard type and low-income type based on the subscriber's income level, with the low-income type offering double the tax-exempt limit.
| Category | Standard Type | Low-Income Type |
|---|---|---|
| Eligibility | Anyone aged 19 or older | Employment income up to KRW 50 million or Comprehensive income up to KRW 38 million |
| Tax-Exempt Limit | KRW 2 million | KRW 4 million |
| Excess Tax Rate | 9.9% separate taxation | 9.9% separate taxation |
| Contribution Limit | Same (KRW 20 million per year) | Same (KRW 20 million per year) |
If you qualify, sign up for the low-income type. The tax-exempt limit doubles from KRW 2 million to KRW 4 million, which means far greater tax savings on the same level of returns. Low-income eligibility is checked automatically when you open an ISA through a brokerage app, or you can verify it yourself by issuing an income verification certificate via the National Tax Service's Hometax system.
3. U.S. Stock Products Available Through an ISA
A Must-Know Point!
You cannot buy U.S. stocks directly (e.g., AAPL, TSLA, NVDA) within an ISA account. Only domestic-listed stocks and domestic-listed ETFs are eligible. So if you want to invest in U.S. stocks, you need to use overseas ETFs listed on the domestic market (KOSPI/KOSDAQ). These ETFs trade in Korean won on Korean exchanges, but in practice they track U.S. indexes such as the S&P 500 and Nasdaq 100.
What Are Domestic-Listed Overseas ETFs?
Domestic-listed overseas ETFs are products created by Korean asset managers (e.g., Samsung Asset Management, Mirae Asset Asset Management) that are listed on the domestic market but track foreign indexes or hold foreign assets. For example, buying an ETF such as "TIGER U.S. S&P500" means you trade it in Korean won on the Korean stock market, but the actual investment exposure is to the U.S. S&P 500 index. You can expect returns similar to investing directly in SPY (SPDR S&P 500 ETF).
The major advantage of this approach is that you can fully enjoy the ISA's tax benefits. In a regular account, capital gains and dividends from domestic-listed overseas ETFs are taxed at 15.4%, but in an ISA account, the tax-exempt limit plus the 9.9% separate taxation applies. This is a significant tax advantage.
Recommended ETFs
Below are the most popular domestic-listed overseas ETFs used by ISA account holders for indirect U.S. stock investing. The lower the total expense ratio, the more advantageous for long-term investing.
| ETF Name | Tracked Index | Total Expense Ratio | Features |
|---|---|---|---|
| TIGER U.S. S&P500 | S&P500 | 0.0068% annually | Largest AUM in Korea; diversified exposure to 500 U.S. large-caps |
| KODEX U.S. S&P500 | S&P500 | 0.0099% annually | Samsung Asset Management; high trading volume and liquidity |
| TIGER U.S. Nasdaq100 | Nasdaq100 | 0.0068% annually | Tech-heavy; high growth potential |
| KODEX U.S. Nasdaq100 | Nasdaq100 | 0.0099% annually | Samsung Asset Management; tracks the Nasdaq 100 |
| ACE U.S. Dividend Dow Jones | Dow Jones U.S. Dividend 100 | 0.0100% annually | 100 U.S. dividend stocks; popular for monthly distributions |
| TIGER U.S. Dividend +7% Premium | Dow Jones U.S. Dividend 100 + Covered Call | 0.3900% annually | Targets 7% annual distribution via dividends + option premiums |
Beginner Recommendation: If you're just starting out with U.S. stock investing through an ISA, simply buying TIGER U.S. S&P500 is a sound strategy. The S&P 500 index covers 500 U.S. large-caps, providing natural diversification, and it has one of the lowest expense ratios, making it ideal for long-term investing. For a more aggressive tilt, you could add TIGER U.S. Nasdaq100. For a detailed ETF comparison, see our U.S. Stock Tax Guide and Brokerage Fee Comparison.
Regular Account vs. ISA Account — Tax Comparison for Domestic-Listed Overseas ETFs
Even when buying the same domestic-listed overseas ETF, the account you use can make a big difference in taxes. The table below clearly highlights the advantages of an ISA account.
| Category | Regular Account | ISA Account (Standard Type) |
|---|---|---|
| Tax on Capital Gains | 15.4% (dividend income tax) | KRW 2 million tax-exempt + 9.9% on excess |
| Tax on Dividends (Distributions) | 15.4% | Included within the tax-exempt limit |
| Gain/Loss Offsetting | Not allowed (taxed on gains only) | Allowed (losses offset gains) |
| Comprehensive Financial Income Tax | Aggregated | Excluded via separate taxation |
A particularly notable feature is the gain/loss offsetting available in an ISA. In a regular account, if Fund A yields KRW 3 million in gains and Fund B yields KRW 2 million in losses, each is taxed separately, meaning you pay tax on the full KRW 3 million gain. But in an ISA, gains and losses are netted, so tax applies only to the net KRW 1 million gain, which falls within the KRW 2 million tax-exempt limit, resulting in zero tax. This gain/loss offsetting is a major benefit when diversifying across multiple ETFs.
4. Check Your ISA Tax Savings
Theory alone may be hard to grasp. The calculator below lets you enter your investment amount and expected return to see exactly how much tax you can save with an ISA account compared to a regular account. Try plugging in your own numbers — the tax-saving power of an ISA will be clear at a glance.
ISA 절세 효과 계산기
일반 계좌
ISA 계좌
💡 ISA로 약 853,380원을 절세할 수 있습니다. 일반 계좌 대비 세금이 47% 줄어듭니다.
* 일반형 ISA 기준, 실제 수익은 상품/시장 상황에 따라 달라질 수 있습니다.
Tax-Savings Simulation by Investment Amount
Before using the calculator yourself, here is a snapshot of tax savings across representative investment scenarios. All figures assume a standard-type ISA (KRW 2 million tax exemption) and are based on total net gains over 3 years of investing.
| 3-Year Total Net Gain | Regular Account Tax (15.4%) | ISA Tax | Tax Savings |
|---|---|---|---|
| KRW 2 million | KRW 308,000 | KRW 0 (Fully tax-exempt) | KRW 308,000 |
| KRW 5 million | KRW 770,000 | KRW 297,000 | KRW 473,000 |
| KRW 10 million | KRW 1.54 million | KRW 792,000 | KRW 748,000 |
| KRW 20 million | KRW 3.08 million | KRW 1.782 million | KRW 1.298 million |
You can see that when gains stay at or below KRW 2 million, there is zero tax liability, and as gains grow, the tax savings grow alongside them. In particular, if you invest consistently over 3 years and accumulate more than KRW 10 million in gains, a single ISA account can save you from several hundred thousand won to over KRW 1 million in taxes.
5. 5 Steps From Opening an ISA to Investing
Opening an ISA and getting started with actual investments is simpler than you might think. A single brokerage app lets you open an account in 5–10 minutes and buy ETFs right away. Follow the 5 steps below.
Apply for a Brokerage-Type ISA Through Your Brokerage App
Most brokerages — Kiwoom Securities, Mirae Asset, Samsung Securities, NH Investment, Toss Securities, and others — let you open an ISA via their mobile app. Search for "ISA" or "Individual Savings Account" to find the account opening menu. If you already have an account with the brokerage, no additional documents are required.
Verify Low-Income Eligibility (If Applicable)
During the account opening process, you'll choose between the low-income type and the standard type. If your employment income is up to KRW 50 million or your comprehensive income is up to KRW 38 million, opt for the low-income type. Most brokerage apps automatically pull income data, but if you want to verify manually, you can request an income verification certificate via the National Tax Service Hometax system.
Deposit Funds Into Your ISA Account
Once the account is opened, deposit your investment capital. The annual contribution limit is KRW 20 million. You can deposit the full KRW 20 million at once or split it across monthly contributions. If you don't use the full limit this year, the unused amount carries over to the next year, so there's no pressure to deposit everything at once.
Search for and Buy Domestic-Listed Overseas ETFs
Within your ISA account, go to the stock/ETF trading screen and search for the ETF you want. For example, searching for "TIGER S&P500" or "U.S. S&P500" will bring it up. Buying is identical to buying regular stocks — enter the quantity, hit buy, and you're done. Trading takes place during regular Korean market hours (9:00 a.m. – 3:30 p.m.).
Maintain the Account and Invest for 3+ Years
To qualify for ISA tax benefits, you must hold the account for at least 3 years. Once the 3-year period passes, the tax exemption/separate taxation benefits on your investment gains become locked in. During this period, you can freely buy and sell ETFs within the ISA. However, withdrawing principal is treated as account closure, so be careful. After the 3-year maturity, you can extend, close, and reopen a new account.
Practical Tip: Many brokerages run new ISA account opening events. Just for opening an account you may receive cash or points, plus commission discounts for a set period, so be sure to check for events before signing up. Large brokerages such as Kiwoom Securities, Mirae Asset, and Samsung Securities tend to offer attractive perks. For a side-by-side of brokerage commissions, see our Brokerage Fee Guide.
Investment Strategy in an ISA — Why Dollar-Cost Averaging Works
Given the ISA's KRW 20 million annual contribution cap, many investors prefer investing a fixed amount every month via dollar-cost averaging (DCA) rather than putting in a lump sum. For example, buying KRW 1 million–KRW 1.7 million of TIGER U.S. S&P500 or KODEX U.S. Nasdaq100 each month. DCA spreads out your purchase timing, reducing the risk of buying everything at a market peak — making it especially well-suited to beginners.
Some brokerages offer an ETF auto-investment feature within the ISA. This lets you automate ETF purchases on a fixed date each month, freeing you from having to remember. It's also a strategy that aligns nicely with the 3-year mandatory holding period.
6. Important Precautions
An ISA is a powerful tax-saving tool, but if you fail to meet the conditions, you could lose every benefit. Be sure to review the precautions below before you start investing.
Failing the 3-Year Mandatory Holding Period Forfeits All Tax Benefits
This is the most critical ISA condition. If you close the account before 3 years from the opening date, all the tax-exemption/separate-taxation benefits you received will be wiped out. In other words, closing early means your gains are taxed at the regular rate of 15.4%, just like in a regular account. Think of it as: if you close mid-way, you get retroactively taxed on the exempted gains. So the money you put into an ISA should be surplus funds you won't need for at least 3 years.
Cannot Exceed the KRW 20 Million Annual Contribution Limit
The maximum amount you can deposit into an ISA is KRW 20 million per year, capped at KRW 100 million over 5 years. You cannot exceed this. However, any unused portion of the annual limit carries over to the next year. For example, if you deposited KRW 15 million this year, next year you can deposit up to KRW 2 million + KRW 500,000 carried over = KRW 2.5 million. One thing to note: the contribution limit is based on the "principal deposited," not the "account balance." Even if your balance exceeds KRW 20 million due to investment gains, that is perfectly fine.
Direct Foreign Stock Investment Is Not Allowed
To reiterate: you cannot invest directly in foreign stocks (U.S. individual names) within an ISA account. To buy Apple (AAPL), Tesla (TSLA), or Nvidia (NVDA) directly, you need to use a regular overseas stock account. All an ISA allows is indirect investing via domestic-listed overseas ETFs. More people than you'd expect open an ISA without realizing this, so be sure to confirm before opening.
Mid-Term Withdrawal Is Treated as Account Closure
Withdrawing funds from your ISA triggers immediate account closure. Unlike a regular deposit account, you cannot "take out a little when needed and keep the rest going." Withdrawing within 3 years forfeits all tax benefits as described above, and withdrawing after 3 years still closes the account at that point. The principle is: don't put money into an ISA that you expect to need before maturity.
One Account Per Person Only
You can hold only one ISA account per person across all financial institutions. If you open an ISA at Brokerage A, you cannot open another at Brokerage B. To switch brokerages, you must close your existing ISA and open a new one — but doing so restarts the 3-year mandatory holding period from the beginning. So it's important to choose your brokerage carefully from the start.
Regarding the Proposed Expansion of Tax-Exempt Limits
Proposals to expand the 2026 tax-exempt limits (standard type from KRW 2 million to KRW 5 million; low-income type from KRW 4 million to KRW 10 million) and raise contribution caps are being discussed in the National Assembly, but they have not been finalized. This article is written as of March 2026 under the current rules (standard type KRW 2 million, low-income type KRW 4 million). We will update the content once the legislation is confirmed. Plan your investments based on current rules, and treat any expansion as a bonus if it passes.
Precaution Checklist
- Invest only with surplus funds you can commit to the 3-year mandatory holding period
- Direct foreign stock purchases are not allowed — only domestic-listed overseas ETFs
- Mid-term withdrawal = account closure — any withdrawal triggers closure
- One account per person — choose your brokerage carefully
- KRW 20 million annual limit — excess deposits are not allowed (unused amounts carry over)
- Re-subscription is allowed after maturity — closing and reopening after 3 years resets the tax-exempt limit
Frequently Asked Questions
Q1. Can I buy U.S. stocks (Apple, Tesla) directly within an ISA?
No, you cannot buy foreign stocks directly within an ISA. What you can invest in via an ISA is limited to domestic stocks and domestic-listed ETFs/funds. To invest in U.S. stocks, you need to invest indirectly through domestic-listed overseas ETFs (TIGER U.S. S&P500, KODEX U.S. Nasdaq100, etc.). To buy individual U.S. stocks (AAPL, TSLA, etc.), you'll need to use a separate regular overseas stock account.
Q2. What happens if I urgently need money within the 3-year ISA period?
Unfortunately, withdrawing money from an ISA triggers account closure. If you close within the 3-year mandatory holding period, all the tax-exemption/separate-taxation benefits you accumulated are forfeited, and your gains are taxed at the regular rate (15.4%), just like a regular account. So only deposit funds into an ISA that you are confident you won't need for at least 3 years. If a sudden need for a large sum is possible, set aside an emergency fund separately and consider reducing the amount you put into the ISA.
Q3. Should I prioritize ISA or a Pension Savings account?
The two accounts serve different purposes. A Pension Savings account offers a tax credit on the contributions themselves (year-end tax refund), and the funds are intended to be withdrawn as a pension starting at age 55. An ISA reduces tax on investment gains, and you can use the funds freely after 3 years. Generally recommended order: (1) First max out the Pension Savings tax credit limit (KRW 6 million per year), then (2) if you still have surplus funds, invest through an ISA. However, if you anticipate needing the funds before age 55, prioritizing the ISA is also a sound strategy. Using both accounts together can maximize your tax savings.
Q4. How do I check whether I'm eligible for the Low-Income Type ISA?
Low-income type ISA eligibility applies if your employment income is up to KRW 50 million or your comprehensive income is up to KRW 38 million. There are two ways to verify: First, when you open an ISA through a brokerage app, the system automatically pulls your income data from the National Tax Service, so you'll be notified right away. Second, to verify manually, you can issue an "Income Verification Certificate (for ISA subscription)" via the National Tax Service Hometax system (www.hometax.go.kr). If your income falls below the threshold, you'll be automatically routed to the low-income type, so there's no need to worry too much.
Q5. What happens after the ISA matures (3 years)?
When your ISA reaches its 3-year maturity, you have three main options. First, extend the account — keep the account open and continue investing. The same tax benefits apply to gains generated during the extension period. Second, close and reopen — close at maturity and open a new ISA, which resets the tax-exempt limit. In other words, even if you already used up the KRW 2 million (standard type) exemption on your old ISA, a new ISA gives you a fresh KRW 2 million exemption. Third, convert to a Pension Savings account — transfer the matured ISA balance into a Pension Savings account to receive an additional tax credit (up to KRW 3 million). This strategy can further maximize your tax savings.