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Read more…How to buy JD Digits stock in Canada when it goes public
Here's everything we know so far about the JD Digits IPO.
JD Technology (formerly JD Digits) will no longer be having an IPO on the Shanghai Stock Exchange STAR Market. Even though you won’t be able to buy stock in JD Technology directly, there are still ways to back the company.
What we know about the JD Technology IPO
On June 28, 2020, JD Technology (then JD Digits) filed with the China Security Regulatory Commission to go public on the Shanghai Stock Exchange STAR Market. It had hoped to raise $3.1 billion from the IPO.
But on March 30, 2021, JD Technology submitted a request to the Shanghai Stock Exchange to withdraw its IPO. The cancellation was publicly announced a few days later on April 2. Although JD Technology has not officially stated its reasoning, it’s speculated that the withdrawal occurred because of internal business and management changes.
On March 31, the day after submitting its IPO cancellation request, JD Technology entered into an agreement with its parent company, JD.com, to buy fellow subsidiary, JD Cloud & AI. The transaction increased JD Technology’s assets by USD $2.4 billion.
Increased regulatory scrutiny from the Chinese government has made it challenging for fintech companies like JD Technology and its rival, Ant Group (founded by billionaire Jack Ma), to go public. JD Technology has not ruled out the possibility of having an IPO in the future, although it also hasn’t announced any official plans yet. We’ll update this page as more information becomes available.
How to invest in JD Technology from Canada
Although you won’t be able to buy stock in JD Technology directly, there are 2 ways investors can back the company.
1. Buy stock in JD.com, Inc. (NasdaqGS: JD)
Although it’s a less direct investment than purchasing JD Technology stocks outright, one option is for investors to buy stock in its parent company, JD.com, Inc. The company trades on the Nasdaq Global Select Market under the ticker symbol “JD.”
How to buy stocks in JD.com
You’ll need a brokerage account to invest in Western Alliance Group. Here’s how it works:
- Compare share trading platforms. If you’re a beginner, look for a platform with low commissions, expert ratings and investment tools to track your portfolio. Narrow down top brands with our comparison table.
- Open and fund your brokerage account. Complete an application with your personal and financial details, like your ID and bank information. Fund your account with a bank transfer, credit card or debit card.
- Search for JD.com, Inc. Find the stock by name or ticker symbol: JD. Research its history to confirm it’s a solid investment against your financial goals.
- Purchase now or later. Buy immediately with a market order or use a limit order to delay your purchase until JD.com reaches your desired price. To spread out your purchase, look into dollar-cost averaging, which smooths out buying at consistent intervals and amounts.
- Decide on how many to buy. your budget against a diversified portfolio that can minimize risk through the market’s ups and downs. You may be able to buy a fractional share of JD.com, depending on your broker.
- Check in on your investment. Congratulations, you own a part of JD.com (and, indirectly, JD Technology). Optimize your portfolio by tracking how your stock — and even the business — performs with an eye on the long term. You may be eligible for dividends and shareholder voting rights on directors and management that can affect your stock.
2. Buy ETFs
You can also indirectly buy into JD Technology by investing in exchange-traded funds (ETFs) that track JD.com. By purchasing these ETFs, you can potentially earn gains when JD.com subsidiaries like JD Technology are performing well.
The following ETFs hold investments in JD.com:
- Global X MSCI China Consumer Disc ETF (NYSEARCA: CHIQ)
- First Trust Chindia ETF (NYSEARCA: FNI)
- EMQQ The Emerging Markets Internet & Ecommerce ETF (NYSEARCA: EMQQ)
- Vanguard FTSE Emerging Markets Index Fund ETF Shares (NYSEARCA: VWO)
- SPDR NYSE Technology ETF (NYSEARCA: XNTK)
- KraneShares CSI China Internet ETF (NYSEARCA: KWEB)
Tax implications of buying US stocks in Canada
Agreements between Canada and the US require Canadians holding US stock investments to pay the US Internal Revenue Service (IRS) a 15% withholding tax on any dividends earned on their US stocks. Interest earned from bonds or other interest-yielding US investments are similarly taxed at a rate of 10%.
An exception is made for stock investments held in trust exclusively designed to provide retirement income. Such trusts include RRIFs, LIRAs, LIFs, LRIFs and Prescribed RRIFs. RRSPs are also exempt from US withholding tax if you own US investments in the form of US stocks, bonds or ETFs.
Investment accounts that do not qualify for this exemption include RESPs, TFSAs and RDSPs.
All income from investments, including foreign investments, must be declared as part of your income on your Canadian tax return. Unless your US earnings are exempt from withholding tax, this means you’ll be double taxed on those earnings — first by the IRS, then by the CRA. However, the CRA may allow you to claim foreign tax credits for any taxes you’ve already paid to the IRS.
Speak with a tax professional to find out what rules and exceptions apply to your circumstances.
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Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades. Read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the product on the provider's website.
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