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Klarna, a buy now, pay later e-commerce fintech company, is expected to conduct an initial public offering.
There's no news yet about how much the stock will cost when it goes public. No date has been set for when the stock will be publicly available. Here's how investors in Canada can prepare to buy in.
The buy now, pay later e-commerce giant Klarna is expected to go public. It has not yet filed a viewable form S-1 with the US Securities and Exchange Commission. But we'll update this page as information as it becomes available.
Klarna is a Swedish fintech company that lets customers purchase products from major retailers and then pay for those items in four zero-interest payments. As of December 2020, it has reached more than 11 million customers in the US.
It partners with major brands such as Macy’s, Adidas and Sephora.
On March 1, the company announced a new funding round had raised $1 billion and valued the company at $31 billion, Bloomberg reported.
According to its website, Klarna is the most highly valued fintech company in Europe and the fourth-highest in the world.
Klarna is among the latest buy now, pay later companies to emerge.
Note: all dollar amounts on this page are in US dollars unless otherwise stated.
Once Klarna goes public, you'll need a brokerage account to invest. Consider opening a brokerage account today so you're ready as soon as the stock hits the market.
You won't be able to buy Klarna stocks on a Canadian stock exchange like the TSX or CSE. Instead, you'll need a Canadian broker that provides access to stocks sold on international exchanges. However, some Canadian brokerages don't offer access to international investments at all or only provide access to a limited range of investment opportunities.
You can access US exchanges like the NYSE and the NASDAQ using Canadian trading platforms like Questrade, Wealthsimple Trade, Scotia iTRADE and Interactive Brokers. Interactive Brokers also provides access to many stock exchanges outside North America like the Hong Kong Stock Exchange (SEHK), Korea Stock Exchange (KSE), National Stock Exchange of India (NSE), Frankfurt Stock Exchange (FWB) and London Stock Exchange (LSE).
The process of buying stocks listed on international exchanges is basically the same as buying stocks in a Canadian company. You buy and sell using your online trading account or through an investment broker who handles international stocks.
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.
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.
Note: The dollar amounts in the table below are in Canadian dollars.
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