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How to Buy Amazon Shares UK for Beginners

Tobi Opeyemi Amure
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How to Buy Amazon Shares UK for Beginners

In a nutshell, to buy Amazon shares in the UK, choose a brokerage that offers access to US stocks, like eToro or Plus500. Open and fund your trading account, ensuring you complete a W-8BEN form to comply with US tax regulations. Then, search for Amazon’s stock ticker ‘AMZN’, decide on the number of shares or the amount you want to invest in and execute the buy order.

Investing in Amazon shares from the UK can seem daunting, but I’ve put together a straightforward guide to simplify the process.

This article offers clear, step-by-step instructions to help you confidently navigate the world of stock investment, addressing common concerns and providing practical solutions for UK investors.

This article was reviewed by Tobi Opeyemi Amure, a trading expert and writer at InvestopediaInvesting.com, and Trading.biz.

How to Buy Amazon Shares in the UK – Step-by-Step Guide

Here’s a simple step-by-step guide to help you invest in Amazon shares.

1. Select a broker

Your journey to buying Amazon shares in the UK starts with choosing the right broker. While most UK-based brokerages permit buying US stocks, it’s important to weigh your options.

Look for brokers that align with your preferences, whether it’s lower transaction fees, enhanced customer support, user-friendly platforms, or access to comprehensive market analysis and research.

2. Set up your account

After picking a brokerage, the next step is to open a trading account. This will require basic personal information like your name, address, employment status, National Insurance number, and debit card details.

The setup process is typically straightforward and a key step in getting ready to invest.

3. Fill out the W-8BEN form

Before buying shares in a US company like Amazon, UK investors must complete the W-8BEN form.

This form, mandated by the US Internal Revenue Service (IRS), is used to declare that you’re not a US resident. Properly filing this form saves you from the 30% tax on income from US shareholdings.

4. Decide how much to invest

Decide on the amount you’re comfortable investing in Amazon shares.

It’s crucial to invest only what you can afford to lose, considering the inherent risks and volatility of the stock market.

Remember, even the most stable stocks can fluctuate, sometimes significantly.

5. Research Amazon

Before investing, conduct thorough research on Amazon. Examine various data points like stock price trends, trading volumes, and key financial ratios such as the price-to-earnings (P/E) ratio.

Also, review regulatory filings with the Securities and Exchange Commission (SEC) and keep an eye on Amazon’s corporate website, especially the Investor Relations section, for the latest company news and financial reports.

6. Invest in Amazon stock

With your account set up and research in hand, enter Amazon’s stock ticker symbol ‘AMZN’ on your broker’s platform.

Assess the current buying and selling prices, decide on the number of shares you want, and proceed to purchase. Confirm the transaction, which includes a breakdown of any applicable trading fees.

7. Manage your investment

After acquiring Amazon shares, it’s vital to monitor your investment regularly.

Stay informed about market changes, company developments, and adjust your investment strategy as needed to align with your financial goals and market conditions.

8. Understand fees & taxes

Be mindful of any brokerage fees, including transaction fees, account maintenance, or inactivity charges, as these can impact your overall investment return.

Also, consider the tax implications like potential capital gains tax, ensuring you’re managing your investments efficiently from a tax perspective.

Best Place to Buy Amazon Shares UK

In 2023, around 2 in 5 Brits (42%) invest and trade, up from 36% in 20211.

Choosing the best trading platform for investing in Amazon shares is crucial for newcomers in the market.

Having worked in the retail investment sector in London over the last four years, I had the opportunity to experience the rise first-hand.

Additionally, in my role working for one of the UK’s leading financial companies, “a trustworthy and respected provider of news, education and market analysis for the everyday investor”, I was able to work with and test some of the biggest UK stock brokers in the market.

Using my experience in this field, I’ve picked two of the best places to buy Amazon shares in the UK.

Factors such as fees, commissions, usability, trading platforms available, research tools, educational materials, and additional features were also considered.

Both of the platforms I’ve reviewed below are regulated by the UK’s financial watchdog, the Financial Conduct Authority (FCA) or similar.

1. eToro – Overall best place to buy Amazon stock UK

eToro – Overall best place to buy Amazon stock UK.

eToro emerges as a top choice for UK investors looking to buy Amazon shares, offering a blend of convenience, user-friendliness, and low-cost trading.

This multi-asset platform not only provides commission-free access to a wide array of stocks, including Amazon, but also features assets like ETFs, indices, forex, and cryptocurrencies.

Its standout feature, the social trading aspect, allows users to replicate the trades of experienced investors, making it an ideal choice for both beginners and seasoned traders.

The process of setting up an account on eToro is quick and straightforward, with a minimal deposit requirement of £50.

The platform is regulated by the Financial Conduct Authority (FCA) and covered by the Financial Services Compensation Scheme (FSCS), ensuring a high level of safety and security for your investments.

Moreover, eToro’s user-friendly web and mobile applications make trading accessible on the go, enhancing the investing experience.

eToro’s extensive range of tools, including ProCharts for technical analysis and risk management features like Stop Loss and Take Profit, caters to the needs of different trading strategies. For investors seeking more structured investment options, eToro offers over 40 pre-allocated investment portfolios focusing on various market segments.

eToro stands out in the UK market for its comprehensive offerings, combining 0% commission on real stocks, a diverse range of assets, innovative social trading features, and robust regulatory compliance. This makes it a highly recommended platform for those seeking to invest in Amazon shares in the UK.

Read my complete eToro review.

Zero commission means that no broker fee will be charged when opening or closing the position and does not apply to short or leveraged positions. Other fees apply including FX fees on non-USD deposits and withdrawals. Your capital is at risk. For more information, click here.

2. Plus500 – Good for trading Amazon CFDs

Plus500 – Good for trading Amazon CFDs

Plus500 stands out as a top choice for UK traders looking to engage in Contract for Difference (CFD) trading, particularly for Amazon stock.

This platform is regulated by the Financial Conduct Authority (FCA) and offers the security of the Financial Services Compensation Scheme (FSCS), ensuring a safe trading environment.

Plus500’s user-friendly native apps for iOS and Android make trading accessible and convenient, catering to both new and experienced traders.

One of Plus500’s key strengths is its commission-free trading across a wide range of markets, including stocks from major international exchanges.

The platform also offers leverage up to 1:5, allowing traders to amplify their trading capital and potential profits, though it’s important to be mindful of the associated risks.

Additionally, Plus500 provides advanced trading tools, including market sentiment indicators and predefined stops and limits, to help traders manage their positions effectively.

The Plus500 platform is also equipped with its own analytical tool, ‘Insights’, which offers a valuable analysis of trades and market trends, aiding traders in making informed decisions.

However, it’s worth noting that Plus500 does not support the MetaTrader platform and has minimal educational resources, which may be a consideration for some traders.

Plus500 is a robust and competitive option for trading Amazon stock CFDs in the UK, offering a range of tools and features to support effective trading strategies, backed by strong regulatory compliance and a user-friendly interface.

Read my complete Plus500 review.

Frequently Asked Questions About Buying Amazon Shares in the UK

Here are some answers to some of the most asked questions regarding purchasing Amazon stock in the UK.

Can I buy Amazon shares in the UK?

Yes, you can buy Amazon shares in the UK. To do so, you’ll need to choose a brokerage that allows trading in US stocks and open a trading account. Remember to complete a W-8BEN form, which is necessary for UK residents investing in US stocks. After setting up your account and deciding your investment amount, you can proceed to buy Amazon shares through the chosen platform.

Should UK investors buy shares in Amazon?

When contemplating whether to invest in Amazon shares, UK investors need to consider several key factors.

Firstly, Amazon’s position as a global e-commerce and cloud computing giant underlines its significant role in the market, often making it a sought-after stock for its growth potential and stability. Amazon has shown a strong track record of growth and innovation, which can be appealing for those looking to invest in a company with a solid foothold in multiple industries.

However, investing in any stock, including Amazon, involves risks. Market volatility, regulatory changes, and economic shifts can all impact stock performance.

UK investors should therefore weigh these risks against their personal investment goals and timeline. It’s crucial to consider one’s own risk tolerance and how an investment in Amazon fits into a broader, diversified investment portfolio.

Additionally, the impact of currency fluctuations should not be overlooked. As Amazon is a US-listed company, investing from the UK involves currency exchange, which can affect the investment’s return in GBP terms. This adds an extra layer of complexity and potential risk to the investment.

While Amazon’s strong market position and growth trajectory can make it an attractive investment, UK investors should thoroughly assess their financial goals, market conditions, and the inherent risks involved in international stock investments.

As with any investment decision, it’s advisable to conduct thorough research or consult with a financial advisor to ensure that the decision to invest in Amazon aligns with one’s investment strategy and financial objectives.

Is it safe to invest in Amazon?

Investing in Amazon, like any stock, carries inherent risks and uncertainties.

While Amazon has a strong market presence and a history of growth, its stock can be affected by market volatility, economic shifts, and company-specific developments.

Investors should consider their risk tolerance and investment goals before investing.

How to sell Amazon shares?

  1. Log in to your brokerage account where you hold Amazon shares.
  2. Navigate to the trading section and search for Amazon’s stock ticker, ‘AMZN’.
  3. Enter the number of shares you wish to sell and choose the type of sell order (e.g., market, limit).
  4. Review and confirm the transaction details.
  5. Execute the sale order and monitor the execution status.

Why invest in Amazon?

Investing in Amazon is a consideration for many due to the company’s robust market presence and growth potential.

Amazon, a leader in e-commerce, also excels in cloud computing with its AWS division, making it a diversified business. This diversification helps mitigate sector-specific risks and contributes to its overall stability.

The company’s constant innovation and expansion into new markets, such as artificial intelligence, healthcare, and media streaming, offer potential for future growth. These ventures demonstrate Amazon’s adaptability and forward-thinking approach, key traits for a company in the evolving tech landscape.

Financially, Amazon has consistently shown strong revenue growth and maintains a substantial market share in its primary sectors. This financial health makes it an attractive option for investors seeking long-term growth.

However, it’s important to note that Amazon’s stock can be affected by market fluctuations, global economic conditions, and company-specific factors. Investors should consider these aspects, alongside their investment goals and risk tolerance, before investing in Amazon.

Amazon offers potential for growth and innovation, but like all investments, comes with inherent risks that should be carefully considered.

What to consider before investing in Amazon shares?

Before investing in Amazon shares, several key factors should be considered to make an informed decision.

Firstly, understanding Amazon’s business model is crucial. As a major player in e-commerce and cloud computing, Amazon’s performance is tied to these sectors’ dynamics.

Potential investors should assess how trends in online shopping, cloud technology, and Amazon’s other ventures like AI and media streaming could impact its future growth.

Secondly, investors need to review Amazon’s financial health. This includes analyzing its revenue growth, profit margins, and market share. While Amazon has a history of strong financial performance, it’s important to stay updated with its latest earnings reports and financial statements.

Market volatility is another important factor. Amazon’s stock, like others, can be subject to fluctuations due to broader market conditions, economic changes, and company-specific news. Investors should evaluate how market volatility aligns with their risk tolerance and investment timeline.

Considering Amazon’s global reach, UK investors should also be aware of the impact of currency exchange rates, as investing in a US-based company involves currency risk.

Lastly, investors should note that Amazon historically has not paid dividends. This means the investment return would primarily be from capital gains, making it more suitable for those looking for growth rather than income.

Investing in Amazon shares requires a thorough understanding of the company’s business, financial health, market conditions, and personal investment goals. Careful consideration of these factors can help investors make a well-informed decision.

How to buy Amazon shares UK for beginners?

  1. Choose a broker: Select a UK-based broker that offers US stock trading, including Amazon shares.
  2. Create an account: Sign up for an account with the broker, providing the necessary personal details.
  3. Verify identity: Complete the identity verification process as required by the broker.
  4. Deposit funds: Transfer money into your brokerage account, often possible via bank transfer or debit card.
  5. Complete W-8BEN form: Fill out this form to declare non-US residency for tax purposes.
  6. Research Amazon: Understand Amazon’s business model, financials, and recent stock performance.
  7. Decide investment amount: Determine how much you want to invest based on your budget and risk tolerance.
  8. Place order: Search for Amazon’s ticker symbol ‘AMZN’ and place a buy order for the desired number of shares.
  9. Review and confirm: Double-check the order details and confirm the purchase.
  10. Monitor your investment: Regularly track the performance of your Amazon shares and stay informed about market changes.

What are the risks of investing in Amazon shares?

Investing in Amazon, like any stock, involves certain risks that should be considered. Market Volatility is a primary risk, as Amazon’s stock price can fluctuate due to factors like economic changes, market sentiment, and company-specific news. This can impact the value of an investment, especially in the short term.

Competition is another risk factor. Amazon operates in highly competitive markets, including e-commerce and cloud computing. Intense competition can affect its market share and profitability, which in turn can impact its stock performance.

Regulatory Challenges are also significant. Amazon faces ongoing scrutiny from regulators globally, particularly in areas like antitrust and data privacy. Changes in regulations or legal challenges can have financial and operational implications for the company.

Tech Industry Risks are inherent in Amazon’s business model, as it heavily relies on technology and innovation. Rapid changes in technology or failure to innovate can adversely affect its business.

Finally, Currency Risk is relevant for UK investors. Since Amazon is a US-based company, fluctuations in the exchange rate between the US dollar and the British pound can affect the investment value for UK-based investors.

Is it worth buying one share of Amazon?

Deciding whether to buy just one share of Amazon hinges on several factors. Firstly, the Cost of a Single Share needs consideration.

Amazon’s share price is relatively high, which might be a substantial investment for some individual investors. However, the concept of fractional shares, offered by many brokerages, allows investment in a portion of a share, making it more accessible.

Secondly, the Investment Goals of the individual play a crucial role. If the aim is long-term growth, even a single share of Amazon can contribute to portfolio diversification and potential capital appreciation. Amazon’s solid market presence and growth potential make it an attractive option for long-term investors.

Thirdly, Market Performance should be monitored. Like any stock, Amazon’s performance is subject to market volatility and company-specific factors. Potential investors should assess how Amazon fits within the broader market trends and their risk tolerance.

Finally, considering Transaction Costs is important. When investing a small amount, transaction fees, if any, should be weighed against the potential return on investment. High fees can significantly impact the overall return, especially when buying just one share.

Buying a single share of Amazon can be worthwhile, depending on the investor’s budget, goals, and understanding of the market. It offers a way to participate in the growth of a leading tech company, but it’s essential to consider all related factors and costs.

What’s the best time to invest in Amazon stock?

Determining the best time to invest in Amazon stock requires a careful analysis of various factors. Market Timing is crucial, as buying during a market dip or when Amazon’s stock is undervalued can be advantageous.

However, predicting market lows with precision is challenging, and attempting to time the market perfectly is often not recommended for the average investor.

Amazon’s Financial Health is another key consideration. Investors should monitor the company’s earnings reports, revenue growth, and future business prospects. Positive financial results or strong growth forecasts can indicate a good investment opportunity.

Economic Indicators and Market Trends also play a significant role. Broader economic conditions, tech industry trends, and consumer spending habits can impact Amazon’s stock performance. Keeping an eye on these can provide insights into potential investment timing.

Lastly, a Long-Term Investment Approach is often advised when investing in stocks like Amazon. Due to the inherent volatility in the stock market, a long-term perspective can help mitigate the impact of short-term fluctuations and capitalise on the company’s growth trajectory over time.

What’s the minimum required investment for Amazon?

The minimum investment required to buy Amazon shares largely depends on the share price and the policies of the brokerage you choose. Amazon’s share price can be quite high, which might seem prohibitive for small investors.

However, many brokers now offer fractional shares, allowing you to invest in a portion of a single Amazon share. This feature significantly lowers the entry point, enabling investment with a much smaller amount of capital.

For instance, if a brokerage offers fractional shares, you could invest as little as a few dollars or pounds in Amazon, depending on the minimum transaction limit set by the broker. It’s important to check with your chosen brokerage for their specific terms regarding minimum investments and fractional shares.

Additionally, consider any associated fees or charges that the brokerage might impose, as these can affect the overall cost of your investment, especially when dealing with smaller amounts.

Final Thoughts

Buying Amazon shares in the UK is a process that can be navigated with ease and confidence.

By choosing the right brokerage, setting up an account, understanding the importance of completing the W-8BEN form, and making informed decisions about investment amounts and strategies, UK investors can successfully invest in one of the world’s leading companies.

It’s important to conduct thorough research, consider the risks involved, and align your investment with your financial goals and risk tolerance.

Whether you’re a seasoned investor or a beginner, understanding these steps ensures you are well-prepared to embark on your investment journey with Amazon shares in the UK market.

FAQs

Does Amazon pay dividends?

Amazon does not pay dividends to its shareholders. The company has historically reinvested its profits back into the business to fuel growth and expansion in various sectors. Investors typically look to Amazon for capital appreciation rather than income from dividends. This approach is common among technology companies focused on growth.

What’s the cheapest way to buy Amazon stock?

The cheapest way to buy Amazon stock is often through online brokerages that offer commission-free trading. eToro, for example, is a popular choice as it allows investors to buy Amazon shares without paying any commission fees. This platform also supports fractional shares, enabling investment in Amazon with a smaller amount of capital. However, investors should be aware of any other potential fees, such as currency conversion fees, when using platforms like eToro.

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Sources:

  1. https://www.finder.com/uk/investment-statistics ↩︎

Will Fenton is the founder of Sterling Savvy. He is a personal finance expert and writes about trading, investing, budgeting, and other financial topics.

Along with his education in Economics & Finance, he has experience working in the financial services industry in London working for one of the UK’s leading financial companies, “a trustworthy and respected provider of news, education and market analysis for the everyday investor”.

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