How can a foreigner trade in the US stock market?
There is no citizenship requirement for owning U.S. stock and foreigners can easily access U.S. stock through U.S.-based brokers and international brokers. Despite its popularity among foreign investors, many foreigners haven't properly planned for the U.S. estate tax consequences of owning U.S. stock.
There is no citizenship requirement for owning stocks of American companies. While U.S. investment securities are regulated by U.S. law, there are no specific provisions that forbid individuals who are not citizens of the U.S. from participating in the U.S. stock market.
Non-US residents can access the US market through: Opening a local brokerage account with access to US stock markets. Opening an account with a US broker (options are limited). Investing in US stocks through mutual funds or exchange-traded funds (ETFs) offered by local brokers.
Direct investments: Opening an overseas trading account with a domestic broker: This involves opening a trading account with a domestic broker in your home country that offers access to international markets, including the U.S. stock market. The broker facilitates the buying and selling of U.S. stocks on your behalf.
The easiest way for non-US investors (eg. Malaysians, Singaporeans) to invest in the S&P500 index is through Ireland-Domiciled ETFs. Why? Because Ireland-Domiciled ETFs benefit from the US-Ireland tax treaty of only 15% withholding tax on dividends.
Capital gains income is not usually taxable for nonresidents who have been present in the US for less than 183 days in a calendar year. However, it is taxable when the presence is 183 or more days.
Users create and fund their accounts and can start trading. Unfortunately, you cannot use Robinhood without an SSN; an ITIN is not accepted, which means you must be a U.S. citizen or permanent resident to use the app.
Non-U.S. citizens can open bank accounts in the U.S., but may need to go through extra steps, especially if they're nonresidents. Some banks and credit unions accept alternative forms of identification, such as an Individual Taxpayer Identification Number (ITIN), for non-U.S. citizens to open accounts.
However, not having a Social Security number does not mean you cannot participate in the stock market. Alternative options are available, such as obtaining an Individual Taxpayer Identification Number (ITIN) or opening an account with brokers offering SSN alternatives.
| Broker | Overall score | Minimum deposit |
|---|---|---|
| Interactive Brokers | 4.9 /5 | $0 |
| Saxo Bank | 4.9 /5 | $0 |
| NinjaTrader | 4.5 /5 | $0 |
| CMC Markets | 4.5 /5 | $0 |
Who can trade in US stock market?
Yes, Indians can invest in the US stock market. There is more than one way to buy and hold US stocks in your portfolio. Direct equities, ETFs, and mutual funds are just one of the few popular options. You can invest in US stocks in two ways from India – indirect and direct.
Yes, you can technically start trading with $100 but it depends on what you are trying to trade and the strategy you are employing. Depending on that, brokerages may ask for a minimum deposit in your account that could be higher than $100. But for all intents and purposes, yes, you can start trading with $100.
Individual retirement account (IRA): You can start investing in stocks by opening an IRA in addition to your workplace retirement plan (if you have one). IRAs provide some tax benefits, and you can choose between a traditional IRA (tax-deductible contributions) or a Roth IRA (tax-free withdrawals in retirement).
Index funds and ETFs were first created in the US and are now widely available outside of the US. A fund's domicile may affect how your home country treats your holding, in particular, taxes on dividends or capital gains.
Interactive Brokers is a reputable broker that accepts applications from non-residents. Other popular brokers accepting online applications include TD Ameritrade, Charles Schwab, ETRADE, and Fidelity Investments.
Please note: You need to be a U.S. citizen with a U.S. mailing address to open an account. If you live or work outside the U.S., please check out our international site.
Foreigners and Rich Americans. Our new analysis shows that foreign investors owned about 40 percent of US corporate equity in 2019, up substantially over the last few decades.
It is taxed for a nonresident at the same graduated rates as for a U.S. person. FDAP income is passive income such as interest, dividends, rents or royalties. FDAP income that is non-effectively connected income is taxed at a flat 30% rate on the gross income unless a tax treaty specifies a lower rate.
However, you may qualify to exclude your foreign earnings from income up to an amount that is adjusted annually for inflation ($107,600 for 2020, $108,700 for 2021, $112,000 for 2022, and $120,000 for 2023). In addition, you can exclude or deduct certain foreign housing amounts.
That means non-U.S. citizens or international investors can open a brokerage account and invest in U.S. stocks. But it's important to identify the different forms and policies that apply to non-U.S. taxpayers. TD Ameritrade does not provide tax advice.
Is brokerage cash my money?
Brokerage cash is a top-line cash total in your investing account. It's the cash amount before stripping out items like unsettled trades and collateral. Buying power is the bottom-line amount of cash available to you immediately. It might be called "cash available for withdrawal" or some variant on that.
As part of the KYC and AML requirements, Robinhood collects your SSN for tax reporting purposes, but it's also the identity for your account. It is crucial it is accurate.
| Bank | Monthly maintenance fees | Foreign transaction fees |
|---|---|---|
| Capital One | $0 | $0 |
| Bank of America | $4.95 (unless you meet certain requirements) | 3% |
| Wells Fargo | $10 | 3% |
| Charles Schwab | $0 | $0 |
Yes, a foreigner can open a bank account in the US without needing a US address. However, not all banking institutions allow for it. Even traditional banks that do offer accounts to non-residents often have requirements – like opening the account in person – that make it difficult for non-residents to apply.
It is possible in theory to set up a US bank account online from abroad — but in practice it's usually hard to find a traditional bank which will let foreigners get full access to an account online. That may mean you can start your application remotely, but need to attend a branch to get verified, for example.
