The answer is generally yes, but there are some other things you need to know.
The U.S. stock market is one of the foundations of the nation's economic system, and there is no citizenship requirement when it comes to allowing small investors to own shares in a U.S. company. However, there are some extra hoops that non-citizens have to jump through to get U.S. stocks in their portfolios. Following are some of the issues you'll face as a non-U.S. citizen.
Getting a brokerage account
To trade U.S. stocks, the easiest thing to do is to open a brokerage account with a U.S. broker. (Get started by visiting our Broker Center.) However, brokerage firms have different procedures for non-citizens based on their residency status, and non-citizens therefore have to produce more documentation to comply with their internal rules.
Different brokerage firms impose different restrictions on non-citizens. In some cases, brokers will accept applications but require paper filings rather than online application forms. Other brokers are less friendly to non-citizens, especially nonresident aliens, and will demand legitimate visa information before opening an account to trade stocks.
If you can't find a broker you like in the U.S., then some foreign financial institutions will allow you to open brokerage accounts that will give you access to U.S. stock exchanges. For U.S. residents, however, those foreign institutions might also consider it a problem if you don't have a local address in your country of citizenship.
Another option is to buy shares of U.S. companies that are listed on foreign exchanges. You'll find that many blue-chip stocks trade on exchanges overseas.
Dealing with taxes
Non-U.S. citizens trading U.S. stocks potentially have to deal with taxation issues. In general, nonresident aliens pay a 30% tax on investment income, and the tax will typically be withheld at the source by the brokerage firm involved. Citizens of countries that have tax treaties with the U.S. often pay a lower rate of tax. However, capital gains are often exempt from U.S. tax for nonresidents.
For resident aliens, the IRS imposes tax on worldwide income from all sources. Therefore the tax considerations are generally equivalent to those imposed on U.S. citizens, and you'll typically file similar tax returns to those for citizens.
Not being a U.S. citizen shouldn't stop you from investing in U.S. stocks. Just be aware that there are some additional hurdles you might need to overcome to do so.
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FAQs
The U.S. stock market is one of the pillars of our country's economic system, and U.S. citizenship is not required to trade U.S. securities.
Can foreigners trade on the US stock exchange? ›
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.
Can I trade in US stocks? ›
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.
Do you have to be from the US to invest in stocks? ›
Do you have to live in the U.S. to open a stock brokerage account? No, non-U.S. investors are able to open brokerage accounts and invest in U.S. companies, but they might face a few additional hurdles in getting started.
Can foreigners invest in the S&P 500? ›
How to invest in S&P500 Index as a non-US resident. As an investor, we cannot invest directly in the S&P500 index. Instead, the easiest way to invest in the S&P500 index is through investing in the S&P500 Exchange-Traded Funds (ETFs). An ETF is an instrument that mirrors the performance of an underlying index.
Can non-US citizens use Robinhood? ›
Be 18 years or older. Have a valid Social Security Number (not a Taxpayer Identification Number) Have a legal U.S. residential address within the 50 states or Puerto Rico (exceptions may apply for active U.S. military personnel stationed abroad) Be a U.S. citizen, U.S. permanent resident, or have a valid U.S. visa*
Can a non US citizen open a Charles Schwab account? ›
Please call us to request a Schwab One International Corporate Account Application OR click “Apply for an Account” at international.schwab.com. Substitute Form W-8BEN Complete one form for each non-U.S. citizen/resident Account Holder.
Is Vanguard only for US citizens? ›
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.
Does Fidelity allow international trading? ›
Fidelity international trading is suitable for those who want to go beyond ADRs, global U.S. stocks, and international funds. International investors will find the opportunity to trade in 25 countries.
How to buy US stocks for non-residents? ›
There are two primary methods to invest in US stocks: Investing with a Personal Account: When opening a personal account for investing, brokers typically require a Social Security number (SSN) for US citizens or an Individual Taxpayer Identification Number (ITIN) for non-US citizens.
The more comfortable investors are with the stock market, the greater the benefit from going with a discount broker or online broker such as Charles Schwab and E*Trade, where fees $0 per trade for stocks and ETFs and $0.65 for options.
Can anyone trade on the stock market? ›
The answer is simple: Anyone with a trading account can trade. Here are some points to ponder over if you want to make money from stock trading: Make up your mind about choosing stock trading as a profession. Use technology to trade, learn and grow.
Can you invest in stocks with an ITIN number? ›
The answer is YES! Through an Individual Taxpayer Identification Number or (ITIN), people who do not have social security numbers can open investment accounts. Brokerage companies such as Vanguard, Charles Schwab, and Fidelity allow individuals with ITINs to open investment accounts.
Do you have to pay US tax on US stocks? ›
Without appropriate documentation, income from U.S. investments may be subject to the U.S. domestic tax rate which is generally a flat 30% U.S. non-resident withholding tax rate.
Can undocumented immigrants invest in the stock market? ›
There is currently no legal requirement that a person has to be a citizen or have a certain type of visa or immigration status to invest and own stocks or funds. But generally, immigrants will have to provide more documentation to open an account with a brokerage company.
Can a non US citizen buy a US business? ›
Generally, there are no restrictions on foreign ownership of a company formed in the United States. The procedure for a foreign citizen to form a company in the US is the same as for a US resident. It is not necessary to be a US citizen or to have a green card to own a corporation or LLC.
Can a non-US resident open a Schwab account? ›
To apply for a Schwab One International® account, simply prepare the required supporting documents and go through the online account opening process. Once the account is fully established, you can fund your account and start investing.
Can non-US residents buy US mutual funds? ›
The purchase of U.S. mutual funds by non-U.S. residents is restricted in order to comply with U.S. regulations. As a result of this, non-U.S. resident clients may only hold or redeem existing U.S. mutual fund share positions, initial or subsequent purchases are not permitted.
