How to Buy U.S. Stocks from Anywhere in the World
If you plan to invest in the United States stock market, you should understand how to buy U.S. stocks because it will help you find the best stock deals. Otherwise, you may end up losing funds to companies that don’t guarantee high returns to investors.
The U.S. stock market is open to all international investors. So, you don’t need to be a U.S. citizen to own shares in an American company. No provision in the United States laws prohibits non-citizens from investing in the country’s stock market.
While the U.S. laws don’t prohibit you, a non-citizen, from investing in the United States, there’s no doubt you may pass through many hurdles to get started. So, you need to know how the U.S. Stocks market operates, including the laws and regulations.
How to Buy U.S Stocks for Non-Residents
Investing in the U.S. stocks as an international investor may involve lengthy procedures, necessitating the need for assistance by a U.S. brokerage company. A reputable broker will ensure that your investment complies with the U.S. applicable laws.
Here are the steps on how to buy U.S. Stocks from overseas.
1. Open a U.S. Brokerage Account
As a non-citizen, the chances are high that you may not understand the complexities of the United States stock market. So, the best way to safeguard your interest in investing in the country is by opening a brokerage account with a U.S. broker.
However, different brokers handle foreign investors differently and may apply different restrictions for investors in particular countries. You need to find out the requirements for investors coming from your home country.
As a non-citizen, you may have to submit more documentation than a U.S. resident when opening a brokerage account. While this rule applies to all non-resident investors buying the U.S. stocks, some brokers may even demand valid visa information.
While the U.S. laws don’t prohibit any foreigner from investing in the U.S. stock market, some brokers may only work with investors from specific countries. So, you need to find out if a brokerage company accepts international investors from your home country.
Also, when searching for the best brokerage company in the United States, make sure that they have experience in dealing with international investors. It will help you verify the legitimacy and credibility of a company before entrusting it with your funds.
If you don’t find a U.S. brokerage firm that suits your investment needs, you can consider a foreign financial institution that offers brokerage accounts and allows you to access the U.S. stocks exchanges.
If you need currency exchange services to invest in the U.S. stocks through a foreign financial institution, look for the best USD to CAD currency exchange provider.
2. Select the Stocks to Buy
After setting up and funding your brokerage account, you should now pick the stocks to purchase. Before you buy the stocks, you need to research more about the companies to evaluate their performance in the stock market.
As you buy the stocks, start with the companies you already knew and guarantee higher returns. To become successful, you need to invest as if you want to own the company, and not only to build your stock portfolio.
When researching the companies to invest in, you should consider their annual reports to shareholders, including the yearly returns reports.
How to Buy U.S. Stocks Online
Most brokerage firms require international investors to submit online applications when opening an investment account. However, some may want you to fill out paper forms and mail the documents to their offices in the United States.
Buying U.S. stocks online is simple. All you need to do is open a brokerage account online at a reputable brokerage company. You’ll have to submit proof of identification and then choose how you plan to invest.
Generally, companies will always list their share prices in the stock market. As you buy the shares, you don’t have to pressurize yourself. The general rule of thumb is to start with the number of shares you can afford without struggle, even if it’s a single share.
4. Check the Tax Implications of Investing in the U.S.
As a non-resident investing in the U.S. stocks, it’s essential to understand the country’s tax implications. Generally, the government will subject your investment income to a 30 percent tax rate. Your brokerage firm will withhold these taxes.
However, if you are a citizen of a country that has a tax treaty with the United States, you may qualify for a lower tax rate. Note that the capital gains on non-residents’ investments are not subject to U.S. taxation.
Now that you understand how to buy U.S. stocks for non-residents, you need to find a reputable brokerage company and open an investment account. Upon buying stocks and shares, you need to keep optimizing your stock portfolio to maximize your returns. The fact that you are not a U.S. citizen shouldn’t stop you from buying the U.S. stocks.