This past week, my office phone rang several times with non-Americans inquiring about opening American brokerage accounts.
Given the hassles of dealing in some of the more popular offshore jurisdictions, and given the many benefits of keeping investments in the United States, these people were happy to see how they could easily invest through a U.S. brokerage firm.
Why non-Americans have American investment accounts
There are two parts to having a brokerage account: the specific investments and the “custodian” of the funds. The specific investments include what stocks and shares you own, or which mutual funds or bank deposits you choose. The “custodian” of the assets is normally a major bank or brokerage firm that is responsible for safeguarding the securities, executing the trades, printing the statements, arranging for checkbooks and credit/debit cards for the clients, and other back-office services. Before investing money you must choose both a custodian of your account (the firm) and the individual investments (stocks, bonds, etc.)
Non-Americans frequently use a U.S. brokerage firm to custody their assets. Here’s why:
– The unrivaled transparency of the financial system in America
– The huge number of investment choices
– The potential for good returns
– The relatively lower fees
– The ability to geographically diversify their investments in one account
– America’s political stability
Send me an email (doug@profile-financial.com) for a detailed report on the additional benefits of non-Americans having American brokerage accounts.
Is it legal for non-Americans to open U.S. accounts?
Not only are NRAs (non-resident aliens) allowed to hold their assets in America, they are actively encouraged to do so. From the standpoint of the American government, having foreign investors maintain accounts in the United States helps to keep the U.S. markets as the top trading locations in the world. In fact, the United States doesn’t tax the interest and capital gains that foreigners make on their U.S. assets (This is a general discussion. Be sure to speak to your own tax advisor before investing.) If you would like to learn about the advantages of global investments through a U.S. investment firm, please call my office at 02-624-2788.
Douglas Goldstein, CFP®, is the Director of Profile Investment Service, Ltd., which specializes in helping people who live in Israel with their US dollar assets and American investment and retirement accounts. He helps olim meet their financial goals through asset allocation, financial planning, and using money managers.
Published October 19, 2016.