Despite having many of the largest investment brokerage firms in the world, the U.S. offers relatively few that can accommodate foreign investors. In most cases, you’ll need to invest in the U.S. financial markets through brokers in your home country. But there are a handful of U.S.-based brokers that will provide accounts for non-U.S. citizens living in foreign countries.
That can be important to non-U.S. citizens, because the U.S. is the single largest financial market in the world. Having a U.S.-based brokerage account may provide an opportunity to invest in U.S. securities more quickly and at lower cost.
Apart from the usual requirements for opening a brokerage account in the U.S., foreigners do face certain special requirements.
The first is that most U.S.-based brokerages don’t accept accounts held by foreigners living outside the U.S. But even among those that do, the countries they serve are usually limited. Some may accommodate residents of only a small handful of countries, while others welcome those from a larger number of countries, with certain limitations. For example, while some firms may charge the same fees to foreign investors as they do to U.S. residents, others may have an entirely different fee structure.
Either way, every brokerage that does permit foreign investors will be prohibited from accepting those who reside in countries determined by the U.S. government to be high risk or dangerous. The countries on that list change on a regular basis, so you’ll need to check with the brokerage firm to determine if your country of residence is on that list.
When a U.S. brokerage can accept foreign residents, you can typically expect to provide the following information to open an account:
Form W-8BEN is required for income from interest, dividends, rents, royalties, premiums, annuities, compensation for services, substitute payments in the securities lending transaction, or “other determinable annual or periodic gains, profits, or income.”
Under U.S. law, foreign persons are subject to a U.S. tax at a 30% rate on income they receive from U.S. sources that consist of any of those listed above.
Below is our list of what we believe to be the five best brokerages for foreign investors:
Best for: Best all-around for foreign investors.
Why Firstrade is a good broker for foreign investors: Firstrade makes its investment services available to residents in what is perhaps the largest number of countries by any investment broker. But beyond that, this is a very strong investment broker. There is no account minimum required, and stocks, exchange traded funds (ETFs), and options trade commission free.
The platform offers abundant investment tools, research and information, and educational resources. It’s a perfect choice for investors at all levels, from beginners to advanced.
Even though residents of multiple countries can open an account with Firstrade, it offers trading only in U.S. stocks. But if you’re a resident of a foreign country looking to invest in U.S. stocks, Firstrade is an excellent choice. Meanwhile, the company offers 11,000 commission-free mutual funds, if that investment is important to you.
Best for: Mutual fund investors.
Why Interactive Brokers is a good broker for foreign investors: Interactive Brokers offers 8,300 no-transaction-fee mutual funds. If mutual funds are an important part of your portfolio, Interactive Brokers may be the brokerage for you.
Interactive Brokers provides account services for investors in the U.S., Canada, Europe, and Asia. It also offers a very wide range of investment opportunities, including currencies and futures. On the pricing side, they are competitive with other major brokerage platforms. You can generally open an account with no money, though minimum requirements will vary based on your country of residence.
Interactive Brokers Pros:
Interactive Brokers Cons:
Best for: Canadian investors.
Why Questrade is a good broker for foreign investors: Questrade consistently ranks as one of the top investment brokers in Canada. Not only do they offer the full range of investment products, including stocks, bonds, options, and futures, but also Canadian retirement accounts, like RRSPs and TFSAs. And you can even invest in precious metals through the platform.
You can engage in either self-directed investing or take advantage of the managed option—Questwealth Portfolios. Though the broker is available for Canadian residents, investors can invest in the full range of U.S. and international investment options.
Best for: Options trading.
Why Webull is a good broker for foreign investors: Webull is currently open to investors in India, Brazil, Turkey, the Philippines, Malaysia, Japan, China, and Korea, in addition to the U.S. But they’re expanding operations to accommodate residents in other countries. And while Webull is a limited trading platform, light on both trading tools and customer support, it provides easy and inexpensive investing.
Where Webull really stands out is with options trading. Not only do they offer commission-free trades on options, but they also don’t charge the usual per contract fee large brokers do. You can trade single-leg options, covered stock strategies, and vertical, butterfly, condor, collar, straddle, strangle, iron butterfly, iron condor strategies.
And if you want to invest in cryptocurrencies, you can do it on Webull—right along with your other investments.
Because the platform is fast and has far fewer tools and resources than traditional firms, it’s best suited for intermediate and advanced investors.
Best for: Diversified investing.
Why TD Ameritrade is a good broker for foreign investors: Formerly owned by Toronto Dominion Bank, TD Ameritrade became part of the Charles Schwab family in 2020. It’s one of the most diversified investment platforms in the industry, not only offering just about any type of investment, but also the widest possible range of account types. You can invest either as a self-directed investor or take advantage of one of their fully managed portfolio options.
You should be aware that the current plan is to fully integrate TD Ameritrade customers into Charles Schwab by 2023. If so, the platform may no longer be available for foreign investors, since Schwab doesn't accommodate them.
TD Ameritrade Pros:
TD Ameritrade Cons:
Because of various laws and brokerage regulations, relatively few U.S.-based brokers accommodate non-U.S. citizens in foreign countries. But the five brokers described above can.
They can give you direct access to investments in the U.S., which is the largest financial market in the world. If you’re a non-U.S. citizen living outside the country, sign up for one of the five brokerages on this list, and start investing directly in U.S. financial markets today.