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Written by Kevin Mercadante on July 1, 2021
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5 Best Brokerages For Foreign Investors

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.

What to Look for in Brokers for Foreign Investors

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:

  • A fully completed brokerage account application.
  • Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for U.S. Tax Withholding.
  • A valid passport photocopy.
  • Proof of foreign residency.
  • Other documentation, as required by the broker and/or your country of residence.

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:

1. Firstrade

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.

Firstrade Basic Features:

  • Minimum Initial Investment: None.
  • Available accounts: Individual and joint taxable brokerage accounts; traditional, Roth, rollover, SIMPLE and SEP IRAs; trust, custodial, and business accounts.
  • Fractional shares available?: Yes
  • Investments offered: Stocks, bonds, ETFs, mutual funds, OTC penny stocks, and options.
  • Fees: Commission-free trades on stocks, ETFs, mutual funds, and options; no contract fee charged on options.
  • Customer support: By phone, email and live chat, Monday through Friday, 8:00 AM to 6:00 PM, Eastern time.

Firstrade Pros:

  • No commissions on stocks, ETFs, and options.
  • No minimum initial investment required.
  • Professional-grade trading tools.
  • Strong platform for options trading.
  • 11,000 commission-free mutual funds, in addition to stocks, ETFs, and options.
  • Extended trading hours.

Firstrade Cons:

  • Cannot trade foreign stocks.
  • Lacks 24/7 customer service capability of the bigger brokerage firms.

2. Interactive Brokers

interactive broker logo

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 Basic Features:

  • Minimum Initial Investment: Generally none for a cash account, or $2,000 for a margin account, but may vary by your country of residence.
  • Available accounts: Joint and individual taxable investment accounts; trusts; traditional, Roth, rollover, and SEP IRAs.
  • Investments available: Individual stocks, bonds, ETFs, mutual funds, currencies, options, and futures.
  • Fractional shares available?: Yes, except for residents of Israel and Japan, or those with Canadian registered retirement savings plans (RRSP) or tax-free savings accounts (TFSA).
  • Fees: No commissions on stocks and ETFs; $0 commissions, plus $0.65 per contract for options; more than 8,300 no-transaction-fee mutual funds.
  • Customer support: Phone, email, and live chat, 24/6, in the U.S., Europe, and Asia.

Interactive Brokers Pros:

  • No commissions on options, and more than 8,000 no-transaction-fee mutual funds.
  • Wide range of investor tools, research resources, and investor education.
  • Customer service is available 24-hours a day, six days per week in most countries.

Interactive Brokers Cons:

  • Interactive Brokers has so many tools and resources that the platform can be somewhat confusing.

3. Questrade

questrade logo

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.

Questrade Basic Features:

  • Minimum Initial Investment: None
  • Available accounts: Individual taxable investment accounts, tax-free savings accounts (TFSA), registered retirement savings plans (RRSP), locked-in retirement accounts (LIRA), registered retirement income funds (RIF), life income funds (LIF), and managed accounts.
  • Investments available: Individual stocks, bonds, ETFs, mutual funds, options, precious metals, and futures.
  • Fractional shares available?: No
  • Fees: 1 cent per share for stocks, with a minimum of $4.95 and a maximum of $9.95; no commissions to buy ETFs, sell for $4.95 per trade, or 1 cent per share to a maximum of $6.95; $4.95 commissions, plus $0.75 per contract for options; 0.25% advisory fee for the managed option, dropping to 0.20% on accounts greater than $100,000. No annual RRSP or TFSA account fees.
  • Customer support: Live chat but no phone contact.

Questrade Pros:

  • Very low trading fees on most investments.
  • Wide range of investor tools, research resources, and investor education, specifically for options trading.
  • Invest in Canadian, U.S. and international markets and securities.
  • Offers both self-directed and managed investments.

Questrade Cons:

  • Charges more and higher fees than most brokerages.
  • Fractional share investing not offered.
  • No phone contact available.

4. Webull

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.

Webull Basic Features:

  • Minimum Initial Investment: None
  • Available accounts: Individual taxable investment accounts; traditional, Roth, and rollover IRAs.
  • Investments available: U.S. stocks, ETFs, options, and cryptocurrencies.
  • Fractional shares available?: Yes
  • Fees: No commissions on stocks or ETFs. No commissions or contract fees on options.
  • Customer support: Email only.

Webull Pros:

  • No minimum balance requirement.
  • Not only are there no commissions on options, but there are no contract fees either.
  • Perfect broker for quick, easy trading.
  • You can also trade cryptocurrencies on the app.

Webull Cons:

  • Doesn’t offer non-U.S. stocks.
  • Very limited investment tools, research, or educational resources.
  • Customer services limited to email contact only.

5. TD Ameritrade

TD Ameritrade Logo

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 Basic Features:

  • Minimum Initial Investment: None, but $2,000 minimum required for margin accounts and certain option privileges. Managed portfolio minimums can be either $25,000 or $250,000.
  • Available accounts: Individual and joint taxable investment accounts; traditional, Roth, and rollover IRAs; 529 and Coverdell education accounts; custodial accounts. Business accounts are also accommodated.
  • Investments available: Individual stocks and bonds, ETFs, mutual funds options, futures, and FOREX.
  • Fractional shares available?: No
  • Fees: No commissions on stocks or ETFs; $0 commissions on options, plus $0.65 per contract; mutual funds: hundreds of no-transaction-fee funds, no commissions on load funds, $49.99 per trade on no-load funds. Managed portfolios: these range from 0.60% to 0.90% per year.
  • Customer support: Phone support 24/7.

TD Ameritrade Pros:

  • No minimum initial investment required.
  • No commissions on stocks, ETF’s, or options
  • .

TD Ameritrade Cons:

  • Does not offer fractional shares investing.
  • High commissions on no-load mutual funds.
  • Fees and account minimums are high on managed portfolio options.

Bottom Line

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.

foreign investors featured image
Article written by Kevin Mercadante
Kevin Mercadante is a freelance professional web content writer for hire, and the owner of his own personal finance blog, OutOfYourRut.com. He has extensive backgrounds in both accounting and the mortgage industry. In fact, it was his career crash-and-burn from the mortgage business in 2008 that led him into blogging and freelance professional web content writing. Kevin and his family live in New Hampshire, after long stints in New Jersey and Georgia.

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