Can non-U.S citizens invest directly with Vanguard? (2024)

Hi!

I just finished reading the fantastic Bogleheads' guide to investing. Now I'd like to start investing directly with Vanguard, but after browsing their website I'm a bit confused. Is it even possible for a Finn (=I'm from Finland) to invest directly with Vanguard? I would start with an initial investment of ~ €8.000? If it's not possible, what other similar low-cost mutual fund options do I have? I have no previous investment experience.

Thank you for your help!

The Bogleheads' Guide is written specifically for US investors. The basic ideas of index investing are universal. However, investing directly in Vanguard funds is efficient for US investors but may not be efficient for you.

For example, US funds must always distribute dividends. In contrast, some EU ETFs can accumulate dividends into capital gains. If you live in a country with no capital gains tax you may find it better to invest in these ETFs, even if their annual charges are a bit higher.

Before doing anything review your own tax position to make sure you're investing efficiently. Will Finland tax your 'offshore' ETFs or investments more harshly than local ones? Will exchanging € to $US and back reduce your returns? Will the 15-30% the US takes in tax on dividends paid to non-US persons who hold US investments be a problem? Will you eventually run into problems with US estate taxes on your US holdings?

If Vanguard is still the answer see if you can buy Vanguard ETFs through a local brokerage account. That will at least sidestep problems opening a US brokerage or fund account from outside the US.

The short answer is no. A non-US citizen, not resident in the US can't invest directly with Vanguard USA. A non-citizen who is resident in the US can invest directly. The longer answer is that if you know someone in the US who will let you use their address, then you can first get a US taxpayer identification number (TIN) and then can invest directly with Vanguard USA using the TIN and the US address. If you have enough to invest, then you may be able to use Vanguard's foreign funds domiciled in Ireland or perhaps the Vanguard funds that have started in the UK. Sorry, I'm not up to date on the exact rules of who can invest with Vanguard where.

Other options for index investing in Europe are to invest in exchage traded funds which are index funds that you buy like regular stocks through stock exchanges like the Deutsche Bourse.

You may be able to find better answers with a search through old threads on bogleheads.org; I recall that how to index invest for European investors has been discussed several times. Though with how fast investing options evolve, information older than a year may well be out of date. Best wishes investing in a low cost, highly diversified way. My prediction is that you'll be happy with the results later and find the effort to have been well worthwhile to invest the Bogle(heads) way.