How to Invest in US Mutual Funds for Non-US Residents (2024)
Mutual funds are security investments in which investors with similar objectives pool assets together to have larger market leverage. Mutual funds are managed by investment firms around the world. U.S. investors have thousands of U.S.-based mutual funds to choose from. Those who are not residents may still invest in U.S. mutual funds and maintain accounts while in the US or from their home country. Non-residents may invest through domestic brokerage firms that allow it.
Find a domestic brokerage account that allows non-residents to invest in U.S. stock. Large firms such as Charles Schwab and E*Trade offer these services online but may have special requirements. You may also contact a brokerage firm in your area.
Open the account with the required documentation including a Form W-8BEN, copy of photo identification and a letter describing the purpose of your stay in the United States, if applicable.
Fund the account. If you are conducting a wire transfer from an international source, factor in the exchange rate to make sure you have enough to purchase the mutual fund.
Choose the mutual fund and purchase it.
File a non-resident tax return, which is IRS Form 1040NR. Non-residents in the country for less than 183 days pay no tax on portfolio interest, capital gains or bank interest. There is an automatic 30% tax on dividends and on all other interest not deemed bank or portfolio interest. Consult a tax advisor regarding your specific investments.
The purchase of U.S. mutual funds by non-U.S. residents is restricted in order to comply with U.S. regulations. As a result of this, non-U.S. resident clients may only hold or redeem existing U.S. mutual fund share positions, initial or subsequent purchases are not permitted.
The purchase of U.S. mutual funds by non-U.S. residents is restricted in order to comply with U.S. regulations. As a result of this, non-U.S. resident clients may only hold or redeem existing U.S. mutual fund share positions, initial or subsequent purchases are not permitted.
There is no citizenship requirement for owning stocks of American companies. While U.S. investment securities are regulated by U.S. law, there are no specific provisions that forbid individuals who are not citizens of the U.S. from participating in the U.S. stock market.
Please note: You need to be a U.S. citizen with a U.S. mailing address to open an account. If you live or work outside the U.S., please check out our international site.
Bans on purchasing U.S. mutual funds by non-residents, including American citizens, are now the norm. These new restrictions affect bank accounts, brokerage accounts and retirement accounts (such as IRAs and 401ks). Many commentators attribute these actions to FATCA and increased offshore tax enforcement efforts.
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