Investing with H1B? - Bogleheads.org (2024)

bonita wrote:I have some savings, not quite sure If I can do some investment in stocks, bonds and mutual funds with my H1B visa (non-immigrant/temporary working visa).

This has a lot of potential for future complications. A lot depends on your home country.

I suggest you call Charles Schwab, explain the situation, and open the appropriate account that they recommend. They know how to do this.

If you open a simple account with Vanguard and then return to your home country, I doubt they are able to deal with it.

Do you have a US mailing address you can use for the long term, even if you are not a resident? That makes a big difference. Some of this is tax law, much of it is money laundering, terrorism, political ideology, and other such things.

L.

Leeraar wrote:

bonita wrote:I have some savings, not quite sure If I can do some investment in stocks, bonds and mutual funds with my H1B visa...

This has a lot of potential for future complications. A lot depends on your home country.

Indeed.

Can? Yes. Should? More nuanced. Part of the answer may depend on spending quality time with the tax treaty (if any) between your other country and the US.

Leeraar wrote:If you open a simple account with Vanguard and then return to your home country, I doubt they are able to deal with it.

Maybe, maybe not. I am a former US resident and still hold both a 401k and a (vestigial) trading account with Vanguard. They are well aware that I am a non-resident alien not living in the US, and deal correctly with all the appropriate NRA forms; for example W-8BEN and not W9, 1042s and not 1099. So far they have not raised any objection to my keeping these accounts.

Some of the treatment you get might depend on what non-US country you live in. It's been reported that Canadians holding Vanguard accounts in the US have quite a few restrictions on what they can do. As a Brit it seems I have more freedom.

Leeraar wrote:Do you have a US mailing address you can use for the long term, even if you are not a resident? That makes a big difference. Some of this is tax law, much of it is money laundering, terrorism, political ideology, and other such things.

A US mail address skirts some issues but generates others. With a US address on file it may be hard to get a W-8BEN recognized and a 1042s out of Vanguard at the end of the year.

bonita,

As other members have mentioned, you can invest in Vanguard when you are on H1B. As TedSwippet mentioned, you can also access your accounts once you have moved out of US. I had asked Vanguard last year and here is the response I got -

You may invest in Vanguard funds if you’re a lawful permanent resident of the United States. If you decide to move out of the U.S. and have an existing account, you can continue to make additional purchases or open new account registration types unless you move to Canada or a sanctioned country.

Also, if you move out of the U.S. and continue to invest in your account, we recommend that you contact a tax advisor or the IRS regarding the tax implications of a mutual fund investment. You may also want to visit the IRS website at:
http://www.irs.gov

Hope this helps.

For what it is worth, the legal term cited below, "lawful permanent resident", refers to those that hold a "green card". An H1B visa is different.

An H1B visa is a nonimmigrant visa which is different than lawful permanent residence.

bhramar wrote: I had asked Vanguard last year and here is the response I got -

You may invest in Vanguard funds if you’re a lawful permanent resident of the United States.

Someone else has already replied, but just to make this abundantly clear: this is wrong. You do not have to be a lawful permanent resident in order to invest in Vanguard funds. You do have to be a lawful resident, and you are, since you're on an H1B visa.

bcjb wrote: ↑Thu Jun 19, 2014 11:49 amAfter we moved to the US, we waited years, and we only really started investing properly (rather than saving) in 2011/2. But that was primarily because we didn't understand the system, and we didn't know where to turn for information. I think some of this depends on what your future plans are. The H1B visa is a dual-intent visa. Are you applying for a green card or planning to do so soon? If you haven't made up your mind yet, at least start a taxable account. If you move back or to a third country, and it becomes too much of a hassle to keep the account in the US, it should be relatively straight-forward to close it and transfer the funds.

I am interested to know the answer to this question as well (I am on a L1 visa) and opened the Vanguard brokerage account. I have emailed Vanguard about this.

Problem with selling and transfer the funds is that if you are in a high tax state like CA you will potentially pay a huge amount of tax including NIIT of 3.8%.

With my employee provided Stock Plan account I was able to hold that as a non-resident alien without any problems - just had to file a special form that I am not a US Tax resident (W8-BEN? dont remember the exact form). I am not sure why the Vanguard account should be any different?

I got a reply from Vanguard regarding this question - question and the answer are reproduced below. Looks like it should be an issue to even make additional purchases into the funds.

I am a resident alien in the United States on a work visa - L1. I may or may not stay in the US long term. My question is if I move back to my home country or my wife's home country, can I still continue to hold this account and the funds being held in the account provided that I receive all communication through email?

Reply from Vanguard:

Because you have already established a relationship with Vanguard, you
would be able to make additional purchases into our funds and invest in
brokerage products.

Since you have already elected to receive communications through our
electronic delivery service, we will continue this even if your address
changes.