Yes, a foreigner can open a brokerage account in the US. No federal law bars non-U.S. citizens from buying American stocks, bonds, or ETFs, and most major brokerages have dedicated international programs for exactly this purpose. What changes for you is the paperwork at the front end and the tax treatment on the back end. Get both right and the account behaves much like a domestic one; get either wrong and you’ll either wait weeks for approval or hand the IRS more of your returns than you owe.
Who Can Open One
U.S. tax law sorts foreign investors into two groups, and both can invest. A resident alien holds a green card or has spent enough time in the country to pass the IRS substantial presence test, a weighted day-count across the current and prior two years.1Internal Revenue Service. Substantial Presence Test A non-resident alien meets neither test but still has the legal right to invest in U.S. markets from abroad. The distinction shapes how you’re taxed rather than whether you can open the account.
Students on F, J, M, or Q visas and teachers or trainees on J or Q visas are treated as “exempt individuals” for a set number of years, so many international students stay non-resident aliens for tax purposes even after living in the U.S. for several years.1Internal Revenue Service. Substantial Presence Test
Two things can shut the door regardless of status. The Office of Foreign Assets Control publishes lists of sanctioned countries and individuals, and U.S. financial institutions cannot open accounts for people caught by those sanctions.2Office of Foreign Assets Control. Specially Designated Nationals (SDNs) and the SDN List Separately, the USA PATRIOT Act requires brokerages to run identity and anti-money-laundering checks on every applicant, and firms have wide discretion to decline applicants from jurisdictions where they lack the compliance infrastructure.3Financial Crimes Enforcement Network. USA PATRIOT Act Even eligible countries aren’t uniformly served; the list of accepted nationalities varies by broker.
Documents You’ll Need
A current passport is the primary ID for every applicant. Beyond that, gather:
- A tax identification number. Resident aliens with work authorization use a Social Security Number. Non-resident aliens who aren’t eligible for an SSN need an Individual Taxpayer Identification Number, obtained by filing IRS Form W-7. Some brokerages accept a foreign tax ID and help you obtain the ITIN internally, so ask before filing separately.4Internal Revenue Service. U.S. Taxpayer Identification Number Requirement
- Proof of residential address dated within the last 90 days, such as a utility bill or bank statement.
- Form W-8BEN, which certifies your foreign status and, if completed correctly, claims a lower tax rate under a treaty.5Internal Revenue Service. About Form W-8 BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)
- Certified English translations of any documents in another language. These typically cost $20 to $40 per page.
The W-8BEN is the form that carries the most weight for a non-resident investor. Without it on file, the brokerage applies a flat 30% withholding to your U.S.-source income by default. A signed W-8BEN stays valid from the date of signature through the end of the third succeeding calendar year, and you have 30 days to submit a new one if your name, address, country of residence, or citizenship changes before then.6Internal Revenue Service. Instructions for Form W-8BEN (Rev. October 2021)
How to Apply and Fund the Account
Interactive Brokers supports the widest range of nationalities, and Charles Schwab and Fidelity also run dedicated international programs. None of these firms require a minimum deposit for a standard international account. Most applications run through an international portal where you upload scans of your passport and supporting documents, though a few firms still ask for a mailed paper application. Compliance review generally takes three days to two weeks, depending on how complete your paperwork is.7Charles Schwab International. How to Open an Account Wait for confirmation that the account is approved and activated before wiring any money.
International wire transfers are the standard funding route. You’ll need the brokerage’s SWIFT or BIC code along with its U.S. bank details. Sending-side wire fees typically run $25 to $50, and intermediary banks may add relay fees that are hard to predict in advance. If you already hold a U.S. bank account, domestic ACH transfers skip those costs entirely. Initial deposits are usually held briefly for internal risk screening before the funds become available to trade.
How You’ll Be Taxed
The default U.S. withholding rate on dividends, certain interest payments, and other fixed or determinable income paid to non-resident aliens is 30%. The brokerage withholds this automatically before the money hits your account.8Office of the Law Revision Counsel. 26 USC Ch. 3: Withholding of Tax on Nonresident Aliens and Foreign Corporations
Capital gains are treated very differently. A non-resident alien present in the United States for fewer than 183 days during the taxable year is generally not subject to U.S. tax on profits from selling stocks, ETFs, and other capital assets.9Office of the Law Revision Counsel. 26 U.S. Code 871 – Tax on Nonresident Alien Individuals The count here is straight calendar days in the current tax year, not the weighted three-year formula used elsewhere. For investors focused on growth rather than income, this exemption is one of the biggest reasons to hold U.S. securities in a U.S. account.
One boundary worth noting: capital gain distributions from Real Estate Investment Trusts may fall under separate withholding rules for foreign investment in U.S. real property, with rates that can differ from the standard 30%. If you plan to hold REITs in size, check the specifics with a tax professional.
If you fail to provide a valid W-8BEN when the brokerage requests one, the firm can also apply 24% backup withholding on top of any other applicable rate. Foreign persons who submit a valid W-8 form are exempt from backup withholding.10Internal Revenue Service. Publication 515 (2026), Withholding of Tax on Nonresident Aliens and Foreign Entities
Using a Tax Treaty to Pay Less
The United States has income tax treaties with dozens of countries, and many of them cut the 30% dividend withholding rate to 15% or lower. Some treaties zero out withholding on certain interest income. None of that happens automatically. You claim the reduced rate in Part II of Form W-8BEN by naming your country of tax residence and citing the specific treaty article that applies.6Internal Revenue Service. Instructions for Form W-8BEN (Rev. October 2021) Skipping Part II is the most common mistake foreign investors make, and it costs real money every dividend cycle.
Each year your brokerage issues Form 1042-S to both you and the IRS, showing total U.S. income paid to your account and the exact tax withheld.11Internal Revenue Service. Instructions for Form 1042-S (2026) You’ll use it to claim a foreign tax credit at home and avoid paying tax twice on the same income. Read it carefully when it arrives; the IRS has publicly flagged that errors on these forms are common.12Internal Revenue Service. Information Reporting for Form 1042-S
The Estate Tax Trap Most Foreign Investors Miss
When a non-resident alien dies holding U.S.-situated assets, the U.S. imposes estate tax on those assets, and stocks held in a U.S. brokerage account count. The filing threshold is only $60,000.13Internal Revenue Service. Some Nonresidents With U.S. Assets Must File Estate Tax Returns The comparable figure for U.S. citizens and residents is roughly $13.99 million.
The statutory credit against estate tax for non-resident aliens is $13,000, which shelters only the first $60,000 of U.S. assets. Everything above that is taxed at graduated rates that reach 40%.14United States House of Representatives. 26 USC 2102: Credits Against Tax A portfolio of a few hundred thousand dollars can generate a six-figure estate tax bill.
Only about 15 countries have estate tax treaties with the United States, including the United Kingdom, Canada, Germany, Japan, France, and Australia.15Internal Revenue Service. Estate and Gift Tax Treaties (International) These treaties can raise the effective exemption by prorating the U.S. citizen’s credit based on the share of your worldwide assets located in the United States. If your country isn’t on that list, plan around this risk once your U.S. holdings grow meaningful.
SIPC Coverage for Foreign Account Holders
If a U.S. brokerage fails, the Securities Investor Protection Corporation covers customer accounts up to $500,000, including a $250,000 sub-limit for cash. Citizenship and residency don’t matter. SIPC states that a non-U.S. citizen with an account at a member firm “is treated the same as a resident or citizen of the United States.”16SIPC. What SIPC Protects
SIPC covers the failure of the brokerage and missing customer assets. It does not cover market losses or bad investment decisions. Uninvested cash swept into an FDIC-insured bank carries separate deposit insurance up to $250,000, but the treatment of foreign account holders at certain bank branches can be more complicated. Ask your brokerage where its sweep cash actually sits.
Keeping the Account in Good Standing
The hard part is opening the account. Keeping it clean is mostly a matter of renewing paperwork on time. Your W-8BEN expires at the end of the third calendar year after signing, and the brokerage will remind you before the deadline. Miss it and the firm reverts to 30% withholding on all applicable income until a new form is on file.6Internal Revenue Service. Instructions for Form W-8BEN (Rev. October 2021) Change your country of residence, citizenship, or address in the meantime and you have 30 days to file a new form.
When the 1042-S arrives each spring, cross-check it against your own statements before you rely on it for your home-country return. Correcting a 1042-S after it’s been submitted to the IRS is possible but slow.11Internal Revenue Service. Instructions for Form 1042-S (2026)
If your status shifts from non-resident to resident alien, whether through a green card or by passing the substantial presence test, the tax picture changes substantially: worldwide income reporting, different withholding, and potential access to retirement accounts if you have U.S. taxable earned income.17Internal Revenue Service. Retirement Topics – IRA Contribution Limits The timing of that transition affects which tax year’s income is reported where, and it’s worth a conversation with a cross-border tax advisor before the change takes effect.