In this post, we’ll talk about:
- Can I keep my stocks if I leave the US?
- US Stocks Tax
- Stocks Reporting Requirements
- How to manage stocks from abroad
- Is it worth investing in US stocks?
- Benefits of investing in US stocks
- Disadvantages of investing in US stocks offshore
If you are looking to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me (advice@adamfayed.com) or WhatsApp (+44-7393-450-837).
This includes if you are looking for alternatives or a second opinion.
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If you own stocks and want to leave the US, there are a number of things to consider when it comes to managing those investments, especially in terms of legislation, tax effects, as well as access to brokerage accounts.
Can I invest in US stocks from another country?
You could still be permitted to hold US stocks and keep your brokerage accounts open if you’re a non-resident alien with plans to depart the US. The majority of brokerage houses, including WeBull, have particular rules for account users who are not residents.
Some brokers have stepped up their policies as of late, which may force non-resident aliens to shut their accounts.
For example, NRAs may need to switch to other brokerage firms as WeBull has indicated that it would only allow accounts to be held by citizens and residents of the United States as of 2024.
You can usually keep your stocks and carry on trading, though, if you maintain your US citizenship / Social Security Number.
To make transactions easier and handle your investments more skillfully, you must keep up a US bank account.
Offshore brokerages may present a good choice for foreigners wishing to keep their investments intact.
In terms of admitting clientele who don’t live in the US, these companies are usually more accommodating.
The following are some examples of offshore brokerages for expats:
- US expats can maintain accounts and trade a variety of securities, including US equities and ETFs, with Interactive Brokers. It is a well-known global brokerage with an extensive selection of investing options. It has a strong trading platform and affordable prices, so it’s a provider to look into.
- Charles Schwab International offers services that enable clients to invest in US markets while residing overseas. They ease currency transactions and offer accounts denominated in US dollars, which can be very helpful for foreigners living abroad.
- You may be able to continue managing your investments with Vanguard if you already have an account, even if you relocate overseas. However, opening new accounts may be limited for expats.
- In the past, American investors have favored Fidelity and TD Ameritrade; however, these firms have been limiting their services to customers who do not live in the US. It is essential to verify the most recent account acceptance status according to your new residency.
US Stocks Tax
The tax consequences of your investments may become complicated if you leave the US. You will be liable to pay capital gains taxes in the country on any earnings you make from the sale of your equities if you choose to liquidate them while living overseas.
Moving to a new nation may also result in additional tax obligations on your investment income, such as capital gains taxes on any profits you make after relocating there and establishing residency.
Certain nations have exit tax regulations that could influence your post-leave taxation treatment for your investments.
If you were to move, for instance, you might be required to pay taxes on any increase in value of your stocks between the time of acquisition to the time of the change in residency, even if you decide not to sell them. This is known as a capital gains event in certain countries.
Stock Reporting Requirements
You still have to declare your stock to comply with US tax laws. Wherever you live, you must declare all earnings to the IRS, including capital gains and dividends.
You may be required to pay levies on the profits and must submit a tax return in the US if you offload equities while staying overseas. If your holdings exceed specific thresholds, you may also need to submit paperwork for international accounts.
How to Manage Stocks from Abroad
Any changes to your residency should be communicated to your brokerage. It’s possible that the firm will limit your trading options or force you to shut your account if you move to a foreign address.
It’s important to communicate clearly because some users have had misunderstanding while interacting with customer support after moving.
If you are going to be a long-term stockholder, think about the advantages of enduring market volatility. Investments with a long duration, such as those in the S&P 500, have historically produced positive returns. This is helpful if you think your investments have room to expand or if you intend to return to the US.
You might keep your US mailing address with a relative or virtual mailbox to make the move easier. Use caution, though, as this could lead to legal issues or probes for fraud.
Seeking advice from a financial advisor or tax specialist who is knowledgeable with US and international tax regulations is a smart option because handling investments and taxes can be quite complicated.
They can assist you handle assets and lower your tax burden by providing you with personalized guidance.
Is it worth investing in US stocks?
Benefits of investing in US stocks
- Since US and international markets frequently move differently, investing in US companies may help with your portfolio buildout. It can lower risk as well.
- US equities have access to one of the biggest economies in the world, providing growth potential that aren’t always there elsewhere.
- Due to the lack of citizenship requirements, foreign nationals can readily invest through global accounts in American corporations.
- When selling stocks, nonresident immigrants usually do not incur US capital gains tax; nevertheless, they may still be subject to taxes in their home nation.
- US stocks provide exposure to modern businesses and industries, but historical success is not a guarantee.
Disadvantages of Investing in US Stocks Offshore
- A US citizen’s brokerage account frequently presents difficulties when they relocate overseas.
- A number of US financial companies have begun limiting or terminating customer accounts for those who move abroad.
- The Foreign Account Tax Compliance Act, which mandates that foreign financial companies report on US account holders, is largely accountable for these problems with regulatory compliance.
Bottom Line
US expats have options, even if leaving the country can make managing and owning stocks more difficult.
Investment in US markets can continue thanks to offshore brokerages.
Moreover, even if limitations are becoming more widespread, some US brokerages might still provide services to foreigners.
To retain compliance as well as accessibility to investments, expatriates should keep up to date on their options and legal responsibilities.
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Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.
