Open Foreign Online Brokerage Accounts

Opening a foreign brokerage account will differ in difficulty depending on the level of development of the country and the strengths of its links to the United States. Most foreign brokerage accounts are for exclusive use in the country where they are opened. In countries with a weak legal system, there may be many fraudulently operating brokerages that may take your money but fail to execute orders in a timely fashion. You can limit your risk by getting referrals for quality brokers from lawyers, banks and other global investors.

Instructions

1. Step1

   Research the country where you would like to open a foreign brokerage account. This may be challenging due to language barriers and a lack of publications about securities laws in that country. Contact a law firm specializing in servicing foreign investors in that country, or ask for assistance from a bank that you conduct business with in that country. You may be able to get more information about how to open an account there.

2. Step2

   Get a referral for a brokerage. If the country is relatively developed, such as Canada, the United Kingdom, Australia or Japan, it will be unnecessary to get assistance. Countries such as Nigeria, China, South Africa and Thailand, on the other hand, lack strong protections for foreign investors. As such, it is sensible to seek advice from an experienced lawyer or an investor who already has an account in that country.

3. Step3

   Transfer the funds to the foreign brokerage account and start trading. You may need to pay significantly higher fees for trading than you would need to at a domestic brokerage account. Currency conversion fees can also pose a significant expense. In many cases, it will be more difficult to get up-to-date information about foreign securities, and order execution may take longer than from domestic brokerages. Language barriers and other issues can also make investment research more challenging in foreign markets.

Resources

• IRS.gov: Report of Foreign Bank and Financial Accounts (FBAR)