Foreigners Trading US Equities using Online US Brokerage

Discussion in 'Professional Trading' started by Aeroseal, Jun 23, 2008.

  1. Aeroseal


    Hi all

    I wanted to know if foreigners can use your online US brokerage firms for stock trading. What requirements would be needed of them. I am a Kenyan National and wanted to open an intraday trading account with any of these firms? Any recommendation of which brokerage firm to go with. Was recommended Scottrade by a colleague in Greenwich CT. I am interested in Intraday trading and would prefer firms with good custmer service and swift transaction. Good charting, portfolio manager,low t/c is also a plus. I am hoping to start initially with $50k and with time increase based on the performance.
    Do I also need to have a US banking account or would one with US bank here locally suffice(Citi) or UBS account in Geneva? What about taxes? Would my capital gains be taxed?
    Your feedbacks appreciated.

    Thanks all
  2. johnnyboy


    I trade with eTrade successfully. You really don't need much for opening brokerage account. Just fill out the form and send copy of your passport, that's it.
  3. Aeroseal


    thanks mate. What about taxation. Am I expected to pay taxes on capital appreciation for intraday trading. Are they automatically deduced from my account.
    How efficient in etrade in executing my trade, I am hoping there is a major time lag. How many trades am I eligible to trade per day or is my capital the determining factor?

    Let me know.
  4. tradethetrade

    tradethetrade Vendor

    Go to MB Trading and stay away from brokeage houses like etrade and scottrade. They are great but not for active traders.

    MB Trading or IB are good alternatives. Both take foreigners. I have MB as a backup account and it works fine.

    Taxes aren't taken away and you are supposed to pay for them in your country of residence.

    I do have an american bank account for easier withdrawals. Money is wired from trading account to bank account to Brazilian bank account. I haven't asked if they can send straight to my Brazilian bank but maybe I should.

    Lagging is not bad unless you want to scalp. 50+ trades a day. With an account above 25k you can trade as much as you want.
  5. bstay


    no, foreigners will not be taxed. Scottrade, E*TRADE, TD Ameritrade are web-based brokers and you can compare the commission fees at their sites.

    alternatively, u can explore direct access brokers some of which are listed here: I used TradeStation and the datafeed is ok 9,000 miles away in Asia. for direct access, u will download a proprietary software that gives realtime charts and order execution tools. the monthly software fees is waived if u trade very often.

    this link might answer some questions:
  6. Aeroseal


    Thanks again guys.

    I've been extensively researching and will probably go with either IB, E*trade or Schwab.

    I would like to go with IB, but given I am a new trader, I am a bit weary I will be in for a killing and possibly loose a lot. Is IB recommended for amateur traders, albeit active as I intend to make at least 5 trades a day.

    E*trade's pro seems great and the demo feels good. Is it good for a starter active trader. My biggest drawback with them is their extra $0.015 after 2000 shares levy.

    Schwab looks alright, although from these boards, I am afraid they may not be receptive to active traders. Come to think of it their account manager I spoke to yesterday did ask about what my intentions were for the money, whether to immediately draw from Schwab account to other US/non US accounts or keep it there for say a month or quarter there.

    Overall, I think I'll start with E*trade and see how it goes. The rep will call me tomorrow to see if they can waive the $0.015 or not. Assuming I find them useless and decide to jump ship to say IB, how quick are they to closing my account and refunding me my money.

    Anyone with additional info or any nasty warning lets hear them. Thanks again guys.

    PS: How good is E*trade when it comes to premarket/after market trade. I've posted a pre/after market inquiry in this boards a little earlier Your feedbacks appreciated.

    Ciao all
  7. Trade profits are tax-exempt for foreigners. However dividents are taxable.

    You should fill a form w8-ben and declare that you are a non-resident alien. Send this form to the broker.

    I'd recommend a canadian brokerage, for example for trading US equities by non-americans, because they have no Pattern Day Trader rule (you can day trade as you wish, even with only $2000 in account).
  8. WinSum


    On the w8-ben form, line 6 asks for U.S. taxpayer identification number. Can that be left blank for foreigners ?
  9. Most foreigners don't have a TIN, in which case you have nothing to fill.

    See for explanations.
  10. No problema

    You may open cash or magin accounts for equities without any hassle.
    Some brokers/CFMs won't open futures accounts to foreigners, because of unlimited risk.

    You just fill the W8BEN form and you pay the taxes in your country.

    If you want to daytrade, low commissions and realtime charts are a must to choose your broker.
    #10     Jun 27, 2008