How Can You invest on the US stock exchanges from Africa? | Can F-1 visa holders invest in US stock markets?

How Can You invest on the US stock exchanges from Africa? | Can F-1 visa holders invest in US stock markets?

 How does one invest on the US stock exchanges from Africa?

How do I invest in the US stock market in Africa?

Most People living in Africa wondering how to invest in US stock Exchanges Market in some Big Company but Mostly likely they don't have answers or they don't have an idea what to do or where to start although they may have enough courage and money to invest, i have gathered some information that my help you to know where to start

There are two main ways to invest in the US Stock Market from Africa.

If you mean that you are not a US person, and you are living outside the US, it is not that easy. Even though you might find US online brokers who allow non US residents to purchase US stocks it is not easy and most of them don’t bother with it. The Patriot Act, a US statute that was enacted after Bin Laden attacks on the Twin Towers, World Trade Center on 9/11.

So you have to search for one of the few online brokers, who still allow international investor. You can search Google for this. Even if you find one you must know that every dividend you receive will be taxed at 31%. You must submit a proper government updated identical document, and particulars of your employment, and source of the funds you are using to invest. Your application must be accompanied by a completed W8BEN form. You can chose to use a financial institution in your country of residence to invest in US stocks, but sometimes the costs can be prohibitive .Investment fees charged by overseas financial institution to invest in US stock more expensive than when you uses an online discount broker.

You can choose the DSPP (Direct Stock Purchase Plans) or the DRIP (Dividend Re Investment Program ) method to buy your stocks directly from the companies. Search Google and you can educate yourself about self-directed investment

You can either do it yourself (DIY) invest. For this, you need to find an online brokerage firm that will accept you based on your country of residence.

This is easy if you live in many of the more developed countries in Africa.

It isn’t as easy if you live in some poorer ones, or indeed you are an expat that wants to move from country to country.

In that case, the chance of a brokerage accepting, and keeping your account open if you do continuously move, is smaller.

One of my associates opened up a DIY account when he lived in South Africa.

He works for an NGO. When he moved to the Ivory Coast and then onto Ethiopia, he was told that his account would be closed by his brokerage, as they didn’t support the countries in question.

Anyway, if you do find a DIY brokerage that can accept you, you need to fill out an online application form and give anti-money laundering documents like proof of address and ID.

Then the hardest part comes….you need to trade the instruments you want.

This is where most people struggle long-term. The Vanguard group have done numerous studies where they compare how DIY investors do when investing in Vanguard ETFs and funds vs those that go into the funds via an advisor.

They have found that even where the same funds are used, advisors can add significantly to the client’s net returns:

One big reason for the above is emotions. As the chart below shows, the average investor trails the market by a considerable amount:

An estimated 35% of DIY investors panic sold during the 2020 market falls. You only have to look at all the panicked questions on Quora to see that 35% might be even an understatement!

If you feel you can control your emotions long-term, which is something maybe 20% of people can do in reality, try DIY. If not, find an advisor who can accept for the country in Africa you live in.

Can F-1 visa holders invest in US stock markets?

If you have OPT status, you have nothing to be concerned about.

If you do not, then:

1. Day trading, often defined as 4 or more trades per week, might not be permitted. Below that, you're certainly fine.

2. There should be no restrictions on trading any publicly-traded stock or derivative.

3. Online vs physical mail does not affect your immigration or your taxes. Don't be stupid, trade online.

4. As long as you have money to put in your brokerage account and have an SSN or ITIN, you can use most brokers. Some of them might restrict their clients to US Residents for Tax Purposes (which, as an F-1 without OPT, you probably are not), or ask that you be a US Citizen or US Permanent Resident. Other than that, it would be illegal for brokers to discriminate based on your immigration status. Use E-Trade, Robinhood, TradeKing, or Schwab depending on what features you want.

5. Your broker should provide you with a Form 1099 or similar after the end of the year. File this along with your 1040NR. You could also use a service like Sprintax to prepare your tax return instead of doing it manually. (If you use tax preparation software, make sure it generates a Form 1040NR and not a Form 1040). The direct answer to your question is no - they are not taxed the exact same way as for a resident

I hope the above answers can help You to know on How Can You invest on the US stock exchanges from Africa? | Can F-1 visa holders invest in US stock markets?

Source: Quora