The US stocks and bonds are regulated by the U.S. laws, but they are also open to non-Americans. You can purchase and sell stocks while living in African countries such as South Africa, Kenya, Nigeria, Ghana, etc. However, there are factors that you need to consider to start investing in them as a non-American citizen.
You need to get a brokerage firm to manage your investment and ensure that it complies with US laws. Ensure that the broker you will select works with international investors and work in the country you reside in. You may need to provide them with information like tax details and proof of identity.
You also need to consider tax implications. The US laws require that foreign nationals are subject to a 30 percent tax rate. Dividends you earn from your investment are considered as income and are subject to taxation. The tax is deducted directly by the brokerage firms you use to invest. In addition, your home country may require you to pay capital gains tax on international investments.
The following are companies you can use to invest in US stocks from South Africa, Ghana, Kenya, Nigeria, etc. With these companies you can invest in US companies such as Google, Tesla, Facebook, Nike, Apple, Netflix, and Amazon. Some of these companies have minimum opening balance as low as $10. This is possible because they let you invest through fractional investing.
To start trading in the US stock market from Nigeria, you can use the Nigerian fintech Trove. Trove is an app available for Android and iOS users. You need a minimum opening balance of $10. You also need to provide an international passport, utility bill, bank statement, email address, phone number and bank account details.
Trove is not a registered investment broker; neither does it provide research on its users regarding transactions’ security. However, through its partner DriveWealth, a self-clearing broker holding trading accounts that are regulated by Securities Investor Protection Corporation (SIPC). Besides, Trove uses 256-bit encryption to ensure its users’ data are secure.
SIPC is not a regulatory authority. It is a non-profit membership corporation created under the Securities Investor Protection Act.
You can use the app while in Africa or even outside the continent to trade in the US stock market. You can make payment using MasterCard and Visa or via bank transfers. The app helps you to track your return on investment.
The advantage of trading in the US stocks using Trove is that it has low minimums of only $10. Besides, with the app, you can buy fractional shares instead of buying full shares that are expensive.
To start trading on the platform, you need a minimum deposit of $10,000 and no withdrawal or deposit fees. However, you will be charged inactivity fees if you stay for long without trading. You can trade in over 26 currencies. You can fund your account through bank transfers, credit or debit card transfers and stock transfers.
The negative side about Saxo Bank is that its minimum deposit amount is high and does not have live customer support. In addition, it takes three days to open an account.
eToro is a crypto and stocks broker that is regulated and licensed. It is present in more than 60 countries, with a presence in Angola and Algeria. You can fund eToro account using Dinners Club, Maestro, MasterCard, PayPal, Skrill, Visa, Wire Transfer and Neteller. You need a minimum deposit of $200 but if you are an Algerian citizen, the minimum deposit is $500. Furthermore, you can fund the account using wire transfers and it would take 4–7 days.
The minimum withdrawal amount is $30, with withdrawals attracting a flat fee of $5 and a $10 inactivity fee monthly. eToro has a distinct feature that you can copy-trade, trading like eToro’s top traders. It also has a Discover People feature that you can use to filter traders using certain criteria.
You can access eToro services using an app available both on Android and iOS. Alternatively, you can operate your account using a web browser.
Chipper Cash is another platform that allows you to invest in the US stocks from Nigeria, Kenya, South Africa, and Uganda. You can download the Chipper app and start cross border payments. You can invest using Chipper through buying and selling of cryptocurrencies, U.S. stocks like those of Apple, Tesla and Amazon. Currently, US stock investments are only available in Nigeria, Kenya, South Africa, and Uganda. To start using Chipper, the sender and the recipient must first create an account. Once you have an account, you can deposit, send and lend money. You need to request for early access. With Chipper Cash, you buy fractional stock shares with as little as $1 in naira or equivalent.
Chipper Cash has partnered with several mobile money networks in Africa like MTN, Airtel Money and M-Pesa making investing in US stocks easy and convenient.
You can trade in the US stock market from Egypt, Morocco, South Africa, etc., using Firstrade. The platform is regulated by the Financial Industry Regulatory Authority (FINRA). It is a great option for beginners and those looking for zero-commission. It has educational and research tools to help you invest in stock, ETF and mutual funds.
Account opening is fully digital and easy and it takes 3 business days. It does not have a minimum deposit and no deposit fees, making it easy to operate the account. Deposits and withdrawals can only be done using bank transfers that attract high fees. The good side is that it does not charge inactivity fees.
Zacks Trade is a US stockbroker and is regulated by FINRA and SEC. Zacks Trade has been operating for a long time and has a good track record. If you are an investor looking for research tools, this can be a great option for you.
It has low fees, extensive stock and great customer service. Also, it is safe due to its two two-step login. However, it has limited educational research tools, while opening an account is slow and limited.
Zacks Trade has low trading fees for stock, ETF and bonds of $1, while there are no inactivity fees. There are account demonstration videos on how you can use their systems. The account opening process is fully digital with no minimum deposit. You get one free withdraw every month.
The downside is that the mutual fund fees are high. Also, you cannot deposit or withdraw using credit cards, debit cards, or electronic wallets.
Investing in US Stocks for Non Residents
The allure of the US stock market, with its vast array of companies and diverse industries, has captivated investors worldwide, including those residing in Africa. As discussed in this article, investing in US stocks from countries like South Africa, Nigeria, Kenya, and Ghana is not only possible but also offers a gateway to potential growth and diversification benefits. Through established brokerage firms, specialized funds, and readily available online platforms, African investors can access the US stock market and participate in its dynamic financial landscape.
Remember, investing in the US stock market as a non-resident requires careful planning, thorough research, and a well-defined investment strategy. By partnering with reputable brokers, utilizing online platforms, and seeking expert guidance, you can overcome any geographical barriers and participate in the dynamic growth of the US economy.