The best broker for trading internationally ultimately boils down to who offers the largest number of products across the largest number of markets. However, we also assess the top international trading platforms based on their capabilities and quality. Interactive Brokers (IBKR) emerge this time as the winner overall. It is the best international broker and the most reliable online broker for investors from outside the United States in various categories it has controlled for a long time. Fidelity completes the list with the top global trading platform designed for newcomers to trading. International investors will find that each of these platforms is a part of the ETFs, exchange-traded funds (ETFs), American deposits (ADRs) universes, and direct access to assets on global markets.
What Is an International Broker?
A foreign broker can be described as a company that provides the U.S. and/or international investors the opportunity to purchase and sell securities worldwide. In our analysis, the brokerage company must be U.S.-based and U.S.-regulated to be considered an international broker. One of the primary motives for investors to want to invest in foreign securities (or investments that provide an international perspective) include diversification and the potential for growth, especially in emerging markets. You should also learn about FBS from their main website.
While most investment brokers offer access to ETFs, stocks worldwide, and mutual funds, serious investors looking to trade internationally require international brokerage.
How To Buy Stocks Internationally
Investors can access international markets in a variety of ways. For instance, you can use foreign-based securities to purchase American depositary receipts (ADRs), U.S.-registered mutual funds, or U.S.-registered ETFs. It might surprise you that many major U.S. companies do business abroad and provide access to global consumers. In this instance, investing in a multinational company could be like buying stocks from overseas.
For buying individual stocks in the market in a foreign country, it is essential to establish your account through an international broker — one that allows the selling and buying of international stocks. It is important to know the charges, available countries, and the available assets before selecting your broker for international transactions.
After you have created and funded your account with an international broker, trading international securities is like buying stocks from U.S. exchanges. You might need to ask for access (including price information) to the particular exchange(s) you wish to trade on. Additionally, you might require research on the ticker symbol and exchange to ensure that you are trading the stock you want to trade.
In general, stocks from abroad must be purchased and sold at one exchange (e.g., when you purchase stock in France, you must sell it in France, too). Certain exchanges might have additional rules. For instance, the Tokyo Stock Exchange and Osaka Securities Exchange established daily price limitations for all securities to reduce the risk of volatility. Most of the time, it’s more costly to purchase and sell securities internationally. The fees and commissions for international transactions may differ from the ones for U.S. stocks, and the fees for currency exchange could also be applicable.
What To Consider When Choosing an International Broker?
If you are looking for an internationally-based broker, be sure to look for the exact features you’d expect from any broker: an excellent reputation in the market, up-to-date security standards, excellent customer service, affordable costs as well as robust trading tools, informative content for education and accessibility to markets that you wish to trade in.
Access to screeners, research reports, and international news is crucial when selecting the right broker for international trade. It may be more essential to conduct an extensive study before buying an international company than a U.S. company due to different reporting requirements under the law for international businesses.
Can a Non-U.S. Citizen Open a Brokerage Account?
In most cases, U.S. residents who are not U.S. citizens can legally open U.S.-based brokerage accounts if they have completed the necessary documentation and confirm that they are tax-paying. You may have to submit additional tax forms required for citizens of other countries.
Non-U.S. citizens who reside outside of the U.S. can open an account if the broker is willing to accept applications from the countries of residency. There could be restrictions regarding the kinds of accounts you can open even if you’re not a U.S. resident. Another option could be opening the account of a broker in your home country that has access to U.S. investment markets.