If you’re a foreign national or a non-resident alien living in the United States, you may be wondering how to invest in stocks without a Social Security Number (SSN). An SSN is required to open a brokerage account and invest in stocks, but the good news is that it’s not the only way to invest. In this article, we’ll show you some alternatives for investing in stocks without an SSN.
Investing in Stocks through an International Brokerage Account
If you’re a non-resident alien looking to invest in stocks, you can open an international brokerage account that allows investing in the stock market. International brokerage accounts are an excellent option that allows investors to purchase stocks that trade on major U.S stock exchanges and invest in exchange-traded funds (ETFs).
You don’t need an SSN to open an international brokerage account; All you need is your passport, a foreign tax identification number, or an equivalent document from your country. Be aware that some international brokerage firms might require that you meet certain financial requirements before allowing you to open an account, so be prepared for this process.
Investing in Stocks through ADRs
Another alternative for investing in stocks without an SSN is through American Depositary Receipts (ADRs). ADRs are securities that represent shares of the stock of foreign companies traded on a U.S. stock exchange. They allow investors to invest in foreign companies without having to go through the hassle of buying foreign securities or opening international brokerage accounts.
To invest in ADRs, you don’t need an SSN. However, you’ll need to open a brokerage account with a firm that offers ADR trading. Keep in mind that some ADRs trade over-the-counter (OTC), and purchasing OTC stocks can be riskier than trading on an official U.S stock exchange. Review each prospectus before investing in any ADR.
Investing in Stocks through Mutual Funds
Investing in stocks through mutual funds is another possible alternative for individuals without an SSN. Mutual funds allow you to pool your money with other investors to buy different stocks managed by professional fund managers.
Numerous mutual funds offer investors access to U.S. stocks while requiring no SSN. If you’re interested in investing in mutual funds, you need to open an account with a brokerage firm that offers these funds. Check reviews and fees of each mutual fund before investing.
Investing in Stocks through ETFs
Exchange-traded funds (ETFs) work similarly to mutual funds, but they trade like individual stocks. ETFs are composed of various stocks grouped together by theme. You can invest in ETFs that track U.S. stocks or international stocks.
ETFs do not require an SSN to purchase; you’ll need to open a brokerage account with a firm that offers ETF trading. Be aware of the fees charged by the brokerage firm and the ETF at the time of buying and selling.
Investing in Stocks through a Partnership
Lastly, you can invest in stocks through a partnership. In this case, two or more investors pool their money and open a brokerage account as partners. You can find a partner who holds an SSN to open the brokerage account, or you can find a trustworthy partner that agrees to share the gains and losses fairly. Make sure to come to an agreement before investing any money.
Conclusion
Investing in stocks is an excellent way to grow your wealth. Don’t let the presence of an SSN hinder you from investing in stocks. As we saw, there are various alternatives available for investing in U.S and international stocks, including international brokerage accounts, ADRs, mutual funds, ETFs, and partnerships. Regardless of the method you select, make sure to do your research and review all risks before investing any money.