The United States Citizenship and Immigration Services (USCIS) grants F1 visas to foreign national full-time academic students who wish to complete their education at a U.S. academic institution. Foreign nationals in the United States on a student F1 visa are not prohibited from opening stock accounts with U.S. based brokerage firms.
About Student F1 Visas
Foreign nationals in the country on student F1 visas may stay in the U.S. as long as they remain enrolled full-time at an accredited academic institution. F1 students cannot work off-campus during their first year in the country on an F1 visa. After the first year, the students may work off-campus Curricular Practical Training, Optional Practical Training or optional practical training extension jobs in science, technology, engineering and math (STEM OPT).
Individual Taxpayer Identification Number
An F1 visa is temporary, so it is unlikely that the student will have a Social Security number that brokerage firms require to open a stock account. The student will have to apply for and receive an Individual Taxpayer Identification Number (ITIN) from the IRS before he is able to open a brokerage account. F1 visa holders may apply for an ITIN by submitting an Application for IRS Individual Form W-7.
Tax Withholding
Since F1 visa holders are not U.S. citizens, any interest or dividend payments they receive as result of buying, selling or owning stock is subject to a federal income tax of up to 30 percent. Any brokerage firm will require that the student complete and submit IRS Form W-8BEN -- Certificate of Foreign Status of Beneficial Owner for United States Tax. The student must submit this form to the brokerage firm and not the IRS. This form allows the brokerage to withhold the necessary taxes from income received from buying and selling stocks.
Considerations
Students in the country on an F1 visa may not be able to open a brokerage account online to buy and sell stock. The students will have to submit copies of the brokerage’s required information by mail to the firm before the student will be able to open an account. Also, some brokerage firms require that all foreign applicants provide a copy of their photo identification, such as a passport or valid driver’s license, and that their address be within the United States.
