Can a Non-Resident Open a Brokerage Account in Canada?

Short Answer

At present, the potential to open a brokerage account in Canada, while being a non-resident is complicated and has numerous terms and conditions. This varies from broker to broker. To become savvy in this topic, continue reading.

Detailed Answer

Who is a Non-resident of Canada?

To figure out if you are a non-resident of Canada, your current status must check-off one of the following:

  • I live outside the Canadian border for a full tax year beginning 1st January and ceasing on 31st December
  • I live inside the Canadian border for less than 183 days in a specific tax year.

Are you a Non-resident of Canada who would like to open a brokerage account in Canada? Read more to find out, if you can open one.

What is a Brokerage Account?

A brokerage account is a hub where you can invest, procure and peddle various sorts of investments such as shares, Exchange Traded Funds (ETFs), bonds, and managed funds, based on your goals, investment time frame, and risk appetite.

Top Brokerage Accounts in Canada

We have listed below a few well-known online broking accounts in Canada:

  • Questtrade
  • TD Direct Investing
  • Scotia iTrade
  • Wealthsimple Trade
  • BMO InvestorLine

Brokerage Account vs Registered Investment Plans of Canada

The difference between a brokerage account and a registered investment plan offered by Canada such as a Tax-free savings account (TFSA), Registered Retirement Savings Plan (RRSP), or Registered Education Savings Plan (RESP) is as follows:

  • You do not receive any tax benefits in a brokerage account
  • There are no limitations on the amount you contribute to the account
  • You can withdraw your funds at any given time from your brokerage account.

Can a Non-Resident Open a Brokerage Account in Canada?

The answer to this is not a straight no. However, at present, the potential to open a brokerage account in Canada, while being a non-resident is complicated and has numerous terms and conditions. This varies from broker to broker.

The foreign policy of some brokers do not allow them to offer services to Non-residents of Canada.

Some brokers allow the non-residents to open a brokerage account after having agreed to a hefty minimum balance, high account-keeping fees, based on the jurisdiction of the non-resident, citizenship status, and after the identity verification process. Such accounts are closely monitored and audited regularly.

Why non-resident cannot open a Brokerage Account in Canada?

Some of the reasons for the stringent rules are:

  • Tax assessment and complexity
  • Anti-money laundering policies
  • To curb terrorist financing

Brokerage Accounts for Non-Residents of Canada

It can be deduced that it is a strenuous process to open a brokerage account in Canada for the non-residents. Hence, it is prudent to open a trading platform in your current country and invest in options that has exposure to the Canadian markets.

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Categories: Stock Market
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