No, you cannot open an investment account in Canada while you are a Non-resident, the exemption being - Tax-Free Savings Account (TFSA). Having said that, you can continue to hold the investment accounts that you once opened while you lived in Canada.
An investment account is a type of a current account, and it holds the various investments you purchase (shares, bonds, Exchange Traded Funds, and managed funds) along with cash that supports your purchase and sales.
A savings bank account is an instrument to assist your personal finances, whereas an investment account is aimed to reap higher returns and is commenced to accumulate money that is pointed towards a goal. Read more to find out if a Non-resident of Canada is eligible to open an investment account
There are four types of investment accounts, based on your objectives:
It is a standard account that is owned by an adult. It transacts & trades in cash & investments and it is not intended to achieve any goal. This is generally tax-free and it is popularly called the Canadian Tax-Free Savings Account (TFSA).
The funds accumulated and invested in the account are meant to be used during the retirement phase of the owner. The well-known term for this in Canada is Registered Retirement Savings Plan (RRSP).
This account invests in shares and bonds and saves up for exclusively paying educational expenses. This is called as the Registered Education Savings Plan (RESP) in Canada.
This account is used to grow your money and offers the utmost flexibility in terms of age and contribution limit.
Being a non-resident you can still open or contribute to a TFSA in Canada, however, you must be above 18 years of age and must have a valid Canadian Social Insurance Number (SIN). As the name says, TFSA is generally tax-free, however, for non-residents, the contributions made while they are away from Canada, are taxed at 1% every month the contribution stays in your investment account.
Non-residents are generally people who once used to be a resident of a country. If you had opened an RRSP while you were in Canada, you can continue holding the same. If you have had contribution room by the time you left Canada, you can contribute to utilize the unused cap. However, you are not eligible to open a new RRSP account or to make new contributions after you have left Canada.
You cannot open a new RESP, while you are being a non-resident, however, you can continue contributing to the already opened account, given the beneficiary remains to be a Canadian citizen.
Although this type of account offers pliability with respect to age, purpose, and contribution limits, a non-resident cannot open a non-registered investment account in Canada.
Canada has strict laws with respect non-residents opening investment accounts. This owes to the special tax treatment, access to investment markets, and investment objective of the accounts that are offered exclusively to the people who live in Canada.