When you work in the US on an H1B Visa, you can make a decent amount of money to pay for your living expenses and put a good chunk of it towards savings. As many think about savings and investing, when on an H1B Visa, there comes the question of whether there are any restrictions related to investing in the US stock market.
This article will review topics related to investing in the US stock market as an H1B Visa holder and address questions such as: “Can I do stock trading in the US?” “How does Day trading work with H1B?” or “How do taxes work with Stock Trading on H1B?” etc.
What is Stock Trading in the US? How does it work?
Stock Trading in the US is nothing but buying and selling stocks related to a company listed publicly on the US Stock exchanges. The general concept of stock trading is similar to that of other countries. The main difference is the list of stock exchanges used for stock trading. There are many stock exchanges in the US, and the list below is where the public can buy and sell stocks in the US.
- Two main Stock Exchanges
- Other smaller Stock Exchanges
- Chicago Stock Exchange (CHX)
- Boston Stock Exchange (BSE)
- National Stock Exchange (NSX)
- Philadelphia Stock Exchange (PHLX)
- Miami Stock Exchange (MS4X)
In general, individuals (retail buyers) need to create an account with stock brokers like Interactive Brokers, ETrade, Robinhood, Ameritrade, etc., where they can buy and sell the stock of any publicly traded company.
Now that we understand the basics, let’s get into the context of H1B Visa holders doing stock trading in the US.
Can H1B holders Invest in Stocks in the US? Buy, Sell Stocks?
Yes, H1B visa holders can invest in the US stock market and do stock trading in the US. They can buy and sell stocks like any other retail investor who is a US Citizen. There are no rules that say H1B holders cannot do stock trading in the US.
H1B holders can create an account with one of the stock brokers, including online stock brokers like Robinhood, Ameritrade, etc., and start buying and selling stocks. It is perfectly legal to do general delivery-based stock trading. This means you can buy the stock and hold it for the long term, technically not selling the stock on the same day you purchased it.
What are the requirements for H1B holder to buy stocks?
The requirements for H1B holders to do stock trading are similar to those of US citizens, with some additions. You cannot trade on behalf of someone; it should be for you and from your account.
Below is the standard requirements for H1B holders to do stock trading in the US:
- You need a Social Security Number (SSN).
- Copy of Passport
- Copy of H1B Visa Stamp in Passport (if you arrived in the US on H1B)
- Copy of H1B Approval Notice (Optional)
- Copy of I-94 Arrival / Departure Card
- (For some brokers) Employment information like Employer Name, address, and phone.
- US residential address proof is like a utility bill or rental agreement.
- Some brokers have restrictions on the age of the person doing stock trading for example, to use Robinhood account for buying stocks, you need to be 18 years or older
Most of the time, when you try to sign up online, you will be given the list of documents they will need from you. You should speak to these stock brokerage agencies if any clarification is needed.
Day trading vs. Delivery based trades on H1B visa?
In general, there are two main options to do stock trading. One is delivery-based trading, where you buy and hold the stock for the long term and not sell on the same day. Unlike the second option is to do day trading, where you buy and sell the stock on the same day.
In general, most of the H1B holders do delivery-based trades(long-term investing). Full-time stock traders usually do day trading, which requires a lot of time and effort. It is like a full time job being a day trader.
Usually, when you are on H1B, to maintain proper legal status, you are supposed to work full time for the employer who sponsored your H1B Visa, and the majority of your time should go towards the company where you have legal approval to work. When you get into day trading, much of your time may go into that and that is a grey area, and subject to scrutiny. While some may do day trading on and off, but it should not be done as a full-time job. It can raise questions on the maintenance of H1B visa status.
In fact, there is no immigration rule that clearly tells that you can do delivery based stock trading or day trading. The immigration rules for H1B tell that you need to work full time for your H1B sponsor and maintain your status. You may make passive investments in stocks by doing stock trading in the US. But, the passive investments or the time you spend on that cannot be equal to a full-time role like someone working as a “Day Trader” at a stock brokerage company.
Taxes for Stock trading gains when you are on an H1B visa
You should pay all the required taxes the in US for all your Stock earnings or gains. There are no exceptions, as it is a source of income for you. You are required to pay taxes to the IRS based on your income. As an H1B holder, you are subject to standard taxation on capital gains on profits from selling stocks. This can be a tricky area if you are making a lot of trades and timing varies. It is a good idea to go to a tax consultant to get help with filing taxes.
If you are not sure, it is always best to use tax consultants for filing taxes for stocks, as it can get complicated. Because if you lose money, it is tax-deductible, and you can get some advantages. You may miss some of these nuances if you file on your own.
USCIS Rules on H1B holders doing stock trading
There are no USCIS official rules regarding H1B holders that tell them whether they can do stock trading or not get involved in stock trading. USCIS only publishes information related to the maintenance of your visa status and its requirements. USCIS says that you should not violate your legal H1B status when you are involved in these investing activities.
What it means is that if you are a full-time student on an F1 visa, you need to be enrolled full-time and maintain legal status and not work off camps, etc. Similarly, if you are on H1B Visa, you are supposed to work full-time for the companies that sponsor your H1B Visa, you cannot do stock trading on your own as a full-time job…If you are in doubt, you should always check with your attorney or tax consultant.
Can I do Forex Trading on an H1B Visa?
Similar to other types of stock trading, there are no special rules laid out for Forex Trading. The same logic applies to that of delivery-based trading. Unless the stock brokerage restricts you, there is no restriction as such. It cannot be your full-time job. If it is done as an investment, like delivery-based stock trading, you are free to do this as well.
Other Investment Options for H1B Visa Holders
In addition to investing in the stock market, H1B holders can also do investments in the below. Each of these comes with its own pros and cons. Depending on your situation, you can invest in any of the below as well.
- Buying a House
- 401K investments
- Crypto Currencies
- Certificate of Deposits(CDs)
- Fixed Deposits
- FCNR Deposits as NRI
Summary
As a visa holder working in another country, making investments that can increase your returns is important. Investing in stocks is among the most sought paths by many H1B holders for building wealth. As mentioned in the above article, you can invest in the US Stock market when you are living in the US on an H1B Visa, and there are no restrictions as such from an immigration standpoint. You need to pay relevant taxes for the gains.
What has been your experience? Share your experiences in the comments section below.
Can I do options trading on H1B? I want to do it as side hustle, so not spending much time everyday on trading. Also, would there be any issue if someone on H1B starts earning more from options trading than their regular H1B income?
I would like to know the same as well. Long term shares buying is fine but is buying or selling call / puts okay while you are on your H1B visa?
Hi Kumar,
Thank you for the information. Do you know if H4 visa (without H4 EAD) can day trading?
ching,
No, they cannot. Day Trading is technically working as a trader, so it can create issues. There is no official documentation on this, but H4 cannot work without EAD that is the key point.
Hi Kumar,
Thanks for running the show and passing the information. Your site has been very helpful.
As part of H1B life, one might acquire lot of stocks in US. I currently use eTrade. And they have confirmed that if I leave US and decide to stay in India, I will not be able to hold the account open/trade. I will need to close my account.
Can we keep the account open and possibly trade after returning to India? Do you know any brokerage firms that allows this?
Thanks
SG
SG,
Thanks for nice words.
That’s probably sad reality. It depends on the country. If you move to countries like Singapore, you can use certain players like Saxo capital, DBS Vickers, etc. to do stock trading. But, I don’t know, if you can transfer your US account. As far as India is concerned, I have not done due diligence, so cannot say. If you do find out, please share here for community benefit. I wish I could answer…
can green card holders trade American f&o ?
Manish,
Green card holders have no restrictions.
Hi, can a H1B visa holder do forex trading in USA ? Just as a side hustle not full time (say making 1000 usd per month – will it be considered passive income) – but definitely the buy and sell transaction will be happening in a single day !!
Sumedha,
Yes, should be fine. There is no specific guidance that says that one cannot do forex trading.
This article is so old, now we have apps like Robinhood, Webull, and even algorithmic trading is here now. if I create an algorithm that trades for me daily that means I m not giving any time to from my full-time job can it still be a problem?
Thank you
Is there a limit on the amount someone can invest. RBI allows $250,000 remittance for Indian residents – but that rules is for residents. Is there a limit for h1bs residing in US from India to invest in stocks ?
Rakshan,
I am not aware of any such limits as long as you can show the source of funds and it is your earnings.
Hello Kumar,
Thanks for clearing doubts on the stocks investing , do we (H1b)have a specific stocks that we can invest in or can they invest in anything . Can we invest in cannabis stocks that are based out in Canada. Will it impact any of my status on H1. Some websites say we should not and some say we can ,so not sure which is correct . I just invested in them not doing any day trade or business .
libraguy863,
You can invest in anything that is typically categorised as investment as per US stock market view. There is no H1B list or anything as such.
Hello @Kumar ,
Do you know any good immigration attorney , who can provide more information on this matter that how much trading is safe(which should not be misunderstood) for an H1B worker .
singh,
You cannot go wrong with reputed firms like Murthy’s, Balglobal, Fragomen, etc. These are big attorney firms. We technically do not endorse anyone…
Hi ,
My Wife just got her H4 EAD. Can she do trading ,if so what kind of trading would be suitable for her?
SRG,
She can do whatever she likes as there are no work restrictions for H4 EAD.
Hi do H1b visa holders have to fill W8 BEN to open a online trading account? or a W9. am confused
W8 if you don’t pass the substantial presence test. W9 otherwise.
Hi,
So in your experience day trading is ok as long as it does not take away your full time job? What about swing trade? Are you a green card holder already?Thanks
Hi Kumar,
Thanks for the article and I have invested in few stocks and I am on H1B visa. I am not sure is there USCIS info where it says to invest in stocks and mutual funds while in h1B visa. I would appreciate if you can share the info. As I google I don’t see any positive lead except your article.
Vijay
Vijaykumar,
Well, USCIS does not have any guidance on stock trading. The fact is that, they will only tell the key things to maintain your stauts and key things you should not that violate status. For instance, they will clearly tell that H4 visa holder cannot work, if they do not have EAD through their spouse…but they will not specifically tell that you can study on H4 visa or you can drive on H4 visa, etc. Do you see what I mean ? If you are in doubt, it is always best to speak to the agency that you plan to do stock trading on the visa status and understand more on how to work with stocks as foreigner. This is a good article that talks about the same : http://www.fool.com/knowledge-center/can-a-non-us-citizen-trade-us-stocks.aspx
RS
Additional info : Although I am on h1 and trade on tradeking.com. I was trying to open a trading account with Merrill Edge and came to know that Merrill Edge requires Green Card. I wish Merrill Edge would have allowed trading with H1, atleast they charge very reasonable commission . Till I don’t get gc, i guess i will have to stick to tradeking.
Hi neeraj.. I have a few Questions regarding trading on H1B Visa, I had requested the Admin for some suggestions but didnt get any reply So I am directing the same Qns to U.
1. SO the initial funding has to be 25000$, or U can trade with less initial Funding?
2. I know I cant trade much on H1B visa as it can be misunderstood with interfering with my primary Job. But Can I hire some1 to daytrade my account as I know someone who r successful in Daytrading US markets and r willing to manage my account. If I take all responsibility of profit/loss.. then I guess I am not breaking any rules on daytrading for H1B visa holders ??
Since U r there, I will appreciate ur help/suggestions Thnx.
hi Kumar,
Thanks for the info U provided in this webpage. I have a few Questions regarding trading on H1B Visa.
1. SO the initial funding has to be 25000$, or U can trade with less initial Funding?
2. I know I cant trade much on H1B visa as it can be misunderstood with interfering with my primary Job. But Can I hire some1 to daytrade my account as I know someone who r successful in Daytrading US markets and r willing to manage my account. If I take all responsibility of profit/loss.. then I guess I am not breaking any rules on daytrading for H1B visa holders ??
Pls share ur Views.. thanks
This is probably related to the topic ,I opened an account with some online broker and they are requesting for visa with photo ID and all i have is approval notice with I-94 card attached to it , how do i explain this person that i don’t have a H1 B visa with Photo Id and it will be pasted into my passport when i travel outside of USA (at least that’s my understanding) , Any suggestions? I explained it to him but the guy says its listed as required doc ,what to do i am in pickle!
@Kumar,
greetings, and many thanks for the information
but what about the category who is in US , like students, who is in F1 VISA
can he trade, and what is the tax structure to pay in case you earn money.
short term profit attracts taxes, if so
what about long term profit
by the by how is your experience as a trader
or was
care to shower us with information
you are doing fantastic service Mr.Kumar
keep coming and bless us
love and gratitude
easwaran
india
Yes, students on F1 visa can do trading provided they have SSN. I am not an expert on the details of specifics of taxing, I usually go to tax consultant. I have not done enough trading in US. The best idea is to talk to customer service of a stock brokerage firm to get more specifics.