How to open an account with a brokerage company: where to open a brokerage account? | Law&Trust International

How to open an account with a brokerage firm

What is a brokerage account?

A brokerage account is an account that is opened with a licensed brokerage firm for its further management. Unlike bank accounts, brokerage accounts offer you access to a variety of different investment options, including stocks, bonds, and mutual funds. Many brokerage accounts also offer more sophisticated stock market investment products such as options, Forex or futures, as well as safer investments such as CDs (Certificate of Deposit) and cash management accounts.

What should you do before opening a brokerage account?

  1. Choose the type of brokerage account that you need. There are regular brokerage accounts and individual investment accounts (IIAs). The difference between them is the amount of tax paid on income from investments. A regular brokerage account provides for the payment of standard tax, personal income tax, and IIP can offer tax benefits when investing for a certain period without the possibility of withdrawing funds.
  2. Consider the functionality of the account and the cost of its maintenance. You need to consider the conditions for maintaining the account. You will have a personal account where you will act like a trader. Decide on the minimum amount of investment. You can invest through a broker, which acts as an investment tool. You should pay attention to monthly service rates and transaction fees. When you choose a strategy for yourself, the broker will offer you a tariff plan. Decide how often you intend to trade, how many transactions are planned. Then look at the transaction fees and monthly service fees. The conditions in each brokerage company, regardless of the jurisdiction, are different, so they should be studied in detail before registering an account.
  3. Choose a brokerage company that suits your needs. Brokerage is licensed, so when choosing a company, find out if it has a license. Then go to the regulator’s website which issues licenses, and check if the company is on the official state website in the list of brokerage companies that have received a license. This is the most important step in choosing a brokerage company.
  4. Start the process of opening an account. In order to start the process of opening an account, it will be necessary to fill out forms, applications for opening an account, as well as collect and provide personal documents for opening a brokerage account. The list can always be different, but the basic package includes documents that identify the person, documents confirming the profile of the person (the presence of an opened bank account, CV, etc.). After your complete the identification procedure, you sign a contract with a broker.
  5. Replenish your account and start investing. Transferring money to a brokerage account is usually done by bank transfer or card transfer. You will get access to your account and will be able to start trading.

Where is it better to open a brokerage account?

We will consider the most stable and long-standing brokerage companies, where is it possible to open an account, and what conditions they have.

1.

Charles Schwab, UK, LTD

The minimum size for opening an individual or joint customer account is 25,000 US dollars. The online stock trading fee is $0 per trade, and there is no charge for working with a Schwab financial advisor. To open an international Schwab account, you will need to prepare the necessary documents and go through the account opening process. An account is opened remotely and does not require a physical visit. Once the account is fully open, you can replenish your account and start investing.
The company offers the following products:

  • Stocks and options
  • Fixed income
  • American Depositary Receipts (ADR)
2.

Fidelity Co. UK (Fidelity International)

The company does not have a minimum amount for opening an account, and service fees vary depending on the amount of investment. They can be up to £ 7,500 and more. The account can be opened remotely after passing checks and filling out documents.
You can invest in:

  • Stocks
  • Investment trusts
  • Funds
  • Exchange funds
3.

TradeZero, Bahamas.

TradeZero is a licensed broker-dealer based in Nassau, Bahamas. TradeZero is quoted and regulated by the Bahamas Securities Commission.

TradeZero provides direct access to the trading market on US exchanges, a complete set of online trading platforms, and free stock trading.

This broker can open an account remotely. The only restriction is on opening an account for Bahamian citizens, US citizens, or United States green cardholders.

4.

Dukascopy Swiss, Switzerland.

Dukascopy Bank SA provides the opportunity for currency and precious metals trading (the so-called Forex trading) for both private and institutional clients.

Trading services of Dukascopy Bank SA are optimized for professional trading:

  • The same liquidity and quotes are available to all customers;
  • All types of trading are allowed (including news trading, scalping, hedging, etc.);
  • Accounts can be opened in different currencies;
  • The bank offers trading on the Forex market, precious metal bullions, binary options, CFDs on commodities, indices, and stocks;
  • The minimum trading account with Dukascopy Europe is 100 USD, while with Dukascopy Bank SA it’s 1,000 USD.
5.

Saxo Bank, Denmark.

Saxo Bank A / S is a fully licensed bank that was established in Denmark and is regulated by the Danish Financial Regulatory and Supervisory Authority. The bank works in the field of financial and regulatory technologies that provide traders, investors, and partners with the markets of currencies, CFDs, stocks, options, futures, and other asset classes accessible from one account.

Products:

  • Forex trading
  • Stocks
  • Forex options
  • Bonds
  • Futures
  • CFDs
  • ETFs
  • Quoted options
6.

eToro

eToro (Europe) Ltd. is a financial services company which activities are authorized and regulated by the Cyprus Securities and Exchange Commission.

eToro (UK) Ltd is a financial services company which activities are authorized and regulated by the UK Financial Institutions Supervision Authority (FCA).

eToro AUS Capital Pty Ltd. is authorized and controlled by the Australian Securities and Investments Commission (ASIC) and is subject to Australian Financial Services License No. 491139.

The main instruments are:

  • Bitcoin (BTC)
  • Ripple (XRP)
  • Amazon stocks
  • Apple stocks
  • Gold (commodity)

In conclusion, it is worth saying that investing and trading are a classic market with a variety of tools and ways to earn money. Before deciding to open a brokerage account, a non-resident should carefully study the company and verify it. For beginners, the best solution would be to rely on a company that has been on the market for many years and has already earned a reputation. This way, you will gain experience and be protected from fraud. International foreign brokerage firms do not impose restrictions on nationality and citizenship, so opening a brokerage account for a non-resident is possible abroad.

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