Author Topic: Vanguard Alternatives - Non-US citizens/green card holders  (Read 25490 times)

Bruno

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Vanguard Alternatives - Non-US citizens/green card holders
« on: January 31, 2014, 11:36:05 AM »
Called Vanguard to open and roll over a Roth IRA - been told you need to be US citizen or greencard holder to open an account.
Resident for tax purpose is not enough (they told me that explicitly) - the USCIS definition applies (http://www.uscis.gov/tools/glossary/permanent-resident-alien). Weird, as his rules out all H1B, J and other high income earners.
It even took them some time to figure that out.

So: I am looking for alternatives, open to resident aliens. Ideally with low fee structure and brokerage service.

Thank you.

Cyclonium

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Re: Vanguard Alternatives - Non-US citizens/green card holders
« Reply #1 on: January 31, 2014, 04:04:16 PM »
That is very weird, I am a H1B holder and had hoped to open an account soon.

Normally being a tax resident is fine for all things financial, or a 2 year history of residence here which makes things like mortgages easier.

Bummer!

Bruno

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Re: Vanguard Alternatives - Non-US citizens/green card holders
« Reply #2 on: January 31, 2014, 04:51:46 PM »
That is very weird, I am a H1B holder and had hoped to open an account soon.

Normally being a tax resident is fine for all things financial, or a 2 year history of residence here which makes things like mortgages easier.

Bummer!
Give them a call anyways and see what you get (and report back).
I really think their hotline is wrong on that topic (and start wondering what else might not work well at Vanguard).
It is no problem at other places (TIAA-CREF, Fidelity, TD), even Social Security.

 
« Last Edit: January 31, 2014, 05:02:26 PM by Bruno »

mustachianism_is_aredpill

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Re: Vanguard Alternatives - Non-US citizens/green card holders
« Reply #3 on: January 31, 2014, 05:09:48 PM »
I can't find the Vanguard link right now, but when I applied for a Vanguard account, I had to confirm that I was considered a "US person" by the IRS. It is part of the account application process. That is the only visa/citizenship/residence-related requirement for a Vanguard account.

http://www.irs.gov/Individuals/International-Taxpayers/Classification-of-Taxpayers-for-U.S.-Tax-Purposes

The IRS considers US citizens, green card holders and people who are tax residents by the "substantial presence test" as "US persons" http://www.irs.gov/Individuals/International-Taxpayers/Determining-Alien-Tax-Status. H1-B holders who spend more than 6 months in a calendar year are considered tax residents for that year and are therefore, US persons. If you are a tax resident as defined by the IRS, then you are good to open a Vanguard account (as per their own application rules). The hotline operator gave you wrong info.



Paul der Krake

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Re: Vanguard Alternatives - Non-US citizens/green card holders
« Reply #4 on: January 31, 2014, 05:20:15 PM »
I've had a Vanguard IRA as a J-1, and now on an H1-B. They did tell me over the phone that I couldn't do it but some guy on a forum told me I should just go ahead and sign up as a resident, so I did. For the first couple months I was living in fear of being discovered by the Retirement Police but this year is the third time I fund it fully. If I wasn't eligible, I sure as hell hope that their back office checks would have figured it out by now.

mustachianism_is_aredpill

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Re: Vanguard Alternatives - Non-US citizens/green card holders
« Reply #5 on: January 31, 2014, 05:35:28 PM »
I just dug out my application form for Vanguard. This is the text that you agree to:

Quote
If I am a U.S. citizen, a U.S. resident alien, or a representative of a U.S. entity, I certify under
penalties of perjury that:
 1. The taxpayer identification number I have given on this form as mine is correct (or I am
waiting for a number to be issued to me);
 2. I am not subject to backup withholding because (a) I am exempt from backup withholding,
or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to
backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS
has notified me that I am no longer subject to backup withholding; and
 Important: Cross out item 2 if you have been notified by the IRS that you are currently
subject to backup withholding because you have failed to report all interest or dividends
on your tax return.
3. I am a U.S. citizen or other U.S. person (as defined by the IRS in its Form W-9
instructions).
 If I am a nonresident alien, I am required to complete the appropriate Form W-8 to certify
my foreign status. I understand that I am not under penalties of perjury certifying the above
information.
The IRS does not require your consent to any provision of this document other than the
certification required to avoid backup withholding.

Nowhere on the form does it say you have to be a "permanent resident". It just says "US resident alien" and "US person"

luna

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Re: Vanguard Alternatives - Non-US citizens/green card holders
« Reply #6 on: January 31, 2014, 07:50:01 PM »
I'm an H1B holder and have a Roth IRA, an IRA (don't ask why I have both...), and a normal investment account.

I opened my first account with them about two years ago and the most recent one a couple of weeks ago.  Nobody has questioned my actions so far and the text above about "US person" makes me believe that I'm doing the right thing.

Bruno

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Re: Vanguard Alternatives - Non-US citizens/green card holders
« Reply #7 on: January 31, 2014, 10:39:57 PM »
I just dug out my application form for Vanguard. This is the text that you agree to:

Quote
....

Nowhere on the form does it say you have to be a "permanent resident". It just says "US resident alien" and "US person"
Thank you! Yes, that is the standard text, required by law.

I'm an H1B holder and have a Roth IRA, an IRA (don't ask why I have both...)
I do too! Shouldn't you have both? Good for tax tuning...

Back to the topic: I am kinda surprised that Vanguard fails at such a simple and basic question. Not a good first impression.
I certainly won't roll over a lot of money, but I guess I could open a small test account.

CanuckExpat

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Re: Vanguard Alternatives - Non-US citizens/green card holders
« Reply #8 on: January 31, 2014, 11:54:31 PM »
Why did you need to call them at all? You should be able to open an account no problem online.