Many countries, including the U.S., allow non-citizens to invest directly in their equity and bond markets. Others prohibit such investment entirely or limit the types of companies or types of shares that individual overseas investors can trade.
If you’re interested in making direct investments in overseas markets, you may want to begin by talking to your domestic investment adviser. The firm where your adviser works may have international branches or affiliations with brokerage firms in the country or countries where you want to invest.
While electronic links between markets continue to make international investing easier, there are some potential problems with investing in other markets that you should be aware of:
Trading and accounting rules, as well as the level of financial information required from issuing companies, may be different from the U.S. standard
Clearing of trades may be slower, and there may be questions about who has custody of your securities
Buy and sell orders may be complicated by language and timing barriers, despite electronic links
Changes in currency values and currency exchange fees may eat into profits
Taxes on gains and losses may be handled differently than in the U.S.
