Buying shares in Australia as a non-resident

Key points

• Buying shares in Australia as a non-resident is still possible, but finding an Australian investment provider that accepts non-residents can be a key consideration.

  
  

• Your Australian and overseas tax position matters, with different rules applying to capital gains and dividends once you become a non-resident for Australian tax purposes.

  
  

• The right investment structure is important, with your provider, tax residency, investment strategy, currency exposure and plans to return to Australia needing to be considered together.

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Buying shares in Australia as a non-resident

For Australian Expats living overseas, building wealth through shares can be an attractive long-term strategy. But once you become a non-resident for Australian tax purposes, investing through an Australian provider can become more complicated.

The good news is that buying shares in Australia as a non-resident is still possible. The challenge is finding an investment provider that will accept you, correctly recognise your non-resident tax status and continue to provide the access and services you need while you live overseas.

For Australian Expats considering buying shares in Australia as a non-resident to improve their financial position, there are several important factors to consider beforehand, which we explore in this blog.

Can you buy shares in Australia as a non-resident?

Yes. Becoming a non-resident for Australian tax purposes does not prevent you from owning or investing in shares. The difficulty is often not the investment itself, but accessing an appropriate Australian brokerage account.

Many Australian retail brokers are designed primarily for Australian residents. Their account-opening processes, identification requirements, tax reporting systems and regulatory obligations may not accommodate someone who lives permanently overseas.

Some providers may allow an existing client to continue holding investments after they move overseas, while others may require the account to be closed or the investments transferred elsewhere.

This means buying shares in Australia as a non-resident requires you to consider the investment provider before you decide what to invest in.

Why can opening an Australian brokerage account be difficult?

When you apply for a brokerage account in Australia, the provider will generally need to establish your identity, residential address, tax residency and other information required under Australian and international financial regulations. For a non-resident Australian Expat, this can create additional hurdles. You may be asked to provide:

• Evidence of your overseas residential address;

• Your overseas tax identification number (TIN);

• Details of your Australian and overseas tax residency;

• Additional identification documents;

• Information about where your funds are coming from;

• An Australian bank account, depending on the provider.

Many Australian investing platforms do not accept new applicants who are foreign tax residents. This is often due to the additional regulatory and reporting obligations that may apply when providing services to clients who live and are tax residents overseas.

Are there still Australian options available?

Yes, and this is where it is important not to assume that every Australian investment provider has the same policy.

There are Australian-based investment providers and platforms that may be able to accommodate non-resident investors, depending on their individual circumstances and country of residence.

For an Australian Expat, the options can include:

1. An Australian brokerage account that accepts non-residents

Some providers may allow Australian Expats to establish or retain a brokerage account after becoming a non-resident.

The important question is not simply whether you can access the platform from overseas. You need to establish whether the provider will formally accept you as a non-resident for Australian tax purposes.

This distinction matters because your tax residency needs to be correctly recorded so that the appropriate withholding tax and reporting requirements can be applied.

2. An existing Australian investment account

If you already have a brokerage account before leaving Australia, your options may be different from someone trying to open a brand-new account after moving overseas.

However, you should not assume that an existing account can continue indefinitely after you become a non-resident. Providers have their own policies, and you should notify them of changes to your residential and tax residency status.

The right approach is to contact the provider before or shortly after leaving Australia and confirm whether you can continue to hold, buy and sell investments.

3. An Australian investment platform through a financial adviser

For some Australian Expats, an adviser-supported investment platform may provide another option.

Rather than selecting a standard retail brokerage account, you may be able to invest through an Australian investment platform where the provider is able to accommodate your non-resident status.

This can be particularly useful where the objective is not simply to trade shares, but to build a diversified investment portfolio that may include shares, ETFs and other investments.

Importantly, platform availability varies significantly according to your country of residence and circumstances. A provider that accepts one Australian Expat may not necessarily accept another.

You don't have to invest only in Australian shares

One of the biggest advantages of using an Australian investment provider is that you don't necessarily have to restrict your portfolio to investments listed in Australia.

Depending on the platform, you may be able to access Australian and international shares, ETFs and other investments through the same Australian-based investment arrangement.

This can make buying shares in Australia as a non-resident particularly appealing for Australian Expats who want to maintain an Australian-based investment structure while still building a globally diversified portfolio.

For example, an Australian Expat may want exposure to Australian companies, US equities, global markets or a combination of different asset classes. The fact that the investment account is Australian-based does not necessarily mean the underlying portfolio needs to be Australia-focused.

What are the tax implications when buying shares in Australia as a non-resident?

Tax is one of the most important considerations when buying shares in Australia as a non-resident.

Australian tax treatment can be quite different once you cease to be an Australian tax resident.

Generally, a foreign resident is subject to Australian CGT only where a capital gain relates to taxable Australian property. Ordinary shares and ETFs that are not taxable Australian property will generally fall outside Australia's CGT rules when disposed of by a foreign resident. This can make shares an attractive investment for Australian Expats from an Australian tax perspective.

However, this does not always mean there is no tax to pay anywhere.

Your country of residence may tax your investment income and capital gains, potentially under completely different rules. You also need to consider the tax treatment of investments acquired before you left Australia and whether the Australian deemed disposal rules applied when you became a non-resident.

What about dividends?

Dividends are treated differently from capital gains.

For foreign residents, the unfranked component of Australian dividends is generally subject to Australian withholding tax, with the applicable rate determined by Australia's tax treaty with your country of residence (typically between 15% and 30%). Fully franked dividends generally do not have Australian withholding tax deducted, but non-residents cannot claim a refund of excess franking credits.

The tax treatment in your country of residence also needs to be considered.

This is why the investment provider you use matters. The provider needs to correctly record your non-resident status and apply the relevant withholding requirements.

Why can shares be attractive for Australian Expats?

For many Australian Expats, buying shares in Australia as a non-resident can form part of a broader long-term wealth creation strategy.

Shares can provide:

Favourable Australian CGT treatment: For Australian Expats who are non-residents for tax purposes, certain share investments will generally fall outside the scope of Australian capital gains tax when sold. This can provide a significant tax advantage, especially compared with other Australian investments, such as residential real estate, which typically remains subject to Australian CGT for non-residents.

Long-term capital growth: Investing in growth assets can provide an opportunity to build wealth over many years rather than leaving surplus cash sitting in low-growth assets.

Income: Shares and ETFs can generate dividends and distributions, potentially providing an additional source of income.

Diversification: Shares provide exposure to businesses and economies across different industries and countries. An Australian-based investment account can still provide access to international investments.

Liquidity: Compared with property, shares can generally be bought and sold relatively easily, making them a flexible component of a long-term portfolio.

Australian dollar exposure: For an Australian Expat who expects to eventually return to Australia, maintaining some assets denominated in Australian dollars may be useful. This needs to be balanced against the currency in which you currently earn and spend.

Portability: A well-structured investment portfolio can continue to grow while you live overseas, potentially providing a source of wealth for retirement or your eventual return to Australia.

Is buying shares in Australia as a non-resident worthwhile?

For many Australian Expats, it can be. However, the answer depends on more than simply whether shares are expected to generate attractive returns.

You need to consider:

• Your Australian and overseas tax residency;

• The tax rules in your country of residence;

• Whether your preferred Australian provider accepts non-residents;

• The investments available through the provider;

• Currency exposure and foreign exchange costs;

• Your investment timeframe;

• Your existing Australian assets;

• Your plans to return to Australia;

• The tax treatment of investments you already owned before leaving Australia.

The biggest mistake is often choosing the investment first and worrying about the structure afterwards.

For Australian Expats, the investment provider, tax residency and investment strategy should be considered together.

Getting the right structure in place

Buying shares in Australia as a non-resident doesn't have to mean giving up access to Australian investment providers or limiting yourself to Australian investments.

There are still Australian-based options available, but eligibility can vary considerably between providers. Some platforms may not accept new non-residents, while others may be able to accommodate Australian Expats depending on your circumstances and country of residence.

The key is to find an arrangement that allows you to invest appropriately, correctly reflects your non-resident status and provides access to the investments needed to build a diversified portfolio.

For Australian Expats, shares can be a valuable part of a long-term wealth strategy. The question is not simply "Can I buy shares while living overseas?" but rather "What is the most appropriate way for me to invest while I am a non-resident?"

If you are considering buying shares in Australia as a non-resident, getting advice before opening an account can help you understand your investment options, Australian tax position and the implications of investing from your country of residence.

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Runway Wealth Management is the trusted Financial Adviser to the Australian Expat community. Our tailored advice is backed by expertise, education and experience, which allows us to be at the forefront of Australian Expat Financial Planning.

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General Advice Disclaimer: The information contained herein is of a general nature only and does not constitute personal advice. You should not act on any recommendation without considering your personal needs, circumstances, and objectives. We recommend you obtain professional financial advice specific to your circumstances.