How to Choose a Broker to Trade US Stocks from Outside the US

What a broker does and why the choice matters

A broker is the intermediary that receives your orders and sends them to the market. It also holds your money and your shares until you withdraw them. That's why choosing one isn't a formality: it determines how much you pay on each trade, how fast your orders are executed and, above all, what happens to your money if the company runs into trouble.

If you live outside the US, for example in Latin America or Spain, and want to trade US stocks and ETFs, you have two routes: an international broker that accepts clients from your country, or a local intermediary that gives you access to those markets. Both can work. What changes is the regulation that protects you, the costs and the paperwork.

Before you compare platforms or promotions, look at what the ads don't show: who supervises the company, which legal entity you're signing with and how much each trade really costs you.

Regulation: the first thing to check

A reputable broker is authorized and supervised by a financial regulator. Some of the most relevant ones for anyone trading US stocks:

• United States: securities brokers register with the SEC and are members of FINRA, the body that supervises them. You can look the firm up on BrokerCheck, FINRA's free tool, which shows its registration and disciplinary history.
• Spain: firms that provide investment services must be authorized by the CNMV (Spain's securities regulator) or, if they're from another European Union country, registered to operate in Spain. The CNMV publishes its registers and a warning list of unauthorized firms.
• European Union: the MiFID II rules, in force since January 3, 2018, require firms to disclose all costs, classify their clients and assess whether a complex product is appropriate for you before you buy it.
• Latin America: each country has its own securities regulator, for example the CNBV in Mexico or the CMF in Chile. If you use a local intermediary, confirm that it's authorized there.

One key detail: many international brands serve clients in different countries through different subsidiaries. The protection you get depends on the legal entity you open your account with, not on the brand name. Check the contract to see which company it is and in which country it's regulated.

How your money is protected (and what isn't covered)

Regulation doesn't protect you from trading losses. It protects you, to a degree, if the broker goes bankrupt or can't return what's yours.

If your intermediary in Spain is a bank, coverage comes from Spain's Deposit Guarantee Fund, not from FOGAIN.

Look at the last column. If you buy a stock at $50 and it falls to $30, no fund gives you the difference back. These mechanisms kick in when the intermediary can't return your cash or your securities. If your account is with a subsidiary outside the US or Spain, these protections may not apply; ask in writing which one covers you.

If you live outside the US: residency and the W-8BEN form

Not every broker accepts clients from every country. Before you send any documents, confirm that your country of residence is on its list and what it will ask for: usually a passport or national ID, proof of address, and information about your income and experience.

If you open an account in the US without being a US resident, the broker will ask you for Form W-8BEN from the IRS, the US tax authority. It certifies that you're not a US tax resident. Without it, the standard withholding on certain US-source payments, such as dividends, is 30%. If your country has a tax treaty with the US, the form also lets you claim the treaty's reduced rate. In general, the form is valid until the end of the third calendar year after you sign it, unless your information changes; your broker will normally let you know when it's time to renew it.

What you owe in your own country on gains or dividends depends on your local laws. Talk to an accountant or tax advisor in your country before you start, not after.

Costs: what you see and what you don't

Many brokers advertise "zero commissions." That can be true and they can still charge you in other ways. Check the full fee schedule:

• Commission per trade: flat, per share, or zero.
• Spread: the difference between the buy price and the sell price. It doesn't show up as a charge, but you pay it on every trade.
• Currency conversion: if you deposit in your local currency or in euros, converting to dollars may carry a markup over the exchange rate.
• Deposits and withdrawals: international wire transfers, intermediary bank fees and the broker's own charges.
• Inactivity and maintenance: some accounts charge you if you don't trade for a certain period or if your balance drops below a minimum.
• Market data and platform: real-time quotes or advanced tools may come with a monthly fee.

Example: you deposit $2,000 by international wire and your bank charges $40 to send it. Before making a single trade, you've already paid 2% of your capital. That's why it's worth calculating the total cost of a year of use, not just the commission per trade.

Account types, platform and orders

To start, most beginner traders need nothing more than a cash account: you trade only with the money you have. A margin account lets you borrow from the broker and sell short, but it amplifies losses and has its own requirements; in the US, for example, trading on margin requires minimum equity of $2,000. The day trading rules for US margin accounts changed in 2026, so confirm with your broker how it applies them.

Also check:

• That it offers the basic order types: market, limit, stop and stop-limit (a stop order that becomes a limit order once triggered).
• That the platform shows clear charts and works well on your phone, if that's where you'll trade.
• That it has a practice account (demo or paper trading) so you can try it without risking money.
• That customer support answers in a language you're comfortable with and during hours that work for you.

Steps to open your account and move your money

Once you have one or two candidates, the process usually follows these steps:

1. Online application: personal details, country of residence, employment status and source of funds. Answer truthfully: the broker is required to verify your identity and where the money comes from.
2. Experience questionnaire: questions about your knowledge and your goals. In the European Union, these answers determine whether you're allowed to trade complex products.
3. Identity verification: a photo of your ID, recent proof of address and, sometimes, a selfie or video call.
4. Tax forms: the W-8BEN if the account is in the US and you're not a US resident.
5. First deposit: by bank transfer, domestic or international, depending on the broker and your country.

Before you deposit, check three things: which currency your balance is held in, who converts it to dollars and how much they charge, and whether withdrawals only go back to a bank account in your name, which is standard at regulated brokers. Be wary of any intermediary that asks you to deposit in someone else's name.

To withdraw, the path is usually the reverse: you request the withdrawal on the platform and the money reaches your bank in a few business days, minus whatever fees the fee schedule lists. Try this with a small amount at the beginning: it will tell you how long it really takes and how much it really costs to get your money out.

Warning signs of a scam

Fake broker scams are common across the region. Be suspicious if you see any of these signs:

• They promise guaranteed profits or high fixed returns.
• They contact you out of the blue, by phone, WhatsApp or social media, and pressure you to deposit quickly.
• An "account manager" offers to trade for you or asks for access to your account.
• They ask you to deposit in cryptocurrency or into bank accounts held by individuals.
• They don't appear on BrokerCheck, in the CNMV register or in your country's regulator's register, or they appear on a warning list.
• They put up obstacles or hit you with surprise fees when you try to withdraw your money.

A simple rule: make a small deposit first and, before depositing the rest, request a test withdrawal. If withdrawing is hard with a little money, it will be worse with a lot.

Checklist for comparing brokers

Use this list to compare two or three options before you decide:

1. Which legal entity opens my account, and which regulator supervises it?
2. What protection does my money have at that entity, and up to what amount?
3. Does it accept residents of my country, and what documents does it require?
4. How much does a year of use cost me, adding up commissions, spread, currency conversion, deposits, withdrawals and inactivity?
5. Does it offer a cash account, limit and stop orders, and a demo account?
6. How, and how quickly, can I withdraw my money?
7. Does it offer support in my language?

There's no universal "best broker for beginners": the right one is the one that passes this checklist for your country and your capital. If you don't yet know how you're going to trade, start by learning the basics in lesson 1.1 and practice on a demo account before you deposit.