How to buy US shares in the UAE

Below are the steps you need to follow to invest in US shares with us¹:

Why would you buy US shares?

You may want to buy US shares because North America is home to the biggest stocks in the world. The United States accounts for more than 40% of the global stock market,² making it a popular investment choice.

Generally, US shares tend to attract a lot of interest around factors such as share price performance, new developments, economic reports and market sentiment. Depending on how they’re performing, you’d buy and own US shares in hopes that their value would be higher at some point in the future.

If the value appreciates over time, you can sell the shares for a profit. The opposite is also true. If the value depreciates over time, you’ll incur a loss.

Some investors buy US shares to earn a passive income in the form of dividend payments if the company grants them. The dividends can be reinvested into the company meaning you buy more shares in the stock effectively at no extra cost.

The popularity of American stocks, which spans across different sectors, also attracts global investors looking to diversify their portfolios. It may be difficult to buy shares in every listed US company. However, you can get exposure to SP500 ETFs that track a basket of shares through a single position.

You’ll have to monitor factors that may cause the US market to go up or down. Some of these macroeconomic factors include wars or other conflicts, changes in inflation and interest rates, supply and demand, government fiscal and monetary policy, natural disasters or extreme weather events, as well as regulation or deregulation.

Before you buy shares or ETFs, it’s important that you do your research as part of your own due diligence. You can do that through both fundamental and technical analysis to assess the asset’s historical share price performance and to get a sense of how the price action might likely fare in the future. But remember, past performance does not guarantee future performance.

Over the last 25 years, US shares, as a whole, have performed relatively well. The average total yearly returns (including dividends) of the S&P 500 from 1996 to early-2024 is around 10% in nominal terms, or 7.5 % in real terms – in line with historical results. You could choose to invest in individual shares within the S&P 500 or invest in an ETF which tracks all those shares in a single position. With ETFs, you’re diversifying your exposure and spreading your risk – which may be less volatile than a single stock.

That’s because if a single stock underperforms, the rest of the basket may perform considerably better to counterbalance the drop – this isn’t possible in an individual company investment.

For example, a look at an index like the Standard & Poor's 500 (the US 500 on our platform), which comprises of 500 of the largest US companies can support your decision whether or not to get exposure. Historical data shows that the S&P 500 appreciated in value over a 25-year period and peaked at a return of 370%.

Note that past performance is no guarantee of future results.

Why buy US shares with us?

Below is a list of the key reasons to consider buying US shares.

• Low costs and best possible price: You won't find lower commissions on US shares anywhere else. Enjoy zero commission and no forex conversion fees on US shares for up to 100 trades per month with our stock trading account³
• Wide range of shares to choose from: Pick from more than 10,000 leading global shares available on our platform to buy and hold
• 24-hour support: Contact us via email, phone, live chat or WhatsApp to get in touch with our knowledgeable support team around-the-clock
• Ease of access with mobile app: Open, monitor and close your positions from anywhere using our interactive mobile app
• Out-of-hours: Experience our unique offering and seize the opportunity to invest. We offer after-hours trading on US shares via our stock trading platform and 80+ key US shares outside of the main trading session with CFD trading
• Execution speed: Use our award-winning platform⁴ to take advantage of our fast execution speed to get the best price

5 steps to buying US shares in the UAE

1. Open a stock trading account
2. Complete a W-8BEN form
3. Learn about the risks and charges
4. Find your preferred US shares
5. Buy US shares
    

1. Open a stock trading account

You'll need to open a stock trading account with us to be able to buy US shares on our platform. For convenience, you can choose whether you want to open your investment account through our website or mobile app.

After you complete the application process, you can fund your account whenever you're ready to start buying US shares. We have more than 10,000 popular shares and ETFs to choose from. You'll need to do your research on the shares you want to get exposure to before you open a position.

Open a stock trading account with us

2. Complete a W-8BEN form

As part of the requirement for buying US shares, you must complete a W-8BEN form. This condition is stipulated by the American Internal Revenue Service (IRS). You can complete the form online – there's no need to download it. The purpose of the W-8BEN form is to confirm that you're not a US resident.

3. Understand the risks and charges

When you buy US shares via your stock trading account, you'll need to put down the full value of the position size upfront to get exposure. We don't charge commission on all US shares up to 100 trades per month.³ Other costs may apply

4. Find your preferred US shares

You can choose from hundreds of popular US shares, such as Amazon, Tesla Motors, Meta Platforms, Apple and Alphabet. Finding your preferred shares is made simpler by our 'finder' panel. All you have to do is enter the names of the US shares you want to buy and search.

Our stock trading platform also provides investors with key market insights and tools that you can use to support your decision to buy a particular share. These include trading charts, signals, alerts, client sentiment, technical indicators and analytics.

5. Buy US shares

To buy US shares, you must ensure that your account is funded. You can do that by opening your stock trading account online or on our trading app and depositing your funds. To gain access to the platform, you'll log in to input your username and password. Then, head over to the finder panel and search for the shares you want to buy.

Thereafter, you'll choose whether you want to buy the shares at the current market price or if you want to set an order to buy the shares at a specified price. A limit order, for example, sets the price you're happy to pay and executes automatically when the price level is hit.

5 factors to understand before investing in US shares

To ensure you make an informed decision on which shares you back, we've compiled a few factors you need to consider before investing in US shares:

1. Learn about US stock market indices
2. Company earnings' release times
3. Market opening hours
4. W-8BEN form
    

1. Learn about US stock market indices

Instead of buying a single US share, you can track the performance of a group of shares from an exchange. You can do this in one position by trading indices – they give you exposure to an entire economy or sector through a single position. This asset class provides better security against market risk compared to a single share.

With us, you'll trade an index using a contract for difference (CFD), which is a financial derivative that enables you to speculate on the price of its underlying asset without owning the asset. Using a CFD trading account with us, you can get exposure to indices that track some of the most popular US shares, including the DJIA (Wall Street), NASDAQ 100 (US Tech 100), and S&P 500 (US 500).

When trading CFDs, you'll go long if you think that the market price will rise – if you think it'll drop, you'll go short. If the market moves in your favour, you'll make a profit; if it doesn't, you'll incur a loss. CFDs are leveraged derivatives – this means that you can open a position and get full exposure by paying only an initial deposit called 'margin'. Trading with leverage amplifies both your potential profits and losses to the full value of the trade, and losses might exceed your initial deposit. So, it's important that you manage your risk.

Some investors may seek specific exposure, such as US value in the form of an ETF rather than just generic indices exposure. A popular choice is the iShares Edge MSCI USA Value Factor UCITS ETF, which tracks the investment result of an index that consists of US large- and mid-capitalisation shares. With us, you can buy and hold ETFs through stock trading. Alternatively, you can trade them via CFDs, without owning any shares in the ETF.

2. Company earnings' release times

Generally, US companies release their earnings reports after the market closes. This is done to provide investors with an opportunity to analyse the results, and subsequently take a position supported by the findings.

It's important to do thorough research on a company before buying shares in it. This involves using both fundamental and technical analysis. With fundamental analysis, you'll evaluate a company's value by assessing economic and financial factors, such as its balance sheet and management forecasts as well as macroeconomic indicators. When you use technical analyses, you'll study historical chart patterns and formations to predict the future price direction of a particular share.

3. Market opening hours

The period in which you buy US shares is also important because it determines the price and charges you'll have to pay. You can trade after-hours on US shares via our stock trading platform or get exposure to over 70+ US shares before the market opens, during the main session and after hours.

You'll need to take steps to manage your risk, as taking a position pre-market or post-market and during weekend trading carries a certain level of risk because of low liquidity, wider spread and high levels of volatility

4. W-8BEN form

You can't invest in US shares without completing a W-8BEN form. As a UAE resident, you're required to fill in the W-8BEN form to declare that you're not a US taxpayer. After completing the form, you'll be eligible to receive reduced withholding tax rates on dividends earned from the US shares you buy.

Find out more about filling in a W-8BEN form on our platform

FAQs

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¹ When investing with us, you’ll do so via our stock trading platform. This means that we manage, hold and safeguard securities you choose to buy and sell on your behalf. You’ll be entitled to dividends if any are paid, and granted shareholder rights if applicable.
² Visual Capitalist, 2023.
³ Other fees and charges may apply, please refer to our stock trading charges and fees page.
⁴ Best Finance App, Best Multi-Platform Provider and Best Platform for the Active Trader as awarded at the ADVFN International Financial Awards 2024.