Investment transfer - US to Canada

If you have lived for several years in the US, chances are that you also have investments in financial institutions like Fidelity Investments, Vanguard etc. We are referring to the non-retirement investment accounts and not retirement plans like 401K, IRAs etc. In this blog we are referring to non-retirement, investment account where you might have stocks, ETFs, mutual funds or fixed income instruments like bonds, CDs. When we were planning to immigrate to Canada, very few people knew anything about transferring assets. Online research didn't give us good results. Hence the blog! If you decide to immigrate permanently from the US to Canada, here are few things that you should know.

Can you keep your investments in the US?

1. If you are not a US resident then you cannot maintain your investment account in the US long term.  You should plan to move your investments to Canada. 
2. If you have resided in the US for part of the year then you would be paying US taxes. 
3. You can fill out the W8 form that states that you are no longer a US resident.
4. Change your address so that your communications are not sent to your old address.

Some facts

1. You can trade on major US exchanges like NYSE, NASDAQ etc.
2. You can buy and sell securities in USD currency.
3. You can have a investment account in Canada with the following features -
• You could buy securities on US exchanges in USD currency.
• You could buy securities on Canadian exchanges in CAD currency.

What investments can be transferred to the US?

You don't have to sell ALL your US investments and transfer the proceeds to your Canadian account. It is possible to retain some of the investment types and the rest unfortunately have to be liquidated.

1. Stocks, ETFs and bonds can be transferred from your US brokerage firm like Fidelity to a Canadian investment firm like Questrade.
• Your Canadian investment firm should also hold that security. For example, if you had FB stock in your US investment firm like Fidelity and are trying to transfer it to Questrade i.e. Canadian investment firm then you can only do it if Questrade holds the stock. Usually the popular stocks and ETFs are held by all major firms. 
• If the Canadian firm doesn't hold it then you can either liquidate it or try to find another firm that holds the security.
2. Mutual fund securities are something that you wouldn't be able to transfer.
• The prospectus for most US mutual funds usually states that account owner resides in the US. That is why the US mutual funds typically cannot be transferred to the Canadian investment firm.
• You typically need to liquidate mutual funds and transfer the proceeds to the Canadian investment firm.

What is usually the process?

1. You have to initiate the transfer of assets process via the Canadian investment firm. 
1. Depending on the Canadian investment firm you choose, you will be able to e-sign and apply or send paperwork manually to allow the transfer. More on how to choose a good Canadian investment firm!
2. If you have stock, ETF and bonds then you could list them and have them transferred in kind.
3. Your Canadian investment firm will send the request to your US investment firm and they may reach out to you for confirmation.
4. Once confirmed, the securities will be transferred to you in kind.
• You should have the record of the transaction in your US and Canadian accounts.
• Since you are dealing with USD currency all the way there should not be conversion.
• You just need to ensure that the quantity is correct. In other words if you had 10 shares of FB trading on NYSE then 10 should be transferred.
5. If you wish to liquidate the securities then the US firm typically could do it for you. The proceeds can be transferred to your Canadian firm.
6. It usually takes about a month for the end-to-end process. 
7. Transfer didn't have charges from the Canadian firm but the US firm did charge a nominal fee of 10 USD since we were transferring partial quantity. 
8. Some Canadian firms also give a rebate if you transfer more than 25000 USD.
9. All this transfer process was online. But if you choose an investment firm where the process isn't online, you might have to mail the application and it might take longer.

Hope this gives you relief and information on transferring assets. You need to be patient for this process but the result is worth it because you would ultimately have all your investments in Canada and tax filing would be simplified for future years. For the 1st year, you might have to do both US and Canada taxes because you might most likely have resided in both countries but the subsequent years would just be Canadian taxes!

Disclaimer - We are only stating our experience and recommending based on the research we did. We are not financial advisors and are not marketing for any financial firm.

You may also be interested 

1. How to open a Canadian bank account? Read along.
2. Basics of Canadian banking