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I am looking for some advice on how I could accomplish this:
Consider a Person A living in Europe, and having no US citizenship, visa or plans to ever travel there. I am being asked to invest A's savings for him in the US, and pay him a monthly fixed amount from the gains - basically become his in-official 'trust-keeper'.

  • He is not able to do it himself (assume he would blow the money or make bad decisions, whatever). By me handling it, he would not have access to the account without going through major efforts.
  • There are no do-you-trust-him considerations; ignore those. Assume there is full trust from both sides. Also I am not responsible for the performance; if the money runs out, it runs out.
  • The money is 'clean', the sources are well-known and provable, there is nothing fishy about it.
  • I am perfectly willing to file taxes for him and pay (from his money) what is due for any gains.
  • I'd rather not merge it with my money, or even invest it separately under my name, as I would have to pay higher taxes for the gains, and the transfer would look like a taxable 'gift'.
  • I don't know enough about formal Trusts to understand if this would be a good option.
  • Obviously, I look for 'cheap' solutions.
  • the point is not to invest in US shares, but handle the investment in the US

It seems difficult if not impossible to invest in the US under his name - he doesn't have an SSN or ITIN, and no legal basis to apply for one, so the typical candidates (Vanguard, Fidelity) don't offer accounts for him.

How can I set this up? What is a legal way to deposit and invest money for someone else, in the US, controlled and handled by me?

[If you think 'Why in the US?': Simple, I am living in the US. Any other country would in principle work too, but seems even worse; I have the additional issue of not being a resident there, and not having the respective thing of SSN/ITIN, and I wouldn't know how to file taxes there, etc. So assume - for this question - the US location is a given.]

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    Why not invest it in his name in his own country of residence, but with you having access to the online accounts so that you can manage the investments for him? – Mike Scott Jul 7 '18 at 19:32
  • @MikeScott, it's an option I considered, but as US citizen, i have to report such access, and more importantly, he would have to file taxes (he's not really able to, and I don't know well enough how this works there). It is still on the table, if I don't find a way to handle it in the US. – Aganju Jul 7 '18 at 19:35
  • I once did something like this with a close friend. Though a US citizen, it had to remain off the books. It was not a huge amount of money. Similar to your description, other than one detail, everything was legit there was full trust between us. He "loaned me the money" and the agreement was that if his gains or losses caused a change in my tax liability then we'd adjust his pay out by that amount. This may be a half fast suggestion but its simplicity enabled us to do what we wanted to do. And FWIW, this was small compensation for acts made on my behalf during a difficult time in my life. – Bob Baerker Jul 7 '18 at 21:46
  • @BobBaerker , I am considering this option too. it's easy to know the exact impact - when I file my taxes, I note the total tax I owe, and then delete the lines that are his, and immediately see the difference to the cent. – Aganju Jul 8 '18 at 0:02
  • The simple answer is "No, of course not.". – Fattie Jul 8 '18 at 14:30
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You are likely to find that acting as an agent to invest other people's money for them and return them an income is a regulated activity.

If so, it could be extremely burdensome for you to meet all the regulatory requirements, acquire any needed qualifications, pass any necessary tests, arrange for any necessary ongoing audits, make all the ongoing periodic reports and filings and so on.

It may not be economically feasible to do all this for a single client.

  • It's not the answer I was hoping for, but it explains why there can't be a good one. thanks. – Aganju Jul 10 '18 at 1:52

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