In this article, we’re exploring what is a “nonresident alien”, meaning an individual who does not have residence in a specific country.
This will also include a close assessment of foreign financial services for nonresident aliens. Of course, we will provide a comparison to resident aliens and answer common questions we receive on the topic.
This article is part of our free series on opening an offshore bank account for non-residents and foreigners, which you can access here.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Nonresident Alien Meaning
- Nonresident Alien vs Resident Alien
- Frequently Asked Questions
- Do You Want Help Opening a US Bank Account?
Nonresident Alien Meaning
Nonresident alien, meaning an individual that does not have residency in a specific country, often receives this label when attempting to carry out a specific action. For example, individuals looking to open bank accounts, access mortgages, or obtain a credit card in a country where they do not reside are nonresident aliens.
That said, the term nonresident alien also applies for immigration purposes. Similar to banking and financial services, in the world of immigration, nonresident alien refers to an individual who does not have a right to reside in a country.
However, being a nonresident does not mean that a person cannot enter a country. Importantly, if you are a nonresident alien in a country and want to better understand any restrictions that impact your ability to enter, you should consult the related country’s immigration information directly.
Non-Resident Alien vs Resident Alien
The main difference between a non-resident alien and a resident alien is that a non-resident alien does not have permission to remain in a country permanently while a resident alien does have permission to remain in a country permanently.
Additionally, non-resident aliens and resident aliens have different tax regimes applied to their domestic earnings. For example, resident aliens are typically subject to the same tax as citizens while non-resident aliens may only be liable for domestic sourced income if they are liable for any tax at all.
If you are trying to better understand your tax obligations in a specific country you should consult a qualified tax professional to better understand the requirements.
What Is a Resident Alien?
Resident alien is an individual who has the right to remain in a country indefinitely. They are free to travel in and out of a country, obtain employment in a country, and are liable to pay taxes in the country.
What Are Nonresident Aliens?
Nonresident aliens are individuals who do not have the right to remain in a country indefinitely. Their ability to enter and stay in a country will have restrictions, depending on their place of residence and citizenship. Likewise, they are generally not allowed to obtain local employment. That said, they may be taxed on earnings generated locally, depending on the country.
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Frequently Asked Questions
Below are a few of the most common questions we receive from people looking into the meaning of a nonresident alien. If you have further questions you would like to ask our team, don’t hesitate to get in touch.
How Do I Know If I Am a Resident Alien or Nonresident Alien?
You will know if you are a resident alien or a nonresident alien if you have a legal right to remain in a country, as set forth in the immigration laws of the country. Importantly, individuals are resident in countries where they have a legal right to reside. However, they are also nonresident in any country where they do not have a legal right to reside. In other words, an individual may be a resident alien in one country but they are also a nonresident alien in another.
Is a Nonresident Alien a US Person?
No, a nonresident alien is not a US person in the United States. Instead, the United States defines a nonresident alien as a non-US citizen who does not have a legal right to reside in the country. In other words, to be a nonresident alien in the United States you need to both be a foreign and live in a foreign country.
Is a Green Card Holder a Nonresident Alien?
No, a green card holder is not a nonresident alien. If an individual holds a green card, they are a resident alien for the year in which they meet those requirements. That said, it is possible for an individual who previously held a green card to become a nonresident alien in the future.
Can Nonresident Aliens Work?
Whether a nonresident alien can work will depend on the specific country. For example, in the United States, nonresident aliens can typically work after they receive specific approval and pass certain verification processes. That said, other countries impose stricter rules and only allow resident aliens and domestic citizens to work.
Do You Want Help Opening Bank Accounts?
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And “yes!” GlobalBanks Insider is designed to help foreign and non-resident individuals and companies open bank accounts.
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