U.S. securities are a great investment for NRAs if properly structured. The U.S. has very favorable U.S. income taxation on U.S. securities.
For NRAs there is no income tax on U.S. capital gains, income tax-free “portfolio” interest paid from U.S. sources, and U.S. dividend tax rates reduced from 30% to special rates as low as 15% (depending on county-specific treaty provisions).
NRAs must be aware of the U.S. estate tax exposure of 40% on all investments in U.S. securities directly held by the NRA. The estate taxes are easily avoided by transferring the U.S. securities to an offshore entity. The offshore entity is typically owned by a South Dakota Foreign Grantor Trust, consequently providing all the non-tax advantages of a South Dakota Foreign Grantor Trust in addition to favorable U.S. tax consequences for U.S. securities.