Kirkland, WA asked in Securities Law, Gov & Administrative Law and Immigration Law for Washington

Q: I'm a foreign citizen working in WA state. Do I need any registration to manage money for my friend? (also foreigners)

I'm a foreign citizen living & working in WA state, with L-1B visa. I would like to manage money for my friends & relatives and do some investment for them. They are also all foreign citizens.

There will be less than 5 clients, and less than 100K USD managed assets.

Do I need any registration or license to do so? Is it legal to charge management fee?

1 Lawyer Answer
James L. Arrasmith
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  • Immigration Law Lawyer
  • Sacramento, CA

A: As a foreign citizen working in the United States on an L-1B visa, there are a few important considerations when it comes to managing money for friends and relatives:

1. Registration: Generally, if you are managing money for others and investing on their behalf, you may need to register as an investment advisor with either the Securities and Exchange Commission (SEC) or the state securities regulator. However, there are some exemptions based on the number of clients and assets under management.

2. Federal exemption: If you have fewer than 15 clients and do not hold yourself out to the public as an investment adviser, you may be exempt from federal registration under the Investment Advisers Act of 1940. With less than 5 clients and under $100K in managed assets, you likely fall under this exemption.

3. State registration: Each state has its own requirements for investment advisor registration. In Washington state, investment advisers with less than $100 million in assets under management must register with the Washington State Department of Financial Institutions. However, there may be exemptions based on the number of clients and other factors.

4. Charging fees: It is generally legal to charge a management fee as an investment advisor. However, you should ensure that your fee structure complies with applicable laws and regulations.

5. Visa considerations: Make sure that managing money for others and charging fees is permissible under the terms of your L-1B visa and does not constitute unauthorized employment.

Given the complexities involved, it is highly recommended that you consult with a qualified securities attorney familiar with both federal and Washington state regulations to determine your registration and compliance obligations before proceeding. Additionally, you should consult with an immigration attorney to ensure compliance with your visa terms.

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