A:

There is no law that prevents Canadians from participating in direct stock purchase plans offered by U.S. companies. There are also no laws preventing Canadians from participating in dividend reinvestment plans (DRIPs) offered by U.S. companies. However, if these plans interest you, be advised that the U.S. company in question must allow foreign participation in the direct stock purchase plan or DRIP in order for you to participate.

Pfizer (NYSE: PFE) has both a dividend reinvestment plan and a direct share purchase plan, and at the time of writing (January 2006), it allowed Canadian residents to participate in both of these programs. Non-U.S. citizens should be certain that participation in a U.S. company's direct share purchase plan or its DRIP does not violate U.S. law or the laws of their home country. It is impossible to check every international law regarding share purchase, but laws that could potentially be violated include those involving matters of local and international tax, foreign currency exchange, stock registration, foreign investment, money laundering, trade embargos, and so on.

If you are in doubt about your government's regulations governing participation in direct share purchase plans or DRIPs in a particular country, you should contact your respective taxation authority and any other government bodies concerned. To find out whether a company has a direct stock purchase program or a DRIP that allows foreign participation, check with the company's investor relations department, shareholder services agent or transfer agent.

For more information, read The Perks Of Dividend Reinvestment Plans and What is a DRIP?

RELATED FAQS

  1. What kinds of costs are included in Free on Board (FOB) shipping?

    Find out about free on board shipping, the obligations of parties involved and the costs parties must assume in free on board ...
  2. Why would a country's gross domestic product (GDP) and gross national income (GNI) ...

    Understand the economic metrics, gross domestic product, or GDP, and gross national income, or GNI, and why the two evaluations ...
  3. What types of companies benefit from reporting results utilizing constant currencies ...

    Understand constant currency figures, and explore some of the reasons why a company is likely to benefit from reporting using ...
  4. What are the differences between B-shares and H-shares traded on Chinese stock exchanges?

    Learn about B shares and H shares of publicly listed companies in mainland China and Hong Kong stock exchanges, and the differences ...
RELATED TERMS
  1. Poison Put

    A takeover defense strategy in which the target company issues ...
  2. Enterprise Investment Scheme (EIS)

    A UK program that helps smaller, riskier companies to raise capital ...
  3. Assented Stock

    A share of stock owned by a shareholder who has agreed to a takeover.
  4. Back-End Plan

    An anti-acquisition strategy in which the target company provides ...
  5. Voting Poison Pill Plan

    An anti-takeover strategy in which the company being targeted ...
  6. Record Date

    The cut-off date established by a company in order to determine ...

You May Also Like

Related Articles
  1. Stock Analysis

    Is Smaller Better When Investing Overseas?

  2. Entrepreneurship

    Comparing Impact Investing & Venture ...

  3. Stock Analysis

    Google Stock: A Tale of Two Share Classes

  4. Economics

    Gaining Market Influence-- The Case ...

  5. Fundamental Analysis

    Can You Invest in China's Huawei?

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!