says while it is nearly impossible to predict returns broad capital market theory throws up these numbers 3 and 3 from us treasuries 712 from low quality corporate debt and 515 from equitiestax impact a very critical aspect of investing in the us is the tax implication and there are two types of taxes to keep in mind income tax and estate tax for tax purposes the term used by the irs to refer to foreign investors who do not live in the us is non resident alien below are some rules regarding estate tax and taxation on interest dividends and capital gainsestate tax the us has very unique estate tax rules applicable to its citizens and residents as well as non residents this tax is payable by the heirs from the estate of a deceased individual and can be as high as 55 the tax can arise by way of any contact in the us either by spending time in the us or by investing in us assets so your us assets would be subject to estate tax when they are passed on as inheritance opening a joint account spouse may not help save estate taxes there are very few estate tax exemptions available for nonus persons the tax is usually based on contribution basis so if it can be shown that the surviving account holder contributed to the value of the joint asset the amount of such contribution will not be taxed otherwise the irs presumes that if there are joint owners of property all of its value should be subject to tax at the death of the first joint owner explains parag patel a tax attorney at new jersey based law firm patel law offices if you plan at an early stage you can save significant taxes sharma says adding nonus high net worth investors may want seek legal advise to set up offshore trusts in order to invest in us markets in addition they may want to consider investing in offshore mutual funds to avoid tax withholding on interest and dividend incomeinterest income if the interest income is paid by a us bank a us savings loan company a us credit union or a us insurance company to a nonresident alien it is nontaxable and non reportable no 1099 or 1042s reporting unless the interest income is effectively connected with a us trade or business if the interest income is portfolio interest and earned by a nonresident alien then the interest income is reportable on form 1042s but nontaxable as a resident of india you would need to pay taxes in india on your global income this income would be taxed in indiadividend income if the dividend income is from a us source and paid to a nonresident alien it is reportable for any amount in excess of zero and the withholding tax rate would be at 30 in case of a tax treaty a lower withholding tax rate would apply according to the indiaus