How to Invest as an American Expat

U.S.-Based Investments

Many Americans living abroad prefer the peace of mind that comes from keeping their investments in the United States. The biggest challenge, however, is finding a U.S. custodian willing to work with clients who have a foreign address. This is by far the most common issue we see at Renascence & Partners. As a result, we have built relationships with reputable custodians who accept Americans living overseas.

Individual or joint brokerage accounts:

A brokerage account is a straightforward investment account that provides access to a wide range of options, including U.S. stocks, bonds, and ETFs. While these accounts do not offer the tax advantages of retirement accounts, they can be held individually or jointly, and there are no limits on contributions or withdrawals.

Retirement accounts:

There are several types of retirement accounts available. If you currently work or previously worked for a U.S. employer, you may have access to a company-sponsored plan such as a 401(k) or SEP IRA. In addition, many Americans can save through non-qualified accounts like an IRA. Retirement accounts offer valuable tax benefits designed to help you build long-term savings for the future.

Key Tax Considerations

While investment opportunities exist both in the U.S. and abroad, the most important consideration is whether those investments are tax-compliant, particularly with the IRS.

U.S. tax obligations:

U.S. citizens are taxed on their worldwide income, regardless of where they live. Although foreign tax credits may reduce double taxation, filing a U.S. tax return is still required. This can become complicated when holding investments that do not issue a 1099 form—such as many foreign investment accounts—since you must track dividends, interest, and other income yourself. U.S.-based accounts typically provide the necessary tax documents, simplifying the filing process.

PFIC rules:

The IRS’s Passive Foreign Investment Company (PFIC) rules have been a major hurdle for many Americans living abroad. Investments classified as PFICs can trigger unfavorable tax treatment and extensive reporting requirements. This is one of the main reasons Americans are generally advised to avoid investing in foreign funds.

Can I Invest in the U.S. with a Foreign Address?

As noted earlier, many U.S. banks and custodians are hesitant to accept clients with a foreign address, leaving expats with limited options. Some investors attempt to use a family member’s U.S. address, but regulators and institutions have increasingly cracked down on this practice. At Renascence & Partners, we work with custodians who accept Americans living overseas, even if you later relocate to another country or return to the U.S.

What’s the Best Way to Invest as a U.S. Expat?

Working with a qualified and experienced cross-border fiduciary advisor is essential. An advisor can help you develop tax-efficient investment strategies tailored to your goals, time horizon, and risk tolerance. With thoughtful planning and professional guidance, you can manage your investments effectively and build long-term financial security as a U.S. expat.

Peace of Mind with Renascence & Partners’ Cross-Border Investment Solutions

Renascence & Partners is proud to deliver a high standard of fiduciary services. Our cross-border advisors have the expertise to help U.S. expats make informed financial and investment decisions while staying compliant with all applicable regulations.

#Asia #USExpats #USExpatInvesting