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Why it’s difficult for expats to invest


Americans who move overseas find themselves with limited options for investing their money. The IRS follows you abroad, requiring that you report your worldwide income and offshore assets. No other country, other than Eritrea, taxes you on worldwide income.

Brokerage firms

Expats who invest in their host country are subjected to the Foreign Account Tax Compliance Act (FATCA) which increases complexity for the taxpayer. The brokerage firm holding your investments is also subject to these rules and they have been known to close Americans’ accounts to avoid the complexity and legal risk.

Expats may choose to leave their money in the U.S. The U.S. brokerage firm housing your investments may not accept your foreign address, forcing expats to give mistruths about their whereabouts. Accounts have been closed in these situations. It’s necessary to work with a firm that will accept your foreign address.

Investing choices

Accessing professional investment management overseas is expensive and subjects the expat to FATCA and other reporting requirements. U.S. mutual funds are another form of professional management and are not allowed due to the Anti-Money Laundering rules established by the Patriot Act^1. Self-direction of your investments by using stocks, bonds, and exchange-traded funds (ETFs), is a compliant and a possible way to invest.

At Eureka Wealth Management, I offer the professional management of your investments while you’re abroad. I use a global investment platform that accepts your foreign address and issues 1099 tax forms each year for the most simplified tax experience. Advice is also given on your assets, liabilities, retirement, and insurances. For more information, please call +1 (760) 537-0791 or visit eurekawealthmanagement.com/expats.

Sources:

https://www.investopedia.com/advisor-network/articles/022817/how-invest-while-living-abroad-expatriate

https://www.cnbc.com/2015/05/21/americans-working-abroad-face-unexpected-financial-issues.html

https://www.kiplinger.com/article/retirement/T037-C000-S004-how-to-manage-your-money-if-you-retire-abroad.html

^1 https://www.sec.gov/about/offices/ocie/amlmf/67fr21117.pdf

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©2020 BY EUREKA WEALTH MANAGEMENT.

Eureka Wealth Management is a registered investment adviser in the State of California. The adviser may not transact business in states where it is not appropriately registered, excluded or exempted from registration. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities or investment advisory services. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.