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AARO has held several meetings with financial advisors over the past year or so to discuss access to banking services for Americans residing abroad. We have received mail from members. Most of the mail concerns our members in France, so our information is incomplete for the rest of the world.
We can break the issue into four segments: Within the U.S., Banking and Brokerage services; Local (i.e. non-U.S.) accounts; and Investments.
Within the U.S.
It remains difficult to open or maintain a simple bank (checking) account in the U.S. if you do not have a U.S. address. Many Americans living overseas try to maintain an address with parents, other family, or friends, but this is not a permanent solution and could be considered fraudulent.
However, some banks will still serve us, such as Fifth Third or Capital One. You must be physically present in the bank branch and should have appropriate identification (including U.S. passport and evidence of home address) to open the account. In the case of Capital One, you must also provide a statement from your local (non-U.S. host-country) bank.
These banks usually also offer retail brokerage services, as well.
Members of the American Consumer Council, an organization open to all American citizens, have access to membership in the State Department Federal Credit Union (SDFCU). Based in Arlington, VA, SDFCU provides members with basic banking services. AARO is in the process of establishing a similar arrangement and will inform is members when the final paperwork is completed.
We encourage you to let us know about your experience with these banks and whether other U.S. banks allow Americans living abroad to open accounts.
More and more brokerage services have decided to limit or refuse service to Americans residing overseas, even long-standing customers. The list is long.
All is not lost, though. An industry of asset managers/financial advisors has emerged which can provide brokerage services although usually with significant fees attached; the following list is not complete:
MASECO is a London-based financial advisory service that caters to Americans overseas. The threshold is $1million. Fees start at 1.25% and are reduced with more assets under management. They work through Raymond James. They offer a debit card, but no check-writing. The portfolio is made up of mutual funds, mostly managed by Dimensional. Website: https://masecoprivatewealth.com
Our information is essentially for France. Most banks now require U.S. persons to sign a W-9 form confirming that they are U.S. persons and providing their Social Security number. In many cases, local nationals who were born in the U.S. have been unaware of their U.S. nationality until informed by their bank. These “Accidental Americans” are mobilizing and seeking solutions through both the U.S. and French systems. Some are rushing to get Social Security numbers; others are refusing this imposition of citizenship and the accompanying tax filing obligations.
The European Union guarantees the rights of residents to basic bank accounts. The AARO Banking Committee has received a letter confirming that right will provide it to members if they are being refused a simple account. In France (or if you are French and reside outside France), the Banque de France can offer a solution: obtain formal proof of refusal to open an account (“attestation de refus d’ouverture de compte”) from the bank that has rejected either your old account or your new application. Then go to: www.abe-infoservice.fr., click “Banque” and “Droit au compte” for instructions. A bank should be designated to provide you with basic banking services within a few days.
The major banks are still offering “comptes courant”(checking accounts) and one should have no problem opening a Livret A or any of the accounts that are exempt from a bank’s FATCA reporting obligation. Still, some banks and some branches, even of the major banks, are refusing to deal with Americans. If possible, go to the main branch in Paris or your region.
Problems have been reported with Crédit du Nord, in particular, and some with Société Générale. Even BNP, at local branch level, has refused to take an American. As the OECD Common Reporting Standard is brought into the equation, however, the issue may become less one of discrimination against Americans and increasingly one of refusing accounts to people who do not reside in the country (tax residence).
In Switzerland, Tages Anzeiger reports : “Vontobel, Postfinance and Migros-Bank have never stopped receiving U.S. customers anyway. During discussions and meetings, however, we were also informed by UBS, Credit Suisse, Cornèr Bank and the Cantonal Bank of Vaud, under which conditions they are re-entering this business. We have expanded our offensive. In January 2017, we will publish a list of 24 Swiss banks that will accept U.S. citizens as customers. 19 of them have only started again thanks to my newsletter. I am proud to be able to do this for U.S. citizens.” (http://www.tagesanzeiger.ch/wirtschaft/standard/19-Banken-nehmen-wieder-USBuerger-als-Kunden-auf/story/26115487 and Google translation)
No problems have been reported by Americans in the U.K. We have received some reports of difficulties in Norway and Denmark. In Germany, people in the AARO Facebook group have reported difficulties in opening accounts locally, and having to make day trips to larger cities and supply not just proper ID, but also notarized proof of residence.
There are more complicated issues around investment accounts. Regulations surrounding these are clearly protectionist in character. The banks do not report income as they do on a 1099 form from an American institution. Some investments, mutual funds or funds in a French “Assurance Vie”, for example, are treated as Passive Foreign Investment Companies (PFICs) by the IRS. These can be difficult to report correctly and may be subject to punitive taxation. Some funds might even be forbidden by the U.S., if they are linked to certain countries and the foreign institutions are unaware of these restrictions. The simple solution for these institutions is to refuse service to Americans while most Americans should avoid PFICs.
At the same time, EU regulations have made it difficult for Americans resident in the EU to invest in collective investments, notably mutual funds, in the U.S. or elsewhere outside Europe. As a result, the options offered by the brokerages suggested above are in some cases restricted to cash, bonds, individual stocks and ETFs.
AARO hosted a meeting by Witam for residents of France. At a threshold of €250K, they can offer a U.S.-friendly “assurance vie” and more attractive investments for customers with more to invest. Please refer to the event follow-up report: “Investment Follow-Up with WITAM and WISEAM”
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