so many issues for US expats ... would forming an investing LLC in the US help?

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DouroBound
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so many issues for US expats ... would forming an investing LLC in the US help?

Post by DouroBound »

I haven't researched this at all, so I'm likely missing something obvious.

There have been a number of posts lately by American expats (myself included, though it's clear I am not alone wrestling with this) on the myriad challenges they face in trying to invest while overseas. Yesterday's thread by mcc57 suggests that one of options that has seemed to be favored by some (Schwab) may be closing its doors to certain Americans.
mcc57 wrote: Mon Aug 05, 2019 2:51 pm I'm a US citizen but have been living in Italy for the last few years years. I've had a Schwab account for the longest time. When I moved to Europe a few years back, Schwab warned me that - as a result of my move - I could no longer make certain investments (such as mutual funds), but could certainly invest and trade ETFs.

All of this has worked fine until today I received a phone call from Schwab informing me that AS OF SEPTEMBER 2019, as a UE resident I will NO LONGER be allowed to invest and trade ETFs.

Has anyone else experienced this or heard of this?
As I indicated in a previous post, I've been told by Fidelity reps that my taxable account should remain open and allow trading in ETFs after I move to the UK, but I have zero confidence that this (1) is actually true, or (2) if true, will remain true. Past posts have suggested that keeping a US address (friends and family) is a workaround, but this is not appealing to many who wish to be completely transparent, and it also seems to be ending as firms ramp up scrutiny (and there may be undesirable state tax effects as well).

So I'm trying to think of options. Has anyone looked into setting up a US LLC (I guess ideally in a no-tax state) to hold taxable investments? To be clear, the intent here would not be any kind of tax-avoidance, US or foreign. It just occurs to me that a trading account in the name of a US LLC might prevent account closure (and trading restrictions). I'm sure it would add substantially to compliance costs, but I'd be willing to bear those (within reason) if it offered a clear legal path to maintaining investments while overseas.
Pirate
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by Pirate »

No experience with US taxes or setting up US companies. But if I recall correctly, a US LLC is a fiscal transparant structure. That means that tax is due directly to the person operating the company. As a US citizen and an Italian resident this means both countries. But this might solve the problem with the PRIIPs regulation.
nalor511
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by nalor511 »

If you file a corp tax return instead of passing it through to your individual 1099, presumably you'd pay the Corporate tax rate (21%?), which does not receive any favorable tax treatment for LTCG/Dividends, that individuals ordinarily receive (0%/15%). I know this is what happens with non-grantor trusts that supposedly shield assets (you pay a heavy tax penalty)
cbeck
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by cbeck »

Under no circumstances should you alert your brokerage or bank that you live abroad. Some of them like Fidelity and VG may very well close your account immediately, although experiences do vary. It has happened to me. Therefore the only prudent way to manage it is to take these steps:

1. get a mail forwarding service and change your addresses at all institutions, except the SSA, to the forwarder's address for you. None of them will complain.

2. Make sure you have a US phone number such as Google Voice or some VOIP service and update your records with all banks and brokerages to this number. GV provides SMS service which is valuable.

3. Use a vpn so that when you login to your banks and brokers they see a US ip address. If you can arrange a vpn that terminates at a friend's address in the US, that would be the best.

4. Do not do any money transfers to or from your brokers that references your foreign bank. Do those with your bank and then an addition hop to or from the broker.

I know of only one US bank/credit union that will knowingly open an account for an expat, State Department Federal Credit Union. For this and other reasons they are my preferred bank these days.

You can't deal with your brokerage in good faith, because even if they don't close your account immediately when they become aware of your expat status, they may do so in the future after the next 9/11 type incident, for example. You have to be careful not to generate a trail of activity that will arouse their interest at such a time.
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typical.investor
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by typical.investor »

DouroBound wrote: Tue Aug 06, 2019 1:37 pm Yesterday's thread by mcc57 suggests that one of options that has seemed to be favored by some (Schwab) may be closing its doors to certain Americans.
mcc57 wrote: Mon Aug 05, 2019 2:51 pm I'm a US citizen but have been living in Italy for the last few years years. I've had a Schwab account for the longest time. When I moved to Europe a few years back, Schwab warned me that - as a result of my move - I could no longer make certain investments (such as mutual funds), but could certainly invest and trade ETFs.

All of this has worked fine until today I received a phone call from Schwab informing me that AS OF SEPTEMBER 2019, as a UE resident I will NO LONGER be allowed to invest and trade ETFs.

Has anyone else experienced this or heard of this?
I don't see any indication of Schwab closing it's doors.

Mutual Funds by regulation have never been for non-US residents. It's true that that was ignored for a long time by many in the industry but tightening of rules in recent years have triggered enforcement.

Schwab seems committed to offering it's international account where it is allowed. If the EU doesn't allow it's residents to purchase US traded ETFs, then those are EU rules. I guess it makes no difference to those who are unable to invest, but it's not that Schwab and Interactive Brokers don't want your business. They have to follow international agreements.
DouroBound wrote: Tue Aug 06, 2019 1:37 pm Has anyone looked into setting up a US LLC (I guess ideally in a no-tax state) to hold taxable investments?
Nolo seems able to set one up for $99 + state fees. A US address is required. If you have a US address, why not simply open a brokerage account at that address. If you don't have a US address, you could use a registered agent at $49 or so per year.

Not 100% sure on taxation, but I believe income will "pass through" to your personal tax return unless you incorporate.
Last edited by typical.investor on Tue Aug 06, 2019 8:41 pm, edited 1 time in total.
AlohaJoe
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by AlohaJoe »

cbeck wrote: Tue Aug 06, 2019 7:56 pm 2. Make sure you have a US phone number such as Google Voice or some VOIP service and update your records with all banks and brokerages to this number. GV provides SMS service which is valuable.
An increasing number of banks have blocked VOIP numbers and the trend is likely to continue, so this is no longer a viable choice. You need to keep a U.S. SIM, probably in a secondary phone, and pay monthly fees for the rest of your life. You can find lots of complaints on the Google Voice forums from people oversees who have suddenly lost access to the bank accounts when the bank stopped working with VOIP providers.
Topic Author
DouroBound
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by DouroBound »

AlohaJoe wrote: Tue Aug 06, 2019 8:19 pm
cbeck wrote: Tue Aug 06, 2019 7:56 pm 2. Make sure you have a US phone number such as Google Voice or some VOIP service and update your records with all banks and brokerages to this number. GV provides SMS service which is valuable.
An increasing number of banks have blocked VOIP numbers and the trend is likely to continue, so this is no longer a viable choice. You need to keep a U.S. SIM, probably in a secondary phone, and pay monthly fees for the rest of your life. You can find lots of complaints on the Google Voice forums from people oversees who have suddenly lost access to the bank accounts when the bank stopped working with VOIP providers.
Good to know. Thanks for the heads up. I don't think it would be too bad to keep a secondary phone through Google Fi if Google voice is no longer an option. Thought I'd flag that in case others hadn't heard about it. I use it and it seems to work pretty well for me overseas, plus it's cheap.
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DouroBound
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by DouroBound »

typical.investor wrote: Tue Aug 06, 2019 8:19 pm
DouroBound wrote: Tue Aug 06, 2019 1:37 pm Has anyone looked into setting up a US LLC (I guess ideally in a no-tax state) to hold taxable investments?
Nolo seems able to set one up for $99 + state fees. A US address is required. If you have a US address, why not simply open a brokerage account at that address. If you don't have a US address, you could use a registered agent at $49 or so per year.

Not 100% sure on taxation, but I believe income will "pass through" to your personal tax return unless you incorporate.
I will not have a US address after I move, and I don't think using a friend or family member address will be a good long term solution. I once did that for a short stint in Europe, giving an address of a friend who live just over state lines from me. When I got home, tax authorities from a state I'd never lived in came calling and wondering why I had failed to file a tax return. They went away when I explained, but it probably had something to do with the fact that I had almost no income or assets at the time. It might be different this time around.

Because of this, I'm wondering if a U.S. LLC gets around the residency issue. The goal would be to have a more durable solution that simply using someone else's address. The LLC would be the actual account holder, and even if it were a passthrough for tax purposes (which I assume it would be), I'm wondering if its US status would be enough for brokerages worried about the residency of their accountholders.
coldnose
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by coldnose »

cbeck wrote: Tue Aug 06, 2019 7:56 pm Under no circumstances should you alert your brokerage or bank that you live abroad. Some of them like Fidelity and VG may very well close your account immediately, although experiences do vary. It has happened to me. Therefore the only prudent way to manage it is to take these steps:

1. get a mail forwarding service and change your addresses at all institutions, except the SSA, to the forwarder's address for you. None of them will complain.

2. Make sure you have a US phone number such as Google Voice or some VOIP service and update your records with all banks and brokerages to this number. GV provides SMS service which is valuable.

3. Use a vpn so that when you login to your banks and brokers they see a US ip address. If you can arrange a vpn that terminates at a friend's address in the US, that would be the best.

4. Do not do any money transfers to or from your brokers that references your foreign bank. Do those with your bank and then an addition hop to or from the broker.

I know of only one US bank/credit union that will knowingly open an account for an expat, State Department Federal Credit Union. For this and other reasons they are my preferred bank these days.

You can't deal with your brokerage in good faith, because even if they don't close your account immediately when they become aware of your expat status, they may do so in the future after the next 9/11 type incident, for example. You have to be careful not to generate a trail of activity that will arouse their interest at such a time.
As a long-time expat I totally agree with this. I do exactly the same, although I have never had any problem with VG, Fidelity and others when I've mentioned that I live overseas. The mail forwarding (PostScan Mail works well) and GV help mostly with the SMS login verification process. Interactive Brokers, which I've used for many years and are excellent, actively pursue client around the world and have no problem with expats. They also have the best wire-transfer set up, including 1 per month for free, making it very easy to send money overseas. When I initiate it in the morning, I usually have the funds in my local bank by midday.

I don't think forming a LLC is necessary in any way. There are many easier and cheaper options like just using Interactive Brokers. I've also opened a myriad of online bank accounts (TIAA Bank, Ally Bank, etc.) without issue.
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typical.investor
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by typical.investor »

coldnose wrote: Wed Aug 07, 2019 7:13 pm As a long-time expat I totally agree with this. I do exactly the same, although I have never had any problem with VG, Fidelity and others when I've mentioned that I live overseas. The mail forwarding (PostScan Mail works well) and GV help mostly with the SMS login verification process. Interactive Brokers, which I've used for many years and are excellent, actively pursue client around the world and have no problem with expats. They also have the best wire-transfer set up, including 1 per month for free, making it very easy to send money overseas. When I initiate it in the morning, I usually have the funds in my local bank by midday.

I don't think forming a LLC is necessary in any way. There are many easier and cheaper options like just using Interactive Brokers. I've also opened a myriad of online bank accounts (TIAA Bank, Ally Bank, etc.) without issue.
You are likely grandfathered in. VG froze me for being overseas. I was a new customer after regulations had started to be more strictly enforced, and was frozen as soon as I tried to enter a foreign mailing address (other institutions let me as long as I had a US address, so I was unaware. Unfortunately, I didn't have a utility bill or w2 form to prove to Vanguard that I was there).

Also, it seems that due to changing regulations that Interactive Brokers and Schwab may no longer be the solutions they once were.
mcc57 wrote: Mon Aug 05, 2019 2:51 pm I'm a US citizen but have been living in Italy for the last few years years. I've had a Schwab account for the longest time. When I moved to Europe a few years back, Schwab warned me that - as a result of my move - I could no longer make certain investments (such as mutual funds), but could certainly invest and trade ETFs.

All of this has worked fine until today I received a phone call from Schwab informing me that AS OF SEPTEMBER 2019, as a UE resident I will NO LONGER be allowed to invest and trade ETFs.
Others have reported they needed to get classified as an institutional investor to buy ETFs as a EU residents.
cbeck
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by cbeck »

coldnose wrote: Wed Aug 07, 2019 7:13 pm
As a long-time expat I totally agree with this. I do exactly the same, although I have never had any problem with VG, Fidelity and others when I've mentioned that I live overseas.
I have heard from other expats who were also inexplicably not shut out by Fidelity or Vanguard. However, we have to consider that policies may change and there need not be any grandfathering if they were to. So, we have to be careful not to generate a trail of evidence that identifies us to them as possible expats to the extent that we can.

Even if we are as careful as possible about this, technology can easily work against us. For instance, when we login to a brokerage website, the site and simply require that we turn on location detection in the browser, which is not fooled by a vpn. Some of the functions in some of the bank smartphone apps already required turning on location in the phone. There may be ways around that, but it will be an ongoing process.
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typical.investor
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by typical.investor »

DouroBound wrote: Wed Aug 07, 2019 6:08 pm
typical.investor wrote: Tue Aug 06, 2019 8:19 pm
DouroBound wrote: Tue Aug 06, 2019 1:37 pm Has anyone looked into setting up a US LLC (I guess ideally in a no-tax state) to hold taxable investments?
Nolo seems able to set one up for $99 + state fees. A US address is required. If you have a US address, why not simply open a brokerage account at that address. If you don't have a US address, you could use a registered agent at $49 or so per year.

Not 100% sure on taxation, but I believe income will "pass through" to your personal tax return unless you incorporate.
I will not have a US address after I move, and I don't think using a friend or family member address will be a good long term solution. I once did that for a short stint in Europe, giving an address of a friend who live just over state lines from me. When I got home, tax authorities from a state I'd never lived in came calling and wondering why I had failed to file a tax return. They went away when I explained, but it probably had something to do with the fact that I had almost no income or assets at the time. It might be different this time around.

Because of this, I'm wondering if a U.S. LLC gets around the residency issue. The goal would be to have a more durable solution that simply using someone else's address. The LLC would be the actual account holder, and even if it were a passthrough for tax purposes (which I assume it would be), I'm wondering if its US status would be enough for brokerages worried about the residency of their accountholders.
Yes, I believe an LLC can be a solution to residency issues. I think you'd need to get a virtual mailbox in addition to a registered agent, and then pay set up fees and file an annual report.

Obviously if Schwab or Interactive Brokers could accomodate you as an ex-pat, that would be the easiest. But if they can't due to restrictions, what else could you do? I bet you have more luck with an LLC (properly set up+virtual mailbox+registered agent) opening a brokerage account than simply trying to open your own with a virtual mailbox.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by AlohaJoe »

DouroBound wrote: Wed Aug 07, 2019 6:08 pm Because of this, I'm wondering if a U.S. LLC gets around the residency issue.
Don't forget that you can't ignore your local country in all of this. Since you're in the UK, this US LLC would be subject to UK CFC laws (controlled foreign company) -- "A foreign company is a CFC if it’s a non-resident UK company that’s controlled by a UK resident person or persons." Most countries have some concept of a CFC; the US certainly does.

So you would dramatically complicate your UK tax filing -- and maybe pay substantially more, I don't actually know how CFC rules work in the UK but in most countries it sucks. However, the UK likes to be a tax haven for investment funds, so maybe they'd offer tax-relief for a CFC that is just an investment vehicle? Something you'd need to research and/or hire a tax specialist for, I guess.
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DouroBound
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by DouroBound »

Yeah ... that’s exactly the kind of issue I’m trying to learn about. Thanks for flagging.
halfnine
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by halfnine »

DouroBound wrote: Wed Aug 07, 2019 9:02 pm Yeah ... that’s exactly the kind of issue I’m trying to learn about. Thanks for flagging.
Please inform of anything you learn about UK CFCs if you head in that direction.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by jminv »

Don't tell your broker you are moving overseas. It's really that simple. Instead of complicating things, use an address in the usa, a vpn, and a google voice number for two factor authentication. Schwab is actually okay with people who they know live part of the time overseas but not people who tell them that they aren't US residents, ie, they'll actually add two factor authentication to your overseas phone number. There are a number of threads here from people who are moving overseas for the first time who massively complicate their lives before they've even moved.
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DouroBound
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by DouroBound »

jminv wrote: Thu Aug 08, 2019 4:36 am Don't tell your broker you are moving overseas. It's really that simple. Instead of complicating things, use an address in the usa, a vpn, and a google voice number for two factor authentication. Schwab is actually okay with people who they know live part of the time overseas but not people who tell them that they aren't US residents, ie, they'll actually add two factor authentication to your overseas phone number. There are a number of threads here from people who are moving overseas for the first time who massively complicate their lives before they've even moved.
For folks relying on that strategy, have you had any state tax issues?
cpan00b
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by cpan00b »

DouroBound wrote: Thu Aug 08, 2019 7:49 am
jminv wrote: Thu Aug 08, 2019 4:36 am Don't tell your broker you are moving overseas. It's really that simple. Instead of complicating things, use an address in the usa, a vpn, and a google voice number for two factor authentication. Schwab is actually okay with people who they know live part of the time overseas but not people who tell them that they aren't US residents, ie, they'll actually add two factor authentication to your overseas phone number. There are a number of threads here from people who are moving overseas for the first time who massively complicate their lives before they've even moved.
For folks relying on that strategy, have you had any state tax issues?
I'd like to know the same thing. If your brokerage thinks you are a US resident, won't they generate the usual tax forms? Do you just not file any state tax returns and let state authorities see that you filed federal taxes as a US citizen living abroad?
halfnine
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by halfnine »

DouroBound wrote: Thu Aug 08, 2019 7:49 am
jminv wrote: Thu Aug 08, 2019 4:36 am Don't tell your broker you are moving overseas. It's really that simple. Instead of complicating things, use an address in the usa, a vpn, and a google voice number for two factor authentication. Schwab is actually okay with people who they know live part of the time overseas but not people who tell them that they aren't US residents, ie, they'll actually add two factor authentication to your overseas phone number. There are a number of threads here from people who are moving overseas for the first time who massively complicate their lives before they've even moved.
For folks relying on that strategy, have you had any state tax issues?
You can have state tax issues if you do not relocate your state domicile to a no-tax state. How significant these issues depend on the individual state. The general advice is to move your state domicile to a no-tax state prior to moving abroad. There are many companies in these states that will provide you with a mailing address.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by cbeck »

DouroBound wrote: Thu Aug 08, 2019 7:49 am
jminv wrote: Thu Aug 08, 2019 4:36 am Don't tell your broker you are moving overseas. It's really that simple. Instead of complicating things, use an address in the usa, a vpn, and a google voice number for two factor authentication. Schwab is actually okay with people who they know live part of the time overseas but not people who tell them that they aren't US residents, ie, they'll actually add two factor authentication to your overseas phone number. There are a number of threads here from people who are moving overseas for the first time who massively complicate their lives before they've even moved.
For folks relying on that strategy, have you had any state tax issues?
When I retired abroad I carefully reviewed the tax domicile regulations for NY. I made sure not to qualify on any of the triggers even though probably more than one trigger would be necessary to generate a tax domicile audit. So, I surrendered my NY state driver's license, own no property in the state, and changed the address on all of my financial accounts to reference mail mail forwarder's address in FL. I did subsequently get a letter from the NYS Tax Commission asking where is my tax return to which I responded explaining that I had terminated residence in the state on such and such a date. That was the end of it. I have never filed a NYS return since leaving.

Some states, such as CA, are known to be much more aggressive and to take into consideration factors such as do you have friends in the state. VA continues to regard you as a VA resident until such time as you establish residency in another state!

However, ithere is no requirement for a US citizen to be a resident of any state or territory. I do miss voting a little bit, but practically speaking NY is such a solid blue state that my vote there would never make a difference anyway.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by coldnose »

cbeck wrote: Thu Aug 08, 2019 6:54 pm
DouroBound wrote: Thu Aug 08, 2019 7:49 am
jminv wrote: Thu Aug 08, 2019 4:36 am Don't tell your broker you are moving overseas. It's really that simple. Instead of complicating things, use an address in the usa, a vpn, and a google voice number for two factor authentication. Schwab is actually okay with people who they know live part of the time overseas but not people who tell them that they aren't US residents, ie, they'll actually add two factor authentication to your overseas phone number. There are a number of threads here from people who are moving overseas for the first time who massively complicate their lives before they've even moved.
For folks relying on that strategy, have you had any state tax issues?
Some states, such as CA, are known to be much more aggressive and to take into consideration factors such as do you have friends in the state. VA continues to regard you as a VA resident until such time as you establish residency in another state!

However, ithere is no requirement for a US citizen to be a resident of any state or territory. I do miss voting a little bit,
Yes! Avoid CA & VA addresses at all costs! Both are very aggressive. Choose a no tax state like TX or FL for your mail forwarding address. There are many companies, mostly servicing RVrs, that will let you use their address to establish residency for voting, etc. if desired.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by billthecat »

cbeck wrote: Tue Aug 06, 2019 7:56 pm 4. Do not do any money transfers to or from your brokers that references your foreign bank. Do those with your bank and then an addition hop to or from the broker.
What about money transfer services like Transferwise, OXF, etc.? Is it OK to link those to your brokerage account and foreign account, transfering funds via the transfer service?

broker --> transfer service --> foreign account

Or would it be better to have a separate traditional US bank account and do it

broker --> US Bank --> transfer service --> foreign account?
We cannot direct the winds but we can adjust our sails • It's later than you think • Ack! Thbbft!
cbeck
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by cbeck »

billthecat wrote: Thu Aug 08, 2019 9:07 pm
cbeck wrote: Tue Aug 06, 2019 7:56 pm 4. Do not do any money transfers to or from your brokers that references your foreign bank. Do those with your bank and then an addition hop to or from the broker.
What about money transfer services like Transferwise, OXF, etc.? Is it OK to link those to your brokerage account and foreign account, transfering funds via the transfer service?

broker --> transfer service --> foreign account

Or would it be better to have a separate traditional US bank account and do it

broker --> US Bank --> transfer service --> foreign account?
There is really no way to answer this question. We don't know what information the brokerages are using to evaluate whether its customers have expatted on them, nor what they might use in the future. At least for now, brokerages don't want to get rid of their customers, so as long as we don't put our overseas address right in their face, they aren't too likely to pay attention. But neither do we want to generate a trail of evidence that in the future, when their focus has shifted, we have not already identified ourselves undeniably as expats. That's the reason for using a vpn when connecting to the brokerage even though nothing will happen immediately if you don't.

So, all I can say is that it's in our interest not to reference our current location in any way that the broker might notice.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by jminv »

DouroBound wrote: Thu Aug 08, 2019 7:49 am
jminv wrote: Thu Aug 08, 2019 4:36 am Don't tell your broker you are moving overseas. It's really that simple. Instead of complicating things, use an address in the usa, a vpn, and a google voice number for two factor authentication. Schwab is actually okay with people who they know live part of the time overseas but not people who tell them that they aren't US residents, ie, they'll actually add two factor authentication to your overseas phone number. There are a number of threads here from people who are moving overseas for the first time who massively complicate their lives before they've even moved.
For folks relying on that strategy, have you had any state tax issues?
You use a state with no tax implications for mailing address to avoid the worry. Relatives or a service (RV focused, ask in RV forums for recommendations).

Completely apart from this and I don't know where you live, but make sure to check you are not in one of the few states (5 or 6?) that will still consider you a resident of their fine state if you move overseas. Move to another state, fine, move overseas - still a resident. These are the states where you basically have to move to another state to comply with the letter of the law. Transfer or cancel drivers license, voters registration, etc. Look yours up and make sure yours isn't one of these states. It's a problem if it's tax time and you use a service (some companies require their expats to use their service) and the service says you need to file a state return because you still have a voters registration in that state. Or if you're audited by them or if you want to be within exactly what the rules say. I paid state tax one year in one of these states because of a voters registration in one of these states that my company's big 4 firm said made me a resident, even though I had no ongoing connection and didn't actually vote.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by coldnose »

billthecat wrote: Thu Aug 08, 2019 9:07 pm
cbeck wrote: Tue Aug 06, 2019 7:56 pm 4. Do not do any money transfers to or from your brokers that references your foreign bank. Do those with your bank and then an addition hop to or from the broker.
What about money transfer services like Transferwise, OXF, etc.? Is it OK to link those to your brokerage account and foreign account, transfering funds via the transfer service?

broker --> transfer service --> foreign account

Or would it be better to have a separate traditional US bank account and do it

broker --> US Bank --> transfer service --> foreign account?
I've set up intl wire transfer arrangements with Vanguard and regularly transfer $$ overseas without issue. As noted above, IB transfers are easier and faster, but Vanguard's works. For Vanguard you'll need medallion guarantees to set them up, so best to do it before you move. I'm not sure of why the concern about transferring $$; there's no law that US citizens cannot regularly transfer $$ overseas and many justifiable reasons (pay to family abroad, etc.).
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by squirrel1963 »

AlohaJoe wrote: Tue Aug 06, 2019 8:19 pm
cbeck wrote: Tue Aug 06, 2019 7:56 pm 2. Make sure you have a US phone number such as Google Voice or some VOIP service and update your records with all banks and brokerages to this number. GV provides SMS service which is valuable.
An increasing number of banks have blocked VOIP numbers and the trend is likely to continue, so this is no longer a viable choice. You need to keep a U.S. SIM, probably in a secondary phone, and pay monthly fees for the rest of your life. You can find lots of complaints on the Google Voice forums from people oversees who have suddenly lost access to the bank accounts when the bank stopped working with VOIP providers.
Google FI seems like the best option to me for this. It's $20 a month for voice/text worldwide, plus 10$ for each Gbyte of data if you use them. And beyond a certain threshold, they cap the max expenses. Before going abroad, just buy a Google Fi phone, and you'll be all set.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by squirrel1963 »

cbeck wrote: Fri Aug 09, 2019 8:16 pm
billthecat wrote: Thu Aug 08, 2019 9:07 pm 4. Do not do any money transfers to or from your brokers that references your foreign bank. Do those with your bank and then an addition hop to or from the broker.
What about money transfer services like Transferwise, OXF, etc.? Is it OK to link those to your brokerage account and foreign account, transfering funds via the transfer service?

broker --> transfer service --> foreign account

Or would it be better to have a separate traditional US bank account and do it

broker --> US Bank --> transfer service --> foreign account?
Right now I'm still living in the US, but in preparation of becoming an expact, I do have a non-resident account in the Eurozone (Italy). For small transfers, I use XE.com, they have no fees and their FOREX rate is Interbank+0.25%. And if I transfer 50K USD or more in USD to my bank in Italy, their FOREX rate is Interbank+0.1%.

As a side note, it was quite hard for me to find a bank in Italy that would do that. Most large national banks told me no flat out. I use a small regional bank which seems to be more than willing to open non-resident accounts. I'm not sure if the reason they did it for me is also because I have dual US - Italian citizenship, so that's quite likely one less obstacle.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by squirrel1963 »

jminv wrote: Thu Aug 08, 2019 4:36 am Don't tell your broker you are moving overseas. It's really that simple. Instead of complicating things, use an address in the usa, a vpn, and a google voice number for two factor authentication. Schwab is actually okay with people who they know live part of the time overseas but not people who tell them that they aren't US residents, ie, they'll actually add two factor authentication to your overseas phone number. There are a number of threads here from people who are moving overseas for the first time who massively complicate their lives before they've even moved.
I have not moved abroad yet, but a friend of mine who's in my situation (dual US-Italian citizen who's now an expat in Italy) did exactly this. His Schwab adviser actually knows the he lives abroad, but he only told her verbally. Despite that, he has been using Schwab as a US resident and doing wire transfers to Italy for several years without any troubles. The problem becomes if you let me know in writing. At this point they can no longer ignore the fact you are abroad.

The bottom line, it's "don't ask, don't tell". As far as I know, you have no legal obligation to tell your broker that your *primary* tax residence is no longer the US, and they have absolutely no idea of your *primary* tax residence status with the IRS.

Also remember that, unlike EU (where everyone, state government, local government, banks all consider you resident if the national state considers you a resident), in the USA the residency concept is a very fuzzy concept.

AFAIK:

* Invididual states will usually consider you a resident so long as you have a driver license and/or you are registered to vote, which is why it's important to move to a state that has no income tax before you move abroad. Some states don't even recognize your expat status.
* The IRS considers you resident up and until you tell them you moved abroad. And even then, it's not clear what your status is. According to a video webcast from Thun financial, the US government taxation of US citizens is predicated on the legal basis that you are always reside in the US, and as such you are taxed as if you were to reside in the US. Unfortunately I have no second source confirmation of this.
* Banks, financial institutions and such, simply ask you when you open an account is your US address and Social Security. By this, they automatically assume you are a US resident, even though they don't necessarily ask you that (at least I don't recall being asked my tax residence). The will only consider you non-US resident if you tell them so in writing. Just do not ever tell them you moved abroad, use a cell phone with a US SIM card (Google Fi is the best option IMHO) and a VPN when log in, just in case.

In the midst of the "giant gray hole of residence uncertainty", I think there is no reason whatsoever to ever tell your bank you moved abroad. Only trouble can come from this. The absolutely worst case is that they find out, and they'll either no longer allow you to make trades or freeze your account until you move the funds out. At that point you just move your assets to IB and ask for a "professional investor" status.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by cbeck »

squirrel1963 wrote: Thu Aug 15, 2019 5:10 pm
* Invididual states will usually consider you a resident so long as you have a driver license and/or you are registered to vote, which is why it's important to move to a state that has no income tax before you move abroad. Some states don't even recognize your expat status.
* The IRS considers you resident up and until you tell them you moved abroad. And even then, it's not clear what your status is. According to a video webcast from Thun financial, the US government taxation of US citizens is predicated on the legal basis that you are always reside in the US, and as such you are taxed as if you were to reside in the US. Unfortunately I have no second source confirmation of this.
Tax domicile is more complicated than just driver's license and voter registration. You have to look up your state's tax domicile standards and carefully cut every possible tie.

It's not that the IRS adopts an opinion as to your US tax domicile. US citizens are taxable on their worldwide earnings no matter where we live, so the question doesn't really arise. Although I file every year with IRS the forms do not request my address. The IRS neither knows nor cares where I live.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by squirrel1963 »

cbeck wrote: Thu Aug 15, 2019 7:50 pm
squirrel1963 wrote: Thu Aug 15, 2019 5:10 pm
* Invididual states will usually consider you a resident so long as you have a driver license and/or you are registered to vote, which is why it's important to move to a state that has no income tax before you move abroad. Some states don't even recognize your expat status.
* The IRS considers you resident up and until you tell them you moved abroad. And even then, it's not clear what your status is. According to a video webcast from Thun financial, the US government taxation of US citizens is predicated on the legal basis that you are always reside in the US, and as such you are taxed as if you were to reside in the US. Unfortunately I have no second source confirmation of this.
Tax domicile is more complicated than just driver's license and voter registration. You have to look up your state's tax domicile standards and carefully cut every possible tie.

It's not that the IRS adopts an opinion as to your US tax domicile. US citizens are taxable on their worldwide earnings no matter where we live, so the question doesn't really arise. Although I file every year with IRS the forms do not request my address. The IRS neither knows nor cares where I live.
Yes sorry I should have mentioned that. States like CA are very aggressive and consider you resident from "tax domicile" point of view long after you left. It really depends from state to state, and like you say, you have to read the taxation rules for each state.
About what "Thus financial" says, I'm sure how accurate it is.
But anyway, my point is, the concept of "residency", "address", "mailing address" are very fuzzy in the US and each different entity will treat it differently, by either not caring at all (IRS), always considering you resident (some states)....
Which is why I don't think there is reason to worry about not telling Schwab when you move abroad. All Schwab cares is avoiding the legal liability - real or imagined - that comes when you tell them in writing that you no longer reside here.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by AlohaJoe »

squirrel1963 wrote: Thu Aug 15, 2019 4:44 pm
AlohaJoe wrote: Tue Aug 06, 2019 8:19 pm
cbeck wrote: Tue Aug 06, 2019 7:56 pm 2. Make sure you have a US phone number such as Google Voice or some VOIP service and update your records with all banks and brokerages to this number. GV provides SMS service which is valuable.
An increasing number of banks have blocked VOIP numbers and the trend is likely to continue, so this is no longer a viable choice. You need to keep a U.S. SIM, probably in a secondary phone, and pay monthly fees for the rest of your life. You can find lots of complaints on the Google Voice forums from people oversees who have suddenly lost access to the bank accounts when the bank stopped working with VOIP providers.
Google FI seems like the best option to me for this.
I'm pretty sure something like Ultramobile Paygo at $3 a month along with a local SIM is vastly better than Google FI at $30+ a month. You're going to have to get a local SIM anyway, after all. No local business -- banks, online shopping, the pizza delivery guy -- is going to call your Google FI number. $10 for 1GB of Google FI sounds ridiculously expensive in the global market, too. I pay $20 for 12 months of unlimited data with my local SIM.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by AlohaJoe »

cbeck wrote: Thu Aug 15, 2019 7:50 pm The IRS neither knows nor cares where I live.
The IRS definitely knows where you live. You are required to fill in your address when you file taxes and you are required to certify under oath that you haven't misrepresented anything on your taxes.

For all practical purposes, I agree that the IRS doesn't care where you live. That said, I think there are some obscure parts of the tax code that apply based on where you live. (If you live in a country under US sanctions, like Iran? Not sure.)
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by cbeck »

AlohaJoe wrote: Thu Aug 15, 2019 8:12 pm
cbeck wrote: Thu Aug 15, 2019 7:50 pm The IRS neither knows nor cares where I live.
The IRS definitely knows where you live. You are required to fill in your address when you file taxes and you are required to certify under oath that you haven't misrepresented anything on your taxes.

For all practical purposes, I agree that the IRS doesn't care where you live. That said, I think there are some obscure parts of the tax code that apply based on where you live. (If you live in a country under US sanctions, like Iran? Not sure.)
The 1040 instructions are:

Enter your box number only if your post office doesn't deliver mail to your home.


So, I don't think I am running any particular risk by using a mailing address. One of the reasons I do so is that delivery of mail from important sources like the IRS is much more timely and assured than to my Thailand address.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by ARoseByAnyOtherName »

AlohaJoe wrote: Tue Aug 06, 2019 8:19 pm An increasing number of banks have blocked VOIP numbers and the trend is likely to continue, so this is no longer a viable choice. You need to keep a U.S. SIM, probably in a secondary phone, and pay monthly fees for the rest of your life. You can find lots of complaints on the Google Voice forums from people oversees who have suddenly lost access to the bank accounts when the bank stopped working with VOIP providers.
I’ve seen this stated multiple times in different places, so it’s just worth noting I’ve never had any problems with this personally.

I use a Google Voice phone number and have never had any problem with any institution, including financial institutions, either not work or stop working with Google Voice. It’s never happened to me across the maybe 10 to 15 financial institutions I have accounts with.

I’m not saying it doesn’t happen, just that as with many things your mileage may vary.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by AlohaJoe »

ARoseByAnyOtherName wrote: Sat Aug 17, 2019 6:31 am
AlohaJoe wrote: Tue Aug 06, 2019 8:19 pm An increasing number of banks have blocked VOIP numbers and the trend is likely to continue, so this is no longer a viable choice. You need to keep a U.S. SIM, probably in a secondary phone, and pay monthly fees for the rest of your life. You can find lots of complaints on the Google Voice forums from people oversees who have suddenly lost access to the bank accounts when the bank stopped working with VOIP providers.
I’ve seen this stated multiple times in different places, so it’s just worth noting I’ve never had any problems with this personally.
Sure and it is just that uncertainty that leaves many unsettled. Wells Fargo blocked Google Voice (for me at any rate) about three weeks ago. Luckily I already had a trip planned to the US for later this month so I can sort things out then.

On the flip side, Vanguard has no problem with my foreign address, even letting me buy mutual funds as recently as late last year.

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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by TexanInBavaria »

As "Registered Investment Advisors" would be able to continue trading those US-domiciled ETFs for their EU-resident US citizen clients, would an EU-resident US citizen who is Registered Investment Advisor be able to trade their own?

Becoming a RIA doesn't look trivial (passing the Series 65 exam), but I did ok on a sample test. From Investopedia: https://www.investopedia.com/articles/p ... dvisor.asp

Per that article, I think I wouldn't need to register with a state or the SEC, as I currently have no plans for advising anyone other than myself, but I might need to register with my home state in order to meet that "US-based RIA" condition of Schwab.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by Marseille07 »

cbeck wrote: Tue Aug 06, 2019 7:56 pm Under no circumstances should you alert your brokerage or bank that you live abroad. Some of them like Fidelity and VG may very well close your account immediately, although experiences do vary. It has happened to me. Therefore the only prudent way to manage it is to take these steps:

1. get a mail forwarding service and change your addresses at all institutions, except the SSA, to the forwarder's address for you. None of them will complain.

2. Make sure you have a US phone number such as Google Voice or some VOIP service and update your records with all banks and brokerages to this number. GV provides SMS service which is valuable.

3. Use a vpn so that when you login to your banks and brokers they see a US ip address. If you can arrange a vpn that terminates at a friend's address in the US, that would be the best.

4. Do not do any money transfers to or from your brokers that references your foreign bank. Do those with your bank and then an addition hop to or from the broker.

I know of only one US bank/credit union that will knowingly open an account for an expat, State Department Federal Credit Union. For this and other reasons they are my preferred bank these days.

You can't deal with your brokerage in good faith, because even if they don't close your account immediately when they become aware of your expat status, they may do so in the future after the next 9/11 type incident, for example. You have to be careful not to generate a trail of activity that will arouse their interest at such a time.
What exactly constitutes the "expat status" though? If I'm a resident of Texas, live abroad 10 months out of a year, then come back to Texas for December and January staying at an extended stay hotel. Couldn't I claim that I'm a Texas resident who happens to travel abroad a lot, instead of being called an expat?

My residential address would be that of the hotel, but as far as I know there's nothing illegal about that.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by typical.investor »

Marseille07 wrote: Sat Jan 02, 2021 12:19 am
cbeck wrote: Tue Aug 06, 2019 7:56 pm Under no circumstances should you alert your brokerage or bank that you live abroad. Some of them like Fidelity and VG may very well close your account immediately, although experiences do vary. It has happened to me. Therefore the only prudent way to manage it is to take these steps:

1. get a mail forwarding service and change your addresses at all institutions, except the SSA, to the forwarder's address for you. None of them will complain.

2. Make sure you have a US phone number such as Google Voice or some VOIP service and update your records with all banks and brokerages to this number. GV provides SMS service which is valuable.

3. Use a vpn so that when you login to your banks and brokers they see a US ip address. If you can arrange a vpn that terminates at a friend's address in the US, that would be the best.

4. Do not do any money transfers to or from your brokers that references your foreign bank. Do those with your bank and then an addition hop to or from the broker.

I know of only one US bank/credit union that will knowingly open an account for an expat, State Department Federal Credit Union. For this and other reasons they are my preferred bank these days.

You can't deal with your brokerage in good faith, because even if they don't close your account immediately when they become aware of your expat status, they may do so in the future after the next 9/11 type incident, for example. You have to be careful not to generate a trail of activity that will arouse their interest at such a time.
What exactly constitutes the "expat status" though? If I'm a resident of Texas, live abroad 10 months out of a year, then come back to Texas for December and January staying at an extended stay hotel. Couldn't I claim that I'm a Texas resident who happens to travel abroad a lot, instead of being called an expat?

My residential address would be that of the hotel, but as far as I know there's nothing illegal about that.
For proof of residence, brokers typically require something from the following:

[*]Mortgage Statement, Deed or Other Evidence of Property;
[*]Current Lease;
[*]Utility Bill (less than 12 months old);
[*]Current Driver’s License
But if you used driver’s license as proof of identity, then we are required to obtain a second, different document for proof of address (i.e., driver’s license cannot be used again);
[*]Bank Statement, Bank-Issued Credit Card Statement or Bank-Issued Debit Card Statement or Signed Letter from Bank on Bank Letterhead Confirming Address
Customer and bank must be from a country that is a member of the Financial Action Task Force on Money Laundering (see http://www.fatf-gafi.org);
Statement must be less than 12 months old;
[*]Brokerage Statement from a U.S.-Registered Broker Dealer or Foreign Affiliate of a U.S.-Registered Broker Dealer
Customer must be from a country that is a member of the Financial Action Task Force on Money Laundering (see http://www.fatf-gafi.org);
Statement must be less than 12 months old;
[*]Current Homeowner’s or Renter’s Policy Documents or Riders
Policy must be currently in effect;
[*]Bill for Homeowner’s or Renter’s Insurance Policy (less than 12 months old);
[*]Security System Bill/Statement (less than 12 months old); or
[*]Government-Issued Letters or Statements Establishing Current Address (less than 12 months old). For example:
[*]Tax Letters and notices;
[*]Letters or notices from government housing authorities;
[*]Jury duty notices;
[*]Voter registration notices;
[*]Other official government letters or notices showing customer name and address being verified.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by Marseille07 »

typical.investor wrote: Sat Jan 02, 2021 12:49 am
Marseille07 wrote: Sat Jan 02, 2021 12:19 am
cbeck wrote: Tue Aug 06, 2019 7:56 pm Under no circumstances should you alert your brokerage or bank that you live abroad. Some of them like Fidelity and VG may very well close your account immediately, although experiences do vary. It has happened to me. Therefore the only prudent way to manage it is to take these steps:

1. get a mail forwarding service and change your addresses at all institutions, except the SSA, to the forwarder's address for you. None of them will complain.

2. Make sure you have a US phone number such as Google Voice or some VOIP service and update your records with all banks and brokerages to this number. GV provides SMS service which is valuable.

3. Use a vpn so that when you login to your banks and brokers they see a US ip address. If you can arrange a vpn that terminates at a friend's address in the US, that would be the best.

4. Do not do any money transfers to or from your brokers that references your foreign bank. Do those with your bank and then an addition hop to or from the broker.

I know of only one US bank/credit union that will knowingly open an account for an expat, State Department Federal Credit Union. For this and other reasons they are my preferred bank these days.

You can't deal with your brokerage in good faith, because even if they don't close your account immediately when they become aware of your expat status, they may do so in the future after the next 9/11 type incident, for example. You have to be careful not to generate a trail of activity that will arouse their interest at such a time.
What exactly constitutes the "expat status" though? If I'm a resident of Texas, live abroad 10 months out of a year, then come back to Texas for December and January staying at an extended stay hotel. Couldn't I claim that I'm a Texas resident who happens to travel abroad a lot, instead of being called an expat?

My residential address would be that of the hotel, but as far as I know there's nothing illegal about that.
For proof of residence, brokers typically require something from the following:

[*]Mortgage Statement, Deed or Other Evidence of Property;
[*]Current Lease;
[*]Utility Bill (less than 12 months old);
[*]Current Driver’s License
But if you used driver’s license as proof of identity, then we are required to obtain a second, different document for proof of address (i.e., driver’s license cannot be used again);
[*]Bank Statement, Bank-Issued Credit Card Statement or Bank-Issued Debit Card Statement or Signed Letter from Bank on Bank Letterhead Confirming Address
Customer and bank must be from a country that is a member of the Financial Action Task Force on Money Laundering (see http://www.fatf-gafi.org);
Statement must be less than 12 months old;
[*]Brokerage Statement from a U.S.-Registered Broker Dealer or Foreign Affiliate of a U.S.-Registered Broker Dealer
Customer must be from a country that is a member of the Financial Action Task Force on Money Laundering (see http://www.fatf-gafi.org);
Statement must be less than 12 months old;
[*]Current Homeowner’s or Renter’s Policy Documents or Riders
Policy must be currently in effect;
[*]Bill for Homeowner’s or Renter’s Insurance Policy (less than 12 months old);
[*]Security System Bill/Statement (less than 12 months old); or
[*]Government-Issued Letters or Statements Establishing Current Address (less than 12 months old). For example:
[*]Tax Letters and notices;
[*]Letters or notices from government housing authorities;
[*]Jury duty notices;
[*]Voter registration notices;
[*]Other official government letters or notices showing customer name and address being verified.
Sure, but I am not going to be opening new brokerage accounts. Why would I be asked for those documents? I'm also thinking that worst comes worst, one might have to simply have a residence in the US and do the needful (like, pay utilities) so even if SHTF there are some grounds to prove residency in the US.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by typical.investor »

I was asked for documentation to confirm my US residence by Vanguard at one point after it’d been opened.

They specifically required a utility bill or my account would be frozen.

My fault because I tried to give them a foreign mailing address. That said, I didn’t like them mailing info to an address where I really wasn’t (even if I owned the place).
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by Marseille07 »

typical.investor wrote: Sat Jan 02, 2021 4:38 am I was asked for documentation to confirm my US residence by Vanguard at one point after it’d been opened.

They specifically required a utility bill or my account would be frozen.

My fault because I tried to give them a foreign mailing address. That said, I didn’t like them mailing info to an address where I really wasn’t (even if I owned the place).
I think we can get this case covered by having a PMB. Super useful to have one.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by cbeck »

Marseille07 wrote: Sat Jan 02, 2021 12:19 am
cbeck wrote: Tue Aug 06, 2019 7:56 pm Under no circumstances should you alert your brokerage or bank that you live abroad. Some of them like Fidelity and VG may very well close your account immediately, although experiences do vary. It has happened to me. Therefore the only prudent way to manage it is to take these steps:

1. get a mail forwarding service and change your addresses at all institutions, except the SSA, to the forwarder's address for you. None of them will complain.

2. Make sure you have a US phone number such as Google Voice or some VOIP service and update your records with all banks and brokerages to this number. GV provides SMS service which is valuable.

3. Use a vpn so that when you login to your banks and brokers they see a US ip address. If you can arrange a vpn that terminates at a friend's address in the US, that would be the best.

4. Do not do any money transfers to or from your brokers that references your foreign bank. Do those with your bank and then an addition hop to or from the broker.

I know of only one US bank/credit union that will knowingly open an account for an expat, State Department Federal Credit Union. For this and other reasons they are my preferred bank these days.

You can't deal with your brokerage in good faith, because even if they don't close your account immediately when they become aware of your expat status, they may do so in the future after the next 9/11 type incident, for example. You have to be careful not to generate a trail of activity that will arouse their interest at such a time.
What exactly constitutes the "expat status" though? If I'm a resident of Texas, live abroad 10 months out of a year, then come back to Texas for December and January staying at an extended stay hotel. Couldn't I claim that I'm a Texas resident who happens to travel abroad a lot, instead of being called an expat?

My residential address would be that of the hotel, but as far as I know there's nothing illegal about that.
I don't think you could open a new bank account claiming a hotel as your legal residence. The last time I opened a bank account I had to send a utility bill with my name and address to verify my US residence. But it's up to the bank or brokerage to decide whether you qualify as a US resident or not.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by cbeck »

Marseille07 wrote: Sat Jan 02, 2021 3:47 pm
typical.investor wrote: Sat Jan 02, 2021 4:38 am I was asked for documentation to confirm my US residence by Vanguard at one point after it’d been opened.

They specifically required a utility bill or my account would be frozen.

My fault because I tried to give them a foreign mailing address. That said, I didn’t like them mailing info to an address where I really wasn’t (even if I owned the place).
I think we can get this case covered by having a PMB. Super useful to have one.
If by PMB you mean a mail forwarder, that doesn't fool any institution that cares to check. All such businesses are publicly registered and can be instantly identified with a lookup. If you are an existing customer, you can probably change your address to a mail forwarder. I have done so for years, but then one of my banks spotted it and demanded my physical address with a threat of closure for failure to comply.
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by Marseille07 »

cbeck wrote: Sat Jan 02, 2021 4:52 pm I don't think you could open a new bank account claiming a hotel as your legal residence. The last time I opened a bank account I had to send a utility bill with my name and address to verify my US residence. But it's up to the bank or brokerage to decide whether you qualify as a US resident or not.
Yeah, I don't intend to open new accounts but here is the problem. If / when financial institutions demand proof of residence for whatever reason, your hotel bill might not be the strongest evidence for verification.
Last edited by Marseille07 on Sat Jan 02, 2021 5:11 pm, edited 2 times in total.
Marseille07
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by Marseille07 »

cbeck wrote: Sat Jan 02, 2021 4:56 pm
Marseille07 wrote: Sat Jan 02, 2021 3:47 pm
typical.investor wrote: Sat Jan 02, 2021 4:38 am I was asked for documentation to confirm my US residence by Vanguard at one point after it’d been opened.

They specifically required a utility bill or my account would be frozen.

My fault because I tried to give them a foreign mailing address. That said, I didn’t like them mailing info to an address where I really wasn’t (even if I owned the place).
I think we can get this case covered by having a PMB. Super useful to have one.
If by PMB you mean a mail forwarder, that doesn't fool any institution that cares to check. All such businesses are publicly registered and can be instantly identified with a lookup. If you are an existing customer, you can probably change your address to a mail forwarder. I have done so for years, but then one of my banks spotted it and demanded my physical address with a threat of closure for failure to comply.
It's a service that receives mail on your behalf and scans mail so you can view online.

The addresses can be looked up and come back as commercial, but there's nothing wrong to use a PMB for your *mailing address* (not to confuse with residential address) with financial institutions.
cbeck
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by cbeck »

Marseille07 wrote: Sat Jan 02, 2021 4:59 pm
cbeck wrote: Sat Jan 02, 2021 4:52 pm I don't think you could open a new bank account claiming a hotel as your legal residence. The last time I opened a bank account I had to send a utility bill with my name and address to verify my US residence. But it's up to the bank or brokerage to decide whether you qualify as a US resident or not.
Yeah, I don't intend to open new accounts but here is the problem. If / when financial institutions demand proof of residence for whatever reason, your hotel bill might not be the strongest evidence for verification.
So, it goes without saying that you have to load yourself up with multiple brokerage accounts, bank accounts, and US credit cards before expatting, because you cannot count on being able to open any of those once you have left. Two of each I would say, at least, and four or five credit cards, that don't charge a foreign exchange fee. Then you have to make sure there is activity on each one of those accounts all the time so they don't close it on you. I was able to get a credit card from Capital One after expatting. I was also able to open an account at the only bank or credit union that I am aware is willing to open an account for an expat, State Department Federal Credit Union. SDFCU is now my preferred bank.
Marseille07
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by Marseille07 »

cbeck wrote: Sat Jan 02, 2021 10:54 pm
Marseille07 wrote: Sat Jan 02, 2021 4:59 pm
cbeck wrote: Sat Jan 02, 2021 4:52 pm I don't think you could open a new bank account claiming a hotel as your legal residence. The last time I opened a bank account I had to send a utility bill with my name and address to verify my US residence. But it's up to the bank or brokerage to decide whether you qualify as a US resident or not.
Yeah, I don't intend to open new accounts but here is the problem. If / when financial institutions demand proof of residence for whatever reason, your hotel bill might not be the strongest evidence for verification.
So, it goes without saying that you have to load yourself up with multiple brokerage accounts, bank accounts, and US credit cards before expatting, because you cannot count on being able to open any of those once you have left. Two of each I would say, at least, and four or five credit cards, that don't charge a foreign exchange fee. Then you have to make sure there is activity on each one of those accounts all the time so they don't close it on you. I was able to get a credit card from Capital One after expatting. I was also able to open an account at the only bank or credit union that I am aware is willing to open an account for an expat, State Department Federal Credit Union. SDFCU is now my preferred bank.
My approach would be somewhat different in that I would intend to open a bank account and possibly get a domestic credit card abroad denominated by their local currency. You're right that US-based credit cards would have to have some activities to avoid closures.

Technically speaking, CC and a checking account offered by the same institution can detect someone being abroad; though I'm not sure if anyone ran into issues of this nature.
cbeck
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Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by cbeck »

Marseille07 wrote: Sat Jan 02, 2021 11:34 pm
cbeck wrote: Sat Jan 02, 2021 10:54 pm
Marseille07 wrote: Sat Jan 02, 2021 4:59 pm
cbeck wrote: Sat Jan 02, 2021 4:52 pm I don't think you could open a new bank account claiming a hotel as your legal residence. The last time I opened a bank account I had to send a utility bill with my name and address to verify my US residence. But it's up to the bank or brokerage to decide whether you qualify as a US resident or not.
Yeah, I don't intend to open new accounts but here is the problem. If / when financial institutions demand proof of residence for whatever reason, your hotel bill might not be the strongest evidence for verification.
So, it goes without saying that you have to load yourself up with multiple brokerage accounts, bank accounts, and US credit cards before expatting, because you cannot count on being able to open any of those once you have left. Two of each I would say, at least, and four or five credit cards, that don't charge a foreign exchange fee. Then you have to make sure there is activity on each one of those accounts all the time so they don't close it on you. I was able to get a credit card from Capital One after expatting. I was also able to open an account at the only bank or credit union that I am aware is willing to open an account for an expat, State Department Federal Credit Union. SDFCU is now my preferred bank.
My approach would be somewhat different in that I would intend to open a bank account and possibly get a domestic credit card abroad denominated by their local currency. You're right that US-based credit cards would have to have some activities to avoid closures.

Technically speaking, CC and a checking account offered by the same institution can detect someone being abroad; though I'm not sure if anyone ran into issues of this nature.
More bad ideas. Credit cards in many foreign countries are not comparable to US credit cards. Here in Thailand, for example, credit cards do not have any fraud protection. You are on the hook for all charges unless the bank agrees to waive a charge at their discretion. There are no "rewards" on Thai credit cards, as far as I am aware, but I don't have one, because I would never be willing to assume the fraud risk. So, you need to keep your US credit cards.

Of course, you will need a local bank account, but you will also need US bank accounts to pay your US credit card bills, your US income tax or receive a refund, receive your SS benefits in the future, etc. And you need more than one US bank, credit card, brokerage firm, etc., because they can close your account at any time. When you expat it is like going into the desert where you have to bring all the water you will need for the rest of your life, except that in this case we're talking about financial services, not water.

You don't know enough about your future needs as an expat to be making decisions. You should find a forum with US expats living in the country you are thinking of moving to and find out what problems they are facing.
Marseille07
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Joined: Fri Nov 06, 2020 12:41 pm

Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by Marseille07 »

cbeck wrote: Sun Jan 03, 2021 5:59 am More bad ideas. Credit cards in many foreign countries are not comparable to US credit cards. Here in Thailand, for example, credit cards do not have any fraud protection. You are on the hook for all charges unless the bank agrees to waive a charge at their discretion. There are no "rewards" on Thai credit cards, as far as I am aware, but I don't have one, because I would never be willing to assume the fraud risk. So, you need to keep your US credit cards.

Of course, you will need a local bank account, but you will also need US bank accounts to pay your US credit card bills, your US income tax or receive a refund, receive your SS benefits in the future, etc. And you need more than one US bank, credit card, brokerage firm, etc., because they can close your account at any time. When you expat it is like going into the desert where you have to bring all the water you will need for the rest of your life, except that in this case we're talking about financial services, not water.

You don't know enough about your future needs as an expat to be making decisions. You should find a forum with US expats living in the country you are thinking of moving to and find out what problems they are facing.
What the hell...we aren't disagreeing on anything mate. The local accounts are *in addition to* US accounts. Nowhere did I suggest one should close US accounts before expatting.
cbeck
Posts: 640
Joined: Sun Jun 24, 2012 1:28 am

Re: so many issues for US expats ... would forming an investing LLC in the US help?

Post by cbeck »

Marseille07 wrote: Sun Jan 03, 2021 10:21 am
cbeck wrote: Sun Jan 03, 2021 5:59 am More bad ideas. Credit cards in many foreign countries are not comparable to US credit cards. Here in Thailand, for example, credit cards do not have any fraud protection. You are on the hook for all charges unless the bank agrees to waive a charge at their discretion. There are no "rewards" on Thai credit cards, as far as I am aware, but I don't have one, because I would never be willing to assume the fraud risk. So, you need to keep your US credit cards.

Of course, you will need a local bank account, but you will also need US bank accounts to pay your US credit card bills, your US income tax or receive a refund, receive your SS benefits in the future, etc. And you need more than one US bank, credit card, brokerage firm, etc., because they can close your account at any time. When you expat it is like going into the desert where you have to bring all the water you will need for the rest of your life, except that in this case we're talking about financial services, not water.

You don't know enough about your future needs as an expat to be making decisions. You should find a forum with US expats living in the country you are thinking of moving to and find out what problems they are facing.
What the hell...we aren't disagreeing on anything mate. The local accounts are *in addition to* US accounts. Nowhere did I suggest one should close US accounts before expatting.
That is exactly what you did imply in response to my post about keeping multiple US bank accounts your reply was, "My approach would be somewhat different in that I would intend to open a bank account and possibly get a domestic credit card abroad denominated by their local currency. You're right that US-based credit cards would have to have some activities to avoid closures."


This discussion has been a waste of my time. Good luck with your future.
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