Challenges for Americans abroad (Part 3): US expat bank accounts

User Written by Joseph Regan on September 06, 2016.

Challenges for Americans abroad (Part 3): US expat bank accounts

For those who read the previous two blogs (Part 1 and Part 2) of this series, it should be no surprise that US expat bank accounts are also difficult to open in today’s age of FATCA. With frozen IRAs and nasty PFICs that’ll destroy your investments with towering taxes, US expat bank accounts are another financial hurdle facing thousands of Americans abroad.

Due to stringent FATCA reporting measures, foreign banks have found it too much trouble to take on US expat clients. Furthermore, the penalties for misreporting on a US client’s account to the IRS can result in very high penalties. These two factors have caused many banks out there to refuse to service US nationals as clients, as well as terminate the accounts of any US connected people.

It may seem absolutely crazy that a bank would actually terminate your bank account just for being American; it’s as if it were some kind of punishment! In a way, it is, but that’s the sad reality FATCA has created. It’s absolutely disgraceful.

The good news is many banks out there will still take on US nationals. The bad news is there are many countries in which they will not, making internet banking, using a credit card, and just having a place to keep your money difficult. Luckily, there are US expat bank accounts available to those who find themselves in this dire situation.

Offshore banking can be a life saver for the average US expat. Located in offshore jurisdictions (which are usually small states like Singapore, or areas within bigger nation-states like the Isle of Man in the United Kingdom), offshore banks give expats who are constantly traveling an opportunity to store their money in one easy-access international bank account. Offshore banks are also great for holding money in different currencies, and with very easy internet banking, transferring money across the world has never been easier.

In regards to US expat bank accounts, the beauty of offshore banks is that they will indeed take on US expats as clients. Owning an offshore bank account is 100% legal, and in most circumstances the tax filing is quite simple (usually filling out an FBAR is all that’s needed, but you should speak to your expat CPA to get a better idea of your personal circumstance).

So whether your bank account in your country of residence has denied you, or you’re constantly on the move and are tired of opening/closing local bank accounts in every country you live in, or you’re just looking for a bank account to diversify your currency holdings, offshore banking could very well be the best option for you.

Feel free to get in touch to learn more about offshore banking and US expat bank accounts. Drop me a line at jregan@infinitysolutions.com, or give me a ring at +86 152 2182 4499.

Joseph Regan

Joseph Regan

Posted on September 06, 2016 in American Expatriates.