Financial challenges for American expats in Kazakhstan: challenge 1. – tax compliant investment solutions which don’t cost the earth

User Written by Dermot Monaghan on January 04, 2017.

Financial challenges for American expats in Kazakhstan: challenge 1. – tax compliant investment solutions which don’t cost the earth

There are around nine million US nationals living overseas and their finances became more complicated for them in 2010 when the Foreign Account Tax Compliance Act, FATCA for short, became law. Aimed at clamping down on tax filing and reporting, FATCA has drastically changed the attitude of banks, investment houses and online trading sites towards American clients. The strict compliancy rules are so onerous that many financial institutions are simply refusing to deal with Americans to save themselves the headache.

Americans looking to move and work abroad can find that their accounts are frozen or they are forced to liquidate all US holdings which has some serious implications with regard to frozen IRAs and capital gains tax. There is also the problem of what to do with any cash holdings which have been liquidated.

Finding alternative investment avenues which don’t have serious tax implications or exorbitant hidden charges is tricky. Investments outside the US, for example in Asia or Europe, are often classed as PFICS and US citizens pay punitive annual taxes on any growth (around 40%). Alternative ‘contract’ products may be tax compliant but the trade-off is very high charges. That is why Infinity has worked with our investment partner, Tilney Bestinvest, to develop and bring to market a solution for US expats living around the world, including in Kazakhstan.

Basically the strategy provides a legal framework which allows US citizens to save for retirement, transfer frozen IRAS and grow their wealth while living abroad by using a US-based custodian with non-PFIC (Passive Foreign Income Company) investments. The charges involved are comparable to those charged by US-based financial institutions and tax reporting is IRS compliant.

If you have been hit by the FATCA crackdown and are looking for a financial solution which will enable you to invest and grow your savings, why not contact me for a no-obligation chat. I can talk you through the financial solution to your dilemma in detail and get your investment strategy back on track. You can contact me by email at dmonaghan@infinitysolutions.com, call me on +7 (747) 837 0469 or skype me at dermot.m.monaghan.

Dermot Monaghan

Dermot Monaghan

Posted on January 04, 2017 in American Expatriates.