What should I do with my US investment accounts when I move overseas?

by Hui-Chin Chen, CFP® | Last updated Aug 6, 2020 | Published on Aug 7, 2017 | Advanced Global Planning, Americans working abroad, Investing

Whether you are an American becoming an expat, or a long-term US resident heading to another country, you probably have asked the following questions:

What should I do with my US investment accounts when I move overseas?
Am I allowed to keep my accounts open?
Can I still access the accounts from overseas?
Should I take my investments with me to the new country?

I have answered these questions over the years in different shape or form for individual investors and financial advisors alike. With the help of my study group, I am going to summarize below some of the best practices and pitfalls you should watch out for.

Of course, what you should do depends on your personal circ*mstances. Everyone has a different background and reason for moving overseas. In my opinion, the most important two factors to consider before you make any decision are the following:

Are you a US citizen or Permanent Resident (Green Card holder) who intends to keep your immigration status after you move overseas?
Why are you moving (how long are you staying overseas)?

Once you answer these two questions, you may locate the group that you are in and the steps you should go through to consider the future of your US investment accounts. My plan was to cover all the possible groups that may ask this question. If you find that your circ*mstances don’t fit in any one of the groups, let me know and I will try to address it.

Please also note that in this article I focus attention on the investment account implications only. You will likely have similar questions about your real estate, insurance, social security, tax liability, etc. in the US once you move. I will try to address these in a series of posts.

So here we go.

A. US Citizen or Permanent Resident who wishes to maintain status while living overseas

1) On US Government Assignment

Whatever US Department you work for, you should know whether you are in this group. If you work for the US government at a location overseas, the IRS considers you to be a US resident, and your income is fully taxable as if you still live in the US.

Since you will enjoy pay in US dollars, have full access to US retirement systems, and maintain US residency, it’s likely that keeping your investment accounts as they are before you leave the US is the way to go.

Nevertheless, many financial institutions do not know the difference between your situation and someone in the later groups. They are required to adhere to more stringent reporting and “know your client” regimens for all their clients residing overseas, so many simply reject serving clients with a foreign address, or those they know to be residents of other countries. Therefore, the best thing to do if you are in this group is to substantiate your claim as a US resident as much as possible.

Best Practice:

Maintain your accounts as if you still live in the US. Try not to volunteer our physical location.
Obtain online or at least phone access to your accounts before your move.
Use a secure Internet connection and preferably US IP address to access accounts (through VPN or an official government network.)
Show that you are a US resident by:
- Using one single US residential address on all of your accounts.
- Filing your state taxes every year (if applicable).
- Keeping current your in-state driver’s license and voter registration that match the residential address.

Be Aware:

You are liable for state taxes, so you may wish to establish residency in a state with low or no personal income tax.

For those who don’t have natural ties, such as family or real estate property, in certain states, you may have thought about purchasing a mailbox from a private provider that masks as a residential address. While some have had success using this method, it appears to be something on the radar of financial institutions. Many reject people with known mailbox addresses, not allowing them to open new accounts. It is possible that this policy may be extended to existing accounts as well. So, be aware.

2) Maintaining two residences

If you are splitting your time between the US and some other country, and stay at least six months out of the year in your US residence, it’s safe to claim that you are maintaining your US residency. You should be able to invest in your accounts as if you live full-time in the US.

Note that if you are a Green Card holder, you generally need to return to the country within six months to show your intention to continue your US residency anyway.

However, if you begin to regularly spend more time in another country than in the US, your custodian may decide they will consider you a foreign resident. If so, see Group A3 for more directions.

Best Practice:

Maintain your accounts as if you still live in the US. (Follow directions in Group A1)
If you spend a lot of time overseas, you may want to have some investments hedged in the foreign currency for your spending needs.

Be Aware:

Depending on the law of the other country you live in and the tax treaty between the US and said country, your investment income or capital gain may be taxable in that country if you are considered a resident. Do your research before you may cross the threshold from a visitor to a resident.

You may also wish to open financial accounts in the other country if you spend enough time there. Be aware of the foreign asset reporting rules such as FBAR, Form 8938, and PFIC before you move funds and invest overseas.

3) Short-term: with known end date

Many people go overseas for the first time under this category. You may be taking a gap year to travel the world, doing short-term missionary work, working under a definite contract overseas, or even volunteering. You may have a specific reason to be overseas for longer than a few months, but you do not expect to become a resident of any foreign country.

Unfortunately this group falls into the gray area. On the one hand, you are abandoning your US residence to start living abroad full-time. On the other, you already know it’s short-term and the assignment ends in a year or two. So should you just operate like you are still living in the US?

I’d say it is a judgment call depending on your unique circ*mstance. If you maintain a home in the US, do not establish residence in any one country, and know you will not be away for more than 2-3 years, then perhaps you can make the case that you intend to continue US residency and maintain your investment accounts that way. In this case, follow the directions in Group A1, but know that you are running a risk of your custodian finding out you are overseas and closing your accounts.

On the flip side, if you move overseas on a contract without an end date, and may potentially stay for the long-term, you may want to plan in advance accordingly. If so, see directions in Group A4.

Best Practice:

Depends on your unique circ*mstance. Use your judgment.

Be Aware:

The financial institution may not agree with your interpretation of whether you are a foreign resident.

4) Long-term: no estimated return date

You may be a dual citizen, have found a career abroad, are retiring overseas, or just feel the need to find a new home abroad. If you know for sure you are going to become a “foreign resident”, you can take the following steps to figure out what to do with your US investment accounts.

Best Practice:

Find out whether your current US custodians work with residents of the new country. Do not volunteer your current status. Simply inquire hypothetically. Each institution may range from working with residents on a list of countries to no foreign residents as customers at all.
If your current custodian will not continue to work with you, find a custodian that will. Open accounts using your foreign address, transfer the funds, and close the existing accounts. (Some custodians are friendlier to expats, such as Interactive Brokers, Charles Schwab, and TD Ameritrade.)
Your 401(k)s should not be affected as long as you are still a participant. You may report to that custodian your new foreign address. However, when you distribute from a 401(k), the custodian is required to withhold additional taxes if you are at a foreign address.
Some custodians have chosen to close IRAs belonging to foreign residents. So keeping funds in 401(k) instead of rolling it out may be an option until you find a custodian that will open IRAs for foreign residents.
Investment cost in the US is the lowest in the world, so you may want to keep some, if not all, of your investments in the US. However, it may be advisable to partially hedge against the currency in your new country through holding investments or currency denominated in the new country’s currency. Some US custodians are able to hold non-US denominated securities in the account.

Be Aware:

If you are considering moving assets to the new country, know that you potentially have to deal with FBAR, Form 8938, and PFIC reporting and taxation. If you are going to invest in a non-US account, it’s likely that ETF, stocks and individual bonds will make your life easier than mutual funds, variable annuity products, and other types of pooled investments that are not US-registered.

Also, learn the tax treaty and totalization agreementbetween the US and the new country. This will help you determine whether it is worth it to participate in the new country’s pension or retirement system, and the potential overall tax impact.

In addition, once you become a foreign resident, you may not be able to continue to work with your US-based advisor. This is because the new country’s law may require anyone offering investment advice to its residents to register in the country. Your advisor may need to investigate the local law. Eventually you may need to work with a team of professionals from both the US and the new country if you cannot find an advisor dually registered in both countries.

Lastly, there is always the risk that your current financial institution will change their rules and stop working with residents in your new country. Have a backup plan. There are some countries where no custodians will work with residents with US citizenship or Green Card so they do not have to comply with the US Treasury reporting rules. Do your research in advance on which custodians may be willing to take your investments if your current one chooses to end the relationship.

B. Non-resident Alien

1) In US on visa and leaving for good

You may have studied and worked in the US for a while, but never intended to obtain permanent residency or citizenship. Now you are going home or moving on to the next country, what should you do with your US investment and retirement accounts?

Best Practice:

Generally the same as Group A4, except the treatment of tax-advantaged retirement plans.
Any early distribution from your 401(k) or IRA will be subject to the same penalty, so you may want to keep them in the US to grow further. However, distribution from those plans may be taxed at a lower rate overall even with the penalty if you distribute from the account before you become a non-resident alien. It depends on the amount, the presence of a tax treaty, and how your new country taxes the distribution, so do some cost-benefit analysis first.
You should also notify your 401(k) administrator of your new status as non-resident alien so they will withhold future distributions at the correct rate, either at 30% or treaty rate. Use form W-8BEN.
In addition to investing at very low cost, another benefit of keeping taxable investment accounts in the US is that as a non-resident alien, you do not have to pay capital gain taxes when you liquidate the investments. So even if you do want to liquidate your US investment accounts at some point, the best time to sell may be after you have left the US and meet the criteria as non-resident alien, depending on your new country’s capital gains tax rates for overseas investments.

Be Aware:

While as a non-resident alien you do not have to pay capital gains tax, your dividend and certain interest income is taxed at a flat 30% in the US, unless the tax treaty states otherwise. So using the more tax efficient investment vehicle is important.

Fortunately, you do not have to worry about all the mandatory reporting that applies only to US persons once you leave the country. However, you should take into account all the other caution points Group A4.

2) Renounce US Citizenship or Give up Green Card

Due to the increasingly complicated reporting and taxation regime, more long-term American expats are considering giving up US nationality. It does not mean you have to end all financial ties in the US, but the IRS does want to make sure you fulfill all of your obligations before they let you off the hook.

Best Practice:

Find out whether you are considered “covered expatriate”. If not, you should not incur extra US tax liability from expatriation. The direction for Group B1 applies to you.
If you are a covered expatriate, then you just may have a large tax bill coming your way due to the fact the IRS considers that you liquidate all of your assets on the date of expatriation, except for eligible qualified employer retirement plans. So if you want to delay some of the tax liability from IRA balances, you may choose to roll IRA accounts into a current 401(k) if you still have access to it. Note that this only delays the tax liability. When you distribute from the 401(k), the amount is taxed at a flat 30%.
Generally there are a lot more things to be aware of if you are a covered expatriate. Unfortunately I am not able to cover all of it. However, there are many accounting and law firms specializing in this area that you may wish to consult.

Be Aware:

Make sure you file Form 8854 so you do not become a covered expatriate unintentionally if you did not have high income or high net worth before you give up your US nationality.

I hope this guide gives you the first steps to figure out what you should do with your US investment accounts when moving overseas. This is by no mean comprehensive yet. If you have real life experience or caution tales you would like to share, please feel free to comment below. All the best with your move abroad!

: What to do with my US real estate when I move overseas?

: How to manage US Company ESPP when you move overseas?

: Comprehensive Guide of Roth IRA Contribution for US Expats

Susan Bergeron August 29, 2019 at 1:16 pm

The article mentioned keeping one’s driver’s license updated but most DMVs require in-person renewals.
Hui-Chin Chen, CFP®on August 29, 2019 at 3:26 pm

Hi Susan,
Thanks for the comment. According to this source, most states allow online renewal now. The catch is in-person is still needed if you wish to change any info on the license. I was able renew online last year. DMV even mailed it to me in a different address than permanent address on the license.
Keeping US license current is helpful for some other reason. I had a family member who let his US license expire while overseas. He was not able to drive or rent a car while in the US on holiday. Eventually he had to retake driver’s test to get the license back…
Joeon September 20, 2019 at 6:47 am

I’m a US citizen who has lived abroad for 22 years. Most of the information on this page is correct, however the part about needing to be a state tax resident and pay state taxes after moving abroad is generally not correct. Each state has its own policy in this regard, but for those who genuinely move abroad, no state can really claim you. I totally agree with renewing your state drivers license. I hadn’t done that for over 10 years and just a few months ago finally got it back after a whole bunch of testing, including 45 minutes on the road (you are treated as if you never drove in your life).
Hui-Chin Chen, CFP®on October 6, 2019 at 3:43 pm

Thanks for the comment. I agree if someone truly moves abroad and keep non-US address only, they can claim that they’ve given up residency and domicile in the state with documented proof. However, if the idea is to be able to keep an US address for something – driver’s license for one, then the state can easily claim that you are domiciled there. Granted, some states tax on residency and not domicile. It’s best to check how the state determine your tax status before using an US address on an investment account. Or the better, choose a state that does not have income tax if you choose to keep an US address.
Maryon January 3, 2020 at 9:56 pm

Thank you, Hui-Chen, for this very informative post and going to the effort of breaking things down in an easy to read and absorb fashion. Kudos – I’m an editor by trade. I just read your companion article on insurance, as I’m contemplating moving to the UK. I know this article was updated a year and a half ago, but it is a great starting point for me. I’ll definitely read more of your articles here.
Hui-Chin Chen, CFP®on January 15, 2020 at 2:30 pm

Thanks for the kind words! I update existing articles from time to time. Will make sure to include new info if applicable.
D in USon February 21, 2020 at 5:25 am

Thanks for all this information, Hui-Chin.
I read that “Your 401(k)s should not be affected as long as you are still a participant.” What does it mean to be a “participant” (section A.4)?
Also, in the same section, “Some custodians have chosen to close IRAs belonging to foreign residents.” Will this also apply to Roth IRA accounts, meaning will they make people liquidate those if the person moved abroad?
Hui-Chin Chen, CFP®on February 23, 2020 at 3:39 pm

You are welcome! 401(k)s are employer sponsored plan that you “participate” in. So if you still have the account opened with balance, you are likely a participant of the plan.
Yes, it may include Roth IRAs. IRA stands for “Individual” Retirement Account, which means you are the owner of the account. The custodian can internally decide at any time they do not want to work with non-US resident customers. This happened a few years back to a few financial institutions. In contrast, 401(k) plans are the “customers” for these institutions, not you personally as a participant, so it’s unlikely the custodian can kick you off their platform. 401(k) plan participants are also protected by law (ERISA), so the plan sponsors cannot discriminate against existing participant.
Benon February 23, 2020 at 10:44 pm

Hello Hui-Chen,
Thank you for all the advice on your website.
I am an Australian who has been working in the US for the past few years and am trying to decide whether I should be investing in my employer’s 401K plan and/or whether I should be investing in the stock market (index funds mainly) while I am here. Is it worth doing, or will the taxes that are applied make it a poor decision for either investment?
I plan to move home in the next year or two, and so I want to make sure I am not making any major errors when it comes to the tax rules that will apply.
Any advice would be very much welcomed!
Hui-Chin Chen, CFP®on February 24, 2020 at 10:10 am

Hi Ben,
Whether to invest in 401(k) or not as a foreigner depends on various factors. You might want to check out my post on that topic: https://moneymattersforglobetrotters.com/should-i-contribute-to-401k-or-ira-as-a-visa-holder/
For Aussie tax treatment of 401(k), you can check out this ATO reponse:
https://community.ato.gov.au/t5/General-super-questions/Transferring-my-401k-amount-to-Australia/td-p/12905
Eventually, if you do make money from investment, it’s unlikely tax will erase all the gains. The main question is whether the post-tax gain, minus the cost of potentially hiring a tax professional, is worth it. That’s a more personal question.
I’d say don’t forego investing just because the tax complexity. If you want more flexibility and not think about special tax treatment, you can always invest through taxable individual brokerage account.
Hope this helps.
Greg McNeilon March 8, 2020 at 9:07 pm

I am a US citizen recently I moved back to Canada my country of birth. I was told by Vanguard that not only can I not purchase any more mutual funds from them but I cant even adjust allocations between my existing funds. Does this sound right to you? Thanks.
Hui-Chin Chen, CFP®on March 10, 2020 at 4:26 pm

That’s consistent with what I’ve heard. Vanguard does not offer mutual fund to people whose permanent address is not in the US. Adjust current allocation is in effect buying so that is not allowed. I believe you can sell and take cash with you, but with tax consequences in both countries.
Rolanon March 28, 2020 at 7:04 pm

I used to work in the US under work visa and have moved to Australia 2 years ago under work visa (same company). After 2 years, we just recently obtained Permanent Residency here so we are wondering what the implications are especially with our 401k and Personal investment in the USA. We are not actively doing anything with those accounts and just letting it grow passively. Is this fine or should I withdraw everything on the personal investment? Can I let the 401k open?
Hui-Chin Chen, CFP®on March 30, 2020 at 1:50 pm

Hi Rolan, there is no rule against keeping your 401(k) account open in the US, unless your employer closes the plan completely. If you liquidate the account now, you may have to pay both US and AU taxes. You just need to consider whether the benefits outweigh the costs. Hope this helps.
Arunon May 5, 2020 at 5:31 am

I am a retired US citizen with travel restrictions due to a family member, since couple of years. I intend to return when this restriction ends.Not very possible but miracles do happen, sometimes. Coming to the point I have my lumpsum pension rolled over into an IRA. when my current custodian learnt of my situation, he closed my account. Some of the companies you named have refused to allow me to use their robo investing. Can you advise on how I can invest there and which broker are more accepting of this situation.
Hui-Chin Chen, CFP®on May 11, 2020 at 4:03 pm

Hi Arun, not sure which companies you’ve tried. You should be able to transfer your IRA to Interactive Brokers. Maybe Schwab and TD Ameritrade (the latter was brought by the former.) If you go through Schwab International, it appears India is a country they will work with. Schwab has a robo service. However, most of the robo service provider may preclude people not residing in the US. Let us know what you find!
Loganon May 29, 2020 at 2:05 pm

I’ve read many articles about contributing to an IRA while living abroad, but I haven’t seen one article mention any specific company that allows a U.S. citizen abroad to open an IRA while living and working abroad for a non-U.S. entity. With Schwab you could select retired, not employed, homemaker, or student and then not need to enter your foreign employer’s information, but otherwise I don’t see a way.
Can you name a company that is willing to let U.S. citizens living and working abroad open an IRA with a foreign address and a foreign employer?
Hui-Chin Chen, CFP®on June 3, 2020 at 3:23 pm

I believe TD Ameritrade allows Foreign Employer / Foreign address through their online application, although it’s being acquired by Schwab. You can also check Interactive Brokers. However my experience with those two are on brokerage accounts, not IRA specifically. For IRAs I believe those two companies also accept foreign employer address, but I’m not sure whether a foreign home address is allowed if you are a US citizen. (It has to do with how they run their business lines and compliance. You can be a foreigner opening a US account with foreign address info without problem. But if you are a US citizen overseas, you fall through the crack…)
Sometimes custodians will allow you to input foreign address through paper application – it’s not automatically approved, but it doesn’t mean you can’t. It is also on a country by country basis. Using foreign address sometimes will also restrict the trades you can make – especially if you are in the EU. So if you are not permanently overseas, having a US permanent address on file has its advantages. But of course, you need represent yourself to the best of your knowledge on the application. Hope this helps.
Paul Newberyon June 15, 2020 at 12:38 pm

This is all excellent information and I thank you very much for this. I’m a Canadian citizen who has lived in USA for past 22 years and fear moving back home will be daunting. This information helps a lot.
Hui-Chin Chen, CFP®on June 16, 2020 at 3:14 pm

Glad to hear it helped! For Canadians specifically, you might want to take a look at this book, and this book. There is definitely a lot to coordinate between the two systems.
See Also
How to Enable International Trading - Fidelity American Expat: Brokerage Account Closures and Restrictions | Cerity Partners FAQs for Investors Living Outside the US Best Brokers for International Trading 2023
Allison Kelleyon June 17, 2020 at 11:52 pm

Hello Hui-Chin!
Can you explain why robo-advisors (such as Betterment) do not allow for expats living overseas contribute to investment accounts? If the intent was always to move back home to the US after a short time (like you addressed in A3) and the legal domicile was used as a permanent address for the account, does this also fall into the gray area of the law?
Purvi Gandhion June 22, 2020 at 11:16 pm

Thanks a lot for this not so easy to find information. My friend’s case falls under B1 category which is, he did his Masters in US and was on work visa for few years and moved back to his home country for good. He has his Etrade brokerage account and 401K account as well with my US address. Not sure of the implications,he did not inform or make any changes on the account. Now, in 2018 and 2019, he has received Form 1099B for RSU sold and Form 1099-Div from Etrade. Not sure, whether he has to file or not, if file as 1040NR, will he just have to report Dividend income? He would like to consult you, let me know how to get in touch with you.. Thanks in advance
Rishion June 28, 2020 at 2:06 pm

Dear Hui-Chen, thanks for the article ,this kind of information is rare to find online..
I have 1 question for you , I’d highly appreciate if you provide me some information .I was in USA on work visa till 6th Feb-2020. I went to india in Feb and I’m stuck in india as I can’t travel back now.
I have invested few dollars in my Robinhood trading account . Even after coming to india , I’ve been trading and making some profits .
Since I was more than a month in USA , I know that I should be filing tax ..
Can you please tell me if my capital gains are taxed as well ?
Thanks
-Rishi
Hui-Chin Chen, CFP®on June 29, 2020 at 4:11 pm

Hi Allison, that’d be a question for each individual company. My understanding is that they chose not to work with people overseas – perhaps to reduce the regulatory burden they need to meet, but I can’t speculate on why they made the decision.
Hui-Chin Chen, CFP®on June 29, 2020 at 4:16 pm

Hi Purvi, you can learn about how to work with me here. Technically anyone who received US income should file US tax return, unless they meet certain criteria. You can go through
this tool to determine whether your friend meets the criteria.
Hui-Chin Chen, CFP®on June 29, 2020 at 4:22 pm

Hi Rishi, right now tax filing is for 2019. If you were in the US on work visa then, you will be filing as resident and paying taxes that way, regardless where you are currently. For 2020 it’ll depend on whether you return.
Sehon July 20, 2020 at 6:43 pm

Hi Hui-Chin,
I have a E*TRADE personal account, and have a plan to move back to own country. I was told by E*TRADE that I have to close my account and liquidate them should I want to move back. Looks like they don’t allow non resident to own the account. If I liquidate now, I will have to pay the capital gain tax. Any advice in this situation?
Hui-Chin Chen, CFP®on July 22, 2020 at 9:51 am

Try TDAmeritrade or Interactive Broker. It depends on which country you are moving to, but those two companies can open nonresident accounts. You can open an account and transfer your investment “in-kind” so you don’t actually sell the investments.
Josh Shaoon July 26, 2020 at 3:05 am

Hello Hui-Chin
Thank you for all the information and advice in your blog. I’ve still got some questions here and hope you could point me into the right direction.
I noticed that in A4, US person would have to be aware of some legal reporting (form 8938, PFIC reporting, etc.), is there something similar to pay attention to as a foreign investor when I do move my assets out of the US?
In addition, I used to be a F-1 student and I have left US for 1 year now back to Taiwan, currently classified as nonresident alien. I read in section B1 that I do not have to worry about mandatory reporting, but in the comment response to Purvi you mentioned “Technically anyone who received US income should file US tax return unless they meet certain criteria”. I still have my investment accounts opened and still investing. I am still getting the 1099-B, 1099-INT, 1099-DIV forms. I am wondering if I do have to file my taxes or not? If I do, I’ve already missed the deadline for filing this year, should I still file a tax report even if it comes late?
Saverioon July 29, 2020 at 8:09 pm

Hi,I am an Italian with an US passport, I currently live in US but because of the current situation I lost my job and thinking to move back to Italy.I have few thousand dollar invested in a Robinhood taxable account.What should I do? Liquidate my portfolio and pay taxes or transfer it to TDAmeritrade? And if so do I have to pay taxes on my dividends to the IRS every year? Thanks
Investment In Sharjahon July 30, 2020 at 4:41 am

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Hui-Chin Chen, CFP®on July 30, 2020 at 4:35 pm

It depends on whether your withholding was done correctly. If the tax was withheld correctly then some people argue you don’t have to file – even if you file, your tax refund / liability should be zero. If the custodian did not withhold because you opened account as resident alien, then it’s your responsibility to report and pay taxes correctly. If you determine you need to file , you can file late, even for past years. If you are due a refund you get it back. If you owe taxes you need to pay the tax due plus late filing / payment penalty.
Hui-Chin Chen, CFP®on July 30, 2020 at 4:43 pm

Sorry to hear about your job. I can’t advise on whether keeping or selling is more beneficial for your situation. You pay taxes to IRS regardless where you invest because you are a US citizen. If you report an address Italy to the custodian, there may be some restrictions on what investment you can make in the US account related to the EU PRIIPS regulation. Good luck!
Hui-Chin Chen, CFP®on July 30, 2020 at 4:44 pm

Glad you like it!
Josh Shaoon July 30, 2020 at 7:47 pm

Thank you for your help Hui-Chin!
Rolan Cruzon August 2, 2020 at 5:44 am

Hi Hui-Chen, I’ve been in the US for two years under L1 visa and moved to Australia (PR now). I left my 401k and investment account there and that investment account still receives dividend, at around 200 US$ in one year. I received form 1099 for 2019. Do I need to file tax return every year in addition to the filing I do here in Australia? Should have I received that form considering I am non resident? If not, what have I missed? Thanks in advance.
Hui-Chin Chen, CFP®on August 5, 2020 at 2:54 pm

Hi Rolan, as long as you have US income, you should consider filing in the US. The main thing to check is whether withholding was done correctly. If custodian didn’t withhold taxes, then you should definitely file and pay, since the dividend is taxable in the US, and file a new W-8BEN withholding form to claim treaty rate withholding going forward so you don’t have to file to pay taxes. Also you’ll need to declare that income on your Australian tax return, and you may potentially claim tax credit for the US tax you paid on the same income.
Iliyamon August 5, 2020 at 6:57 pm

I have 401K funds from previous employar and about to move to live abroad so can i rollover my 401k to Merrill edge IRA account and managing it from abroud
Amiron August 6, 2020 at 12:23 am

Hi Hui Chen, I am moving back to Europe in several months and will not be moving back to US and will lose permanent resident status. I own stocks through Robinhood. May I keep the stocks and continue buying and selling on Robinhood? Should I sell all stocks and start new in Europe? What do you recommend?
Hui-Chin Chen, CFP®on August 6, 2020 at 2:19 pm

It depends on your US immigration status and where you are moving to and whether Merrill Edge will keep you as a client after you disclose your new location. It’s best you check with them first before rollover. With IRA, there is always a risk that the custodian will choose to not work with you due to your location in the future and close your account unilaterally.
Hui-Chin Chen, CFP®on August 6, 2020 at 2:24 pm

Hi Amir, normally holding individual stocks is less problematic if you will live in EU. If Robinhood won’t keep your account open, you can try Interactive Brokers or TD Ameritrade and transfer the stock holdings over without cashing out. There may also be EU custodians that are willing to hold US stocks directly for you. I can’t comment on whether you should sell or not, but if you wish to keep, there should be a way. Good luck!
Guilherme Limaon August 17, 2020 at 2:26 pm

What a nice site, Hui-chin Chen! Congrats! I read all the previous comments and some already clarified some of my questions. So, to confirm, I am Resident Alien returning to my country. I understood I can keep Mutual Funds and Stocks investments in US if my broker is doing the tax withholding correctly. If this is true, should I still claim taxes in US after leaving regarding these investments?
Hui-Chin Chen, CFP®on August 18, 2020 at 1:58 pm

Thanks! You didn’t mention whether you are becoming a nonresident alien or not so I can’t really tell what your questions are getting at. You likely need to deal with US taxes one way or the other as long as you have investment income from the US. Whether you can keep the mutual funds or stocks with your current broker also depends on whether you will have a status change, and sometimes broker’s / mutual fund company’s internal policy. Hope this helps.
Pavan Nadkarnion August 30, 2020 at 12:02 am

Hi Hui-chen,
I had a brokerage account with Robinhood which I opened when I was working in US couple of years back. I left US and never closed the account. This year i did some trading and unfortunately I came to know that I’m not supposed to trade as Non US resident. I will close the account soon but want to know How should I proceed to fix this issue so that there are no penalties next year when I file returns
Hui-Chin Chen, CFP®on August 31, 2020 at 12:56 pm

Hi Pavan, since Robinhood doesn’t work with nonresidents, I’m not sure whether they’d have had withheld taxes correctly for you. Assuming the account was closed and they didn’t withhold taxes, you should still receive 1099 showing dividend and capital gains earned but zero withholding. Then you’d need to file 1040NR to report those earnings and pay taxes on your own. Hope this helps.
Pavanon September 15, 2020 at 7:45 am

Thanks Hui-Chin Chen that was really helpful. Since i moved to India, can i claim India-US tax treaty on capital gains and pay necessary tax on dividends while filing 1040NR? Even after paying all the taxes will i get in trouble since Robinhood would have reported as resident and i’m filing as Non-resident?
Lingon September 27, 2020 at 2:23 pm

If i open an account with foreign address and transfer the investment funds over to this non-US account and continue investing in US markets, will this account be included in the ‘property of a covered expatriate that is deemed sold for its fair market value on the day before the expatriation date’?
Lingon September 27, 2020 at 2:48 pm

Hi Hui-Chin, I have another question. I am thinking of opening an account using a foreign address, transfer the funds, and close the existing accounts as mentioned in the article. I am currently still in the US. Should I open the account already using a foreign address, or use my US address and change it to a foreign address when I decide to relocate? Or does it even matter?
PS: I am glad to find your blog and appreciate reading about the advice that you provided in the article
Samon September 29, 2020 at 12:38 pm

Thank you, Hui-Che,
When it comes to complex topics like tax related issues, only very few people can explain very succinctly with clarity, using simple and easy language and you are definitely one of them. This posting is awesome; I wish I know about you and your services earlier.
I have two quick questions and I sincerely hope that you have time to respond. I am a US resident alien, currently living US with work visa for the past several years. I am a Canadian citizen and I have neither US citizenship nor US green card. Due to COVID, my job situation is changed, and it appears that I have to go back to Canada permanently. I have an individual non-registered (not retirement related) brokerage account with interactive brokers.
1.Before I move, if I change my account as a joint account, by adding my spouse name, would any of us incur US gift tax or any other US tax? We typically file jointly as a married couple.
2.When I move to Canada, I would still want to keep my account with Interactive Brokers. In that case, do I need to open a new account in Canada, transfer the funds into this new account and close the US account or just change my current account as a non-resident alien US investment account?
Thanks
Hui-Chin Chen, CFP®on September 29, 2020 at 1:19 pm

US Expatriation rule covers worldwide asset and income.
Hui-Chin Chen, CFP®on September 29, 2020 at 1:24 pm

Hi Ling, I’m not sure what you are trying to accomplish. However, whether the custodians allow you to do something is different from whether you have tax liability or IRS would find out. If you can find a US custodian that doesn’t care where you live, you should be able to change address to reflect reality.
Hui-Chin Chen, CFP®on September 29, 2020 at 1:41 pm

Glad you found it useful. The answer to your Q1 depends on the size of account, your US domicile status for gift tax purpose, and US-Canada gift tax treaty. This and this article may help.
As for Q2, that will be a question for IB. It’s more about how they internally service accounts and impose restrictions on investments based on which jurisdiction the client falls under. IB allows you to trade on worldwide exchanges so it doesn’t matter where the account is registered.
Hui-Chin Chen, CFP®on September 29, 2020 at 1:49 pm

If you qualify under all the conditions under the treaty, you can claim treaty position. However, you need to specifically claim treaty position on tax return. However without treaty, capital gains tax on US company stocks for nonresident alien is already zero. If you continue to file under the same tax id, IRS would know you reported the same income, even it’s on 1040NR. If you are afraid of making mistake, the best thing is hire a CPA that is well-versed in this to file the return for you.
Anion October 2, 2020 at 2:45 pm

Thank you for the article Hui-Chin. really helpful. I am a an international student (from India) studying in the US, but moving to Europe soon. I have some investments through robinhood. Should I sell it all before moving to avoid loosing access to them as I do not plan to visit US again. Where do I find reliable information regarding this matter ?
See Also
Non-U.S. Residents Trading Stocks in an International Brokerage Account
Lingon October 4, 2020 at 3:24 pm

hi Hui Chen, thanks for your advice. I was trying to simplify and do it in 1 step. ie open an account with IB with foreign address instead of opening it in US address and then have to change it later.
Hui-Chin Chen, CFP®on October 8, 2020 at 1:03 pm

Hi Ani, The only reliable information will be from Robinhood itself. You can consider transfer your shares to another custodian if you don’t want to sell.
Hui-Chin Chen, CFP®on October 8, 2020 at 1:08 pm

Hi Ling, you may want to check with the custodians on both side first whether address needs to match in order for them to do ACAT. Whenever you open account you use the correct information at the time. There is a possibility that IB will have to close the account and open another one if you change address from US to foreign, so open the account using the foreign address when you are already there might be the way to go.
Leslieon October 26, 2020 at 7:38 am

Absolutely great that you are answering so many Q. My question is, I think, the same as Ling’s above. I was Indian living/working in US but will move to Canada. My brokerage account has assets with accrued capital gains. Canada will not tax me on any of those gains pre my entry into Canada. When I eventually sell they consider their value at entry to be my cost. Am I correct that the US also will not tax me on those accrued gains when I leave the US and transfer the assets to a Cdn broker? So nobody taxes these accrued gains?
Hui-Chin Chen, CFP®on October 26, 2020 at 2:01 pm

Not a Canadian expert, but my understanding is similar to yours. Canada doesn’t tax gains accrued from before you become a resident. US doesn’t tax gains from stock sale if you realize the gain as nonresident and meet the days in the US restriction. I didn’t see anything in the US-Canada income treaty that addresses this direction of migration, only the other way around, when someone moves from Canada to the US. Again, not a Canadian expert so you should confirm this with Canadian inbound expert. However this is not unique. Quite a few countries in the world doesn’t tax capital gains, so realizing gains after leaving the US makes sense.
Tyroneon November 1, 2020 at 6:13 am

Hi Hui-Chin,
Your article is phenomenal. So, much useful advice. My wife and I currently live in Japan (she’s Japanese, I’m American), and are looking to invest. I currently have an account with Edward Jones that I haven’t been able to invest in since retiring from the military and change my address to a local address here in Japan. And a have a retirement account through the US government, similar to a 401(k), that I cannot put money into anymore, because I no longer work for the government. I want to find a way to invest my pension from the military. It is sent to me directly into a US-based banking institute. I do not deposit any of my income from my Japanese employer into any of my accounts with that bank. Is there a way I can invest these funds (from the US government) into the US market? Thank you, I really love your article.
Hui-Chin Chen, CFP®on November 4, 2020 at 5:29 pm

Thanks Tyrone! I know some US citizens working in Japan had luck opening brokerage at TD Ameritrade. Perhaps try there. Once the brokerage is open, you can link that account with the US bank account to fund it. I’d recommend keeping the TSP funds in place. It’s a bit more complicated to roll out while overseas if you have tax exempt balance. Hope this helps.
Ann Hagmanon November 16, 2020 at 2:48 pm

Thank you for great information,
I’m a Swedish (by birth) and US citizen. Lived in USA for many years but plan to retire to Sweden. What should I do with my IRA? As of now I manage it myself- portfolio of stocks, funds and a fixed annuity. You mentioned that TDAmeritrade or Interactive Broker are dealing with nonresidents. Could I make an “in-kind” transfer to either of them and keep managing my IRA from overseas? If that is not an option, is it possible to just set up the IRA in such a way that investments gradually transfer into cash, and just take distributions periodically over the years, without actively buying and selling or making changes within the IRA? Or is it no difference between taking a passive or active role regarding the IRA?
So confusing. Thankful for any information.
Anna
Hui-Chin Chen, CFP®on December 2, 2020 at 3:15 pm

Hi Ann, even for custodians with global presence, US IRAs are generally administered under the US entity since it has special US tax treatment. This is why you need to use a US company that will work with nonresidents. You should be able to transfer in-kind underlying investment from one IRA to the other without liquidation. Hope this helps.
Chrison January 3, 2021 at 9:07 pm

Thank you so much. This information is really helpful.
I am not sure whether this question is partially covered in other questions already, but can you comment on best practices regarding personal investment accounts when moving to the US for work (gaining US tax residency, contributions in 401(k)) and then leaving the US again after a few years (losing US tax residency again). I assume transferring assets all the time is not very tax efficient, so I wonder whether there is a best practice on what to do with the personal investments.
Is it to open a brokerage account in the US and keep it even after leaving the US/losing US tax residency? Would you know good examples for brokers that allow that?
Thank you!
Peter Juranon January 4, 2021 at 9:56 am

Hello Hui-Chin,
I am US resident and working in US but i have Slovak citizenship. I have two open accounts, one in Slovakia and one in US. I made some profits in slovakian account, but they blocked my access due to logins from different country. I am paying taxes in both countries and they have agreenment about Avoidance of Double Taxation. Am i not allowed to have investment accounts in two different countries? Thanks for help.
Chrison January 4, 2021 at 11:00 am

Thank you so much! This is information is super helpful.
What would you recommend someone moving into US, becoming US tax resident after a while and then moving out of the US after several years, losing the US tax residency again as a result.
Is it advisable to open a US brokerage account and keep all investments there, even if US tax residency is lost? I am trying to understand where and how I should open an account and keep that for the next 20 years without the need of transferring assets across firms and borders.
Thank you!
Toaion January 5, 2021 at 1:23 pm

I’m in Vietnam and looking for a us brokerage firm which allows passive investors! IB is for traders or you must have the account above$100k—> not for me!
Schwab requires $25k but it does not allow American expats in Vietnam!
Do you have any suggestions for a brokerage firm which will accept customers with low investment amounts without active tradings?
Thanks
Hui-Chin Chen, CFP®on January 18, 2021 at 11:00 am

Have you tried TD Ameritrade?
Hui-Chin Chen, CFP®on January 18, 2021 at 11:05 am

Hi Chris, like all complex questions, the answer is it depends. As a US tax resident, you most likely will lose the ability to buy foreign funds, at least tax efficiently, unless it’s in a pension account; (or pick stocks or bonds without using a fund). So there really isn’t a good alternative to invest in a US brokerage while you are a US tax resident if you want to invest at all. Whether to keep all of your investments in the US after you leave is another question – depends on type of investment, tax rates in your ongoing destination, tax treaties, etc..
Hui-Chin Chen, CFP®on January 18, 2021 at 11:11 am

Hi Peter, I believe it has to deal with EU or Slovak regulation. Since you weren’t physically in the EU, the Slovak custodian considered you non-resident and therefore cannot trade. It doesn’t matter in which country you pay taxes. It’s best to contact the custodian directly to understand the rules around how you are allowed to trade while not living in country.
Hui-Chin Chen, CFP®on January 18, 2021 at 11:14 am

Hi Chris, transferring assets doesn’t mean you have to sell and incur taxes. You can transfer assets from one bank to the other “in-kind”. It’s likely by the time you leave the US, the landscape on which custodians will work with you has changed. It depends on where you go next, and whether the custodian changes its policy, or the government changes its laws, etc.
Joeon January 25, 2021 at 11:51 pm

Hello Hui-Chin,
I’m an American who has lived in Singapore for the past 24 years. Love the content you are putting out. One small tweak I would recommend for LT expats with U.S. brokers is to simply keep a U.S. address on their U.S. accounts indefinitely. I’ve been with TD (soon to be Schwab) since before I moved abroad and never changed the address to this day. They have never questioned it and I have both a regular and IRA account. I don’t use a VPN, I don’t keep a U.S. drivers license and I don’t file U.S. state taxes… and never had a problem.
Justin Milettion January 27, 2021 at 8:47 am

Hi,
Thanks for the information! I am a Canadian citizen but did my masters in the usa. While I was there I got a SIN for my part time job. Since leaving in 2016 i have had my E-Trade account open with investments. I am still not sure what to do with the 1099 forms. Do I have to file usa taxes even if I haven’t lived there in years?
Sung Jinon February 2, 2021 at 10:54 pm

Hi, Hui-Chin. Thank you very much for a very informative post. I’ve been in the US on a work visa and may go back to my country, Korea upon the visa expiry. (case B-1)
If I leave my current US brokerage account, what tax law/treaty I will be subject to?
Nikkion February 20, 2021 at 11:32 am

This is great info–I’d love if you’d be able to post an udpated version of this? I’ve been an American living abroad for 10 years, and it seems to me that nearly all of the sources you’ve listed no longer allow accounts/investments by Americans living outside of the US (unless you use your US-based address and VPN, as you suggest), but for those who have dual citizenship elsewhere (I’m based in France), I cannot open accounts with TD, Schwab, Vangaurd or anyone else. I’m told Investment Brokers will allow it, but that they’re not the best for “beginners,” which is how I’d classify myself.
I think there are a lot of people out there, after Schwab decided to close its accounts of US nationals living abroad, who are looking for reliable information on where we can save and invest legally on the US market.
Nikkion February 20, 2021 at 11:33 am

**Sorry, I meant to say Interactive Brokers, above, not Investment Brokers 🙂
Sonadilon March 6, 2021 at 2:54 am

I’m planning to move to my home country. I’ve couple of brokerage accounts here in the US. Is it a good idea to maintain them as is or should I open an international trading account from my home country and transfer the assets from these US accounts to the former?
Yanti Harunon March 14, 2021 at 5:58 am

Hi Hui-Chin,
I am a US citizen and invest on an IRA account with Merril Lynch. I was traveling to Asia due to family emergency and stucked here due to pandemic and lock downs, as a result I was out of the US for more than a year. I am planning to go back to US as soon as possible. In the mean time, ML closed my account when they assumed I’ve lost my residency in the US although I’ve kept my US address. If I transfer my funds to another brokerage IRA account, do I have to pay taxes on that funds? I love reading your comments and appreciate your assistance in this matter.
Hui-Chin Chen, CFP®on March 14, 2021 at 8:18 pm

Hi Yanti, I’ve heard the same from several people with ML account. Normally you need to redeposit the IRA check into another IRA account within 60 days, but there are certain permissible reasons you can self-certify to custodians to deposit after 60 days and still has it count as rollover. I don’t have personal experience in this but this article has more detail explanation.
Hui-Chin Chen, CFP®on March 14, 2021 at 8:21 pm

It depends. If you will not hold any US visa, and your home country’s trading platform is easy to use with low trading cost, I don’t see why you need to keep the US account, unless your home country taxes those accounts differently.
Hui-Chin Chen, CFP®on March 14, 2021 at 8:27 pm

I’ve heard Fidelity will open accounts for US citizens in EU countries where Schwab doesn’t work in. You might want to check that. Interactive Brokers has less user friendly interface for people new to trading, but if you just want to buy and hold periodically, it’s not so difficult. The main problem is that if you have a EU address, you cannot trade US domestic ETFs due to EU regulations. You may run into the same issues with all the US custodians.
Hui-Chin Chen, CFP®on March 14, 2021 at 8:33 pm

That’s a very general question. There is a US-Korea tax treaty you can refer to.
Hui-Chin Chen, CFP®on March 14, 2021 at 8:42 pm

Hi Justin, if you are not a US tax resident anymore, you should be getting 1042-S. The fact you are getting 1099 means the tax withholding is likely incorrect and you probably owe taxes. Since the IRS gets a copy of 1099, if you they see you filing tax return to report the 1099, eventually that might trigger an audit. They might have tried to contact you at your old address. You need to contact your custodian to provide your nonresident tax withholding (W-8BEN). If E-Trades doesn’t work with that, they will tell you and ask you to close the account / transfer the investments out.
Hui-Chin Chen, CFP®on March 14, 2021 at 8:47 pm

Thanks for sharing your experience. Not having a current address or ID comes with its own risk. For example, you never know when TD becomes Schwab, whether Schwab will ask all customers to resupply their documentation if they deem TD documentation outdated. Hopefully that doesn’t happen.
Julianon April 15, 2021 at 4:30 pm

hi Hui-Chin,
thanks for your useful feedback
I am a non US-resident under a E-1 working visa and I am planning to come back to Italy next year. I currently have a vanguard account with long term investments in a few funds plus a chase investing account with some stock.
can I keep my accounts open when I will be back in Italy ? at least the vanguard one ? if so then what happen when I will decide to close it? should I pay taxes in Italy or vanguard will send me a 1099?
thank you again
Hanaon April 27, 2021 at 11:01 pm

I am a US citizen living in Canada now. My mutual funds cannot accept foreign address, so I have to close all my accounts. Do you have an idea about what will happen to my money? Can they do direct deposit? Or they will send me a check to my foreign address ? (There are other regulations about sending money more than $10,000 accross the border, right?) I’ve never closed an account before so I’m a little nervous and I haven’t contacted my broker to tell her about my new address yet (although it’s time I’m asked to updated my info).
Hui-Chin Chen, CFP®on May 16, 2021 at 4:54 pm

Hi Hana, it’s a question for your mutual fund company or custodian. You can call and just ask whether they can do a wire transfer to an overseas account. If you don’t have a USD deposit account in Canada, you also need to make sure you know which party is doing the conversion – the US or Canada counter-party. I believe cross-border transfer above $5,000 are recorded by Treasury but there is no law forbidding or reporting requirement for transfer of $10,000 and above.
Hui-Chin Chen, CFP®on May 16, 2021 at 5:13 pm

Hi Julian, the only way to get the answer that applies to you at any given time is to call Vanguard. Vanguard generally does not work with non-US residents. However, I’ve heard from chatters that once you are a client, they may be able to keep your account open, depending on the type of account. However, there may also be trading restrictions when you are not physically in the US. If you wish to sell after you become a nonresident, you need to inquire Vanguard whether you can submit nonresident tax withholding form W-8BEN so they will send you 1042 instead. You need to understand when you begin to be liable to tax in Italy before you decide when to sell the investments.
Chengon May 23, 2021 at 7:20 pm

Hello Hui-Chin, I am a US citizen living in Japan. I just retired from my company few months ago. Schwab doesn’t allow me to open IRA for the rollover my 401K. do other banks in US offer IRA to US citizen who are living in overseas?
Rayon July 29, 2021 at 3:20 am

Hi Hui-Chin,
Thank you for providing so much good information. My question is more of an estate planning one, but I hope you can help. I am a retired US citizen living in Japan with my Japanese citizen wife. I bought some Apple stock over 20 years ago and of course the value has increased tremendously, but it is almost all capital gains. It is currently in a Schwab One Trust Account. I would like to give the stock to my heirs (wife in Japan and US citizen children living in the states) when I die, as I understand their cost basis would be reset to the value at my death. I also understand that it could not be transferred in-kind to my wife’s foreign broker. I’m thinking that she will have to have an account with a US broker to receive it. She can then sell it and close the US brokerage account. Does that seem like a workable plan to you?
Thank you.
Amberon August 15, 2021 at 8:19 pm

Hi. This is a very helpful post. Thank you.
I am a dual citizen of the US and another country. Most of my investments are in the US, where I plan to retire, but I am currently living and working abroad. I have a Vanguard and Schwab international account. Vanguard doesn’t currently know I live abroad. I entered my US address when I opened with them, where I live part of the year (less than 6 months). 1) What will happen to my accounts when Vanguard finds out? Will the revoke any earnings and force me to transfer? 2) Also, I really want to open some sort of custodial or separate brokerage account for my kids’ college fund, and I expect them to go to college in the US. However, Schwab international only allows me to open a second brokerage account with a minimum $25,000 investment, which is too much for me at this time. Can you make any other recommendations? 3) I’ve seen so many amazing apps like Betterment and others offering good options for emergency fund that are much more appealing than other high yield savings account options. However, their fine print requires that US residents live in the US at least 6 months a year. Do you have any other suggestions about this?
Thank you.
John W.on August 19, 2021 at 10:12 pm

Hi Hui-Chin,
Thanks a bunch for this very useful article! I have been trying to read up on this topic, but it is really complicated. I have a rather specific question. I have been working in the US on a H1B visa and moving to Canada as a permanent resident. I have investment accounts (non-retirerment) at Robinhood, Wealthfront, and TD ameritrade in the US. Based on my phone calls to these brokerages and my readings my understanding is that none of these brokerages will allow me to maintain the investment accounts as a Canadian resident. They suggested that I either liquidate my funds (which I really do not want to do) or transfer them to a Canadian brokerage. I also read that Fidelity and Interactive brokers will allow me to do this (i.e., maintain investment accounts in the US while residing in Canada and still be able to buy/sell stocks/ETF. But not mutual funds). However, when I called a Fidelity brokerage representative, I was given conflicting information. Would you happen to have suggestion on this or a source to which I can refer for some insights on this topic? Thanks so much!
Hui-Chin Chen, CFP®on August 20, 2021 at 2:20 pm

Hi Cheng, try Interactive Brokers.
Hui-Chin Chen, CFP®on August 20, 2021 at 3:24 pm

Hi Ray, as your said, if you die with the capital gains, under current law no income is assessed as long as you are under estate tax exemption. So unless you want to liquidate the stocks now for other reasons, you don’t really need to gift it. If you gift the stocks now, you need to make sure the market value is under annual gift exclusion amount, otherwise you need to file US gift tax return. While your wife doesn’t pay capital gains tax in the US as nonresident alien, you and she need to make sure you don’t have some type of Japanese tax liability from the gifting and sale transactions. You can look into Interactive Brokers for transferring the stocks to your wife.
Antonellaon August 26, 2021 at 11:29 am

Hello, I’m a British citizen living and working in the UK. I’ve had an IRA since the 1990s as I used to work in the USA. The Custodian just informed me I must liquidate the IRA or transfer it to another brokerage within the next 8 weeks. I’m too young to retire; I’m unable to transfer the IRA to UK; I’m unable to open an account with a US bank/brokerage because I don’t reside in the USA. I have no idea of how much it’ll cost me to liquidate, how much tax I have to pay in the US and/or UK. How can I find out?
Luluon August 29, 2021 at 4:44 pm

Hello Hui-Chin,
Thanks for this useful article!
I am a US resident and I plan on moving overseas to Taiwan for 1-2 years, but am planning on returning to the US afterwards. I make income by trading stocks/options, would I still be able to access my trading brokerage accounts and day trade while abroad so that I am able to fund my living expenses when I’m there? I also have 401k/Roth from when I was previously employed by a company but I have been leaving those alone and letting them grow on their own and would not expect to need to touch them for decades to come. I am trading through Fidelity and plan on using a VPN during that time. My husband and I will also be keeping our home we bought so I will still have a US address.
Thanks!
Hui-Chin Chen, CFP®on September 6, 2021 at 9:26 am

Hi Amber, 1) No, the earnings is yours. However they could choose not to work with you at any point due to multiple reasons and close the account. The worst they could do is send you a check to the address on file with the cash balance after liquidating all investments. 2) It depends on which country you are in. If you already have the account open, you can always use different investments do denote the college savings within the same account. 3) No. Most US custodians will have the same clause. You might look into tradable short-term CDs through Schwab account if you just want to earn higher yield with your cash.
Hui-Chin Chen, CFP®on September 6, 2021 at 9:35 am

Hi John, both IB and Fidelity has Canadian branch handling accounts for Canadian residents. If you wish to transfer in-kind, you may want to check with the Canadian side whether they are able to take incoming in-kind transfer from an US custodian. I know IB would internally transfer account from IB-US to IB-CA; however I’ve never been through one and understand the inner workings.
Hui-Chin Chen, CFP®on September 6, 2021 at 9:49 am

Hi Antonella, try Interactive Brokers if you want to keep the IRA status. If you liquidate it, the current custodian is required to take mandatory tax withholding in the US. You’ll report the income in the UK and pay taxes at your marginal bracket. You can either claim the US tax paid on UK tax return or apply the treaty to claim tax refund in the US. If you are still working, either way you may be paying a higher tax rate than you would if you take the distribution after you meet the minimum age for taking retirement distributions. It’s best to speak an UK accountant that will help you file the self-assessment return.
Hui-Chin Chen, CFP®on September 6, 2021 at 10:03 am

Hi Lulu, I don’t have personal experience with how Fidelity website deals with VPN connections or foreign IPs. That will be the only practical obstacle in accessing your brokerage account while overseas. Whether it’s allowed under their Terms of Use is another matter.
Charlee Anthonyon September 23, 2021 at 10:22 am

Hello! I am a US citizen currently preparing myself to move to Portugal by next April. I was thinking on liquidating my 401k and removing all assets from the US as I plan to live there long term with my fiance. I want to keep my stocks but the 401k I feel like will just be an issue if I hold onto it, is it that big of a deal if I just liquidate and close the account and hold on to some of the money for taxes in 2022 before I leave?
Hui-Chin Chen, CFP®on September 25, 2021 at 9:33 am

Hi Charlee, it depends on your age, how big the 401k balance is, and your alternative to investing the money. If you are younger than 59 1/2, you’ll pay penalty in addition to the tax on pre-tax 401k balance. Also if you take the money to Portugal, US citizen usually has a harder time opening investment accounts in EU and have a ongoing US tax reporting of foreign accounts. If you were to leave any US investment accounts, 401k is probably the easiest to keep. You should talk to a financial planner to assess the full situation before you close the 401k. Hope this helps.
Thomas Stachlon October 3, 2021 at 1:53 pm

Hi Hui-Chin Chen, I’m currently a permanent resident and am considering leaving the US. Since I have only had my green card for ~5 years, I’m not a covered expatriate yet. After reading your insightful articles, I only have a couple of questions left:
1. 401k – I was thinking about using rule 72(t) to slowly and penalty-free withdraw my 401k funds. Should I start those distributions before or after I return my green card?
2. HSA – What are the tax implications of having an HSA as a non-resident alien?
Giuseppe Cusmaion October 26, 2021 at 7:16 am

Hello Hui-Chin,
first of all I want to thank you for your great article. It is surely helping lots of people.
I am a dual US/Italian citizen, who recently relocated from California to Italy. I still hold securities in Fidelity US brokerage account, with substantial unrealized capital gain, and thinking about what to do. My first goal is to avoid California taxation as I’m no longer california resident. I will still owe taxes to both US federal (as citizen) and Italy (as resident) with precedence and foreign credits set by tax treaty.
Assuming I open an “italian” account with Interactive Brokers, will I be able to transfer stocks “in-kind” without realizing any gain? Basically without liquidating the positions. If so, will the cost-basis be transferred to the italian system?
Thanks!
Konstantinos Mitsopouloson November 10, 2021 at 11:32 am

Hi!! I had been working in the US for the past 3 years on a working VISA as a non-resident alien. During June 2021 I decided to leave the country for good and return to Europe but I still have a big balance of securities in a well known trading app which uses my SSN. Should I sell all my stock and by again using a platform that is international? And then, am I required to submit a tax return in the US for 2021? Thanks!
Jennon November 19, 2021 at 4:41 pm

Hi Jui-Chin, this is really a good article. I really appreciate it. What is your take on Citi International Personal Bank (IPB)? Although they require to maintain a hefty combined balance, it does appear that they offer both investment and banking services for Expat.
Hui-Chin Chen, CFP®on December 10, 2021 at 4:11 am

Hi Thomas,
1) That’s a good question. I haven’t encountered that scenario and not sure whether submitting W-8BEN will jeopardize existing 72(t) order. I also don’t know whether plan administrator will process a 72(t) for NRA. The best thing is to ask the plan administrator directly.
2) The same requirements to distribute from HSA applies. You still need to file Form 8889 with your 1040-NR.
Hui-Chin Chen, CFP®on December 10, 2021 at 4:24 am

Hi Giuseppe, what you want to do is theocratically possible. I’ve heard situation involving other IB branches that it was done. However, it’ll be a question for IB EU before you open the account with them. For CA state tax, you should look into whether you qualify for safe harbor to be treated as nonresident.
Hui-Chin Chen, CFP®on December 10, 2021 at 4:27 am

Hello, if you don’t intend to return to the US and have access to low cost trading in EU, you may consider just liquidating your account in the US to avoid 30% withholding on dividend and potential US estate tax consequences in the future. Once you qualify as nonresident alien, capital gains is tax free in the US when you sell. However, double check your current country’s tax rate on the gains from foreign holdings.
Hui-Chin Chen, CFP®on December 10, 2021 at 4:30 am

Hi Jenn, I don’t have particular experience with private banking side of large international banks. Like you said, they require high balance. For them, it’s the only way that compliance cost is worth it. If you want advisory service and have access to your own private banker, that can be an option. I’d expect the cost is also relatively high.
timon February 5, 2022 at 11:39 am

Are there any special arrangements between US and Ireland for individuals returning to Ireland who are us citizens when it comes to Roll Over IRAs and 401ks?
Ravion March 13, 2022 at 7:11 pm

Hello Hui-Chin,
I moved out of USA and went to Canada. My company said they will bring me back to USA but now they are saying they cannot and I have to stay in Canada for good as permanent resident of Canada. I was in USA as student and on work visa for 5 years. I kept on investing all that time and now I have active accounts with those stock brokers.
Should I let the stock brokers know that I left the country for good and cash out? I do not want to as I bought some stocks for long term.
Zozoon March 23, 2022 at 2:43 pm

Hi Hui-Chin,
Thanks for the informative article and answers. I was thinking of opening a Roth IRA at Merrill Edge, but I may move abroad for 1-2 years and I saw that it said if I moved abroad, I would have to close my account, so I didn’t go through with creating the account.
If I did create the Roth IRA and ended up moving abroad for 1-2 years, would I get a penalty for having to close my account? Would I pay a penalty from any earnings on the account?
Is there a company I should open one with instead that won’t make me close the account if I move? Thanks!
Tony Mon May 17, 2022 at 7:47 pm

Thank you so much for all you do!
Austrian citizen currently on worker visa in US, will get married in September this year (option for green card). We intend to move to Austria in 2023
The big questions:
1. Should I apply for a green card? (Tax implications)
2. Where should I keep my investments? US or move to Austria? (e.g., conventional investment account via M1 Finance, 401k, IRAs etc)
3. Can I keep investing in my US investment account even if I move without holding a green card?
4. What would be the tax penalties associated with these activities?
I appreciate your time and look forward to your response!
All The Best,
Tony
Michaelon May 24, 2022 at 3:52 pm

Thanks for the article and info! I am planning to move to Japan for 1-2 years as a student and will techically have residence there as a student. I still plan to maintain an address in the US though. I have 2 brokerage accounts, a SEP IRA, and a traditional IRA with vanguard and morhan stanley. If my current plan is to return to the US after 2 years will I need to do anything during this time? If I decide to stay longterm, I would need to transfer my brokerage accounts correct. And can I leave my IRA accounts as is? And Japan only taxes foreign based income if you’ve been there 5 years from my understanding. Thanks.
Ramaon June 4, 2022 at 5:02 pm

Hi,
Thanks for this post and q&a. I wanted to revive the question here re: any custodians that will hold US securities (stocks, etfs) while I am in Canada for a 2 yr assignment. Selling/transferring is not an option for me right now. I have checked with TD, schwab, IB, rbc, Rjl and a few others but with no luck. I might go with the vpn and US address route but I wanted to first check if there was any new solution to this problem. If you know a name of a custodian/broker that does this, then that will be super helpful.
Thanks so much,
Rama
Hui-Chin Chen, CFP®on August 17, 2022 at 4:04 pm

Hi Rama, it’s unlikely you can do it with US ETFs. If you are a US nonresident after you move, you may be able to transfer individual stocks to a Canadian brokerage without selling. I know IB does this with other countries. Not sure about their rule on Canada specifically. Also Canada tracks basis based on when you establishes residency – that may be one reason Canadian brokerage does not take in-kind transfer of stocks from US brokerage.
Hui-Chin Chen, CFP®on August 17, 2022 at 4:09 pm

HI Michael, it is my understanding as well that you are only taxed on Japanese source income until you become long-term resident. You can keep your US account for as long as the US custodians let you keep it. You can hold foreign investments as a Japanese resident. You just need to report the income.
Hui-Chin Chen, CFP®on August 17, 2022 at 4:11 pm

Hi Tony, those are questions that have different answers depending on your personal situation. I’d suggest you get a consultation from someone. Sorry that I can’t answer them more specifically here.
Hui-Chin Chen, CFP®on August 17, 2022 at 5:11 pm

Hi Zozo, with some exceptions, most US custodians require US address on the account. Most expats keep a US address on the account whenever possible, especially if the move is temporary. If the move will be permanent, Roth account is likely not a great option unless you are going to a country that recognizes Roth IRA’s tax-free treatment.
Hui-Chin Chen, CFP®on August 18, 2022 at 7:28 am

As far as I’m aware, there is no direct rollover mechanism for IRA or 401(k)s to other countries’ retirement plans. There are rare exceptions where you may redeposit your withdrawal from an US retirement plan to a foreign retirement plan and receive favorable tax treatment in the new country. However, you’d still need to meet the US penalty-free withdrawal rules.
Hui-Chin Chen, CFP®on August 18, 2022 at 1:24 pm

Ravi, if you hold individual stocks, you can check with Interactive Brokers to see they will allow you to open a Canadian account and transfer US stocks in-kind without selling. However, you need to keep track of your Canadian basis separately. It’ll be different from what the US custodian says. I also know other nonresidents keeping accounts with TD Ameritrade by simply updating their tax status (filing W-8BEN). However, I’m not sure whether Canada is a country that TD will work with in this situation.

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What should I do with my US investment accounts when I move overseas? - Money Matters for Globetrotters (2024)

A. US Citizen or Permanent Resident who wishes to maintain status while living overseas

1) On US Government Assignment

Best Practice:

Be Aware:

2) Maintaining two residences

Best Practice:

Be Aware:

3) Short-term: with known end date

Best Practice:

Be Aware:

4) Long-term: no estimated return date

Best Practice:

Be Aware:

B. Non-resident Alien

1) In US on visa and leaving for good

Best Practice:

Be Aware:

2) Renounce US Citizenship or Give up Green Card

Best Practice:

Be Aware:

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