General Investing

Common and widely popular investments, Exchange Traded Funds and Mutual Funds, are not accessible to Americans abroad due to foreign regulations. Having little incentive to comply with foreign laws, ETFs and Mutual Funds are simply not available. Even after finding a US brokerage firm that will support them, expats will see error messages upon trying to purchase them. This effectively turns everyday Americans abroad into individual stock pickers.

Because of the investing difficulties, taxpayers are forced to either become individual stock pickers or look for the foreign accessible equivalent. The foreign equivalent, known commonly as “PFICs” (Passive Foreign Investment Companies) can trigger tax filings with punitive tax rates of well over 50%, even when there is no cash inflow to the taxpayer.