FATCA: what are the investment options for American expatriates?
FATCA – the Foreign Account Tax Compliance Act that was passed in the US in 2010 – has been playing havoc with the finances of American expats. It has become extremely difficult for US expats living abroad to invest, the reason being that investment institutions and banks simply don’t want the bother of having to comply with onerous legislation and have no desire to risk hefty fines for not doing so. Understandable as that is, it does leave many US citizens in a quandary. What do you do with the wealth you have been forced to liquidate when you are told you are not wanted as a client any more?
The options are pretty limited. There are European and Asian financial institutions offering investments outside of the US, but for US citizens these kind of holdings are often classified by the IRS as passive foreign investment companies or PFICs. Taxes on PFICs are highly punitive at rates of 40% or more as they are always subject to the higher rate of personal income tax on any capital gains on share value increases.
You could opt for ‘contract’ products which are tax-compliant, but these carry very high charges. Many of the investment options open to Americans have excessive hidden fees and also bring complicated tax implications.
The lack of investment opportunities for Americans is one reason that Infinity is delighted to have exclusive access in Asia to a fantastic solution for American expats. This is a dedicated, tax-compliant service aimed at US individuals, trusts and companies and is approved by the US Securities and Exchange Commission.
The service is provided by Infinity’s strategic partner, Tilney Bestinvest (TBI). TBI have an impeccable track record in investment management and have won a multitude of industry awards. They currently manage over $26bn of assets and are renowned for their rigorous research methods which underpin all investment decisions.
TBI’s investment solution for US expats is provided via a US custodian based in New Jersey and makes the process of filing and submitting tax returns as straightforward as possible. Investments are compliant with US and local tax jurisdictions.
If you are an American living in Asia and would like to find out more on creating a suitable portfolio which works within the bounds of FATCA, please do get in touch. (firstname.lastname@example.org)
If you would like to know more about our investment services for American expatriates download our brochure here.
A leading provider of expat financial services and wealth management services across Asia.