Are there foreign-resident friendly US bank accounts or brokerage accounts?

Question

I often find that US banks/brokerages are not able to deal with foreign addresses. I've had Vanguard tell me that I cannot roll over an existing 401k into a new IRA account because I couldn't give them a US address despite the fact that I already had an existing account with them. I had Scottrade explain that I can't transfer stocks because my old address is no longer valid and they won't let me add a new one. Sharebuilder explicitly states that you need to have a US address to open an account.

What banks/financial institutions are foreign resident friendly?

Answer 1

The issue of US address doesn't have to do with the way that banks and brokerage firms deal with addresses but it has to do with Anti-Money Laundering regulations like Patriot Act.

One of the things that Patriot Act requires the banks and brokerages to do is to verify who you are (Patriot Act Section 326), and in addition if you have a foreign address there may be reporting requirements for the country where that address is on any account of their residents. Which means that the US entity of Vanguard will need to be able to report to regulators in France, UK or wherever your address is.

Having said that the best solution is to have an account with the broker that has local presence in your country of residence unfortunately the online brokerages such as Scottrade, eTrade and similar don't have foreign presence. But full service brokers like Goldman Sachs, Charles Schwab, JP Morgan, Morgan Stanley do have global presence so you can change your brokerage account to the local branch and you should be able to transfer the money/stock you own in your US account to the local account.

Of course fees and taxes will likely apply.

Answer 2

Not true. Schwab has an 'international' division that will let you open a brokerage (not bank) account if you reside outside of the US. It is a service geared towards foreign investors, not US expats. Schwab US bank and brokerage will close your accounts if you tell them you are moving outside the US - even if you are a US citizen. They told me that today in a phone conversation. Same for Vanguard - I also asked them that question.

Answer 3

HSBC has offices all over the world.

You may also want to look into a service like Earth Class Mail which will let you maintain a US address even if you are living outside of the country.

Answer 4

Yes, Schwab can accommodate anyone with an anywhere in the world address. Here is the link for information and application process:

http://international.schwab.com/public/international/accounts_products/accounts/brokerage_account

Answer 5

While it is possible there are other reasons, I think one reason they want a US address is for tax reporting. They may need to report your income to your US state of residence, but if they don't have an address for you in some state they have no idea which state they should be reporting to. Thus, while the foreign address could be for the obvious reason, that you've moved overseas, it could maybe also be seen as an attempt to obscure your state of residence to avoid taxes there. They seem to not want to figure out the difference.

My situation is that I'm a former US resident but not a US citizen. When we moved but decided to keep some accounts in the US we found, I think not coincidentally, that the banks where the account was in the name of a California trust, rather than directly in our own names, were happy to take our foreign address, but the bank where we'd opened an account in our own names insisted on a US address; we kept that account only because we had an address we could use.

All the banks are aware we no longer live in the US (or at least that we are no longer "US persons" for tax purposes) since we filled out a W-8BEN and were asked to state a purpose for each account. They don't seem to care, and I'm certain would have even less reason to care if we were Americans. They seem, however, to want to be able to associate the account with a US state in all cases (the trust is a California "resident" even if the trustees aren't), and to demand a US address when the US state isn't otherwise clear.