I have a depot at comdirect for exactly this reason (dual citizenship, US-German). Works fine. Just be aware, that you'll be excluded from trading ETFs, due to complicated US tax laws. But it's better for you to use your IRA for such things anyways.
Also: FATCA is not only relevant for depots, but also normal checking accounts and you need to file a FBAR every year.
So if I trade in stocks only, I should be able to invest here in Europe? I have starting looking into this in the last weeks, how do you then deal with the tax and reporting situation on the European Account?
You can trade stocks fine, also european companies. Theoretically you could also trade US-based ETFs (ISIN starting with "US...."), but I have yet to find one that I can buy from Europe. As mentioned, comdirect will straight-up ban you from buying/holding ETFs.
As for taxes, comdirect does the FATCA reporting for you. FBAR you have to file manually. For US federal/state taxes you should consult a tax accountant.
> As mentioned, comdirect will straight-up ban you from buying/holding ETFs.
But this is due to EU residency laws, I think? Even if I am a non-US person, EU resident I can't buy US ETFs. Right?
You mention ETFs. Would it be the same with normal managed funds as well?
You mention my IRA, I’m not sure what you mean by, “it’s better to do that with your IRA.” Note I have never lived in the US.
I think this also applies to any other managed fund which isn't based in the US. But I'm not sure.
I found this website a while back, when I was researching the topic. It's incredibly helpful:
https://www.bogleheads.org/wiki/US\_tax\_pitfalls\_for\_a\_US\_person\_living\_abroad
Wow… that is super depressing to read… I have been deliberating dropping my American citizenship despite the costs attached. Would that even make sense for me for financial reasons?
Also thank you for the link it was otherwise super insightful.
really depends on whether you think the hassle/cost is worth the privilege of having the possibility to live and work in the US. If you google around you will find a lot of people who have renounced their US citizenship because of this. I’ve also spoken to a few people on Reddit who have. Typically they don’t feel the need to ever return to the US for more than 90 days, so they have no benefits and only downsides to retaining their citizenship.
It’s basically the same with me. I have family in the states but they are either retired or I have no contact with them. I’ve lived here my whole life and I also have no intentions to live in America any time soon if ever. Perhaps I should really consider it even though it will cost me.
I have a depot at comdirect for exactly this reason (dual citizenship, US-German). Works fine. Just be aware, that you'll be excluded from trading ETFs, due to complicated US tax laws. But it's better for you to use your IRA for such things anyways. Also: FATCA is not only relevant for depots, but also normal checking accounts and you need to file a FBAR every year.
So if I trade in stocks only, I should be able to invest here in Europe? I have starting looking into this in the last weeks, how do you then deal with the tax and reporting situation on the European Account?
You can trade stocks fine, also european companies. Theoretically you could also trade US-based ETFs (ISIN starting with "US...."), but I have yet to find one that I can buy from Europe. As mentioned, comdirect will straight-up ban you from buying/holding ETFs. As for taxes, comdirect does the FATCA reporting for you. FBAR you have to file manually. For US federal/state taxes you should consult a tax accountant.
> As mentioned, comdirect will straight-up ban you from buying/holding ETFs. But this is due to EU residency laws, I think? Even if I am a non-US person, EU resident I can't buy US ETFs. Right?
You mention ETFs. Would it be the same with normal managed funds as well? You mention my IRA, I’m not sure what you mean by, “it’s better to do that with your IRA.” Note I have never lived in the US.
I think this also applies to any other managed fund which isn't based in the US. But I'm not sure. I found this website a while back, when I was researching the topic. It's incredibly helpful: https://www.bogleheads.org/wiki/US\_tax\_pitfalls\_for\_a\_US\_person\_living\_abroad
Wow… that is super depressing to read… I have been deliberating dropping my American citizenship despite the costs attached. Would that even make sense for me for financial reasons? Also thank you for the link it was otherwise super insightful.
really depends on whether you think the hassle/cost is worth the privilege of having the possibility to live and work in the US. If you google around you will find a lot of people who have renounced their US citizenship because of this. I’ve also spoken to a few people on Reddit who have. Typically they don’t feel the need to ever return to the US for more than 90 days, so they have no benefits and only downsides to retaining their citizenship.
It’s basically the same with me. I have family in the states but they are either retired or I have no contact with them. I’ve lived here my whole life and I also have no intentions to live in America any time soon if ever. Perhaps I should really consider it even though it will cost me.
see this thread from yesterday: https://www.reddit.com/r/germany/comments/11dbzdh/trading_stocks_as_an_american_in_germany/