Home > Insights > Investing > Smart Cross-Border Investing Moves Every Expat Should Make

Smart Cross-Border Investing Moves Every Expat Should Make


5 Important Investing Tips for U.S. Expats

A move overseas shouldn’t derail your investment strategy, but there are a few important financial moves you need to make before you leave the United States.

Move #1 – Diversify your portfolio.

Many Americans living overseas tend to maintain portfolios significantly skewed toward U.S. investments. If this is you, it may be time to diversify. A smart approach for many U.S. expats is to maintain a broadly diversified multicurrency portfolio with additional exposure to the currency in which they spend money. For example, Americans living in Europe may wish to invest a bit more in European stocks and bonds.

But be careful! While it’s important to diversify your investments across countries and regions, try to avoid investing in foreign mutual funds, also known as passive foreign investment companies (PFICs), as these investments are taxed very punitively by the United States when purchased by U.S. citizens.

One of the best approaches for most U.S. expatriates is to work with a qualified U.S. wealth manager who has experience working with U.S. citizens living overseas. Your wealth manager can help you establish a comprehensive expat investing and financial plan that includes a diversified portfolio of both foreign and domestic investments while also managing currency risk.

Move #2 – Save and invest in the United States with money earned abroad.

There are no tax penalties for investing in the United States with money earned abroad. Before you move overseas, establish an investment account with a U.S. custodian that is willing to work with U.S. expats. That way, you can continue to access the U.S. financial markets, which offer the largest and most liquid selection of investment products.

As an expat, you may find that many U.S. custodians won’t open an account directly with Americans living abroad. However, advisory firms such as Creative Planning International can often open accounts on a client’s behalf, providing a solution for expats.

Move #3 – Be aware of tax treaties and local tax breaks.

A key to successfully managing your U.S. expat investments is to take advantage of any tax treaties held between the United States and your country of residence. Once your U.S. investment accounts are established, take some time to educate yourself on strategies to reduce or eliminate your withholdings and tax liabilities accordingly. Gaining an understanding of common American expat tax misconceptions can also help you navigate a wide range of tax challenges.

Your Creative Planning International wealth manager is a great source for updated information and can help you navigate the intricacies of these treaties to avoid potentially overpaying in taxes.

Move #4 – Plan in advance.

If you’re preparing to move overseas, make sure you understand the specific impact your move may have on your current investments and accounts. You may need to take steps to prepare prior to leaving the country.

For example, it may be beneficial to put assets in a trust before you establish residence in another country.

Move #5 – Work with a qualified team of advisors.

One of the best moves you can make as an American living and investing overseas is to hire an experienced team of U.S. financial advisors. Advisors outside the United States seldom have the knowledge and experience necessary to navigate the U.S. tax system. Likewise, U.S. advisors who have never worked with cross-border investors likely don’t have experience navigating various international accounts and tax treaties. That’s why it’s important to put together a team of experienced advisors who understand the specific challenges you face as a U.S. expat investor. Your team should include both a fiduciary financial advisor and an experienced tax accountant.

Feeling overwhelmed? We can help. At Creative Planning International, we work with Americans living abroad and cross-border families to help maximize their wealth and avoid costly mistakes, especially when it comes to U.S. expat taxes and investments. We understand the complex interaction of multijurisdiction tax and regulatory regimes and take into account currency, diversification, tax and other portfolio considerations as we help you plan and invest for the future.

If you’re an American living abroad who could use some help establishing a U.S. expat investment strategy, request a meeting with a member of our team.

This commentary is provided for general information purposes only, should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.

Ready to Get Started?

Meet with an international wealth advisor to see if your money could be working harder for you. Receive a free, no-obligation consultation.


We work with households having a minimum of $500,000 in investable assets.