US Expatriate Issues to Consider:

Investment account management

As a result of increasing regulation of cross-border financial transactions and more onerous money laundering reporting, US financial institutions are increasingly refusing to deal with non-US residents. In some cases pension accounts such as 401ks or IRAs are frozen or the client is asked to take their business elsewhere even though these accounts cannot be moved outside the United States without incurring tax consequences and perhaps penalties.

At IAM we specialize in cross-border investment management and, through our international brokerage firm partners, we offer full retirement and taxable investment management services to non-US residents customized for their specific situations.

Global investing

If you are an American citizen living abroad, you should be especially conscious of diversifying your investments globally. Most brokers and financial advisors focus on investment markets in the region in which they are located, allocating only a small percentage to international investments. For example, if you are dealing with a US advisor but live in Europe, your advisor may place too great an emphasis on US investments, thus exposing you to potentially unfavorable currency fluctuations should the Euro strengthen against the US Dollar.

US advisors may have limited access to non-US investment markets and may have to rely only on mutual funds and ADRs to diversify your portfolio internationally, or may charge much higher commissions to access non-US markets. IAM has direct access to US as well as major international markets, therefore we can better take advantage of global investment opportunities for our clients’ benefit. Furthermore, our investment accounts are multi-currency and offer excellent exchange rates as well as deposits or withdrawals in most major currencies.

We offer a complete international diversification program and possess the specialized knowledge necessary to manage such a portfolio. At IAM, we believe there are compelling and ever-growing investment opportunities outside the USA and we recommend a significant allocation to global markets for non-US residents.

Currency fluctuations

If a significant part of your portfolio is in US investments but you live outside the United States, you should be aware of the effect currency fluctuations can have on your spending power and investment returns.

The United States is still by far the largest and most sophisticated market for portfolio investments, therefore an allocation to the US market presents considerable opportunity and should be part of most investors’ portfolios. There may also be specific reasons why you need to hold US investments; for example non-liquid assets such as real estate or a concentrated position in your American employer’s stock.

It may be to your advantage from time to time to hedge the currency risk of a portion of such holdings; for example, if you are planning to cash out a US investment in the near future for a significant purchase in a non-US currency. Most advisors are not prepared to assist you with hedging your portfolio against a declining US Dollar, but at IAM we have the expertise to help you in this area.

Taxation Issues

At IAM, our expatriate clients benefit from a complete solution to their financial needs and we offer our clients the services of a tax advisor who specializes in taxation for US non-residents and non-US citizens with American tax obligations. Furthermore, we have a network of tax advisors located in various countries who do both US and local tax returns and understand the tax treaty between the two countries.

Estate planning issues

There are potentially severe and complex estate tax issues to be considered if you are an American expatriate married to a non-US citizen. For example, a US citizen who is married to a non-US citizen is not allowed the unlimited marital deduction when passing on their estate to their spouse. This can have considerable estate tax implications and may significantly reduce the amount that the surviving spouse is left with after tax.

IAM’s network includes US cross-border estate planning attorneys who can arrange a trust that will legally protect you in such a situation and ensure that your spouse would receive the same tax benefits as a US citizen spouse.

Americans working in the international oil industry

IAM has on staff an advisor who spent ten years in the international oil industry and is well aware of the financial planning and investment management issues inherent to this lifestyle. We offer specialized services to expatriates in this industry and make ourselves available for consultation outside regular office hours.

Expatriates working in the oil industry earn and save a considerable amount of money while they are employed internationally. It is often the case that the money earned during these years may be squandered on high-risk investments or due to lack of a proper investment and savings program. IAM has a program specifically tailored to expatriates in the international oil industry – we can help you build and maintain a nest-egg for your future without compromising your lifestyle.