After relocating to Spain, Sarah updated her address. Weeks later, her US broker emailed: her account would be restricted, then closed in 60 days. Unable to trade, she rushed to transfer assets. Compliance cited “non-resident policy changes.” She hadn’t expected moving abroad would disrupt her investments so abruptly.
Unfortunately, Sarah’s story isn’t uncommon. Moving abroad triggers unexpected financial challenges for Americans, and one such hurdle many expats face is the potential closure of their US brokerage accounts, as most US brokers won’t work with non-US residents, while those that accept expat clients often limit the scope of available services.
This can be a significant inconvenience, as the benefits of retaining US brokerage accounts include simpler tax filing (due to avoiding foreign account and asset reporting), lower fees, access to the benefits of US markets, and the convenience of the same language and culture when dealing with American brokers, compared to holding foreign investments.
In this article, we outline into the reasons behind the issue along with possible remedies.
Why are Americans expats’ brokerage accounts being closed?
US brokerage accounts are increasingly being closed when clients move abroad, not because of a single law, but due to a combination of regulatory complexity, cost, and internal risk management. When a client resides outside the United States, brokers may be subject to the laws and licensing requirements of that foreign jurisdiction. Complying with multiple regulatory regimes can be expensive and operationally burdensome, especially if the firm has only a small number of clients in a given country.
In addition, maintaining accounts for non-resident clients can create legal uncertainty. In the US in particular, KYC (Know Your Client) and Anti-Money Laundering rules are the primary drivers of account closures for expats. Knowing which services can be offered, which products can be traded, and how advice is delivered aren’t always clear. Rather than deal with the administrative burden of this complexity, many firms choose to limit or discontinue relationships with clients living abroad.
Ultimately, account closures are typically a business decision: firms weigh the revenue from expatriate clients against the increased compliance obligations and potential regulatory risk, and often conclude that it isn’t worthwhile.
What actually happens?
When a US brokerage account is flagged for closure due to a change in residency, the process typically begins with a notification from the firm. Clients are usually given a limited window (often 30 to 90 days) to take action. During this period, the account may be restricted, meaning no new investments can be made, though selling positions is usually still allowed.
If no action is taken, the broker may proceed with further restrictions or initiate closure. In some cases, clients are required to transfer their assets to another eligible brokerage. If a transfer is not completed in time, the firm may liquidate holdings and return the proceeds as cash, which can have unintended tax consequences.
Access to the account may also become more limited, particularly for certain services or products. The exact process varies by firm, but the key feature is a transition period during which the client must reorganize their investments quickly.
Which US brokers close accounts vs restrict vs allow expats in 2025/2026
A reported 340,000 accounts were closed in 2025 alone for Americans abroad. Below is a summary of the main US brokers and their policies in terms of working with non-resident clients in 2026:
- Merrill Lynch – close or force transfer
- Morgan Stanley – close or force transfer
- UBS – close or force transfer
- Wells Fargo – close or restrict
- Citigroup – close or restrict
- JPMorgan Chase – restrict or close (wealth accounts)
- Goldman Sachs – restrict or close
- Fidelity Investments – restrict (keep account)
- Charles Schwab – restrict (keep account)
- Vanguard – restrict (keep account)
- TIAA – retirement ok, brokerage restricted
- Bank of America – banking ok, investments restricted
- Chase Bank – banking ok, investments restricted
- Citibank – banking ok, investments restricted
- Interactive Brokers – supports expats
- Charles Schwab International – supports expats, with account limitations in some countries
- HSBC Expat – supports expats
What should expats do when faced with brokerage account closure?
US expats have several options to manage or avoid brokerage account disruptions. The most effective step is planning ahead before moving abroad. This may include confirming whether your current broker supports clients in your destination country or opening an account with a firm that specializes in serving US expatriates.
If you’ve already moved and your account is at risk, you may be able to transfer your assets to a more expat-friendly brokerage. Some firms allow existing holdings to remain even if new purchases are restricted, which can buy time while you evaluate alternatives. It’s also important to understand the tax implications of any forced sales or transfers.
If in doubt, seek advice from a US expat cross-border investment specialist, who will be able to advise you based on your country, broker and circumstances.
What about US retirement plans?
Unlike personal retirement or brokerage accounts, 401(k) retirement plans can usually be maintained when moving abroad, as long as you remain employed with your US firm. However, if your international move involves separating from your US employer, it’s often advisable to consider rolling over your 401(k) into an IRA (Individual Retirement Account), which most providers allow non-resident Americans to retain and contribute to from abroad.
Retaining IRA accounts allows for lots of investment options, providing greater flexibility for portfolio diversification as well as global diversification through funds, allowing expats to align their retirement savings with their evolving plans and priorities abroad. However, note that many countries’ local tax systems don’t recognize the tax benefits of US retirement plans. Furthermore, claiming Foreign Earned Income Exclusion can affect your ability to contribute to US IRAs.
What brokerage accounts and investment options are available for expats who face account closure when moving abroad?
Some firms let you retain access while living abroad, and as noted the ideal is to switch brokerage firm before you move to such a firm. The right firm can depend on where you are moving to and for how long. Charles Schwab and Interactive Brokers are often good options.
Working with an expat specialist investment manager is another option. These specialized professionals focus specifically on the unique financial needs of US expats, offering a global perspective. They possess a nuanced understanding of expats’ investment options and the associated US and foreign tax implications. By leveraging this expertise, these professionals provide personalized, compliant solutions that align with both the financial regulations of the resident country and the US, all while striving to meet long-term financial goals.
For non-US residents, building portfolios abroad with individual stocks and bonds is another option, although there may be higher costs involved and diversification limitations.
What other investing restrictions are there for Americans living abroad?
Another layer of complication for US banks is due to EU MFID rules, which prohibit EU residents from purchasing funds that don’t provide an EU-format information sheet. This includes most US investment products, and US banks wary of inadvertently violating these regulations, exposing themselves to legal issues and potential lawsuits.
Another barrier for expats from investing is because many US mutual fund providers won’t sell funds to non-US residents. This is because US fund groups can’t actively seek business for their SEC-registered funds outside the United States, so offering mutual fund shares to Americans living abroad could potentially create lawsuits.
The Foreign Account Tax Compliance Act (FATCA) adds another layer of complexity. Enacted in 2010, FATCA empowers the US government to require foreign banks to report details of their American account holders to the IRS. While most foreign financial institutions comply with FATCA, some choose instead to avoid the reporting burden by not accepting American clients. This unintended consequence has left many US citizens living abroad struggling to access banking and financial services in the country where they live. Those that do comply with FATCA meanwhile ask their American clients to confirm their US tax filing situation.
Should expats use a US correspondence address?
If you’re only planning on a short tern stay abroad, you could also consider retaining a US correspondence address such as a friend or relative address or a virtual address. However, this approach has drawbacks. It can have implications for state income taxes, and it is breaching your brokerage firm’s T&Cs, so if they discover that you don’t live at the address you provided, they may take action such as freezing or closing your account that may also impact your ability to open US financial accounts in the future.
Brokerage Account Closure for Americans Abroad Frequently Asked Questions
Can US expats keep their brokerage accounts open while living abroad?
Many US brokers allow expats to keep accounts, but some restrict services due to regulatory and compliance challenges. It’s important to confirm with your broker before moving.
Why do some brokerage firms close accounts when clients move overseas?
Brokers may close accounts to avoid complex international regulations like FATCA, heightened compliance costs, or restrictions imposed by foreign jurisdictions.
What should I do if my brokerage account is closed after moving abroad?
If your brokerage account is closed after moving abroad, consider expat-friendly brokers experienced with international clients, such as Charles Schwab, Fidelity, or online options like Interactive Brokers. These firms tend to better support investors living overseas.
Are there any risks in opening a new brokerage account as a US expat?
Some foreign brokers don’t support US clients or comply with US tax laws, which can lead to extra reporting and tax complications.
How can I avoid losing access to my investments as an expat?
Maintain at least one US-based brokerage account known for servicing expats, and communicate proactively with your broker about your residency status.
Can I transfer my existing brokerage account to an expat-friendly broker?
Yes, many brokers allow you to transfer your investments to an expat-friendly brokerage. It’s best to check transfer policies and any fees involved before making the move to ensure a smooth transition.
Although many US brokers may be hesitant to serve clients abroad, there are still options available for US expats. The optimal choice varies based on individual circumstances, including the destination, duration of stay, and long-term objectives. Consulting with an expat specialist investment advisor is recommended, providing the right insights to navigate the array of options. With the right knowledge, you can confidently embrace the exciting opportunities of living abroad as a US expat.
If you have any questions about financial planning or investing as an American living in the EU, get in touch.
This article is for informational purposes only; it is not intended to offer advice or guidance on legal, tax, or investment matters. Such advice can be given only with full understanding of a person’s specific situation.
