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Comment by jb1991 | Hacker News Reader

jb1991

> In fact, the laws are so strict, they make living abroad as an honest middle-class expat a total nightmare. I have friends who cannot find a single bank in their country that will work with them because of the reporting requirements of working with US citizens.

What? This is not true at all. Getting a bank in most other countries is not hard at all and certainly not a "nightmare."

As a U.S. citizen you must still file taxes and an FBAR that merely reports your assets in foreign accounts, but I've never seen a bank have any problems opening an account for an American, in any country.

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Then you didn’t look. There’s some rule from the ‘1940s which says only a SEC-licensed broker can manage securities for a US tax payer. It was mostly ignored outside the US until 2010 but since then, together with FATCA, is very much enforced.

Most of my US expat friends are lucky in that their local banks will let them have a checking account and sometimes even a savings account, but no other services are available to them. (And no local brokers would touch them with a 10-feet pole).

>Most of my US expat friends are lucky in that their local banks will let them have a checking account

No, it's not luck. Getting a bank account is not the chore you are making it out to be. A securities broker for trading stocks -- that I have never tried -- but when it comes to opening a regular bank account, there are no major hurdles whatsoever. Your expat friends, assuming they are living legally in another country, got bank accounts because it is easy to do, not because they were lucky.

The one exception to this would be those living in another country without any formal residence permit, then in that case, it would be problematic in any country since you are technically not allowed to actually live there and many countries do not allow that for citizens of other countries (not just the U.S.).

I've lived all over the world and I have never known a single person in the American expat community who was denied opening a regular bank account anywhere -- again, assuming they were legally living in the foreign country.

I have known. Totally legally residing expats. Everyone who persevered was able to get one, but some gave up after 4 months of back and forth of increasingly onerous requests.

And none of them was able to get any reasonable saving rate - saving accounts pay less than local government bonds in just about every place, but the most anyone was able to get was a savings account with low interest (and in some cases, not even that).

I have a friend in Israel who was born in the US, and has a US passport, but has not set foot in the US since age 6 (40 years ago). It didn’t matter in the past, but over the last 10 years he has been increasingly told to take his business elsewhere by every financial institution; big banks will do checking and saving. Nothing else is allowed.

There is definitely more to the story than either you are telling or that you know. I am certain of that.

Also, this:

> And none of them was able to get any reasonable saving rate - saving accounts pay less than local government bonds in just about every place, but the most anyone was able to get was a savings account with low interest (and in some cases, not even that).

Has nothing to do with whether you can open a bank account, and is an entirely different topic. In the Netherlands for example (and most European places), all regular bank account offerings are the same for all residents, regardless of their actual citizenship.

Oh, the offering is the same. But you can get up to 0.5% more buying a government bond than the (equivalent, risk wise) bank deposit - except that due to SEC rules, the local bond purchase is unavailable to US taxpayers (even if they are also local citizens). In that sense, is taxpayers (even if they hold a local citizenship) are discriminated against.

And no, at least in Israel, there isn’t any more to the story. Each of the big three Israeli banks have paid between $400m and $900m in fines for noncompliance with US law, and as a result they offer the minimal services they can without getting sued. I’ve heard similar stories about places in Europe where I am less familiar with the details, so I won’t say it’s necessarily the same in Europe - but in Israel, that’s most definitely the case - and I heard it from both customers and bank officers.

> Getting a bank in most other countries is not hard at all and certainly not a "nightmare."

I don't know about "most" countries, but my American colleagues in Germany and Switzerland complained about the difficulty of doing anything related to finance (banks, brokers, taxes) because of their extra tax liability. I personally had to sign quite a few forms certifying that I am not a US citizen or a greencard holder or in any other way tax liable in the US, so it does seem to be a big deal.

The original thread was about finding a "single bank" and in that regard, it is not a problem to open a bank nearly anywhere, including in Europe (assuming legal residence there). Brokers, that might be a different matter, if you wish to trade European stocks from a European account. Taxes can be the added hassle of having to file in the U.S. regardless of where you live, but we were originally discussing getting a bank account, which is straightforward.

You're right, they can't find a bank because they don't have a visa that allows them to work. It is common for people to say they "live" somewhere while doing visa runs, leaving and re-entering the country, in order to remain.

It's unfortunate that this statement [1] is so prominently placed in this thread. That's social media for you I guess.

[1] "I have friends who cannot find a single bank in their country that will work with them because of the reporting requirements of working with US citizens"

Yeah Americans in particular are famous around the world for choosing to live in places they have not tried to legally reside in, and so much of these anecdotes are likely coming from stories like that.

Even in the U.S. it can be very hard if not impossible to open a bank account with an American bank if you are not legally living there, so the shoe fits on both feet.

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