How to Invest as a US Expat: What Actually Works From Abroad

Investing as a US expat is more complicated than most guides admit. The combination of US citizenship-based taxation, restrictions on foreign investment products for US persons, and the limited access some US brokerages provide to non-US residents creates a landscape that requires more deliberate navigation than domestic investing.

The good news: the complications are manageable, the solutions are clear once you know them, and the geo-arbitrage surplus most expat founders generate creates a significantly higher investment capacity than US-based peers at the same income level. The path to building meaningful wealth as an expat founder is real. It just requires understanding the specific constraints upfront.

This is not investment advice — consult a qualified financial advisor familiar with US expat situations before making investment decisions. This guide covers the framework.

For the money stack foundation this investment layer builds on, read The Expat Founder Money Stack: Banking, Entity, and Tax Setup.

Browse the ExpatBuildr shop for the tools and calculators that support this investing framework.

For everything in the Market Arbitrage pillar in one place, visit Market Arbitrage Links.

The Core Constraint: PFIC Rules

The most important thing US expat investors need to understand is the Passive Foreign Investment Company (PFIC) rules. These rules were designed to prevent US investors from deferring US tax by investing through foreign entities, and they apply to foreign mutual funds, ETFs, and most foreign investment funds.

A US person who owns shares in a PFIC faces one of the most punitive tax treatments in the US tax code — in some scenarios, gains are taxed at the highest ordinary income rate plus an interest charge, regardless of how long the investment was held. This effectively makes most foreign investment products economically unattractive for US investors even when they are living abroad.

The practical implication: stick to US-domiciled investment accounts and US-listed securities. The international investment landscape that non-US expats access freely is largely off-limits for US persons without significant tax complexity.

What Actually Works: US Brokerage Accounts

The cleanest investment vehicle for most US expat founders is a US brokerage account holding US-listed securities (index funds, ETFs, individual stocks). These avoid the PFIC problem entirely and are straightforward from a US tax reporting perspective.

The access problem: Some US brokerages restrict account access or close accounts for US persons who update their address to a foreign country. This is a compliance decision on the broker’s part, not a legal requirement. The solution is to maintain a US mailing address — a trusted family member’s address, a mail forwarding service, or a virtual mailbox — and not update your brokerage account to a foreign address.

Charles Schwab is the most expat-friendly major US brokerage. It does not restrict international access, supports international wire transfers, and offers both brokerage and checking accounts. It is the standard recommendation for US expat founders who want to maintain US investment accounts while abroad.

Interactive Brokers is the other commonly used option and explicitly supports accounts for US persons living abroad with strong international functionality.

The Investment Structure for Expat Founders

Given the geo-arbitrage surplus that most expat founders generate, the investment structure question is primarily about sequencing — in what order to fill which accounts and with what assets.

Step 1: Emergency fund in USD. Three to six months of total expenses (not just living expenses — include business operating costs) held in a high-yield savings account or money market fund. This buffer is what allows you to make longer-term investment decisions without being forced to liquidate at bad times. For an expat founder with $2,000 per month in living costs and $1,000 in business costs, this is $9,000 to $18,000.

Step 2: Self-employed retirement accounts. A Solo 401(k) or SEP-IRA allows self-employed founders to make tax-advantaged retirement contributions. A Solo 401(k) allows contributions up to $69,000 per year (2026 limit) combining employee and employer contributions, making it the highest-capacity tax-advantaged vehicle available to self-employed expat founders. Contributions are pre-tax, reducing your current-year US tax liability.