How to Invest as a US Expat in 2026: FBAR FATCA and Broker Guide

Quick Answer

US expats face unique investing challenges: FBAR filing requirements for foreign accounts over $10,000 (FinCEN 114), FATCA disclosure (Form 8938 for assets over $50,000 abroad), and many US brokers refusing to serve non-US residents. The best brokers for US expats in 2026 are Interactive Brokers (accepts US expats globally, SIPC covered), eToro US (limited features), and Schwab International (for qualifying expats). Avoid local foreign brokers — PFIC rules can make foreign funds extremely tax-inefficient for US persons.

The FBAR Requirement

All US persons (citizens and green card holders regardless of residency) must file FinCEN Form 114 (FBAR) annually if the aggregate value of all foreign financial accounts exceeds $10,000 at any point during the year. This includes bank accounts, brokerage accounts, and investment accounts held at non-US institutions. The penalty for non-wilful failure to file can be $10,000 per account per year. Wilful violations can result in penalties of 50% of account value per year. Filing is free and done through the BSA E-Filing System.

FATCA and PFIC Rules

FATCA (Form 8938) requires US persons abroad to disclose foreign financial assets above $50,000 (single) or $100,000 (married). More importantly for investors, the PFIC (Passive Foreign Investment Company) rules make owning foreign mutual funds and ETFs extremely tax-punitive for US persons — taxed at the highest marginal rate plus interest charges on gains. US expats should stick to US-domiciled ETFs (Vanguard, BlackRock iShares, Fidelity) rather than foreign funds even when living abroad.

eToro for US Expats

eToro US is a separate entity from eToro's FCA/CySEC/ASIC regulated global platform, with more limited features (no CFDs, limited crypto). US expats living abroad can typically access the eToro global platform through their country of residence (not the US entity), but should consult a US tax advisor on the FBAR/FATCA implications. eToro is regulated by the FCA (UK), CySEC (EU), and ASIC (Australia) for its global platform — available in 140 countries.

Frequently Asked Questions

What is FBAR and who needs to file it?

FBAR (FinCEN Form 114) must be filed by all US persons (citizens and green card holders) who have foreign financial accounts with an aggregate balance exceeding $10,000 at any point during the calendar year. This is separate from US tax returns and is filed through the FinCEN BSA E-Filing System by April 15 (with automatic extension to October 15). Penalties for non-filing can be severe — up to $10,000 per account per year for non-wilful violations.

Can US expats use eToro to invest?

US expats living abroad can typically access eToro's global platform (FCA/CySEC/ASIC regulated) through their country of residence — as eToro serves 140 countries. However, US tax compliance applies regardless: FBAR filing if account balance exceeds $10,000, and potential FATCA disclosure. Consult a US expat tax advisor (specialising in expat taxation) before opening any foreign brokerage account to ensure full compliance.

What is the PFIC rule and why does it matter for US expat investors?

PFIC (Passive Foreign Investment Company) rules treat gains from foreign mutual funds and ETFs as ordinary income taxed at the highest marginal rate, plus an interest charge — making foreign funds extremely tax-inefficient for US persons. US expats should invest through US-domiciled ETFs (Vanguard, BlackRock iShares, Fidelity) even when living abroad, and avoid local country mutual funds or ETFs to prevent punitive PFIC taxation.

Which brokers accept US expats in 2026?

Interactive Brokers is the most widely recommended broker for US expats — it accepts US persons living abroad, provides access to US markets, and is SIPC covered. Charles Schwab International accepts qualifying expats. Many major US brokers (Fidelity, Vanguard) close accounts when clients establish foreign residency. eToro US has limited features for expats. Always verify with the broker before relocating abroad.