Banking as an American abroad: why banks say no, and how to get a yes

Some foreign banks won't touch Americans because of FATCA, but in most countries you'll find a bank that says yes if you walk in with the right papers.

The short version

• FATCA requires foreign banks to report accounts held by US persons to the IRS, directly or through their own government [1][2]. Some banks decide a small customer just isn't worth the hassle.
• A "no" is a business call, not a legal ban. In most countries the big retail banks do take Americans.
• Expect to sign a Form W-9 and hand over your Social Security number. Have both ready.
• The IRS publishes a monthly list of banks registered under FATCA, which is a good place to start your search [3].
• Once you have a foreign account, reporting it is on you: the FBAR and possibly Form 8938 [4][5].

Why a foreign bank might turn you away

The Foreign Account Tax Compliance Act, passed in 2010, asks foreign financial institutions to identify their US account holders and report on them. A bank that won't report faces withholding on certain US-source payments it receives [1]. So nearly every bank that touches the US financial system has had to build a way to spot American customers. Uncle Sam's reach, in other words, extends well past the border.

Most countries signed an intergovernmental agreement (IGA) with the US to make this work [2]:

For a big bank with thousands of American customers, this is routine. For a small savings bank, an online-only bank or a small local cooperative bank (think of the foreign cousin of your credit union back home), one American client can mean extra staff training, extra checks and extra risk. Some decide to say no to everyone with a US passport or a US place of birth. Others will open a basic checking account for an American but draw the line at investments, retirement products or savings.

What you might hear:

• "We don't open accounts for US persons." That's a blanket policy. Don't argue; take your business elsewhere.
• "We can open a checking account, but not a savings or investment account." Common in Europe, where local investment funds also cause US tax headaches for you anyway (see our PFIC guide below).
• "You need a local address and a residence permit first." That's the bank's ordinary identity check, not FATCA.

The red flag isn't only citizenship. Banks also look for "US indicia" such as a US place of birth, a US address or phone number, or standing instructions to send money to a US account. If you were born in the States, you'll be asked about it even if you think of yourself as a citizen of somewhere else.

What a bank will ask an American for

A bank that accepts US customers will usually ask for:

1. Your passport and residence permit or visa. The standard identity check every customer goes through.
2. Proof of local address. A lease, a utility bill or a registration certificate, depending on the country.
3. IRS Form W-9. This is where you certify you're a US person and give your taxpayer identification number. For almost everyone that's your Social Security number.
4. A local tax ID, if the country issues one, such as a tax number you get when you register with the local tax office.
5. Sometimes, proof of income or employment, especially if you want overdraft protection or a credit card.

If you don't have a Social Security number (say, an American born abroad who never applied for one), sort that out first. Banks under FATCA need your US taxpayer number, and the US embassy or consulate can tell you how to apply for an SSN from abroad.

Never fudge your citizenship or your US birthplace on bank forms. A false self-certification can get your account closed later, and banks re-check their records over time.

How to find a bank that will say yes

1. Check the IRS FFI list. The IRS's FATCA Foreign Financial Institution list search tool lets you look up banks by name or country. It shows institutions that registered and received a Global Intermediary Identification Number (GIIN) [3]. Registration doesn't guarantee a yes, but a bank that isn't registered at all is unlikely to want US customers.
2. Start with the country's largest retail banks. Big domestic banks usually have the systems to report US accounts and already have American customers.
3. Ask before you go in. Email or call and ask straight out: "Do you open checking accounts for US citizens who live here?" It saves you a wasted appointment.
4. Ask other Americans locally. Recent experience beats any list. Our community groups for Americans abroad are one place to ask which branches have said yes lately.
5. Use your employer's bank. Many employers have a relationship bank that opens payroll accounts for new hires, including foreigners.
6. Try a branch, not the app. Online sign-up often rejects anything unusual automatically. A real person at a branch can escalate your file.
7. Bring every document at once. Passport, residence permit, proof of address, your SSN and a filled-in Form W-9. Missing one piece of paper is the most common reason for a second trip.

Stopgaps while you search

• Keep your US checking account and a US credit card with no foreign transaction fee. See our guide on keeping a US bank account and US address.
• Some licensed e-money and multi-currency account providers give you a local account number in several currencies. They can be a handy bridge for getting paid or covering rent, but check whether your landlord or employer accepts them. Deposit protection rules for e-money often differ from those for bank deposits.
• Expat or "international" banking units of large banks exist in some financial centers. They often come with high minimum balances, so read the fine print on fees before you sign up.

Your own reporting once the account is open

FATCA puts reporting duties on the bank. You have your own, separate ones.

The FBAR is filed online through FinCEN's BSA E-Filing System, separately from your tax return [4]. The $10,000 test is the combined maximum of all your foreign accounts, so a checking account and a savings account of $6,000 each puts you over. The thresholds above are the current figures shown on the IRS comparison page [5].

Interest from a foreign account is taxable in the US. Report it on your return even if the local bank already taxed it. A US expat tax preparer can check your situation, including whether a tax treaty or the foreign tax credit applies.

When a bank closes an account you already have

Sometimes the "no" shows up years later: a letter saying the bank is ending its relationship with US persons, or asking you to send a W-9 by a deadline.

• If they want paperwork, send it. Missing a FATCA self-certification deadline is a common reason for a frozen account.
• If they're leaving the US market, ask for written confirmation of the closing date and move your balance before then. Open the replacement account first.
• Keep the statements. You'll need the year's highest balance for your FBAR, even for an account that closed that year [4].
• Update your recurring payments for rent, utilities and salary right away.

What's different from banking in the US

• Your nationality matters. Back home in the States, nobody asks what passport you hold when you open a checking account. Abroad, it's a standard field on the form.
• Deposit insurance is local. FDIC insurance covers US banks. A foreign account is protected, if at all, by that country's own deposit guarantee program, with its own limits.
• Checks are rare in many countries. Bank transfers, local payment apps and automatic debits do most of the heavy lifting.
• You report your own accounts. Even when the bank already told the IRS about you, you still file the FBAR and, above the thresholds, Form 8938.

Sources

1. IRS: Foreign Account Tax Compliance Act (FATCA)
2. IRS: FATCA governments (Model 1 and Model 2 agreements)
3. IRS: FATCA Foreign Financial Institution list search and download tool
4. FinCEN: Report Foreign Bank and Financial Accounts (FBAR)
5. IRS: Comparison of Form 8938 and FBAR requirements

Keep reading

• Keeping a US bank account and US address
• FBAR: reporting your foreign bank accounts
• PFICs: why foreign funds hurt Americans
• US brokerage accounts while living abroad