Expat Banking Issues - Any Suggestions?

[nun]

FYI you might run into withholding issues on IRAs etc if you live abroad as to elect zero withholding you need a US address. I think many times payees see the foreign address and go from the default 10% to the 30% max. So if they have a W-9 from you you should at least get the 10% rate. If you additionally certify that you did not leave the US to avoid tax you can get the zero withholding.......but there will probably be years when the payee messes up.

 

[MichaelB]

I have a number of family members and friends that are not US citizens, live overseas and have US bank accounts. (Citi, BoA, Chase). No doubt it can be done. I know USAA will (my son just did) but you need to be eligible. Citi as well – if you can stand them. PenFed might (not a bank but a credit union).

Overseas offices of US banks (like Citi) are separate legal entities and require accounts domiciled in each country. For most, however, transferring funds between offices is straightforward (but no less costly). Account management from foreign offices is usually allowed only for large ($$) customers.

US banks have been limiting foreign based accountholders (regardless of citizenship) because there has been a great deal of fraud. They have also curtailed direct online international transfers, for the same reason. Most still transfer but require phone interaction with a bank operator.

just to clarify: US banks will withhold taxes on interest and dividends paid to non-US citizens regardless of domicile. Citizenship is determined when the account is opened. Accounts opened by US citizens with overseas addresses are not subject to withholding. Wire transfers are not subject to withholding regardless of owner citizenship, just fees.

 

[ncaraway]

A lot of very good information. I am glad that I asked here. I've been perusing expat and other forums for about a year now and haven't seen responses like these. Thank you all.

I think I'm going to have to continue visiting bank sites and probably do more reading on the sites of banks that do business in Taiwan and the US (e.g., HSBC, Citi, etc). We won't be in Taipei (the major city) so we'll have even fewer options.

Given that we're expecting to live on $16k/year with about $500k in assets, I doubt that we'll raise any red flags with the IRS. Regardless, we do plan to file each year.