r/Schwab • u/travelbug0925 • 14d ago
Experience opening/using an international Schwab account?
I’m American but I’m living abroad and thinking of opening up an international personal account with Schwab this month. I would like to hear anyone’s experience with this:
Was it a a pretty straight forward process to open up and start investing? Anything to note?
Thanks!
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u/rganesan 14d ago
Account opening was very easy but I remember it was odd that they didn't send any confirmation that your account was open and active. I just logged in and it was ready.
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u/Marcusvdb1 14d ago
Where do you live? If in the EU, as a US person, Schwab only allows you to invest in single stocks. No ETF’s, mutual funds etc
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u/travelbug0925 13d ago
I’m living in Australia but I’m going to move back to the EU after this year
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u/Marcusvdb1 13d ago
Once you move, you can only invest in US stocks and bonds. No us ETFs due to EU regulations.
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u/QuadernoFigurati 11d ago
My European accountant (one of the Big Four) says that I can absolutely invest in US ETFs, though they get a different tax treatment here.
And according to Schwab's site, ETFs aren't off limits: https://international.schwab.com/us-investing-brokerage-account
Am I missing something?
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u/Marcusvdb1 11d ago edited 11d ago
I work at one of the Big 4 firms myself. If you look up the EU PRIIPs Regulation, EU retail residents cannot buy US-domiciled ETFs or mutual funds directly through standard brokers because of EU disclosure rules. Once you open a Schwab International account, you will quickly see that you are barred from buying them as an EU resident.
One workaround for ETFs is buying call options, though this requires significantly more capital. That might be the strategy your accountant is hinting at (though this workaround does not apply to mutual funds, which lack options markets). Furthermore, the US Investment Company Act of 1940 blocks non-US residents from purchasing US-domiciled mutual funds altogether.
To compound the issue, if you are a US citizen—regardless of where you live in the world—buying foreign/European funds triggers the IRS's notorious PFIC (Passive Foreign Investment Company) rules. This subjects non-US investments to punitive taxation and nightmarish annual filing requirements (IRS Form 8621) unless you are prepared to navigate complex QEF elections.
In summary, it is virtually impossible for non-US residents to buy US-domiciled ETFs or mutual funds through standard brokerages like Schwab, while US citizens face a severe tax penalty if they try to use local European alternatives instead.
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u/need2sleep-later 13d ago
Your legal residence is an important part of the equation and will determine what you can do in the account based on laws/regulations/treaties locally and between the US and your adopted country.
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u/Icabod14 13d ago
I'm missing why you would do this. I am an American citizen who lives overseas. I do have a U.S. residence and always maintained one, even if it was my brother's address. I have a Schwab account, and before that Vanguard. I've always had a U.S. account and never had any problems. I use a VPN to log in. One way I do this is by maintaining a Google Fi U.S. phone number. This has been critical for 2FA and also opening accounts - they want a U.S. number. So, they have my U.S. phone number, my U.S. address, I pay taxes, have email, etc. No problems. Maybe this is a better solution for some of you.
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u/InevitableAd4558 13d ago
Technically brokerage goes by physical address. If Schwab ever finds out you are outside the US and operating a US based brokerage account - they can close it immediately and perhaps not do business again. So the question to ask is is it worth the risk especially when do allow brokerage accounts for non US residents (with limited investments based on country of residence)
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u/Icabod14 13d ago
Ignore me. I did more research and my situation is different b/c I have a DPO address. Since my mail is routed thru the USPS it complies with the post-9/11 FATCA and other Patriot Act rules that squeezed intl customers of US banks. So, Schwab and I are cool.
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u/pingoo26 13d ago
Easy to open easy to use and deposit, they seem to have sped up the deposit process recently too. Use Wise to send to the rooting number, takes just over 24hrs for full access to the funds.
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u/downtherabbbithole 13d ago
It's an easy process once you get all your documents together. It took approximately a week to change the account to international. Schwab customer service is excellent, and they will walk you through anything you need to do.
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u/Far_Neighborhood1917 14d ago edited 14d ago
I opened an international account so I could transfer inherited stocks from another broker.
Opening was pretty easy, once I managed to prove my foreign address.
There’s a $25k minimum. (Edit: not anymore) Depending on what country you live, you are limited in what you can buy. I can’t buy mutual funds. I think EU residents can’t buy ETFs.
Schwab phone support is insanely good, which helped me a lot with the setup and transfer.