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Old 22.10.2009, 18:09
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Being a "US-Person" = Investment Purgatory

Has anyone found a good bank or investment institution that will allow a US citizen to invest their Swiss Francs in stocks or mutual funds in a way that does not require a 2 week training course?

I just got off the phone with Credit Suisse to complete my challenges with them regarding investing. I have not been able to successfully make a single investment with them since I opened the account a year ago. I finally found out that nearly all mutual funds are not allowed due to restrictions.

Apparently when you check the box that says "The account holder is a "US person", i.e. a US citizen (single, dual or multiple nationality) or that he holds the "resident alien" status" it means you are relegated to Investment Purgatory where you can only buy a handful of funds and must make amends for the cardinal sin of being born in the US.

In Credit Suisse's case they apparently can't really tell you what that handful of funds is so you are forced to guess. It is like the Monty Python Cheese Shop sketch.

I read in a different thread that Swissquote is a pretty good online trading site. I will try them out. Any other options online or otherwise that will accept the we wretched "US Persons" and allow us to invest without an endless guessing game?

NOTE: To hold this off at the pass. I understand the asset and income reporting rules imposed on financial institutions by the US IRS and these restrictions are responsible for these rules. I also know that these restrictions are in place so these financial institutions can avoid following these rules. Yes, the IRS is overreaching...blah, blah, blah. How to other Americans on this forum handle this problem?
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Old 22.10.2009, 18:16
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Re: Being a "US-Person" = Investment Purgatory

A simple solution is to ignore the Swiss altogether, and open an account in Luxembourg, the UK, etc. It's hard to make recommendation without knowing what you wish to do, but one example would be Interactive Brokers here; low fees and excellent FX conversion.
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Old 22.10.2009, 18:44
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Re: Being a "US-Person" = Investment Purgatory

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A simple solution is to ignore the Swiss altogether, and open an account in Luxembourg, the UK, etc. It's hard to make recommendation without knowing what you wish to do, but one example would be Interactive Brokers here; low fees and excellent FX conversion.
Thanks for the advice. My trouble is that the US brokers I used have a lot of trouble dealing with overseas customers. As soon as I changed my address with E*Trade I was no longer able to purchase any securities and with Fidelity their website does not work with international addresses for account maintenance so I have to do everything by post.

What I am looking for is a way to save and make personal investments with the lowest hassle and cost as a US person living in Switzerland. I thought doing everything through Credit Suisse would at least be easy, but I was wrong. I would prefer to avoid currency conversions as much as possible so I can focus on the performance of the investments as opposed to playing the foreign exchange market.
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Old 22.10.2009, 18:51
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Re: Being a "US-Person" = Investment Purgatory

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...As soon as I changed my address with E*Trade I was no longer able to purchase any securities...
I have had an account with E-trade for several years, and they have no problem with my address (France). So, I would urge you to call them and find out what form(s) you need to file, or why there is a problem.

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What I am looking for is a way to save and make personal investments with the lowest hassle and cost as a US person living in Switzerland.
I use Interactive, and have been pleased with their service. In your situation, you would use their UK office (the link I posted). If you have an IRA or similar account, you would use the US office.
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Old 22.10.2009, 19:00
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Re: Being a "US-Person" = Investment Purgatory

Quote: I use Interactive, and have been pleased with their service. In your situation, you would use their UK office (the link I posted). If you have an IRA or similar account, you would use the US office.[/quote]


I had tried with Interactive about 2 years ago and they said they did not accept US people. I was trying to open an account to invest in US stock market.

Glad to see they allow it now.
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Old 22.10.2009, 19:06
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Re: Being a "US-Person" = Investment Purgatory

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Thanks for the advice. My trouble is that the US brokers I used have a lot of trouble dealing with overseas customers. As soon as I changed my address with E*Trade I was no longer able to purchase any securities and with Fidelity their website does not work with international addresses for account maintenance so I have to do everything by post.

What I am looking for is a way to save and make personal investments with the lowest hassle and cost as a US person living in Switzerland. I thought doing everything through Credit Suisse would at least be easy, but I was wrong. I would prefer to avoid currency conversions as much as possible so I can focus on the performance of the investments as opposed to playing the foreign exchange market.
Do you have a US address that you could use? I use a broker back
home with my brother's address. That way there are no questions.
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Old 22.10.2009, 19:09
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Re: Being a "US-Person" = Investment Purgatory

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I had tried with Interactive about 2 years ago and they said they did not accept US people. I was trying to open an account to invest in US stock market. Glad to see they allow it now.
I assume you mean "non-US"?? For clarification, the UK office (a UK corporation) will take non-US citizens. Some US banks, brokers etc won't take an account from anyone without a US address, though that policy varies quite a lot. There are many (legal) ways around that, with modest cost (a US mailing address, a US LLC, etc), but a US broker in the UK might do just as well.
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Old 23.10.2010, 22:53
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Re: Being a "US-Person" = Investment Purgatory

Are there actually IRA type accounts here in Switzerland? This 3rd pillar stuff does not appear to have the same return rates or management possibility. Any advice on this?
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Old 23.10.2010, 23:20
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Re: Being a "US-Person" = Investment Purgatory

Only for US Catholics (sorry could not resist).
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Old 23.10.2010, 23:39
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Re: Being a "US-Person" = Investment Purgatory

From what I understand, the spiel (according to one example for a bank I read) goes like this:
  • Is the client a US-person?
  • If yes, does the client wish to invest in US securities
  • From then on, it gets weird, if the answer is yes, you seem to be better of than if the answer is no, as the no answer means you have to sell all your US things with withholding tax levied and your account has to be closed by the end of 2012 at the latest. And your account is frozen. Yes means you can do a certain reporting to the IRS and I didn't see anything about having to close an account. Maybe it's the IRS' desire for control, "home investments" might be easier to monitor?
To be honest, the only way around this I can see is to not be a US Person. This is not the Swiss banks' fault, it's the US government making demands that are against our banking regulations and the clients seem to insist on such things as banking secrecy, which the new laws make impossible to maintain. Unless you are in some kind of trust, where you can have the account held jointly.

It's very complicated, see other threads on this topic...
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Old 24.10.2010, 15:24
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Re: Being a "US-Person" = Investment Purgatory

so in regards to a US type IRA….(non catholic/protestant stuff) investment type ira, how do Swiss get good returns on investment with some sort of broad diversification?
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Old 24.10.2010, 16:09
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Re: Being a "US-Person" = Investment Purgatory

The other obvious question that i have is how one can be expected to get any sort of IRA based tax advantage. As I understand it, putting money into a US IRA wouldn't shield you from Swiss taxes and putting money into a Swiss IRA increases your US taxes by a fraction of what you save.

I am still trying to get a handle on the various rules. Sometime next year, I might will be looking for a not too expensive CFA type with knowledge of both US and Swiss tax code.
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Old 22.07.2012, 08:08
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Re: Being a "US-Person" = Investment Purgatory

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I was no longer able to purchase any securities and with Fidelity their website does not work with international addresses for account maintenance so I have to do everything by post.
Would you happen to have a link pointing to where this is documented?
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