U.S. Expats facing account closures can turn to VPN
All over the world, U.S. citizens living outside the country are getting calls, emails, and texts from American financial firms like Fidelity, Merrill Lynch, Charles Schwab, Vanguard, and Etrade. These messages often warn that their broker will no longer serve clients living abroad. Sometimes, brokers say they can’t work with clients in certain countries or regions. Other times, they tell investors that their accounts no longer qualify or have even been frozen. All of this is happening just because these investors are U.S. citizens living outside the U.S.
The types of limits U.S. brokers put in place vary a lot. Some brokers limit the number or types of funds investors can buy, raise minimum balance requirements, or move accounts to special international teams. But the most common thing brokers do is simply close accounts. According to expats, this happens a lot. Companies known to be closing expat accounts include Wells Fargo, Merrill Lynch, Morgan Stanley, USAA, Fidelity, UBS, and others.
Why is this happening?
The U.S. Patriot Act of 2003 made banks follow stricter rules to verify customers, but not much changed until the FATCA (Foreign Account Tax Compliance Act) was passed in 2010. FATCA requires foreign banks to report U.S. citizens’ overseas accounts, which led to many expat accounts being closed. In 2014, the U.S. Financial Crimes Enforcement Network made the rules even tougher, making it more expensive for banks to follow the law. That same year, the OECD introduced the Common Reporting Standard, which added more rules and reporting duties.
Because of all these changes, banks inside and outside the U.S. now have to follow more complicated rules. This group of rules, sometimes called the Global Account Tax Compliance Act, has led U.S. banks to put limits on or close expat accounts. So, after losing access to local foreign accounts after 2010, U.S. citizens living abroad now risk losing their U.S.-based accounts as well.
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But what if expats want to keep their favorite mutual funds?
Being a U.S. citizen means you must pay U.S. taxes even if you also pay taxes in another country. This is called citizen-based taxation. It means that wherever you live, the U.S. sees you as a resident for tax reasons. Because of this, U.S. citizens are allowed to use a U.S. address to open a financial account, even if they live abroad. If you want to keep your financial accounts while living overseas, make sure the address the bank has for you is in the U.S.
Still, financial firms can often tell if you are accessing your account from outside the country. Each time you log in to check your investments, your web browser’s data passes through many computers, leaving clues about your location. U.S. financial companies are required to check for this. This is where a virtual private network, or VPN, can help.
Enter the VPN
VPNs, or Virtual Private Networks, are often used to get around media restrictions, but they are also a strong tool for hiding your online identity. With a VPN, your internet traffic passes through secure servers that hide your real location and replace it with another one. It’s like entering a tunnel in New York and coming out in San Francisco. The best VPNs also encrypt your data, which gives you extra security—especially important for financial information. Many companies use VPNs so their workers can safely access sensitive information from anywhere.
Using a VPN is simple. You just sign up for a VPN service and install the software on every device
you use to access financial information, especially your phone and tablet. There are lots of VPN
services, including free ones, but free services often show ads or have low data limits. You also
probably don’t want to use a free service for important financial tasks. For protecting your
financial data, a paid VPN with strong encryption is best.
NordVPN, for example, offers top-level 256-bit encryption and servers that do not keep logs, so your online activity is erased rather than saved for a long time.
With all the new international rules, U.S. expats should act before they get a notice that their account has changed or closed. Using a secure VPN like NordVPN can help you keep access to your money and accounts.
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Updated on 1/1/2026.
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