Why Americans Can’t Get Bank Accounts When They Live Overseas
And what to do about it
"Hi, American here, moved to France 2 months ago for my job with LVMH….anyone have ideas for getting a bank account?" Every time the French banker sees my passport they say, "Non, madame, c'est pas possible."
These questions come up over and over and over. So, let me break it down…
Americans living overseas are subject to Foreign Account Tax Compliance Act (FATCA). The name sounds bureaucratic and wonky because it is. Before discussing why this arcane bill makes your life difficult, let's talk about what it is.
FATCA was introduced in 2009 by two Democratic elected officials, Max Baucus (D–Montana); Charles Rangel (D–NY-13) and signed into law by President Barack Obama.
The law stipulates that all non-US financial institutions with connections to the United States are subject to US banking and finance regulations.
Any time a non-US financial institution has a customer who is an American citizen, resident, or green card holder, the institution must report their file to the US Dept. of the Treasury.
It was initially part of a stimulus bill, the HIRE Act, intended to bolster the American economy after the 2008 financial crisis. It has resulted in the IRS collecting additional tax revenue but is extremely costly for overseas financial institutions and a burden on regular people like you and me.
I'm against FATCA and want it repealed, but that's beside the point. Let's get into why it matters for Americans abroad.
If a non-US financial institution has American customers, that institution is subject to US financial/banking regulations and laws.
This is a massive pain in the butt because the bank must follow two sets of laws from different countries. In my case, French and American. Financial and banking compliance and regulation are costly and complicated, so this is no simple task. As such, some banks forgo working with American customers to avoid burdensome regulations and costs. But, some banks take American customers. I use BNP, for example.
So, a warning for Americans in France (or anywhere overseas): just because Anglophones in France (British, Australian, etc.) use a particular bank doesn't mean you can. You must find a bank that takes American customers.
Another time I will get into what paperwork you need, but this is good for now.
Oh, you must disclose all overseas accounts on your tax form when you are a French tax resident. Failing to do so is tax evasion. It's not chic.
Artist: Edgar Degas (French, Paris 1834–1917 Paris)
Date: ca. 1870
Medium: Oil on canvas
Dimensions: 12 3/4 x 18 1/4 in. (32.4 x 46.4 cm)
Classification: Paintings
Credit: H. O. Havemeyer Collection, Bequest of Mrs. H. O. Havemeyer, 1929
Accession Number: 29.100.43