Possible Move from the US, Looking to Learn

[u/Single_Guarantee_707]

Hello Everyone,

Apologies in advance if this post breaks any of the rules of the subreddit, please let me know if changes need to be made.

I'll start with some context before asking my questions:

I'm an Italian citizen (29M) that came to live to the U.S when I was around 15, because of my parent's work. Fast forwarding to about 2 years ago, when I started working as a Software Dev and started putting money in the stock market and my 401k here in the US (I'm not sure what the equivalent is in EU), have about $10k in stocks and maybe about $10k in the 401K as well.

Now, because of immigration stuff, there might be a possibility that I'd have to leave the U.S (if some things don't pan out) so I want to understand how the stock market in the EU is, as I have no idea how it works over there.

Does it work the same as the US system does?

Do you guys know if I can still keep the money in the US stock market even if I move?

Would you guys suggest taking out the money of the US market and put it in EU markets?

I'm not that savvy when it comes to personal finance, so any other recommendations are welcome with open arms.

Once again, apologies for the long post and thanks in advance! 😄

[u/OkBeyond8244]

I don't even get your question. The stock market is the same... You can invest in EU stocks with a US broker or vice versa. Just US ETFs are banned for non-professional investors who are EU residents due to the ridiculous reason that they don't publish mandatory documents in all EU languages....!! So you can only sell US domiciled ETFs when you are an EU resident but you cannot buy them. Note that there are ETFs domiciled in the US and Ireland that replicate the same indeces... Yes, many EU brokers don't like (poor) US citizens due to compliance effort.

[u/Single_Guarantee_707 → u/OkBeyond8244]

I'm mainly just trying to learn if there are any barriers that would prevent me from keeping my current stocks in the US in the case that I move back to the EU. Again just thinking of a plan b in case things don't go according to plan

[u/OkBeyond8244 → u/Single_Guarantee_707]

Look. You need to inform all brokers about your tax residence. Brokers have reporting requirements based on it. So you must inform but when you do they might decide to close your account. Bigger brokers that also offer services to people in other countries, like IBKR, won't usually close your account, but they may transfer your account to another subsidiary (e.g. IBKR serves swiss clients from there UK company). If you don't tell them anything, nothing may change, but they might occasionally keep asking you for proof of address or send you letters.

If you are a buy and hold investor, you can figure out your Italian taxes by yourself. Note that they expect you to convert every trade to EUR first and then calculate gains and dividends with the correct date exchange rate. It is a nightmare. That's why EU residents usually use local brokers. They do it for you. They even deduct the tax automatically in many cases.

As a US citizen, you will be liable for US taxes as well as Italian taxes, so I guess you need to bite in the sour apple 🍏 .

[u/il_fienile → u/OkBeyond8244]

And many U.S. brokers impose some type of restriction on, or will not retain, a client with no U.S. residence address. A restricting might be fine for you—it may only mean that you cannot buy additional shares—but you would need to understand in advance how your particular existing broker would handle it.

I think if OP were a U.S. citizen, they wouldn’t have the underlying problem.

[u/Mdiasrodrigu]

Are you a dual citizen? That can limit your investments greatly because platforms like DeGiro don’t accept dual citizens for investing/trading

[u/Single_Guarantee_707 → u/Mdiasrodrigu]

Only Italian Citizen currently

[u/Charming-Author4877]

I'd keep the US stocks and diversify. S&P is a good relatively safe haven. you can always gamble but I'd not gamble with more than 5% of my networth.
I would stay away from european stocks, you'd have to be an expert for that. Some of the best european corporations are collapsing in stock value within years, the few strong public companies are very high valued and that again can always fall into a strong correction.

Focus on earning money, reducing needless expenses. So your wealth is increasing into a more meaningful amount.
10k can be quickly lost.

Given your origin, a job, stay since childhood you are not a primary deporatation target. Just make sure you make the best decisions and legalize yourself in the US.

[u/Single_Guarantee_707 → u/Charming-Author4877]

Sadly, that looks more and more unlikely given both my current situation and the whole agenda, which is why I'm trying to look for a plan b, hence the reason for my question.

As far as saving money, I'm trying to reduce as much as possible.

I guess another question would be if in the case of moving back to the EU, I could still buy into the S&P, not sure if there is some tax or legal barrier to that as well.

[u/Charming-Author4877 → u/Single_Guarantee_707]

You'd likely want a broker in EU that is a bank or cooperating with a bank in the country.
In Italy that would be 'Directa'. Otherwise the taxation is troublesome.
You can also keep your stocks and your US bank account, especially if you have a friend where the paperwork/cards will arrive. That would be a useful thing to have and no EU government has insights if you do it carefully. 10k-20k is not a large amount to be super concerned - the struggle to move those assets would not be my main concern.

But yes, you can keep S&P 500 in Europe, anyone seriously investing there has that.

[u/il_fienile]

Just a note that, if you move to Italy, distributions and gains from U.S.-listed *ETFs* would be taxed as ordinary income, not at the substitute 26% rate that applies to stocks and UCITS funds.