For many Americans living in Europe, investing can feel like navigating a maze blindfolded.
While others may take for granted the ease of building wealth across borders, US citizens abroad face a unique and often punishing set of challenges—from complex tax rules to currency mismatches and escalating geopolitical tensions.
“Americans in Europe are in a uniquely challenging position,” says Eric Lind, Wealth Consultant at deVere Switzerland, part of the world’s largest independent financial advisory organization. “They’re subject to US tax rules even while living overseas, and many common international investment products can trigger unexpected taxes from the IRS.”
The issue stems from the US’s rare citizenship-based taxation system. Unlike most countries, the US taxes its citizens on worldwide income, regardless of where they live. This creates a maze of compliance hurdles for Americans investing in Europe.
Seemingly straightforward European mutual funds, ETFs and pensions often fall foul of IRS regulations by being classified as Passive Foreign Investment Companies (PFICs), attracting onerous taxation and paperwork.
“A client might be advised locally to invest in a fund that makes perfect sense in their country of residence,” Lind explains. “But if that investment isn’t compliant with US rules, it can lead to serious tax consequences. Unfortunately, many well-meaning local or domestic US advisors just aren’t trained to spot these issues.”
Another trap is currency risk. Many Americans abroad maintain US dollar-denominated investments while earning and spending in euros, pounds, or francs. In periods of volatility, this mismatch can quietly chip away at real wealth.
“We see it often—clients think they’re protected because their portfolio looks stable in dollar terms,” says Lind. “But if their expenses are in euros, a weak dollar can reduce purchasing power just when they need it most.”
Compounding these personal challenges is the broader climate of geopolitical instability. The Trump administration’s revived tariffs and transatlantic trade friction are injecting new uncertainty into the mix.
“Tariff tensions, currency swings, and economic nationalism are all at play,” notes American-born Lind. “This isn’t the environment to rely on guesswork—or on advisors who only understand one side of the Atlantic.”
According to the deVere consultant, the single biggest mistake American expats make is assuming that a US-based financial advisor can manage their affairs from afar. “It’s a different ballgame here,” he says. “Americans in Europe need EU-based advisors who are fully conversant in both US and European regulations. Without that dual expertise, they’re flying blind.”
“Going at it alone, or with the wrong advice, can be financially devastating. The right guidance—on the ground, in the new country of residence, with deep US knowledge—shouldn’t be a ‘nice to have’, but a ‘must have’.”
If you would like to contact Eric, you can reach him here: eric.lind@devere-switzerland.ch
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