Can I Keep My Fidelity Investments After Moving Abroad?
Here’s a summary of the main problem and the solutions discussed:
- Main Problem: The user is concerned about the implications of moving back to their home country while holding investments in mutual funds or index funds with Fidelity, specifically regarding account restrictions and withdrawal capabilities.
- Solution 1: Fidelity allows users to retain their investments without requiring liquidation when moving abroad, but certain restrictions may apply based on international laws.
- Solution 2: Users can continue to make unsolicited trades for most securities, but cannot purchase new mutual funds or add to existing ones after relocating.
- Solution 3: Cash from sales will be held as a credit balance instead of being invested in a core money market position due to the inability to purchase mutual funds.
- Solution 4: Features like check writing, debit cards, or margin accounts might be restricted depending on the country of residence.
- Solution 5: Users must submit IRS Form W-8 to certify their foreign status for tax purposes, which affects withholding rates and tax reporting by Fidelity.
This information provides clarity on how to manage investments while considering relocation.
Here’s the full thread
Hi,
I’m currently on an F-1 Visa and I’m considering investing in mutual funds or an index fund with Fidelity. If I move back to my home country in the future, will Fidelity allow me to keep my investments for as long as I want and withdraw funds from a foreign account?
Please let me know if there are any restrictions in these scenarios. I look forward to your response. Thank you.
If you live outside the United States and have questions about opening an account you should call Fidelity
Or you could ask the AI on fidelity’s website
Hi, @tejesh 77.
We will not require you to liquidate your securities when you are moving from the United States to a foreign country. However, restrictions and requirements may be added to the account to comply with applicable international laws and regulations. Once your relocation is finalized, you’ll want to notify us and update your address when this occurs.
The mentioned limitations and restrictions placed on your account aren’t the same for every country. That said, generally, these restrictions include the following:
• Unsolicited trades for most securities, like stocks, Exchange Traded Funds (ETFs), and Certificates of Deposit (CDs), will continue to be allowed, but purchases of new mutual funds or adding to existing funds will be unavailable
• Cash added to the account (from the sale of securities or otherwise) will no longer purchase into a core money market position but will be held as a cash credit balance (due to restrictions on mutual fund purchases)
• Features such as check writing, debit cards, or margin may also be restricted in certain countries
Finally, as far as taxes go, Fidelity must also have a Certificate of Foreign Status, which is satisfied by submitting the corresponding IRS Form W-8. This information is required for U.S. tax withholding purposes on income earned in your Fidelity account, and withholding rates are based on tax treaties with the U.S. and the country you reside in. If your foreign status is not certified, you may be subject to mandatory backup tax withholding at the maximum tax withholding rate. Once you update your foreign status, in most cases, Fidelity will issue tax form 1042-S for the current and future years’ tax reporting. This form reports U.S. sources of income and any nonresident alien taxes withheld.
Foreign Status Certification (IRS Form W-8): https://accountmaint.fidelity.com/ftgw/Profile/action/ew8
If there is anything we can clarify or if additional questions pop up, please don’t hesitate to ask! We’re always happy to help. 🟢