How to Buy US ETFs from Europe as a US Citizen (Without a PFIC Problem)

If you are a US citizen or green card holder living in Europe, you have probably arrived here after a frustrating experience. You tried to buy a simple, low-cost US listed ETF, the kind that forms the backbone of most sensible portfolios, and your European platform would not let you. Then you read about PFIC and started to wonder whether US funds were a problem too.

Here is the reassuring part. US listed ETFs are exactly what you want as a US person, because they are not PFICs. The obstacle is not US tax. It is an EU rule about how funds are marketed. This article explains the barrier and, more importantly, the legitimate routes through it.

This page focuses on one specific wall, getting hold of US ETFs. The related guides at the end of this article set out the wider landscape for a US person investing in Europe.

The Two-Sided Problem

A US person in Europe is squeezed between two regimes that point in opposite directions.

On the US side, funds domiciled outside the US are PFICs. European domiciled funds, including UCITS index funds and ETFs, fall into the punitive PFIC tax regime. We explain this in full in our guide to PFIC rules for Americans in Europe. The natural conclusion is that you should hold US domiciled funds instead.

On the European side, the PRIIPs Key Information Document rules say that retail investors can only be marketed packaged investments that publish a Key Information Document. No US domiciled fund publishes one. So European retail platforms generally block US domiciled funds, which are precisely the funds that solve your PFIC problem.

Two Things Worth Knowing First

Before the routes, two facts that reframe the whole problem.

1. US listed ETFs are not PFICs. PFIC status depends on where the fund is domiciled, and a US domiciled ETF is, by definition, not foreign to the IRS. So the very funds Europe blocks are the funds that keep you out of PFIC trouble.
2. Local tax treatment of US ETFs is often reasonable. It varies across Europe. In many countries a US ETF is taxed broadly in line with a comparable local fund, and in some the treatment is more favorable, though a few member states apply specific fund tax rules, so the local position needs checking country by country. The point is that a US listed ETF is frequently efficient on the local side as well as being PFIC free. The only question is how to access it compliantly.

The Legitimate Routes Through

There are several legitimate ways to thread this needle. They are set out below in rough order of how relevant they are for most clients.

1. Hold US ETFs inside a US pension wrapper (IRA or rolled-over 401(k))

This is often the cleanest route. Inside an IRA or a rolled-over 401(k) held with a US custodian that services clients in Europe, you can typically hold US listed ETFs directly. There is no PFIC issue, because a pension is PFIC exempt and a US ETF is not a PFIC in any case, and the EU Key Information Document barrier does not apply in the same way inside a US pension account.

If you have an old US employer plan sitting idle, our guide to 401(k) to IRA rollovers under SEC-regulated advice explains how to consolidate it. If you are weighing a Roth strategy, a Roth conversion can also be PFIC free inside the wrapper, though the tax on conversion needs careful planning for a US person living in Europe.

2. Use a US brokerage account that serves Americans abroad

The Key Information Document barrier sits with European based retail platforms, not with US custodians. Some US brokers and custodians that specialize in US citizens living abroad will hold US listed ETFs for you against your genuine overseas address. The practical catch is that many mainstream US brokers will not keep accounts for non-resident clients, and some close accounts once you move abroad, so provider choice and eligibility matter, and this is one of the things an adviser handles for you.

3. Become an elective professional client

Under the MiFID rules, the Key Information Document retail protections fall away if you qualify as an elective professional client. To qualify, you generally need to satisfy at least two of three tests: a financial instrument portfolio, excluding your main home, of at least 500,000 euros; a track record of frequent trading in significant size on the relevant market; or at least one year working in a role in the financial sector that requires relevant knowledge. Meeting this status lets you buy US domiciled funds directly. It is not available to everyone, but for higher net worth clients it can be a clean solution.

4. Use a SEC regulated cross-border adviser

For most people, the simplest and most robust route is to have the portfolio built and managed by a adviser who is regulated on both sides, SEC and EU. A dual-regulated adviser can hold and manage US listed, non-PFIC ETFs inside the right wrappers on your behalf, within the appropriate regulatory framework, so you are not relying on workarounds or trying to qualify for professional status yourself.

What We Do Not Recommend

The Boglehead and expat forums sometimes mention two further tactics. We mention them only to be clear about where we stand.

The first is using a US residential address you do not actually live at, in order to keep a US brokerage account open. This is generally contrary to the terms of service of the broker, and we do not advise misrepresenting your country of residence. It also creates a real risk of account closure, which can force an unplanned and taxable sale of your holdings.

The second is buying options on US ETFs and exercising them to acquire the underlying fund. This is an advanced tactic, carries its own risks, and is not suitable as a mainstream strategy.

Putting It Together: Asset Location

The thread running through all of this is asset location. Get your growth assets into the wrappers where PFIC cannot reach and where US ETFs can be held, and keep pooled funds out of the taxable wrappers, such as local brokerage accounts and arrangements like an Assurance Vie, where PFIC bites. Done well, a US person in Europe can hold a globally diversified, low-cost and fully compliant portfolio. The work is in the structuring, not in any single clever product.

A Note From Jonathan Laws

Jonathan Laws, ACA Ch.FCSI

Senior Independent Financial Adviser, Cameron James

“The question I am asked most often is some version of, can I still own a normal US ETF over here. The honest answer is yes, almost always, just not through the European retail account you first tried. Once people realize the barrier is marketing rules rather than US tax, the worry drops away and it becomes a practical question of access.

I steer most clients toward the simplest durable route, which is holding US listed funds inside a US pension wrapper with a custodian that keeps accounts for residents abroad. It avoids the workarounds that circulate on the forums, it keeps you on the right side of both rule books, and it gives you the globally diversified, low-cost portfolio you wanted in the first place”

How Cameron James USA Helps

About Cameron James USA and how we are regulated

Cameron James advisers hold individual SEC authorization in the US through Beacon Global Advisor Network, LLC (CRD 288833), and hold individual EU and EEA authorizations where applicable. This adviser-level authorization on both sides is what allows us to advise on your US accounts and your European accounts within a single coordinated plan, rather than leaving you to stitch together US-only and local-only advice that does not join up.

For US ETF access specifically, that means we can build and manage globally diversified portfolios using US listed, non-PFIC ETFs inside the wrappers where they belong, coordinate the US and local tax treatment, and do all of it within a compliant framework rather than relying on the workarounds that circulate online.

Related Articles

More guidance for US persons with cross-border finances, published on cameronjamesusa.com:

• Fidelity PFIC Restrictions: What US-Connected Persons Need to Know  Why platforms block US-connected investors, and what PFIC exposure means in practice.
  
• 401(k) to IRA Rollover: the SEC-Regulated 2026 Guide  How to consolidate old US plans into a PFIC-safe IRA that can hold US listed ETFs.
  
• UK Expat Retirement Planning in the US: A Cross-Border Guide  How US and overseas accounts and pensions fit into one coordinated plan.
  
• How the SEC-registered BGAN advice model works  The fee-based, fiduciary framework that lets us advise on US and overseas accounts together.
  
• When a Platform Closes US-Resident Accounts: What to Do Next  The steps to take when a broker exits the US-resident market, without forcing a costly sale.