Using FIDELITY abroad [US Non-Resident Alien, moving to Morocco]

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Ghanem016
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Joined: Tue Oct 22, 2019 5:07 am

Using FIDELITY abroad [US Non-Resident Alien, moving to Morocco]

Post by Ghanem016 »

Hey everyone

I'm a non US national and have had a Fidelity account for 15 years.

First opened when I lived in the US. I have been living outside the US for the last 10 years and have been registered with Fidelity as "non resident alien". Except for investing US mutual funds or foreign equities, i've been able to use my account normally for the last 10 years,

The issue I have today is that I may move to Morocco for a new job. Fidelity is telling me that Morocco is in a list of countries where the account "cannot be serviced"; meaning it will have to be shut down.

I'm wondering if anyone here has gone thru a similar process and how you managed the transition to another broker. I'm very upset as I love Fidelity and would much rather stay on.

Thanks
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LadyGeek
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Re: Using FIDELITY abroad [US Non-Resident Alien, moving to Morocco]

Post by LadyGeek »

Welcome! I moved your post to the Non-US Investing forum and retitled the thread. This will attract members with the appropriate experience to answer your question.
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TedSwippet
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Re: Using FIDELITY abroad [US Non-Resident Alien, moving to Morocco]

Post by TedSwippet »

Welcome.
Ghanem016 wrote: Tue Oct 13, 2020 6:26 am First opened when I lived in the US. I have been living outside the US for the last 10 years and have been registered with Fidelity as "non resident alien". Except for investing US mutual funds or foreign equities, i've been able to use my account normally for the last 10 years,

The issue I have today is that I may move to Morocco for a new job. Fidelity is telling me that Morocco is in a list of countries where the account "cannot be serviced"; meaning it will have to be shut down.
Can you indicate what type (or types) of account(s) you have with Fidelity? Ordinary taxable? IRA? Roth IRA? 401k? Some will probably be a lot easier to move than others.

Also, can you say which country you are currently living in? You may or may not have cover from a US income tax and US estate tax treaties currently. Whether this is useful to you depends on the type of accounts you hold with Fidelity US, and also what you hold inside these accounts.

But ... once you move to Morocco, it is highly likely that you will (if you already have it) lose US estate tax treaty cover, since Morocco has no US estate tax treaty. That could expose you to 26-40% US estate tax on all your US situated assets, should the worst happen while you own them.
assyadh
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Joined: Tue Sep 18, 2018 12:44 pm

Re: Using FIDELITY abroad [US Non-Resident Alien, moving to Morocco]

Post by assyadh »

Hi,

You fail to mention your US Person status (Citizen, green card holder, alien?). That's important in order to help you.

Regardless of your status, you might want to look into transferring your assets to a broker that accepts Moroccan residents such as Interactive Brokers (beware of the minimum account fees).

If you are a US Citizen, then the estate tax is less of a concern, but as TedSwippet mentioned, if you are not then beware.

Luckily, I am a Moroccan citizen, so I can shed some light on the tax situation of the country.

First, avoid as much as possible transferring more than the cash you need for daily use to dirhams (MAD). The reason why is that there is a strict currency control policy in effect, meaning that money gets in, but never gets out. That's why wealthy moroccans keep their money offshore. The currency rate is very stable, you can easily get cash using a Schwab debit card for example and use that on a daily basis. The 1k daily limit is plenty, considering that an average monthly salary is around 400 bucks.

Then Morocco has a flat tax on capital gains from the sale of shares like ETFs. It sits at 15%. Do the math, but if you have to liquidate your taxable portfolio because of the estate tax risk, then it may make sense to wait until you are only a moroccan resident to do it (unless you are subject to the exit tax. Again, we need to know your US Person status).

Morocco has a really old tax treaty with the US. It DOES NOT recognize the tax free nature of the Roth. So you're looking at 15% (maybe) on the gains. I never found any data online nor experience of US expats.

However Morocco recognizes and taxes the 401k or traditional like vehicles. And at a REALLY good rates because there is a scheme for retirees to substract something like 80% of the distribution from their income if they chose to bring it and convert it 100% in MAD. This is doable if you intend to spend the money anyways. The allowance is lower (around 60%) if you bring the money in "a convertible checking account".

Morocco has no wealth tax, no exit tax and no inheritance tax. BUT it has specific inheritance rules for Muslims (Sharia law based) and non muslims (They can elect to have their inheritance split following morrocan rules, or their home country rules if expats). Contact a specialized lawyer for that, plenty of people do it to dodge the forced heirship.

Enjoy the weather, the people and the food, it's one of the best in the world (Tagines)
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