I have a number of questions about how to best invest in US assets from Europe (Portugal). Hoping I can get answers to my questions on this forum.
Background: I recently moved from the United States to Portugal. I'm a Swiss citizen (and now EU resident), and a non-US resident for tax and investment purposes. All of my investments are currently in US domiciled investments (401K, Roth IRA, Stocks, ETFs), and while some of them are global investments (i.e. total stock market ETFs), they're all US domiciled since I invested in them via US brokerages (Vanguard, Ally Invest, E*trade US).
While my salary is currently paid in EUR, I plan to continue with the same strategy of investing in primarily US based companies via stocks and ETFs and am trying to learn how to do this best out of Europe as a non-US resident.
- I'm aware that I can invest in US assets via both US based brokerages who allow Europeans (e.g. tastytrade) or via European based brokerages (e.g. IBKR, Degiro). What are the pros and cons of using one over the other? From what I gathered, only US brokerages offer no-fee trading and allow EU based investors to invest in US based ETFs since they don't need to follow the KID regulation. On the other hand, I don't understand if there are any downsides in using a US broker over an EU based broker.
- I'm currently paid in EUR and will need to exchange EUR to USD before investing into US stocks. I haven't done frequent currency conversions before outside of converting some money with Transferwise. Since I'm not investing more frequently, it seems to make sense to better understand how to optimize currency conversions. I'm not trying to time the market, just understand what the most practical and low-cost way is to convert EUR to USD before investing. Is it correct to assume that using a broker (that can hold both EUR and USD) is the proper way to do this? For example, IBKR Europe can hold both USD and EUR and seems to have low cost currency conversion. Is it also correct to assume that all brokers use the interbank exchange rates? Again, my goal is to be practical and low cost.
- From a regulation and asset insurance perspective, are there any key items I should better understand? e.g. am I misunderstanding that I can use a US brokerage (as EU resident) to invest in US ETFs (am I bypassing regulations?), or am I now aware of certain regulations that would heavily tax US investments (either via EU or US brokerage), perhaps on death? And lastly, while I plan to use a financially stable brokerage (i.e. no startups) -- are there any considerations on having my investments insured via US or EU based brokerages?
- I read some posts on investing Ireland domiciled ETFs over US based ones, but don't understand the benefits. Would be super helpful if someone could shed some light or point me towards the right direction for better understanding.
- Any considerations for keeping my existing US domiciled investments in the US (i.e. my Vanguard, Ally Bank, E*Trade) vs. moving them to a EU broker should I decide to use one instead?
- Anything else I may be forgetting?