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Wow, that article was eye-opening. That's a major issue for anyone thinking for living abroad, from the US, at all! It doesn't quite clarify what "living overseas" means either. Local residency? Long-term traveling?
Since these articles are dated 2021 - 2022 this seems to be an issues all the "FIRE Traveling" blogs from just a few years ago have not dealt with!
It sounds like options is to
1) turn off reinvest distributions (and use that for expenses)
2) convert all Vanguard funds to ETFs, which apparently don't have this issue? Thankfully that's also possible in a taxable account without selling.
edit: though it appears even ETF reinvestments are blocked if you reside
in the EU. So forget about long-term living in Slovenia off your vanguard account..
https://creativeplanning.com/insights/why-us-brokerage-accounts-of-american-expats-are-being-closed/I don't know if hiring a vanguard advisor could get around this?
However, some U.S. brokers continue to allow the distribution of ETFs to EU residents where the funds are managed by a U.S. Registered Investment Advisor.
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I don't know where Vanguard stands on expatriate clients. In theory, they should be able to make things work by limiting your investments to ETFs or individual stocks. In practice, it seems that a lot of the big players just don't want to take any risks and find it easier to close accounts. In my experience, there are smaller fee-based financial advisors that are willing to work with people living overseas, but they cost much more than a Vanguard or Schwab account.
As far as what it means to be "living overseas," let me start out by saying that I am not a lawyer and nothing I say should be construed as legal advice. That said, IMHO, the issue isn't just about how much time you spend overseas, but what your tax and residence status is in another country. If you are an American living long-term in a foreign country with legal residency, working and earning money in that foreign country, I think you have probably become a foreign resident. If you are paying tax on your income to the foreign country and therefore not paying tax on it in the US, or claiming the Foreign Earned Income exclusion to avoid paying US tax on it, I think you are probably a foreign resident. On the other hand, if you are slow traveling around the world, but not formally working, not legally resident in any other country, not spending too much time in any one country, and not taking advantage of the "benefits" available to non-residents like the Foreign Earned Income exclusion, I think you have a very good argument that you are not a foreign resident even if you are spending a lot of time outside the US. For example, military and US Government personnel assigned overseas don't get considered foreign residents for investment and tax purposes even if they live outside of the US for years. But they still have to pay full US taxes.
I do think people considering living overseas would be well advised to consult with a good lawyer and/or accountant regarding their own tax and investment situations.