What investment options do I have with Charles Schwab as a US expat in Germany?

• Schwab's International Account allows eligible US citizens abroad to keep trading US-domiciled securities.
• Many US citizens in Germany use Schwab because it continues to provide access to US-domiciled ETFs that are unavailable through most EU-based brokers under the EU's PRIIPs rules.
• Holding US-domiciled funds also generally avoids the punitive US PFIC rules that apply to European ETFs and funds.
• You still must handle German taxation on dividends and capital gains, in addition to US tax obligations.
• Account and product availability depends on eligibility: Schwab decides what it offers based on your country of residence and account type.

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• Schwab One International Account: Standard brokerage account for eligible US citizens living abroad.
• Retirement accounts: Existing IRAs can generally be maintained. Opening new retirement accounts or rolling over a 401(k) while living abroad may be restricted, depending on your circumstances and Schwab's current policies. Worth confirming with Schwab directly before relying on it.
• Managed portfolios: Schwab Intelligent Portfolios (robo-advisory) may not be available to accounts with a non-US address.

Schwab defines its offering per country of residence and account type, and policies can change. Not every product on the US platform is on the international one, so confirm your specific options with Schwab before making plans.

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• US-domiciled ETFs: Examples: Vanguard VTI, iShares IVV, Schwab SCHB.
• Individual US stocks: Access to NYSE and NASDAQ listings.
• US Treasuries and bonds: Direct purchase options available.
• US mutual funds: Access is often limited for overseas residents. Schwab typically lets clients abroad hold and sell existing mutual fund positions but restricts new purchases. If mutual funds matter to you, confirm with Schwab what your account can buy.

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• A possible route around the PRIIPs roadblock: The EU's PRIIPs regulation puts the obligation on the seller. A broker generally cannot sell a packaged product like an ETF to a retail investor in the EU without a Key Information Document (KID), and US ETF providers rarely produce KIDs. That is why brokers in Germany typically cannot sell you US-domiciled ETFs, and being a US citizen does not exempt you. The difference with Schwab is that its international platform is a US broker operating under US rules. In practice, US citizens at Schwab can usually still buy US-domiciled ETFs from Germany, but Schwab applies country-of-residence screens and this can change, so confirm what your account can buy before you fund it. You can read more in our article on why US citizens in Germany can't buy US ETFs through EU brokers.
• Avoiding PFIC treatment: For many Americans in Germany this could be the biggest advantage. US-domiciled ETFs are treated as regulated investment companies under US law and are generally excluded from the PFIC (Passive Foreign Investment Company) rules, which impose punitive tax treatment and heavy reporting on European ETFs and mutual funds. See our article on PFIC rules for US citizens in Germany.
• Familiar US tax reporting: 1099 forms instead of complex PFIC reporting for US-domiciled funds.
• Broad investment choice: More product variety than most EU brokers offer to US citizens.

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• Dividends from US investments: As a US citizen you typically file a W-9 with Schwab, so Schwab usually withholds no US tax on your dividends. You pay the US tax through your annual return (Form 1040), at qualified dividend rates for most broad ETFs. Germany taxes the same dividend at the flat rate below. The treaty then decides who credits whom: Germany generally credits US tax on dividends up to the treaty cap of 15%, and US tax above that is typically relieved on the US side with a foreign tax credit. Capital gains tend to work the other way around: Germany has the primary taxing right on gains, so the credit usually happens on the US side. The exact mechanics depend on your filing situation.
• Capital gains and dividends in Germany: Germany generally taxes investment income of tax residents at the flat Abgeltungsteuer rate of 25%, plus the solidarity surcharge and, if applicable, church tax, for a total of roughly 26.4% to 28%. It is not taxed at your personal income tax rate (a lower progressive rate can apply on request if your income is low, the so-called Günstigerprüfung). The first EUR 1,000 of investment income per year (EUR 2,000 for couples filing jointly) is tax-free under the Sparer-Pauschbetrag.
• Teilfreistellung (partial exemption) for ETFs: Germany treats US ETFs as investment funds under the Investmentsteuergesetz. For funds that qualify as equity funds (at least 51% stocks, which broad ETFs like VTI, IVV, and SCHB typically meet), 30% of distributions and gains is tax-free. That can bring the effective rate on an equity ETF down to roughly 18.5% before church tax, rather than the full 26.4%.
• Vorabpauschale (advance lump sum): Germany also taxes a small deemed annual return on fund holdings each January, based on the official base rate (Basiszins) the Federal Ministry of Finance publishes. It is zero in years when the fund did not gain in value. No US broker calculates or withholds it, so it is an item you (or your Steuerberater) work out for your German return.
• US retirement accounts: The German tax treatment of IRAs, Roth IRAs, and 401(k)s is significantly more complex than "tax-free because it's a retirement account." Germany does not automatically mirror the US tax benefits; for example, Germany generally does not recognize the tax-free status of Roth IRA gains, and German practice on Roth distributions is not uniform (some tax offices tax only the earnings portion). How your accounts are taxed depends on the treaty, German domestic law, the account type, and when and how you take distributions. This is an area where talking to a cross-border tax advisor is genuinely worth it.
• Currency: German taxes are calculated in euros, so USD/EUR exchange-rate movements affect the size of your taxable gains. Separately, certain foreign-currency transactions can have their own German tax consequences.
• Foreign broker reporting: Schwab does not withhold German tax for you. You must declare the income yourself in your German tax return. Fund income from a foreign broker goes on Anlage KAP-INV; other investment income goes on Anlage KAP.

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You live in Germany with:

• $300,000 in US ETFs at Schwab.
• $25,000/year in new contributions.

Using Schwab:

• You keep buying US-domiciled ETFs like VTI and VXUS.
• US taxes: Schwab typically withholds nothing because you file a W-9 as a US citizen. You pay US tax on the dividends through your annual return.
• German taxes: Dividends and realized capital gains are taxed at the flat Abgeltungsteuer rate, with 30% of the income from equity ETFs typically tax-free under the Teilfreistellung. That could work out to an effective rate of roughly 18.5% before church tax, with Germany generally crediting the US tax on the dividends up to the 15% treaty cap.

These figures are illustrative and based on general assumptions. Individual results depend on your personal circumstances and tax situation.

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• Forgetting to report Schwab account income to the Finanzamt in Germany. Foreign brokers do not withhold German tax automatically.
• Assuming US tax treaty benefits apply automatically: you must claim them.
• Assuming US retirement accounts keep their US tax benefits in Germany. They often do not, and the treatment varies by account type.
• Assuming every Schwab product is available to you. Eligibility depends on your country of residence and account type.
• Holding too much USD without considering EUR conversion needs.

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Schwab solves one specific problem: keeping access to US-domiciled funds while you live in Germany. It does not change the fact that most of your investing life now happens under German rules, and funds are not the only asset class worth understanding here.

One route many US citizens in Germany explore alongside their brokerage account is direct German real estate:

• A property you own directly is not a fund, so the PFIC rules never come into play.
• Buying a property is not a packaged retail product, so there is no PRIIPs KID requirement blocking the purchase.
• Germany has its own tax mechanics for property, such as depreciation (AfA) on rental properties and the 10-year holding period (Spekulationsfrist) after which gains on a privately held property are generally tax-free. Whether and how these apply depends on your individual circumstances.

If you want the full picture of how investing works for Americans here, from brokerage setup to property, our guide to investing in Germany as a US citizen walks through it stage by stage. For the property angle specifically, Property vs ETFs in Germany looks at how financing changes the comparison, and Germany vs USA: investing compares the two markets you know best.

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⚠️ IMPORTANT LEGAL DISCLAIMER:

This content is for educational and informational purposes only and does not constitute financial, tax, legal, or investment advice. You should not rely on this information as a substitute for, nor does it replace, professional financial or tax advice. Always consult with qualified professionals (tax advisors, financial planners, lawyers) before making any financial decisions or taking any actions based on this information.

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Disclaimer: This is general information and may differ for individual cases. Brokerage policies and eligibility rules change; always confirm current conditions with Charles Schwab directly. Learn more about financial planning with Financemate in a discovery call. Always consult a cross-border tax professional before investing.