Banks, News

How Dodd-Frank and FATCA Impact Global Investment Choices

Concept art of an article about Dodd-Frank Act: bank building in Vienna, Austria (AI Art)

Regulatory Burdens Prompt Foreign Entities to Cut Ties

Foreign banks, brokers, and trust companies are rushing to cut ties with US clients. This is due to the strict reporting requirements of federal laws like the Foreign Account Tax Compliance Act (FATCA).

The True Motive

If you’ve ever wondered why laws like FATCA exist, the answer is more elusive than you might think.

Contrary to what Uncle Sam is telling you, it has nothing to do with collecting taxes. In fact, official government estimates for FATCA say it will bring in less than $800 million per year in new revenues. That’s about two tenths of 1% of the $3.9 trillion budget for 2013.

The real answer is a case of “follow the money.”

Wall Street and big US banks don’t want overseas competition. This gives them a huge incentive to promote laws that restrict the investment choices available to Americans to “US only.”

The Dodd-Frank Act: A Closer Look

But there are many lesser-known examples that have been successful at eliminating foreign competition.

A case in point is the Dodd-Frank Act.

Wall Street was officially horrified by this law, which officially sought to end some of the practices that led to the financial collapse and big bailouts of leading US investment firms in 2008-2009. But buried in the bowels of this 2,319-page law was a provision targeted squarely at “foreign investment managers.”

Simply put, the new rule forced every foreign bank, brokerage, or financial advisor with 15 more US clients to register with the Securities & Exchange Commission.

This is an expensive and time-consuming exercise that involves oodles of red tape.

One Swiss-based investment manager who went through the process told me he spent more than $100,000 in legal fees to do it – not to mention the hundreds of hours he and his staff spent filling out forms and talking to lawyers and SEC bureaucrats.

As we’re now finding out, many foreign firms won’t bother. As a result, Americans ability to use safer, more stable and potentially more lucrative options offshore is reduced.

Need Help?

An offshore bank account is a foundational part of many clients’ wealth protection planning.

Unfortunately, it’s not as easy as it once was to do it on your own. If you’d like our help, feel free to book in a complimentary, no-obligation call with one of our Associates to see if our planning services are right for you.

On another note, many clients first get to know us by accessing some of our well-researched courses and reports on important topics that affect you.

Like How to Go Offshore in 2024, for example. It tells the story of John and Kathy, a couple we helped from the heartland of America. You’ll learn how we helped them go offshore and protect their nestegg from ambulance chasers, government fiat and the decline of the US Dollar… and access a whole new world of opportunities not available in the US. Simply click the button below to register for this free program.

About The Author

Need Help?

We have 40+ years experience helping Americans move, live and invest internationally…

Need Help?

We have 40+ years experience helping Americans move, live and invest internationally…

As Featured on

Get our latest strategies delivered straight to your inbox for free.

Get Our Best Plan B Strategies Right to Your Inbox.

The Nestmann Group does not sell, rent or otherwise share your private details with third parties. Learn more about our privacy policy here.

The Basics of Offshore Freedom

Read these if you’re mostly or very new to the idea of going offshore

What it Really Takes to Get a Second Passport

A second passport is about freedom. But how do you get one? Which one is best? And is it right for you? This article will answer those questions and more…

How to Go Offshore
in 2024

[CASE STUDY] How we helped two close-to-retirement clients protect their nest egg.

Nestmann’s Notes

Our weekly free letter that shows you how to take back control.