2026-02-21

FATCA and CRS Explained for International Investors

If you hold financial accounts outside your country of tax residency, your bank is almost certainly reporting information about those accounts to tax authorities. Two frameworks govern this automatic exchange of information: FATCA (the US system) and CRS (the global system). Understanding how they work is not optional — it affects where you can open accounts, what documentation you need to provide, and what your home country’s tax authority already knows about your money.

What Is FATCA?¶

The Foreign Account Tax Compliance Act (FATCA) is a US law enacted in 2010 that requires foreign financial institutions (FFIs) to report information about accounts held by US persons to the IRS. The law was designed to combat offshore tax evasion by US taxpayers.

FATCA works by imposing a 30% withholding tax on certain US-source payments made to any FFI that does not comply with its reporting requirements. This gives foreign banks a powerful incentive to cooperate: either report information about your US clients, or lose 30% of any US-source income flowing through your institution.

The result is that virtually every bank, brokerage, and investment fund outside the United States now asks whether you are a “US person” when you open an account. If you are, they report your account information to the IRS through their local tax authority (under an intergovernmental agreement, or IGA) or directly to the IRS.

Who Qualifies as a US Person Under FATCA?¶

FATCA’s definition of “US person” is broad. It includes:

• US citizens (including dual citizens, regardless of where they live)
• US green card holders (lawful permanent residents)
• Anyone who meets the IRS substantial presence test
• US-incorporated entities and certain trusts

This means that a US citizen living in Portugal who has never worked in the US is still a US person for FATCA purposes. Their Portuguese bank account is reportable. See IRS FATCA information for the full rules.

What Gets Reported Under FATCA?¶

FFIs report the following information to the IRS for each account held by a US person:

• Account holder’s name, address, and US taxpayer identification number (TIN)
• Account number
• Account balance or value (at year-end, or the average balance over the reporting period)
• Gross interest, dividends, and other income credited to the account
• Gross proceeds from sales of securities

This is comprehensive. The IRS knows your account balances and the income generated in those accounts. If you have foreign accounts and are not reporting them on your US tax return, the IRS has the data to identify the discrepancy.

FATCA’s Impact on Account Opening¶

The practical effect of FATCA on US persons living abroad is that some banks simply refuse to open accounts for them. The compliance burden of FATCA reporting is significant — smaller banks in particular may decide that the cost of reporting outweighs the revenue from a handful of American customers.

This is a well-documented problem. US expats in France, Germany, and other European countries have reported being turned away by local banks solely because of their US citizenship. The situation has improved since FATCA’s early years, but it remains a friction point.

If you are a US person having trouble opening accounts abroad, see How to Open a Brokerage Account as a Non-Resident for institutions that reliably accept US clients.

What Is CRS?¶

The Common Reporting Standard (CRS) is the global equivalent of FATCA, developed by the OECD and endorsed by the G20. While FATCA is a unilateral US requirement, CRS is a multilateral framework — over 100 jurisdictions have committed to automatically exchanging financial account information with each other.

CRS was developed in 2014 and first exchanges began in 2017. The standard is documented in the OECD’s CRS portal.

How CRS Works¶

Under CRS, financial institutions in participating jurisdictions identify accounts held by tax residents of other participating jurisdictions and report them to their local tax authority. That tax authority then exchanges the information with the account holder’s country of tax residence.

For example: if you are a tax resident of Australia and hold a bank account in Singapore, the Singaporean bank identifies you as an Australian tax resident (based on the self-certification form you completed when opening the account). The bank reports your account information to the Inland Revenue Authority of Singapore (IRAS), which then transmits it to the Australian Taxation Office (ATO).

Participating Jurisdictions¶

As of 2025, over 100 jurisdictions participate in CRS, including all EU member states, the United Kingdom, Canada, Australia, Singapore, Hong Kong, Japan, South Korea, India, South Africa, and many Caribbean and Pacific island nations. Notable non-participants include the United States (which uses FATCA instead) and a small number of developing countries.

The full list of participating jurisdictions is available on the OECD’s AEOI portal.

What Gets Reported Under CRS?¶

CRS reporting is similar to FATCA but applies bidirectionally between all participating jurisdictions:

• Account holder’s name, address, jurisdiction of residence, and TIN
• Date and place of birth
• Account number
• Account balance or value at year-end
• Interest, dividends, and other income
• Gross proceeds from sales or redemptions

CRS Self-Certification¶

When you open a financial account in a CRS-participating jurisdiction, you will be asked to complete a self-certification form declaring your tax residency. This is how the bank determines which jurisdiction to report your account to.

You must provide:

• Your country or countries of tax residency
• Your taxpayer identification number (TIN) for each jurisdiction
• A declaration that the information is correct

Providing false information on a CRS self-certification is a criminal offense in most jurisdictions. If your tax residency changes — for example, if you move from the Netherlands to Thailand — you should update your self-certification with your financial institutions.

FATCA vs. CRS: Key Differences¶

While FATCA and CRS serve similar purposes, there are important differences:

The most significant difference for individuals: FATCA follows US citizenship, while CRS follows tax residency. A US citizen is always subject to FATCA regardless of where they live. Under CRS, your reporting obligations change when your tax residency changes.

How FATCA and CRS Affect Your Investment Strategy¶

Account Opening Friction¶

Both frameworks create documentation requirements when opening financial accounts. You will need to provide your TIN, declare your tax residency, and in some cases provide proof of address. This is standard KYC (Know Your Customer) plus FATCA/CRS-specific requirements.

For US persons, this friction is amplified. Some foreign financial institutions — particularly smaller ones in Europe — may decline to open accounts for US persons to avoid FATCA compliance costs. Larger international banks (HSBC, Citi, UBS, Credit Suisse) generally accept US clients but may require additional documentation.

Reporting Obligations on Your End¶

FATCA and CRS operate on the financial institution’s side — the bank reports your information. But you also have reporting obligations as an account holder:

US persons (FATCA + FBAR): - FBAR (FinCEN Form 114): Required if the aggregate value of your foreign financial accounts exceeds $10,000 at any point during the year. Filed with FinCEN, not the IRS. See How to File FBAR as an Expat for step-by-step instructions. - Form 8938 (FATCA): Required if your specified foreign financial assets exceed $50,000 at year-end (or $75,000 at any point during the year). Higher thresholds apply if you live abroad: $200,000 at year-end or $300,000 at any point. Filed with your tax return. See IRS Form 8938 instructions.

Non-US persons (CRS): Your obligations depend on your country of tax residency. Most countries require you to report worldwide income on your tax return, including income from foreign accounts. CRS ensures your tax authority receives information about your foreign accounts — but the obligation to report that income existed before CRS. CRS just made it harder to ignore.

The End of Banking Secrecy¶

Between FATCA and CRS, the era of private offshore banking is effectively over for most people. If you hold a financial account in a jurisdiction that participates in either framework (which covers almost everywhere), your home country’s tax authority will receive information about that account.

This is not a reason to avoid holding accounts internationally. There are many legitimate reasons to have bank and investment accounts in multiple countries — access to local markets, currency diversification, regulatory advantages, and practical convenience. But it does mean you must report everything. The cost of non-compliance is severe: FBAR penalties alone can reach $100,000 per violation for willful non-filing (see FinCEN FBAR penalties).

How to Stay Compliant¶

Step 1: Know Your Tax Residency¶

Everything flows from tax residency. Determine which country or countries consider you a tax resident, using each country’s domestic rules. This determines: - Where you file tax returns - Which treaty benefits you can claim - What CRS reports about you and to whom - Whether FATCA applies (if you are a US person)

For more on how tax residency affects your investments, see How to Avoid Double Taxation on International Investments.

Step 2: Complete Self-Certifications Accurately¶

When financial institutions ask you to declare your tax residency, be accurate. Provide all jurisdictions where you are tax resident (you can be tax resident in more than one country simultaneously). Include your TIN for each jurisdiction.

Step 3: Report All Foreign Accounts and Income¶

File FBAR if you are a US person with foreign accounts exceeding $10,000. File Form 8938 if you meet the asset thresholds. Report all foreign-source income on your tax return, regardless of whether you think the amounts are immaterial.

Step 4: Update When You Move¶

When you change your country of residence, update your self-certifications with all financial institutions. Notify your old and new tax authorities of the change. This ensures CRS reports go to the correct jurisdiction and avoids confusion.

Step 5: Keep Records¶

Maintain records of all foreign accounts, including account statements, self-certification forms, and correspondence with financial institutions. You may need these to substantiate your tax filings or respond to inquiries from tax authorities.

Track Your International Financial Footprint¶

With accounts across multiple countries and currencies, keeping track of where your money is — and what reporting obligations each account triggers — requires a consolidated view. FlashFi tracks cash accounts, investments, and debt across any currency, giving you a clear picture of your international financial footprint.

Start tracking your global finances — know exactly where you stand across every country and currency.

By David Brougham