Yes, US citizens can open foreign bank accounts, but you must report them to the IRS

A US citizen can open a bank account in another country. Banks in most countries will accept US citizens as customers, though some have become more cautious because of US tax reporting rules. The real constraint is not whether you can open the account — it is that you must tell the US government about it, and the reporting is strict.

The account itself is legal. What matters is disclosure. If you have a foreign bank account with more than $10,000 in it at any point during the year, you must file a report called the FBAR (Foreign Bank Account Report) with the Financial Crimes Enforcement Network, or FinCEN. If you do not file when required, penalties start at $10,000 per violation and can reach much higher. The IRS also wants to know about foreign accounts on your tax return itself, through a separate form called FATCA (Foreign Account Tax Compliance Act).

Key Takeaways

  • US citizens can open bank accounts abroad, but banks may ask more questions because of US tax reporting rules.
  • If your foreign account balance exceeds $10,000 at any time in a calendar year, you must file an FBAR report with FinCEN by April 15 of the following year.
  • You must also report foreign accounts on your federal tax return using Form 8938 if your total foreign financial assets meet the threshold for your filing status.
  • Failure to file either report can result in civil penalties starting at $10,000 and criminal penalties if willful non-disclosure is proven.
  • Some US banks and financial institutions can help you open accounts abroad, and some foreign banks have US-facing services specifically for American expats.

The FBAR requirement and who has to file it

The FBAR is a separate filing from your tax return. You file it with FinCEN, not the IRS, though the deadline is the same: April 15 of the year after the reporting year. The threshold is $10,000 — if the total balance of all your foreign financial accounts combined ever reaches $10,000 or more during the calendar year, you file.

The $10,000 is measured at any point during the year, not an average. If you had $9,500 in January and $10,100 in February, you file. The form asks for the name of each institution, the account number, the account type, and the maximum balance during the year. You file it online through FinCEN's BSA E-Filing System at bsaefiling.fincen.treas.gov.

If you are married and file jointly, both spouses must file separate FBARs if each has signature authority over a foreign account, even if the account is joint. If you have no signature authority over an account but still have a financial interest in it — for example, a trust account or a business account you own — you still must report it.

FATCA reporting on your tax return

FATCA is a different requirement that lives on your federal tax return. You report foreign financial accounts on Form 8938, which you attach to your Form 1040. The threshold for filing Form 8938 depends on your filing status and whether you live in the US or abroad.

If you are a US resident filing single, you file Form 8938 if your total foreign financial assets exceed $200,000 on the last day of the tax year or $300,000 at any point during the year. If you are married filing jointly, the thresholds are $400,000 and $600,000. If you live abroad, the thresholds are higher: $400,000 for single filers and $600,000 for married filing jointly. Foreign financial assets include bank accounts, brokerage accounts, mutual funds, and similar holdings.

Form 8938 asks for the maximum value of each account during the year and the value on the last day of the year. You do not need to file Form 8938 if your accounts fall below the threshold, but you still must file the FBAR if the $10,000 threshold is met. The two forms have different thresholds and different purposes — FBAR is about financial crime reporting, and FATCA is about tax compliance.

Why banks may refuse to open accounts for US citizens

Some foreign banks have stopped accepting US citizens as customers because of the compliance burden. When a foreign bank takes a US customer, that bank becomes responsible for reporting the account to the IRS under FATCA. The bank must verify the customer's US tax identification number, withhold taxes on certain income, and file reports with the IRS. For a small bank, this is expensive and complicated.

Larger banks and banks in countries with strong US ties — Canada, the UK, Australia — are more likely to accept US citizens. Banks in countries with less developed banking infrastructure or less formal relationships with the US may decline. Some banks will open accounts only if you have a visa or residency in that country, or if you have an existing relationship with a branch in the US.

If a bank declines you, it is usually because of the compliance cost, not because it is illegal for them to serve you. You can ask the bank directly whether they accept US citizens and what documentation they need.

How to open a foreign bank account as a US citizen

The process varies by country and bank. Most banks will ask for a passport, proof of address, and a US tax identification number (your Social Security number or ITIN). Some banks require you to visit in person; others allow online applications if you can verify your identity through a video call or notarized documents.

If you are moving abroad or already live in another country, your best starting point is often the largest bank in that country or a bank with an international division. You can also contact the US embassy or consulate in that country — they often maintain lists of banks that work with Americans. Some US-based banks, like Citibank and Bank of America, have international branches or partner banks that can help you open accounts abroad.

Expat-focused financial services like Wise, OFX, and Remitly offer multi-currency accounts and transfers but are not traditional banks. If you need a full banking relationship with checking, savings, and lending, you will need to work with a local bank or an international bank with a presence in that country.

Tax implications of foreign accounts

Interest, dividends, and other income from a foreign account are taxable to the US. You report this income on your US tax return just as you would for a US account. The country where the account is located may also tax the income, which means you could owe tax in both countries. Many countries have tax treaties with the US that prevent double taxation, but you need to understand the rules for the specific country.

If you earn income abroad and meet certain requirements, you may be able to use the Foreign Earned Income Exclusion, which allows you to exclude up to a certain amount of foreign earned income from US taxation. This applies to wages and self-employment income, not to investment income like interest or dividends. The exclusion amount changes each year — for 2024 it is $120,000, but you should check the current year's amount on the IRS website.

You do not get a deduction for filing the FBAR or Form 8938. These are reporting requirements, not tax deductions. However, if you pay foreign taxes, you may be able to claim a foreign tax credit on your US return, which reduces your US tax liability dollar-for-dollar (up to a limit) for taxes paid to another country.

Penalties for not reporting foreign accounts

The penalties for failing to file an FBAR are civil and can be severe. If the failure is not willful, the penalty is the greater of $10,000 or 5 percent of the account balance at the time of the violation, up to $100,000 per year. If the failure is willful — meaning you knew you were required to file and chose not to — the penalty is 50 percent of the account balance at the time of the violation, with no cap.

Criminal penalties for willful FBAR violations include fines up to $250,000 and imprisonment up to five years. The IRS takes foreign account reporting seriously because it is a tool to prevent tax evasion and money laundering. If you have not filed FBARs in prior years and you have foreign accounts, you can file them late, though you may still owe penalties. The IRS has a voluntary disclosure practice that can reduce penalties if you come forward before the IRS contacts you.

Penalties for failing to file Form 8938 are separate: $10,000 for each failure to file, plus $10,000 for each 30 days of non-compliance after the IRS notifies you, up to $60,000 per year. If the failure is willful, the penalty is 40 percent of the underpayment of tax attributable to the foreign asset.

Frequently Asked Questions

Do I have to report a foreign account if I have less than $10,000 in it?

You do not have to file an FBAR if the account never reaches $10,000. However, if your total foreign financial assets (including accounts, investments, and other holdings) exceed the FATCA threshold for your filing status, you must file Form 8938 on your tax return even if no single account reaches $10,000. Check both thresholds to be sure.

What if I have a joint account with someone who is not a US citizen?

If you have signature authority over the account, you must report it on your FBAR and Form 8938, even if the other owner is not a US citizen. The rule is based on your authority to control the account, not on ownership percentage or the citizenship of other owners.

Can I use a foreign account to hide money from the IRS?

No. The reporting requirements exist specifically to prevent this. The IRS receives information about US citizens' foreign accounts from foreign banks under FATCA, and FinCEN receives FBAR filings. Attempting to hide a foreign account is tax evasion, which is a federal crime. If you have unreported foreign accounts, consult a tax professional about your options.

Do I need to report a foreign retirement account or pension?

It depends on the type of account and the country. Some foreign retirement accounts are exempt from FBAR reporting if they meet specific criteria. However, the rules are complex and vary by country. If you have a foreign pension or retirement account, consult a tax professional who specializes in international tax to determine your reporting obligations.

What happens if I move back to the US — do I still have to report the account?

Yes. You must report foreign accounts as long as you are a US citizen or US resident, regardless of where you live. If you close the account, you do not have to report it in future years, but you must report it for the year in which it was open and had a balance over $10,000.