When You’re Affected (and When You’re Not)
Tired of being asked “Are you a U.S. person?” when opening a bank or brokerage account abroad? That’s FATCA working in the background. Even if you’re not American, FATCA shapes onboarding questions, what documents banks demand, and why some customers get rejected. This guide explains FATCA in plain English—what it is, when it affects non-U.S. nomads, what “U.S. indicia” means, how IGAs (Model 1 vs Model 2) change the process, and what to do if a bank flags you by mistake. Educational, not legal advice.
Introduction: FATCA isn’t just for Americans
FATCA—the Foreign Account Tax Compliance Act—was engineered to find U.S. persons with undisclosed offshore assets. But its shockwaves touch everyone who banks or invests cross-border, including non-U.S. nomads. Why? Because FATCA deputizes foreign financial institutions (FFIs) to perform due diligence on all customers to identify potential U.S. persons, capture U.S. tax forms (W-9 for U.S. persons, W-8 series for non-U.S.), and, in many countries, report U.S. person accounts to local authorities under an intergovernmental agreement (IGA). In real life, that means you’ll see extra onboarding questions (“Do you have a U.S. phone?”), requests for self-certifications, and occasional “enhanced due diligence” if something looks American in your profile.
For non-U.S. nomads, the punchline is twofold. First, FATCA ≠ CRS. CRS is the OECD’s global standard that reports accounts to your tax residence country; FATCA is U.S.-centric, aimed at identifying U.S. persons. Second, even if you’re 100% non-U.S., you still live in a FATCA-shaped world: compliance checklists, classification acronyms (FFI/NFFE), and GIIN references pop up because your bank must comply, regardless of your nationality. Understanding this landscape helps you answer onboarding questions cleanly, avoid false flags, and keep accounts open while you travel.
Likely you’ll file Basics of W-8BEN-E; later you’ll read 1042-S.
What is FATCA?
Foreign Account Tax Compliance Act
At its core, FATCA is a reporting and withholding framework. It tells foreign banks and brokers: identify U.S. account holders, obtain the correct IRS forms, and report U.S. accounts (directly to the IRS or via your government under an IGA). If an institution doesn’t comply, certain U.S.-source payments to that institution may be hit with 30% withholding—a nuclear incentive to play ball. For customers, the result is familiar: W-9 for U.S. persons, W-8BEN / W-8BEN-E for everyone else, and a lot of “are you U.S.?” gatekeeping at onboarding.
For individuals, FATCA does not create a new tax. It’s a data pipeline. If you’re U.S., it nudges you toward filing/reporting obligations you already have. If you’re not U.S., it mostly determines which form you sign and what follow-up questions a bank may ask.
Enacted 2010, phased implementation
FATCA was enacted in 2010 and rolled out in phases across the 2010s: registration portals for FFIs, first information exchanges under Model 1/Model 2 IGAs, and progressive tightening of due-diligence rules. Today, FATCA is routine bank plumbing. Legacy accounts (“preexisting”) and “new accounts” can face different thresholds or remediation steps, but practically, most institutions harmonized internal policies to keep processes simple and conservative.
Primary target: U.S. persons hiding offshore assets
FATCA’s bullseye is the U.S. person (citizen, green card holder, or substantial-presence resident) with foreign financial accounts. Banks are tasked with spotting and documenting them. If you are non-U.S., FATCA’s teeth don’t bite you, but they still shape your bank’s behavior. That’s why you complete a W-8 and field questions about U.S. ties, even when your passport says otherwise.
When non-U.S. nomads encounter FATCA
Opening accounts: the “U.S. person” questions
Onboarding forms around the world start with: “Are you a U.S. citizen or U.S. tax resident?” You’ll often see checkboxes for citizenship, green card, U.S. birthplace, and U.S. mailing/phone details. If you answer no, expect to provide a W-8BEN (individual) or W-8BEN-E (entity) to certify non-U.S. status and, if relevant, to claim treaty benefits for U.S.-source income. Many banks repeat this question during periodic KYC refresh or whenever your profile changes (new phone, new address, power of attorney updates).
Green card holders and U.S. citizens abroad
You may be non-resident for local tax but still a U.S. person for FATCA if you hold a U.S. passport or green card. That status follows you worldwide. Foreign banks will require W-9, collect your U.S. TIN, and (under IGAs) report your accounts to the relevant authority for onward exchange to the U.S. If you relinquished a green card or expatriated, expect to prove it (e.g., I-407 for green card surrender; CLN—Certificate of Loss of Nationality—for ex-citizens).
U.S. birthplace (even if you renounced)
A U.S. birthplace is powerful U.S. indicia. Even if you renounced citizenship, banks often ask for your CLN to cure the indicia. Without it, many institutions will treat you as U.S. or refuse the account. As a nomad, scan and securely store that proof; you’ll need it multiple times.
Non-U.S. persons with U.S. investments
Even when you’re non-U.S., FATCA surfaces whenever you receive U.S.-source income via a bank or broker. You’ll sign W-8BEN (or W-8BEN-E for entities) so the withholding agent knows to apply non-U.S. rules and any treaty rate. No W-8 on file? Expect 30% default withholding on U.S.-source dividends/interest until documentation is fixed.
U.S. indicia: red flags that trigger FATCA scrutiny
U.S. birthplace
If your passport lists a U.S. place of birth, most banks treat that as prima facie U.S. status. To “cure” it, provide a CLN showing you are no longer a citizen, plus a non-U.S. TIN (from your tax-residence country). Without a CLN, compliance will likely insist on a W-9 and treat you as a U.S. person.
U.S. address or phone number
A U.S. mailing or residential address, or even a U.S. telephone number, frequently triggers enhanced checks. If you’re genuinely non-U.S., add context: supply a non-U.S. residential address, utility/bank statements, and your W-8. If you keep a U.S. virtual mailbox or VOIP, be ready to show your actual tax-residence address and local TIN.
Standing transfer instructions to a U.S. account
Standing instructions to sweep funds into a U.S. bank/brokerage look like U.S. ties. Banks may request a W-9 for the beneficiary or more evidence from you. If that beneficiary is your own U.S. account, the bank will likely mark the relationship as U.S.-linked and demand U.S. forms—or ask you to remove the standing instruction if you’re certifying non-U.S. status.
Power of attorney granted to a U.S. person
Giving POA to someone with a U.S. address/status can trigger indicia. Banks fear de-facto U.S. control. It doesn’t automatically make you U.S., but expect KYC questions and possibly a request for the attorney-in-fact’s details. If you’re non-U.S., keep POAs aligned with your non-U.S. narrative or be ready to supply extra documentation.
FATCA vs CRS: understanding the difference
FATCA = U.S.-focused, CRS = global
- FATCA: U.S. law. Target = U.S. persons. Reporting goes to the U.S. (directly or via IGA).
- CRS (OECD): Multilateral. Target = everyone according to tax residence. Reporting goes to your residence country (e.g., Spain if you’re tax-resident there).
Both ride on self-certifications, but they chase different targets. As a non-U.S. nomad, CRS likely affects you every year, while FATCA mainly appears as screening unless you are, in fact, a U.S. person.
Overlapping but distinct requirements
Banks implement both regimes simultaneously. You may fill a CRS self-cert (listing your tax residences and TINs) and a W-8/W-9 for the U.S. dimension. Don’t confuse them: CRS asks “Where are you tax-resident?” FATCA asks “Are you U.S.?”
W-9 vs W-8 forms
- W-9 = “I am a U.S. person. Here’s my SSN/ITIN.”
- W-8BEN (individual) / W-8BEN-E (entity) = “I am not a U.S. person. Here’s my foreign status (and treaty claim if applicable).”
If you’re non-U.S. and a bank is pushing W-9, it’s usually because indicia suggests you might be U.S. (birthplace, address, etc.). Provide the cure (e.g., CLN, foreign TIN, proof of residence) and insist on the correct W-8.
Quick comparison
| Topic | FATCA | CRS |
|---|---|---|
| Who’s in scope | U.S. persons | All persons by tax residence |
| Origin | U.S. law (2010) | OECD standard (AEOI) |
| Forms | W-9 (U.S.), W-8 series (non-U.S.) | CRS self-cert (individual/entity + controlling persons) |
| Reporting target | IRS (direct or via IGA) | Your residence country’s tax authority |
| Impact on non-U.S. nomad | Screening + W-8 for U.S.-source income | Annual reporting to your residence country |
Model 1 vs Model 2 IGAs
How your country’s agreement with the U.S. works
To make FATCA workable, the U.S. signed IGAs with many countries. Model 1 IGAs have banks report to their local authority, which then forwards data to the IRS. Model 2 IGAs have banks report directly to the IRS (with some local cooperation). For you, this mostly affects who you see in privacy notices and how banks phrase consent forms.
Reporting pathways
- Model 1: FI → Local tax authority → IRS.
- Model 2: FI → IRS (often with local competent-authority oversight).
Operationally, Model 1 countries feel more like CRS (report domestically, then exchange). Model 2 can mean more direct IRS portal interactions for banks—and sometimes stricter onboarding expectations.
FFI classification and why your bank asks weird questions
Foreign Financial Institution (FFI) registration
Under FATCA, many institutions register as FFIs and receive a GIIN (Global Intermediary Identification Number). Your bank’s onboarding forms may ask if your company is an FFI (if you open a business account), and if so, whether it has a GIIN. Most one-person operating companies are not FFIs; they’re NFFEs (non-financial foreign entities).
GIIN numbers
A GIIN identifies a registered FFI. If you’re opening as an individual, this doesn’t apply to you. If you’re opening as a company, don’t panic when you see GIIN fields—leave blank if you’re not a bank, broker, fund, or investment vehicle that must register. For typical nomad businesses (dev studio, design agency), the correct FATCA posture is NFFE, not FFI.
Why banks reject U.S. persons (FATCA burden)
Some banks decline U.S. customers because of compliance cost and risk—especially small institutions without robust FATCA processes. That’s not politics; it’s economics. If you’re a U.S. person abroad, prefer banks that publicly accept U.S. clients. If you’re not U.S. but were mis-flagged, supply the cures (CLN, non-U.S. TIN, non-U.S. address) to unlock onboarding.
Sidebar — Why U.S. persons get “no” a lot
Extra onboarding steps, ongoing reporting, and perceived audit risk make some banks conservative. If you are U.S., arrive with a clean W-9, proof of address, and patience. If you are not U.S., don’t accept a W-9 demand unless you truly are U.S.; fix the indicia instead.
Account thresholds and reporting triggers
$50k threshold (individuals)
Classic FATCA materials reference a $50,000 threshold for preexisting individual accounts (balances below may be out of scope), with higher thresholds for certain accounts and stricter rules for entities. In practice, many banks ignore thresholds and simply treat all accounts as reportable if U.S. status is present—the cheapest safe policy. Don’t rely on thresholds to “fly under the radar”; operational reality is stricter than the minimum standard.
Aggregation rules
Thresholds (where used) can aggregate across related accounts at the same institution. If the bank applies thresholds, it may add balances across your linked accounts to determine whether due diligence/reporting kicks in. Again, many institutions default to full documentation for all customers to avoid aggregation gymnastics.
Remediation: when your bank finds U.S. indicia
W-9 requests
If indicia suggests you’re U.S., the bank will request a W-9 and a U.S. TIN. If that’s accurate, comply. Failure to provide a W-9 often leads to account restrictions or closure, plus withholding on certain U.S.-source payments.
Account closure threats
If you refuse required documentation (W-9/W-8/CRS self-cert) or your status is ambiguous, some banks will freeze or close accounts. This is a compliance obligation for them, not personal. The fastest route back is to document your true status: W-9 (if U.S.) or W-8 + non-U.S. TIN + proof of non-U.S. residence (if not U.S.).
Curing false indicia
If you are not U.S. but were flagged, you can cure indicia by supplying:
- CLN (if birthplace is U.S. but you’re no longer a citizen).
- Foreign TIN from your tax-residence country.
- Non-U.S. residential address proof (bank/utility).
- Updated W-8BEN/W-8BEN-E.
- Removal of standing U.S. transfers or clear explanation of their purpose.
Document once, store securely, and reuse; you’ll be asked again at future banks.
Non-U.S. nomads: practical takeaways
Being non-U.S. doesn’t exempt you from FATCA’s friction, it just changes your form. Treat onboarding like a checklist:
- Have your W-8 ready (individual or entity) and keep it current (typically valid until the last day of the third calendar year, or earlier if facts change).
- Maintain a clean non-U.S. profile: non-U.S. residential address, local TIN, and supporting documents. If you use a U.S. phone or mailbox for convenience, be prepared to prove your non-U.S. residence.
- Know your story and keep it consistent across CRS and FATCA: the country you list as tax-resident on CRS should match your proof of address and TIN; your W-8 should point to the same reality.
- If you hold U.S.-source investments, expect W-8 onboarding and withholding at treaty or default rates. Keep copies of your W-8 and year-end slips (e.g., 1042-S).
- If a bank mis-flags you as U.S., don’t argue—document. A short pack (CLN, foreign TIN, address proof) solves 95% of cases.
- Accept that some banks/platforms won’t serve U.S. persons. If you are U.S., focus on institutions that publicly support U.S. clients. If you aren’t, don’t let sloppy indicia put you in the wrong bucket.
This is compliance, not morality. Make it boring and consistent, and FATCA becomes background noise.
FATCA shapes the banking landscape for everyone
FATCA isn’t going away, and it isn’t only “about Americans.” It hard-codes U.S.-person detection into global banking, which means every customer is screened. For non-U.S. nomads, the game plan is simple: keep your W-8 current, align your CRS self-cert with reality, and maintain a tidy evidence pack (foreign TIN, address proof, CLN if relevant). Understand U.S. indicia so you can cure false flags quickly. And remember: FATCA ≠ CRS—they run in parallel. Once you frame them correctly, you’ll open accounts faster, avoid needless closures, and spend your energy on living—not paperwork.
Decision Tree — “Does FATCA apply to me, and what form do I sign?”
Start
├─ Are you a U.S. person? (U.S. citizen, green card, or U.S. tax resident)
│ ├─ Yes → Provide W-9 + U.S. TIN. Expect FATCA reporting under IGA/direct.
│ └─ No → Continue
├─ Do you have U.S. indicia? (U.S. birthplace, address, phone, POA, standing U.S. transfers)
│ ├─ Yes → Provide cures (CLN if ex-citizen, foreign TIN, non-U.S. address, etc.) + W-8.
│ └─ No → Provide W-8 (individual or entity). Proceed.
├─ Are you opening as a company?
│ ├─ Yes → W-8BEN-E; classify entity (Active/Passive NFFE vs FFI). GIIN only if FFI.
│ └─ No → W-8BEN (individual).
└─ Holding U.S.-source assets?
├─ Yes → Expect withholding at treaty/default rates; keep year-end 1042-S.
└─ No → FATCA stays in the background; CRS still applies based on tax residence.
Quick tables
W-9 vs W-8 (at a glance)
| You are… | Form | Key data |
|---|---|---|
| U.S. person (citizen/green card/U.S. resident) | W-9 | Name, address, SSN/ITIN |
| Non-U.S. individual | W-8BEN | Name, foreign status, treaty claim, foreign TIN |
| Non-U.S. entity | W-8BEN-E | Entity type, FATCA status (Active/Passive NFFE or FFI), treaty claim, GIIN if FFI |
FATCA vs CRS
| Feature | FATCA | CRS |
|---|---|---|
| Target | U.S. persons | Tax residents of participating jurisdictions |
| Legal source | U.S. statute + IGAs | OECD standard + domestic laws |
| Customer form | W-9 / W-8 series | CRS self-cert |
| Reporting | To IRS (direct/IGA) | To residence country tax authority |
| Relevance to non-U.S. nomads | Screening + W-8 for U.S.-source income | Annual reporting to residence country |
Map ‘where you live’ vs ‘where you are’ in Residence vs Tax Residence.
