@tgbtg7701 Hey so full disclosure, we're a Barcelona-based startup creating a
wealth management tool for people living abroad.
Since we're solving this exact problem, here's our take on your questions:
If I am uncertain about where I will live in the long-term and could end up moving between countries, is there a good reason why I should choose investment funds over ETFs or vice versa? (I.e. to avoid having to pay taxes just because I moved countries)
ETFs are an investment fund, but are generally better to manage in that they trade and are taxed like stocks. There are no entry/exit fees or penalties for leaving early that you see in some mutual funds/SICAVs. Plus, dealing with your broker can be easier especially since some brokers (Degrio, Interactive Brokers, Saxo) have a large international footprint.
The taxes on buying and selling ETFs globally are more clear-cut since they're taxed more or less the same as stocks.
Rebalancing periodically and downshifting your risk as you get closer to your goal is super important,
especially as you want to guarantee your income and not just burn through your portfolio in retirement. In Spain, you can offset a capital gain with a capital loss (tax-loss harvesting), although that does require to be a bit more active in your rebalancing strategy (which is why having more than 2 ETFs in your portfolio can be handy).
Many Spanish mutual funds don't have registration outside of Spain which means they couldn't get local tax benefits if you were to leave. Many countries have similar rules for investment funds, so it's worth keeping in mind.
As DeGiro can be used across Europe, it seems like it would allow more flexibility. Is that true? Could I continue to invest using myinvestor, even if I moved outside of Spain?
Degiro has a presence in multiple markets (i.e. a passport) which means that they can have a proactive relationship with you (i.e. can contact you about products, provide you with country-specific tax documentation/support). You can continue using Myinvestor, but they can't really contact you for anything other than obligatory compliance requirements unless they passport to where you are.
I also have family in the UK and the US and am not sure where I will settle in the end. I could end up retiring in any of these 4 countries (Germany, Spain, UK, US).
As others have mentioned, the US has specific tax rules in that it taxes its citizens and greencard holders on their global income even if they don't live in the United States. It also has incredibly strict reporting rules for foreign financial institutions on their US person clients, which usually means foreign banks/brokers don't take American clients. If that's you, then Degiro won't accept your application, and you're going to have to re-think your strategy.
As I mentioned, we're building a tool to automate all of these pain points for people living abroad. We're planning on opening our private beta in the next month or so (regulations are important but takes forever here in Europe). If you're interested,
feel free to hop on our early access waiting list and we'll send you an invite when we're up.
Hope all of this helps!
