The clean-portfolio setup is less complicated than it sounds: use a US-friendly brokerage account, buy US-domiciled ETFs such as VTI, VOO or VXUS, and avoid UCITS, Swiss-domiciled funds and unit-linked insurance. The reason is a single structural rule: PFIC status follows the fund's domicile, not where you live or where you buy.
The one rule that decides everything
PFIC status follows the fund's domicile, not the broker or your address. A US-domiciled ETF is a US corporation, so it can never be a PFIC, even if you buy it from a Swiss address.
What actually makes something a PFIC
The IRS defines a passive foreign investment company as a foreign corporation where at least 75% of gross income is passive, or at least 50% of assets produce passive income. That covers almost every European UCITS ETF and Swiss-domiciled fund. By contrast, VTI, VOO, VXUS and SPY are US corporations or trusts, so they fall outside the PFIC definition entirely.
The clean-portfolio setup
Keep or open a US brokerage account at a broker that serves non-resident US citizens, most people land on Schwab International or Interactive Brokers, and restrict your holdings to US-domiciled ETFs and individual stocks. Not every US broker still says yes to a Swiss address; our comparison covers which US brokerages still accept Americans living in Switzerland.
- Keep or open an account at Schwab International or Interactive Brokers.
- Buy only US-domiciled ETFs such as VTI, VOO, VXUS or SPY.
- Hold individual Swiss or European stocks if you want local exposure, they are not PFICs.
- Avoid UCITS ETFs, Swiss-domiciled funds and any fondsgebundene or unit-linked insurance product.
- Track your foreign account balances for FBAR; skip Form 8621 if every holding is US-domiciled.
Which brokers actually work
Schwab International is the most expat-friendly major US broker: it explicitly serves non-resident US citizens, lets you keep a foreign address, and offers commission-free US stocks and ETFs. Interactive Brokers is the most globally oriented option, a US company that operates across more than 150 countries, issues US-style tax statements, and lets Swiss residents buy US-domiciled ETFs through its UK branch. Swissquote, by contrast, restricts US-domiciled ETF trading for retail clients and issues no US tax forms.
- Schwab International
- Most expat-friendly major US broker; explicitly serves non-resident US citizens; foreign address allowed; commission-free US stocks and ETFs.
- Interactive Brokers
- US company operating in 150+ countries; Swiss residents typically serviced via UK branch; 1099-style US tax statements; access to US-domiciled ETFs.
- Swissquote
- Restricts US-domiciled ETF trading for retail investors and does not issue US tax forms.
The PRIIPs and FIDLEG question
Switzerland is not in the EEA, so the EU PRIIPs rules never applied directly. FinSA and FIDLEG introduced their own Key Information Document requirement, but execution-only brokers such as Interactive Brokers can still offer US-domiciled ETFs. As of 2026, Swiss residents still have access to US ETFs at IBKR, and a retail client can opt up to professional status with CHF 500,000 or more in assets.
What you actually report
The brokerage account itself is FBAR-reportable on FinCEN Form 114 if your aggregate foreign-account balances exceed $10,000 at any point during the year. If every holding is a US-domiciled ETF or an individual stock, no Form 8621 is required. The default PFIC regime imposes the highest marginal rate plus an interest charge for each year held, commonly a 50–70% effective tax after a 10-year hold, and each PFIC needs its own Form 8621 at roughly $800–1,500 per fund per year in CPA fees. A separate guide explains exactly what Form 8621 reporting looks like.
50–70%
Common effective tax on a default PFIC after a 10-year hold, before CPA fees
Common traps that quietly create PFICs
The biggest trap is buying a European UCITS ETF or Swiss-domiciled fund because it feels natural from a Swiss address. These funds are the classic PFIC problem for US expats, see our explainer on Swiss mutual funds, ETFs and the PFIC tax trap.
Another trap is unit-linked or fondsgebundene insurance, which often wraps the same foreign pooled funds inside a policy. Why unit-linked insurance is a PFIC trap for Americans in Switzerland walks through what to watch for.
What this means for your next step
This article is educational information, not individual investment or tax advice. The structural solution is clear enough to act on calmly, but the exact account choice, asset allocation and reporting position depend on your situation, and that is where a conversation with a cross-border advisor pays for itself.