Why You Can’t Buy US ETFs From Europe (PRIIPs, Explained)

American expats in Europe discover a maddening squeeze. US tax law punishes European funds (the PFIC trap). And European consumer law blocks many US funds. Caught between two well-intentioned regulations, the ordinary index investor seemingly can’t buy anything. Here’s what’s actually going on — and the legitimate ways through.

PRIIPs in plain English

Since 2018, EU rules (PRIIPs) require that “packaged” retail investment products — which includes ETFs — may only be offered to EU retail investors if they publish a standardised Key Information Document (KID). The EU agreed a revamp of these rules in December 2025 (the Retail Investment Strategy) and the UK is replacing PRIIPs with its own regime from 2026, but neither change lets US ETFs through: no KID, no retail access. US ETF providers generally haven’t produced KIDs (their home regulator has different requirements), so EU-based platforms won’t let retail clients buy them. Nothing about this is aimed at Americans — it catches anyone shopping from an EU address.

The four realistic paths through

1. A US brokerage relationship

PRIIPs governs marketing to EU retail investors by platforms operating in the EU. Many Americans abroad simply continue investing through their existing US brokerage, where availability depends on the broker’s own expat policy — and on the account staying with the broker’s US entity (a broker that moves you to its EU arm will block US ETFs just like a local platform). This is the most common working setup — one reason we bang on about choosing the right brokerage before moving.

2. Professional / elective professional status

PRIIPs protects retail investors. Investors who qualify (and elect) to be treated as professional clients — there are portfolio-size and experience thresholds — can regain access to US ETFs on some platforms. Realistic for larger portfolios; irrelevant for most.

The threshold, for the record, is a MiFID II test and you need to pass two of three limbs: at least ten significant trades a quarter across the last four quarters; a portfolio above €500,000; or at least a year in a relevant financial-sector job. It is also a one-way trade in protection — a professional client gives up safeguards that retail clients keep — and a platform can decline to opt you up even if you qualify. The Retail Investment Strategy the EU agreed in December 2025 would lower the portfolio limb to €250,000 (as a three-year average) and add an education criterion, which would put the route within reach of more expats. It had not been formally adopted as of September 2026, and until it is, the old numbers apply.

3. Options-based workarounds

On some platforms, exercising options can result in ETF shares being delivered — a workaround occasionally used by determined investors. It’s convoluted, costs money and demands understanding of options mechanics. We mention it for completeness, not as a suggestion.

For the curious, the mechanism works like this. Options on US ETFs are not themselves “packaged” products in the PRIIPs sense, so some platforms let retail clients trade them. Exercise a call, or get assigned on a put, and the underlying ETF shares are delivered into your account — which the platform will then let you hold and sell, but not add to by ordinary purchase. Each contract covers a fixed block of shares, so the minimum ticket is large; you pay a premium and commissions; and you can end up owning shares because a contract expired, not because you wanted them. Anyone tempted should be able to explain assignment risk without looking it up.

4. Individual stocks and other non-packaged assets

PRIIPs doesn’t touch individual stocks or bonds. A diversified single-stock portfolio is more work than one ETF but remains fully available — and it’s not a PFIC either.

What not to do

Don’t “solve” PRIIPs by buying the UCITS equivalents your EU platform happily offers — for a US person those are PFICs, and the tax damage dwarfs any convenience. And don’t misstate your address or residency to any platform; that creates problems far worse than the one you’re solving.

The UK is not a loophole

Britain left the EU but not the problem. The UK inherited PRIIPs on departure and is now replacing it with its own Consumer Composite Investments regime: transition from 6 April 2026, rules fully in force on 8 June 2027. The new regime rewrites the disclosure document, not the principle that a product without one can’t be marketed to retail investors, and the FCA’s own policy statement is clear that the change doesn’t open US ETFs to retail. An American in London faces the same squeeze as one in Lisbon, and the same four paths apply.

What to do with the UCITS you already own

Plenty of Americans arrive at this article already holding a UCITS ETF or two — bought before they knew better. Those holdings are PFICs and each one normally needs its own Form 8621 every year. There is one useful mercy: if all your PFIC holdings together are worth $25,000 or less at year-end ($50,000 on a joint return), and you took no distribution, sold nothing and made no election that year, the form can be skipped. That suits a small legacy position you intend to leave alone for a tax year while you plan the exit. It does not make the holding a good idea, and the moment you sell, the filing and the punitive tax computation both come back.

So the sensible sequence is: stop buying more (the easy part), work out the size of the gain, and take advice on the exit before the position grows past the threshold. Selling a small holding with a small gain is usually cheaper than carrying it for another decade. The PFIC article covers the mechanics.

The bottom line

The squeeze is real but navigable: most Americans in Europe run their investments through an expat-friendly US brokerage, hold US-domiciled ETFs where their broker permits, and treat the EU platform world as off-limits for funds. Sequencing this — which accounts, which broker, in what order relative to your move — is core Roadmap material, and where a portfolio genuinely needs restructuring, our vetted fee-only advisors take over.

This article is general information, not investment advice. Regulations and platform policies change — verify current rules before acting.