ForumsReal Estate InvestmentsSolo 401K owning real estate in Portugal

Forums Solo 401k Real Estate Investments Solo 401K owning real estate in Portugal

  • Solo 401K owning real estate in Portugal

    Steve S replied 3 months, 4 weeks ago 2 Members · 3 Posts
  • 2 Replies
  • Top SubjectReal Estate Investments,Solo 401k Bank Account
    Top ForumsReal Estate Investments, Solo 401k Bank Account

    Steve S
    Top SubjectReal Estate Investments,Solo 401k Bank Account

    March 15, 2024 at 11:43 am

    Do you have any experience with self directed solo 401K owning real estate in Portugal?


    My main issue is that I cannot find any information on how I can have funds in a Portuguese bank to pay the day-to-day expenses for the rental property. I.e. water, electric, maintenance, property taxes expenses.

    If you have helped others who have used their self directed account to purchase foreign real estate I would love to schedule a short meeting with you to hear how you can help me setting up an account and make a purchase in Portugal.

    Steve S
  • Mark Nolan

    Top SubjectSolo 401k,Solo 401k Contributions
    Top ForumsSolo 401k, Solo 401k Contributions

    Mark Nolan

    Mark Nolan

    Top SubjectSolo 401k,Solo 401k Contributions

    March 15, 2024 at 5:33 pm

    Comply with the Requirement for the Solo 401k Trustee to Live in the USA: While the Solo 401k can invest in foreign assets, the trustee of the Solo 401k must reside in the United States. This is a critical requirement to ensure compliance with the regulations governing Solo 401k plans.

    You will need to use a US bank like Citi that offers bank accounts in a foreign country. https://www.citigroup.com/global/about-us/global-presence/portugal

    The 401k must be maintained as a domestic US trust which requires that a US court can exercise primary supervision of the plan assets. If the assets are held in a US domiciled bank, this may not be the case (depending on the facts and circumstances). See more discussion below:


    A trust is a domestic trust if:

    • A U.S. court can exercise primary supervision over administration of the trust, and

    • One or more U.S. Persons have authority to control all of the trust’s substantial decisions.

    Plan requirements including Solo 401k

    In order to be an internal Revenue Code Section 401(a) qualified plan or other profit-sharing plan’s trust must be a domestic trust.

  • Top SubjectReal Estate Investments,Solo 401k Bank Account
    Top ForumsReal Estate Investments, Solo 401k Bank Account

    Steve S
    Top SubjectReal Estate Investments,Solo 401k Bank Account

    March 18, 2024 at 9:51 am

    I am having difficulties finding a US Domiciled Bank that will offer “retail” like services in Portugal.

    Therefore, I am thinking of taking this approach:

    1) Open US bank account with a US based bank that offers international transfers from their online banking platform

    2) Hire my brother (non-us citizen) to be the Property Manager. I will then wire a deposit to the property manager that can be used for monthly expenses until the property is renovated and ready for short-term rental. Once it starts producing real income I will switch to more comprehensive property management company.

    3) The property management company will collect rent, pay bills and request funds OR return funds (profits) to the 401K on a monthly or quarterly basis.

    With this setup up I avoid having a bank account in Portugal for the 401K. There will likely be a year or two without income and only expenses to renovate the property. After that income should start flowing back to the 401K.

    Does anyone see any problems with such a setup?

    Steve S

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