Seriously considering leaving the U.S.?
Many people are scared after the most recent election and are considering leaving the United States. What’s your advice to young professionals who are seriously considering expatriating?
Every time something like this happens — whether it’s Donald Trump getting elected in the U.S. or Brexit in the UK — we get so much “panic traffic” to our site. In fact, traffic to NomadCapitalist.com went up 1000% after Trump’s election. In the following week, people were constantly looking for passports and second residencies. For all those people, I would like to clarify two points:
1. You don’t have to give up your U.S. citizenship to move
There are plenty of U.S. citizens out exploring the world and running successful international businesses who haven’t set a foot in the U.S. for years — myself included. Becoming an expat doesn’t necessarily have to lead to renouncing your U.S. citizenship.
You can get many of the tax benefits most people are looking for simply by living outside the U.S. for at least 330 days a year (check out the Foreign Earned Income Exclusion). Take a year to travel and find a place that you like for your lifestyle, business, investments, etc. If you hate it, then go back to the U.S., but you’ll never know if you like this lifestyle or not if you don’t go.
Obviously expatriating can mean renouncing your citizenship. I don’t think you should renounce your citizenship unless you are looking into doing it because you are paying a fortune in taxes and none of the tax strategies you have used already have helped you in solving your tax problem.
For example, I have a friend who makes around $1 million USD salary per year in the Middle East. There is no tax there, but because he is a U.S. citizen and because he is an employee and can’t control how he takes his income he just pays $400,000 USD in taxes every year. He is the perfect example of the kind of person who should consider buying a second passport and renouncing their U.S. citizenship.
2. Change the way you think about the rest of the world
Too many people in the United States have been taught to believe that the West — and the United States specifically — is the only civilized region of the world. Consequently, many people who are afraid of Trump would still balk at the idea of living in a place like Georgia.
They want to move to Canada or England or some other “first world” country that’s “just as good” as the United States. What they don’t understand is that they aren’t really solving any of their problems by moving to another high tax western country. “Just as good” really translates to “more of the same.” All they’re doing is jumping from one frying pan to the next.
I recently addressed this matter in an article in which I advised people to choose Mexico over Canada. Why? For starters, Mexico is a more affordable place to live, the food is amazing, there are endless sights to explore from beaches to jungles to deserts to ancient ruins, and expats will find that they can enjoy more freedoms under a government that leaves them alone. If you go to Canada, on the other hand, you’ll get a very similar experience to living in the United States, taxes and all.
What’s more, the process of becoming a Canadian is a lot more difficult than it seems. Some people have the idea that they can just move there… like all the illegal immigrants they like to complain about coming into the United States.
Change the way you look at the world and begin to look at living abroad as an adventure. You shouldn’t feel the need to replicate the U.S. in your new location of choice. You are leaving it behind, after all.
On the other hand, you can get a residence permit in Mexico in a way that you couldn’t get in Canada or most places in Europe. Just by being American and by having a little bit of money you can be a resident of Mexico without the need to enter and leave as a tourist.
Change the way you look at the world and begin to look at living abroad as an adventure. You shouldn’t feel the need to replicate the U.S. in your new location of choice. You are leaving it behind, after all. If you are going to leave, why not make it a grand opportunity to do something different and take advantage of the freedoms that you don’t already enjoy. Realize that the U.S. is not the pastor of freedom that you think that it is and, if you’re looking for nearby places, I would recommend Mexico as a start.
As a rule, I choose not to advise people who want to move to high tax paying countries. I look for applicants who are ready for a real change, not just “more of the same.”
How to expatriate to another country from the U.S.
Please lead us, step by step, through the process of expatriating to one specific country that you think would be a strong candidate for residency and eventual citizenship for the average U.S. citizen.
I always recommend Georgia. As I previously mentioned, everything is so easy there. And, to be honest, that is the main challenge that people who want to leave the U.S. are going to face: too much procedural and administrative barriers.
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