Author Topic: Nomad Capitalist aka Former U.S. Citizen?  (Read 2632 times)

Left Bank

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Nomad Capitalist aka Former U.S. Citizen?
« on: April 13, 2018, 05:42:04 PM »
Hello All,
I've been trying to learn more about becoming a more global citizen and investing and living abroad for greater diversification, enriching my life experience and eliminating the taxes I pay to the U.S. as a future non-citizen.  I found the website Nomad Capitalist by Andrew Henderson but very little of actual substance is there to help one take action steps to developing an educated plan to achieve what I am trying to do or understand completely if what I want is feasible for my situation. Supposedly, he works with select (very wealthy?) people to guide them in this process but I doubt I qualify.

So has anyone here, that was a US citizen, legally obtained a passport(s) from another country or countries to renounced their US citizenship? Set up their business or investments in another country?
I am looking for more information on the subject or information about whom I would need to speak with for help learning about this.  Any guidance?

If you don't have any experience with this or knowledge you can provide, please don't reply as it would be nice to keep this thread "clean" with information that myself or anyone could use if they're interested.
Thank you,
LB

MrThatsDifferent

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Re: Nomad Capitalist aka Former U.S. Citizen?
« Reply #1 on: April 13, 2018, 06:36:53 PM »
Read gocurrycrackerís blog, just search using that. Itís more useful and realistic than nomad captilist. Itís a big call tomrenounce US citizenship and if youíre smart, you donít need to.

KCM5

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Re: Nomad Capitalist aka Former U.S. Citizen?
« Reply #2 on: April 13, 2018, 06:47:17 PM »
Iíve done a couple of things to diversify my country options: Iíve married a person who is a citizen of two different countries and iíve obtained Italian citizenship through my great great grandparents.

The marrying part is pretty self explanatory - fall in love (or not) and get married. Route depends on where youíre marrying/want to live.

The Italian citizenship is interesting- as long as no one in your family line acquired a different citizenship (other than by birth) then Italy still considers you Italian. Prove it to them and youíre a citizen. But moving to Italy or the EU doesnít particularly help you pay fewer taxes, which I get from your post might be a goal of yours. There are plenty of other lifestyle benefits to it though.

Paul der Krake

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Re: Nomad Capitalist aka Former U.S. Citizen?
« Reply #3 on: April 13, 2018, 07:10:50 PM »
You won't pay taxes to the US unless you make a shit ton of money in retirement.

myrax

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Re: Nomad Capitalist aka Former U.S. Citizen?
« Reply #4 on: April 14, 2018, 10:17:33 AM »
If your goals are to 1. live in another country and 2. not pay US taxes the most straightforward thing to do is to find a job that pays less than $104k in another country. Once you are living abroad, claim the foreign earned income exclusion and you aren't paying US taxes. You will stay pay taxes in the country you are living in, but you will be relying on their infrastructure, legal system, medical system, etc. so I would consider it a fair trade-off.

Every country has different laws but many (most?) have some kind of process for obtaining permanent residency or even citizenship for legal residents. You will probably have to live in the country legally and work for several years before getting permanent residency. To get citizenship and a passport you will need to have lived in the country even longer, become fluent in the language, and prove you know the history and culture typically. Depending on the country, there might be shortcuts to permanent residency or citizenship through marriage or giving birth to a citizen of the country. If you have millions and are looking to invest in the local economy, some countries have residency processes for that. Good luck!

Left Bank

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Re: Nomad Capitalist aka Former U.S. Citizen?
« Reply #5 on: April 14, 2018, 11:23:47 AM »

The Italian citizenship is interesting- as long as no one in your family line acquired a different citizenship (other than by birth) then Italy still considers you Italian. Prove it to them and youíre a citizen. But moving to Italy or the EU doesnít particularly help you pay fewer taxes, which I get from your post might be a goal of yours. There are plenty of other lifestyle benefits to it though.

Thank you all so far for the replies.

KCM5: that is very interesting and relevant.  I will look into this further because I thought I was unable to obtain Italian citizenship because it is my mother's side that was from Italy and citizenship, as I understood it, was passed paternally.  Thank you!

myrax, I am FIRE'd and a "job" is not what I am looking to do.  I did work abroad in the past with this exemption but thanks for the idea.

Paul: I realize I could change my address to a different state in the US (S. Dakota) to avoid the state income taxes but I am still paying on dividends and rental income to buy new Tomahawks for world policing and I have to file taxes with the US no matter where I live or what I earn.

MrThatsDifferent: "Itís a big call tomrenounce US citizenship and if youíre smart, you donít need to."  OK, but I would like to. 

AMandM

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Re: Nomad Capitalist aka Former U.S. Citizen?
« Reply #6 on: April 14, 2018, 12:59:23 PM »
I'm a dual US-Canadian citizen married to a US citizen and we've lived in the US, Canada, and Germany. In our experience, it has been impossible to establish permanent residence in a new country, unless you have an employer sponsoring you in a permanent job.  Canada used to have an immigration program for large investors, but no longer does (except in Quebec).
https://www.canada.ca/en/immigration-refugees-citizenship/services/immigrate-canada/investors.html

I think your best bet is to decide where you want to live instead, and then research that country's immigration policies.

KCM5

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Re: Nomad Capitalist aka Former U.S. Citizen?
« Reply #7 on: April 14, 2018, 08:54:56 PM »

The Italian citizenship is interesting- as long as no one in your family line acquired a different citizenship (other than by birth) then Italy still considers you Italian. Prove it to them and youíre a citizen. But moving to Italy or the EU doesnít particularly help you pay fewer taxes, which I get from your post might be a goal of yours. There are plenty of other lifestyle benefits to it though.

Thank you all so far for the replies.

KCM5: that is very interesting and relevant.  I will look into this further because I thought I was unable to obtain Italian citizenship because it is my mother's side that was from Italy

Mine is through my grandmother - it depends on her birth year, but regardless itís not impossible, just a bit more difficult. Look in to it!

seattlecyclone

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Re: Nomad Capitalist aka Former U.S. Citizen?
« Reply #8 on: April 14, 2018, 09:02:54 PM »
I've heard horror stories of American citizens living abroad being denied accounts at pretty much every bank in town due to US tax rules. Can anyone comment on how true this is in practice?

I have personally always been a US citizen and resident. I have no immediate plans to change either of those things, but if we don't get some predictability in our health care costs I may have to look elsewhere during FIRE. I hate the idea that US regulations can create this hassle of limited foreign banking options and tax paperwork, even if you end up owing nothing to the IRS in the end. Giving up my US citizenship in such a situation would not be something I would take lightly, but if keeping it was more hassle than it was worth I would certainly consider giving it up. I'd definitely first want to obtain the citizenship of my new country of residence if that were the case though.

Kyle B

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Re: Nomad Capitalist aka Former U.S. Citizen?
« Reply #9 on: April 14, 2018, 09:21:09 PM »
I've heard horror stories of American citizens living abroad being denied accounts at pretty much every bank in town due to US tax rules. Can anyone comment on how true this is in practice?

I have personally always been a US citizen and resident. I have no immediate plans to change either of those things, but if we don't get some predictability in our health care costs I may have to look elsewhere during FIRE. I hate the idea that US regulations can create this hassle of limited foreign banking options and tax paperwork, even if you end up owing nothing to the IRS in the end. Giving up my US citizenship in such a situation would not be something I would take lightly, but if keeping it was more hassle than it was worth I would certainly consider giving it up. I'd definitely first want to obtain the citizenship of my new country of residence if that were the case though.

Do you have to give up citizenship to get health insurance overseas?

 Here is a video with a guy discussing health insurance options in Thailand. I don't believe he is a citizen, though:

https://www.youtube.com/watch?v=c0Ayw2kNhOo
« Last Edit: April 14, 2018, 09:25:46 PM by Kyle B »

Paul der Krake

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Re: Nomad Capitalist aka Former U.S. Citizen?
« Reply #10 on: April 14, 2018, 09:32:52 PM »
I've heard horror stories of American citizens living abroad being denied accounts at pretty much every bank in town due to US tax rules. Can anyone comment on how true this is in practice?
I've maintained bank accounts at large institutions in the UK and France while being a US person, which is the same as being a US citizen for FATCA purposes. No problemo. From talking to expats on both sides of the pond it's not much of a problem anymore, for every institution who doesn't want to deal with the paperwork there are five that do. Virtually all major European banks do business stateside, one does not simply cut all ties with America's financial system.

Not sure about the situation in second or third world countries though.

Do you have to give up citizenship to get health insurance overseas?
Not any country worth living in.

Seriously people, healthcare isn't a big deal anywhere outside the US. There is no need to make elaborate citizenship plays to go see a doctor. If you qualify to immigrate  (not visit) somewhere, you get the same care as everyone else there, under whatever system is in place, and that's pretty much the end of the story.

seattlecyclone

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Re: Nomad Capitalist aka Former U.S. Citizen?
« Reply #11 on: April 14, 2018, 09:38:46 PM »
I've heard horror stories of American citizens living abroad being denied accounts at pretty much every bank in town due to US tax rules. Can anyone comment on how true this is in practice?
I've maintained bank accounts at large institutions in the UK and France while being a US person, which is the same as being a US citizen for FATCA purposes. No problemo. From talking to expats on both sides of the pond it's not much of a problem anymore, for every institution who doesn't want to deal with the paperwork there are five that do. Virtually all major European banks do business stateside, one does not simply cut all ties with America's financial system.

Not sure about the situation in second or third world countries though.

Thanks. I've gotten pretty good at filling out American tax forms and am happy to continue doing so if that's the only real hassle that my American citizenship would bring living abroad.

desert_phoenix

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Re: Nomad Capitalist aka Former U.S. Citizen?
« Reply #12 on: June 15, 2018, 11:36:45 AM »
If your goals are to 1. live in another country and 2. not pay US taxes the most straightforward thing to do is to find a job that pays less than $104k in another country. Once you are living abroad, claim the foreign earned income exclusion and you aren't paying US taxes. You will stay pay taxes in the country you are living in, but you will be relying on their infrastructure, legal system, medical system, etc. so I would consider it a fair trade-off.

Every country has different laws but many (most?) have some kind of process for obtaining permanent residency or even citizenship for legal residents. You will probably have to live in the country legally and work for several years before getting permanent residency. To get citizenship and a passport you will need to have lived in the country even longer, become fluent in the language, and prove you know the history and culture typically. Depending on the country, there might be shortcuts to permanent residency or citizenship through marriage or giving birth to a citizen of the country. If you have millions and are looking to invest in the local economy, some countries have residency processes for that. Good luck!

I'm a dual US-Canadian citizen married to a US citizen and we've lived in the US, Canada, and Germany. In our experience, it has been impossible to establish permanent residence in a new country, unless you have an employer sponsoring you in a permanent job.  Canada used to have an immigration program for large investors, but no longer does (except in Quebec).
https://www.canada.ca/en/immigration-refugees-citizenship/services/immigrate-canada/investors.html

I think your best bet is to decide where you want to live instead, and then research that country's immigration policies.
I think on this a lot.  I won't have the extra cash to buy a golden visa, so if I were to want to FIRE abroad, I probably need to make the move long enough before FIRE to get permanent residency first.

I've heard horror stories of American citizens living abroad being denied accounts at pretty much every bank in town due to US tax rules. Can anyone comment on how true this is in practice?

I have personally always been a US citizen and resident. I have no immediate plans to change either of those things, but if we don't get some predictability in our health care costs I may have to look elsewhere during FIRE. I hate the idea that US regulations can create this hassle of limited foreign banking options and tax paperwork, even if you end up owing nothing to the IRS in the end. Giving up my US citizenship in such a situation would not be something I would take lightly, but if keeping it was more hassle than it was worth I would certainly consider giving it up. I'd definitely first want to obtain the citizenship of my new country of residence if that were the case though.
I think about this a lot.  It is the biggest reason I think about FIREing abroad...

I've heard horror stories of American citizens living abroad being denied accounts at pretty much every bank in town due to US tax rules. Can anyone comment on how true this is in practice?
I've maintained bank accounts at large institutions in the UK and France while being a US person, which is the same as being a US citizen for FATCA purposes. No problemo. From talking to expats on both sides of the pond it's not much of a problem anymore, for every institution who doesn't want to deal with the paperwork there are five that do. Virtually all major European banks do business stateside, one does not simply cut all ties with America's financial system.

Not sure about the situation in second or third world countries though.

Do you have to give up citizenship to get health insurance overseas?
Not any country worth living in.

Seriously people, healthcare isn't a big deal anywhere outside the US. There is no need to make elaborate citizenship plays to go see a doctor. If you qualify to immigrate  (not visit) somewhere, you get the same care as everyone else there, under whatever system is in place, and that's pretty much the end of the story.

Totally agree with the bolded.  One of my siblings married a French person and will have citizenship there next year.  I am pretty jealous, haha.

I basically already decided to FIRE abroad, but figuring out how to make it happen is so tricky.  The sooner the better so I can FIRE sooner, but the next ~15 months I will make more at my current job than I ever would at a job abroad.  Hmmm.  Weighing putting the cash directly into the market versus building up a bit of a buffer to help me get established abroad.

My income varies rather widely.  I can probably invest/save ~$110,000 between now and September 2019.  After that, I'd probably only be able to save/invest ~$25,000 a year going forward for a few years.  So part of me thinks the time to jump would be right after the high investment year and invest a bit less than the 110k to pay for the move on.  I also think maybe I should set it for two years past and save a year of living expenses to get me through the move and then go.  FIREing abroad is something I'd love to read more on.

Kepler

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Re: Nomad Capitalist aka Former U.S. Citizen?
« Reply #13 on: June 15, 2018, 03:26:26 PM »

Thanks. I've gotten pretty good at filling out American tax forms and am happy to continue doing so if that's the only real hassle that my American citizenship would bring living abroad.

Just to say: have you actually filled tax forms out as a US expat?  They are not entirely the same as the ones you fill out in the US - and, more to the point, a lot of areas of US tax law as applied to other countries are really ambiguous - and yet the penalties for being wrong are extremely, terrifyingly, high.  I have kept my US citizenship, and I do my own US taxes, but it is a much scarier process than when I lived in the US. 

I would also, separately, suggest that relying on the earned income credit may be specifically disadvantageous for the FIRE community, who will usually be hoping to shift to "unearned" income at an earlier point than most retirees.  I am not an accountant, and accounts who know this area from the standpoint of expats to any particular country are few and far between, but it's at least worth looking at whether it's better to use foreign income tax credits, which can be applied either to wage income or interest/dividend income - particularly if you're living some place with high rates of taxation relative to the US.  Also be aware that the treatment of other countries' retirement accounts and pension systems can be particularly complex and, while you'll sometimes read people giving very confident-sounding advice on what to do to minimise your US tax exposure, the reality is that a lot of this stuff just hasn't been formally tested, so it's all a bit tenuous and uncertain.

I'm still hanging onto my US citizenship - but it's not foolish for people to think about surrendering it.

On the 'can you open bank accounts' question: I know people who have had problems in some European countries, and have surrendered their US citizenship as a result.  I /think/ this is getting better, as overseas banks adjust and also as various governments get better at lobbying for their immigrant citizens, but all I have here is anecdote...

affordablehousing

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Re: Nomad Capitalist aka Former U.S. Citizen?
« Reply #14 on: June 21, 2018, 02:51:50 PM »
What about moving to New Zealand? I think there's a pretty low threshold for getting an investor citizenship of $1M or something, plus it's invested in reasonable assets, not EB-5 crap in the US.

jim555

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Re: Nomad Capitalist aka Former U.S. Citizen?
« Reply #15 on: June 23, 2018, 04:11:16 AM »
My mother was born in London and that makes me British by descent.  Got my UK passport ready in case US healthcare gets too expensive.  Plan B is hang out there until Medicare starts at 65 and return for my pension and SS.  NHS is based on residency so all I have to do is get a one way ticket and I am good to go.

That Nomad Capitalist site says a whole lot of nothing.
« Last Edit: June 23, 2018, 04:13:26 AM by jim555 »

lemanfan

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Re: Nomad Capitalist aka Former U.S. Citizen?
« Reply #16 on: June 23, 2018, 05:20:26 AM »
I've heard horror stories of American citizens living abroad being denied accounts at pretty much every bank in town due to US tax rules. Can anyone comment on how true this is in practice?

I just heard this the other week about a person here in Sweden. A swedish couple (friends of a friend) who had lived in USA when they got a kid, and that kid got dual citizenship (US through birth and Swedish through parents). Because of the US citizenship it was claimed to be more or less impossible for them to open a regular bank account here in Sweden.

Yes, this is anecdotal.