Author Topic: Dual Citizenship US/EU  (Read 1816 times)

sipsubsonic

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Dual Citizenship US/EU
« on: July 19, 2018, 05:43:16 PM »
I am eligible for dual-citizenship, US-Austrian. I am finishing school and will soon be starting income generating years. Generally speaking, in terms of targeting FIRE, does it make any sense for me to work in Europe during those years? What would have to be true to make it more advantageous for me to work in the EU over the US?

I know there are a lot of individual country-by-country tax laws to consider, but I am wondering if there are certain European countries that have favorable tax agreements, benefits, etc.?

Any other FIRE advice for Dual Citizens (specifically EU)?


Follow-up question... Once FIRE is achieved, which EU countries are the most favorable to live in, in terms of tax efficiency?

lemanfan

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Re: Dual Citizenship US/EU
« Reply #1 on: July 19, 2018, 10:53:40 PM »
One homework to to before moving to Europe: How to invest? Many (but surely not all) banks and financial institutions in Europe avoid US citizens (and other US tax subjects) because of FATCA regulations.

GeorgeWood

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Re: Dual Citizenship US/EU
« Reply #2 on: July 20, 2018, 06:56:40 AM »
Dual Citizen (US and Germany) here. FATCA used to be a huge problem in the EU, but by now most banks have returned to accepting US citizens as customers. You need to file two tax returns, though (and a report on foreign bank accounts).

As a general rule, due to generally higher taxes and social security contributions, net wages in the EU are somewhat more evenly distributed, with high earners earning less than they would in the US and vice versa. From a stash building standpoint this might be disadvantageous. OTOH, in case something goes wrong (injury, illness), youíre affordably covered.

On your follow-up question: I donít know the situation in most countries, but post-FIRE, be wary of countries with wealth tax (e.g., France, Spain, possibly Netherlands?).

Anette

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Re: Dual Citizenship US/EU
« Reply #3 on: July 20, 2018, 09:04:10 AM »
@GeorgeWood, very interested to find out which banks you are talking about? My husband is American and has been resident in Germany for more than 20 years, however he has not been able to open a depot ( Volksbanken, Flatex, Ing Diba) and our children ( two of them adults) face the same situation. None of them seem to be able to invest in the US either ( the kids have dual citizenship, but we do not have residency in the States).
If you could please let me know which banks might have changed their mind, we would soooo appreciate it.

This should not be a problem if you have a bank account in the states, though :)

Spruit

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Re: Dual Citizenship US/EU
« Reply #4 on: July 20, 2018, 10:43:07 AM »
Quote
On your follow-up question: I donít know the situation in most countries, but post-FIRE, be wary of countries with wealth tax (e.g., France, Spain, possibly Netherlands?).
The Netherlands indeed has a wealth tax.

GeorgeWood

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Re: Dual Citizenship US/EU
« Reply #5 on: July 20, 2018, 10:44:15 AM »
@Anette: Comdirect I know for sure, I think DKB and even Deutsche Bank have overhauled their policies too. Not long ago though. Be sure to report those security accounts on FBAR.

grantmeaname

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Re: Dual Citizenship US/EU
« Reply #6 on: July 20, 2018, 07:31:35 PM »
If you could please let me know which banks might have changed their mind, we would soooo appreciate it.
In three years working in the UK with 60 other Americans (and doing US tax work no less), I never heard of a UK bank refusing to do business with Americans. I heard lots of doom and gloom speculation that no American would be able to bank anywhere outside the US  at some date in the unspecified future, but was never actually denied business and never heard of it happening to a coworker.


Paul der Krake

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Re: Dual Citizenship US/EU
« Reply #7 on: July 20, 2018, 08:00:45 PM »
What would have to be true to make it more advantageous for me to work in the EU over the US?
EU citizen here, working on getting my US citizenship sometime next year.

Every time I've looked at living locations, the US was the clear winner. Professional salaries are just much higher stateside. Generally speaking, you can earn your way to FIRE much faster in the US, and then retire wherever you want.

There are a few locations in the EEA where salaries are significantly higher (Luxembourg, ZŁrich), but otherwise it's not even close. American nurses are paid like European doctors. American office workers are paid like their European managers. American mid-level managers are paid like European senior-level managers, and so on and so forth. Some large US companies pay their EU workers on the same level as their US counterparts, but they are the exception, not the norm.

Yeah it's nice to not have to worry about health expenses, but not worth taking a 50% paycut, especially since professional jobs come with solid benefits packages in most of corporate America. Sucks for everyone who isn't a white-collar worker, but irrelevant for my selfish purposes.

Padonak

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Re: Dual Citizenship US/EU
« Reply #8 on: July 20, 2018, 09:12:47 PM »
Living and working in the US is much better if your goal is FI. Paul der Krake's post is spot on.

While health care cost can be a problem, if you have a decent job in the US, understand and follow the rules (e.g. choose in network providers, choose urgent care instead of emergency room for small issues, etc), you'll be fine. Worst case scenario (e.g. you lose your job, Obamacare is gone and you need to spend a lot on health care), you can leave the US and use your EU passport as a health insurance policy. Make sure you understand the rules in this case. For example, depending on the EU country, you may be required to pay for for health care in Europe for the first few months, then it becomes free.

Anette

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Re: Dual Citizenship US/EU
« Reply #9 on: July 21, 2018, 11:17:46 AM »
Thank you for the answer, I will call them on Monday.

And let me rephrase this: We do not have a problem opening bank accounts, the problem is investing money via a depot ( to hold Efts/ Index funds, stocks). This is the part they have so far all refused to do. For them it means a bunch of paperwork as far as I understand it because they have to report this stuff to the IRS.

Paul der Krake

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Re: Dual Citizenship US/EU
« Reply #10 on: July 22, 2018, 01:07:02 PM »
« Last Edit: July 22, 2018, 01:08:39 PM by Paul der Krake »

gerardc

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Re: Dual Citizenship US/EU
« Reply #11 on: July 24, 2018, 07:01:14 PM »
Yeah it's nice to not have to worry about health expenses, but not worth taking a 50% paycut, especially since professional jobs come with solid benefits packages in most of corporate America. Sucks for everyone who isn't a white-collar worker, but irrelevant for my selfish purposes.

I've gotten some flack from friends/family since I moved to the US. They're complaining about the cost of health care in the US ($10k+/year), and how they have it good back home (Canada, Europe) with free health care. Yeah but my salary is $200k/year more here than elsewhere, so we have to keep things in perspective. They get their free health care but their salary sucks. So, the US isn't that bad. Sometimes people don't realize the true cost of things. They think we can just give free health care to everyone in the US and other variables won't change, but that's not true, they will change.

Paul der Krake

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Re: Dual Citizenship US/EU
« Reply #12 on: July 24, 2018, 09:02:52 PM »
Yeah it's nice to not have to worry about health expenses, but not worth taking a 50% paycut, especially since professional jobs come with solid benefits packages in most of corporate America. Sucks for everyone who isn't a white-collar worker, but irrelevant for my selfish purposes.

I've gotten some flack from friends/family since I moved to the US. They're complaining about the cost of health care in the US ($10k+/year), and how they have it good back home (Canada, Europe) with free health care. Yeah but my salary is $200k/year more here than elsewhere, so we have to keep things in perspective. They get their free health care but their salary sucks. So, the US isn't that bad. Sometimes people don't realize the true cost of things. They think we can just give free health care to everyone in the US and other variables won't change, but that's not true, they will change.
Yeah my family is the same.

They just read about people paying tens of thousands of dollars when they get cancer and hear that a PT session is $200 instead of $20, and think I'm nuts for living here.

I tried to explain to them that after accounting for tax benefits and employer contributions my coverage costs me between minus $1,000 (absolute best case) to $1,800 (absolute worst case) a year, it just falls on deaf ears. The worst case of $1,800 is chump change considering how much higher I'm paid here, but somehow that doesn't register with them. They've read enough news stories about US medical bankruptcy, nothing I can say will change their mind.

I'm not saying the US health system isn't a clusterfuck, because it absolutely is, but the higher income potential completely dwarfs that concern.

Anette

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Re: Dual Citizenship US/EU
« Reply #13 on: August 01, 2018, 04:19:33 PM »
GeorgeWood tanks again, I have called comdirect and this seems to work for my kids. My oldest filled in the paperwork today and did the postident. Hopefully this will work 👍
They couldn't tell me whether this would work for my husband but said likely not, as he pays taxes in the US.

Paul der Krake, thank you as well, we have been trying to sort something out through Creative planing, mostly we want to know if my husband could open an IRA ( the IRS regulations say yes, but because he is not resident in the states no bank wants to do it). If this doesn't work we will try your suggestions.

OP thank you for this thread, I have been battling this for some years and found some answers and I hope I didn't steer to far from your question.