Are you a U.S. citizen who has
worked and resided outside the United States for most of your life and who
finds it doubtful that you will retire to the United States? Have you ever
wondered why you are paying increasing amounts of income tax to the United
States without receiving any perceived benefit? If so, have you explored
obtaining citizenship in another country?
Global Citizenship
Citizenship in another country
has always been available to the very wealthy. In the 1960’s, 1970’s and 1980’s
Switzerland and Monaco were popular choices. It was possible at that time to
negotiate what your annual income tax would be, what your eventual estate tax
would be and how many locals you were required to employ in your household annually.
A popular publication for
international attorneys was titled “How to Obtain A Passport, Legally and
Illegally,” in 60 countries. Prior to the internet, Tax Havens of the World was
another popular publication. Today citizenship by investment is legally available
in multiple countries.
Why Would You Want A Second
Citizenship?
A second citizenship is a hedge
against unforeseen economic and political turmoil. How many Syrians wish that
they had done so years ago? Look at the number of Iraq and Afghanistan citizens
who are fleeing to Europe as stateless immigrants let alone the tens of
thousands from Africa attempting to reach Europe.
Individuals and their families
are looking for freedom and security from discrimination, unequal treatment and
freedom of expression, movement and travel. Excellent medical care in
retirement and education for their children are key considerations. Privacy
with respect to their business and personal affairs is an important factor.
If a key factor is to stop
paying U.S. income tax than attention would need to be paid to obtaining
citizenship in a country with either no income tax or a low income tax and also
a country that has global income tax treaties.
How Does One Obtain
Citizenship In Another Country?
One buys it. The two most
popular programs are Citizenship through an Investment Programme or Citizenship
by Real Estate Investment. As an example we will assume a family of 4 who are
looking for citizenship for both spouses and two children. A $300,000
contribution to the St. Kitts and Nevis Sugar Industry Diversification Fund
buys citizenship for the family of 4. In Dominica a $200,000 contribution to
the Economic Diversification Fund buys citizenship for the family of 4. In
Grenada a $200,000 contribution to the National Transformation Fund buys
citizenship for the family of 4. In all 3 countries there is no requirement to
actually live there to obtain citizenship and a passport.
If you actually want to live in the
country an alternative to a onetime non refundable contribution to a fund is to
purchase real estate. In St. Kitts and Nevis the minimum required investment in
a government approved real estate development is $400,000, In Dominica the
minimum required investment is a government approved real estate development is
$200,000, in Grenada the minimum required investment is a government approved
real estate development is $350,000.
If you are looking for something
closer to Europe consider Malta. A £400,000 purchase or lease of real estate
under the High Networth Individuals Scheme is all that is needed. Browsing the
internet will likely yield another 50 countries that will grant citizenship in
exchange for a contribution or a real estate purchase.
In the United States the cost to
purchase citizenship ranges from $500,000 to $1,000,000.
How Many U.S. Citizens Are
Relinquishing Their Citizenship and Why?
Over the past 4 years the number
has increased from about 1,000 a year to 4,000 a year to a projected 10,000 in
2015. Why? No one really knows. Many articles attribute the increase to FATCA,
but the requirement to annually file a Report of Foreign Bank and Financial
Accounts has been around for at least 30 years. The names of individuals who
relinquish U.S. citizenship are published quarterly in the Federal Register. A
perusal of the list indicates that about half the names appear to be of Asian
extraction but without further information on the individual’s background this
may be meaningless. Over the past 20 years we have assisted an average of 5 to
10 individuals a year with the relinquishment of their U.S. citizenship but the
majority of these individuals were dual U.S./Bermuda citizens at birth who had
decided that Bermuda would be their permanent home and saw no benefit in
continuing to pay U.S. income tax.
For those who only had U.S.
citizenship their country of choice for a second citizenship was primarily
driven by no or low income taxes and their economic circumstances.
How Do You Relinquish Your
U.S. Citizenship?
Quite easily. Simply call the nearest
Embassy/Consulate and ask for an appointment to relinquish your U.S.
citizenship. At your initial meeting you will asked to complete State
Department Forms DS-4079, DS-4080,
and DS-4081 that you can download from your computer and bring with you. At
some point you will be instructed to
go to a window and pay the $2,350 administration fee that is required for
renouncing your US citizenship. You
will then be asked to sign both copies of Forms DS-4080 and DS-4081.
Then you will then be asked to
raise your right hand, and read the "formal renunciation of your U.S.
nationality" oath that is on Form DS-4080.
You will be given a receipt for the $2,350 fee and will be told
that the process will take a few months at which time you will be called to
return to the embassy/consulate. At that time you will be presented with a
"Certificate of True Copy" of your Form DS-4083, signed by a Consular
Officer of the United States of America". As of your first visit you are
no longer a U.S. citizen.
A column on planning to renounce
your U.S. citizenship will be published at a later date.
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