Expatriation used to be a dirty word to Americans.
Who would consider leaving “the best country in the world”? But people are giving up their citizenship at seemingly ever-increasing rates. In 2014, 3,415 people gave up their American citizenship, beating the previous record set in 2013 of 2,999. We’re on a similar pace for 2015, even after the fees were raised by the State Department.
And why not consider other options? The Land of the Free has become a place where the government no longer respects the will of the people, privacy has been destroyed, our police have been militarized against us and the rule of law has largely been trampled.
But even if the idea of expatriation makes your stomach queasy, you have options for protecting yourself as you consider the idea of relinquishing your American passport … and it doesn’t have to be a difficult process.
The Big FATCA Mistake
FATCA has created havoc for Americans living, investing and simply banking offshore. This bit of legislation has resulted in many Americans being shut out and deemed pariahs around the globe. But we’re not without options.
Ted and Bob Bauman took a closer look at FATCA and the impact that it’s had on Americans. FATCA was largely a reaction to the UBS Swiss banking “scandal” and was passed as part of a larger package of bills in 2011, but there was very little forethought or analysis of the impact. Even the IRS isn’t too keen on FATCA.
The truth is FATCA applies irrespective of your residence. Both U.S. taxpayers and foreign banks are required to report holdings to the IRS if you have above a certain level of wealth held offshore. And the penalties for both taxpayers and foreign banks are quite severe if they fail to report.
Where does that leave Americans? Individual retail bank accounts are nearly impossible to open without residence or business interest in the country. What’s more, investment accounts require much higher minimum deposits.
But you do still have options! Ted and Bob listed five different options that are open to Americans who are interested in holding and investing money overseas. To see the entire list and learn more about the impact of FATCA, check out the Total Wealth Symposium Defense Kit.
Insure Your Freedom
FATCA and the destruction of privacy in America has caused a lot of citizens to take a hard look at expatriation or just acquiring a second residence. Daniel Perron, Managing Partner of Henley & Partners, specializes in residency and citizenship around the globe. He explained that a second citizenship is a way to insure your freedom. Some of the reasons people acquire a second citizenship include:
- Visa-free travel
- Retirement in a safe country
- Possible tax planning
- Personal security
- Not being dependent on one passport
- Prerequisite of renouncing citizenship
- Children’s education
- Improved quality of life
Daniel took a detailed look at six citizenship-by-investment programs, weighing their benefits and drawbacks, as well as highlighting two new programs. He also went over the Henley’s top picks for premier residence countries, the status of their residence programs and what is required to gain residence in those countries.
You can watch Daniel’s entire presentation as well as see the PowerPoint slides in our Total Wealth Symposium Defense Kit.
A South American Gem
While we’re talking about a second citizenship or even a second home, you can’t overlook Uruguay. Sancho Santayana, Managing Partner of 360 Terra Realty, walked attendees of the Total Wealth Symposium through what it’s like to live in this hidden gem. The country is located just north of Argentina … and nothing happens there. But I mean that in the best way! There are no natural disasters, corruption is incredibly low, the crime rate is low and there are no conflicts with other nations. It is a haven of security and peace.
In addition, the country has a strong infrastructure and the majority of the population falls in the middle class, so there is great social stability. As a result, many people have started acquiring property in Uruguay as both a second residence where they can spend part or all of the year in a safe, stable country. Or they rent out that property to tourists, creating both a place for occasional residence while also keeping it as a source of steady income.
To learn more about the beauty of Uruguay and the opportunities there, you can see Sancho’s entire presentation in our Total Wealth Symposium Defense Kit.
Time Is Running Out
I’m zipping in and out of the conference hall, taking notes during the last of the sessions and meeting with our various presenters, trying to get the inside scoop. But there’s only so much I can cram into these dispatches.
You don’t have to miss any of it. Click here to order our Total Wealth Symposium Defense Kit before it is too late, and you will be able to see the presentations for yourself.
Regards from your on-the-ground reporter,
Sr. Managing Editor, Sovereign Investor Daily