I began researching this subject a few years ago when a reader contacted me and told me about her move to Chile. She and her husband had decided to make the move after much research. They were loving the clean air, pure food, friendly people, and a change in their lifestyle.
I was intrigued. Hmmm…could leaving the U.S. entirely trump food storage, a bug out location, and all the other traditional preps? I began to research residency requirements of various countries.
My first discovery was a shocker. Very few countries want me! They don't want me, my husband, my family, my parents. Rules for residency can be quite strict, sometimes even requiring the deposit of a large sum of money into one of the nation's banks. Some countries are quite frank about preventing people like me from coming into their country. To do so, I need to provide:
- Proof of health insurance
- Proof of regular income
- Background check
- Health report from a doctor for each family member
- Financial information
- Birth and marriage certificates
- Possibly proof you can speak the language of this country
Additionally, there are strict rules regarding time in country and visa requirements.
This is a stark and startling contrast to the mass human migration we've seen in the past couple of years. If citizens of Central America, Mexico, and nearly every other country can walk past our southern border without any of the above, including personal identification, then why do other countries make it so difficult, and, more importantly, where can a law-abiding, hard working American citizen go when they decide to relocate?
(To be fair, the U.S. does have a lengthy process for legal immigration, and it's quite a difficult path, thus the popularity of illegal immigration.)
Plenty of questions, no easy answers
At one time I thought my family could just pick a country and move there. The entire world was our oyster! Where should we go? Australia? New Zealand? England? Somewhere in Europe? Obviously, we would want to go where English was spoken and where we could quickly blend in.
Well, it didn't take long to find out that if I'm over 35, Australia doesn't want me. Other countries may let us visit for a time, but do not allow long-term or permanent residency. The countries that are left are an odd mix:
- Chile
- Panama
- Costa Rica
- Hungary
- Ireland (ancestry)
- Israel (If you're Jewish or have Jewish heritage.)
- Belgium
There are a few more, but the pickin's are slim when it comes to finding a country that has less restrictive residency requirements.
It boils down to having money, ancestry, time, and/or flexibility. $100,000 will buy a passport and citizenship in Dominica. Ancestors from Hungary, going back 4 generations, can smooth the way for residency in Hungary and Hungarian citizenship. Convert to Judaism and you may become an Israeli citizen, complete with mandatory military service.
If you're about to have a baby, or are planning one, Brazil is one of only a handful of countries that provides citizenship to every baby born within its borders. Permanent residency can be obtained in Chile, after living there continuously for five years.
As you can see, there is no simple path to residency or, if you choose, citizenship. And then there's the nightmare of dealing with bureaucrats, long distance phone calls, websites and applications in a foreign language, and, in many cases, visits to a consulate or embassy that could be hundreds of miles away.
Gaining residency in another country is possible. Just not as easy as one would think.
More complications and considerations
If you are able to find a country that will allow temporary residence, and possible permanent residency, then there are tax considerations. The United States is one of only two countries that taxes its citizens no matter where they live and regardless of how long the have been out of the country. I've read horror stories of people whose families left the United States when they were very young children, grew up elsewhere, and the were taxed by the U.S. on the income they had earned in that country. Yep, the U.S. and Eritrea share this same tax policy. The only 2 countries in the world.
Something to consider, when researching an expat destination and residency, is what the taxation policy is of your country of choice. Some countries, such as Hungary, has a double taxation policy, which allows them to collect taxes from non-resident citizens — but then there are loopholes and exceptions!
The U.S. is dead serious about collecting taxes from expats. Not sure if it's out of greed, entertainment for the I.R.S., or stems from a desire to punish anyone leaving the country, but stories like this one are far more common than you might think:
I just found out that despite my income earned and taxed abroad being a) below the foreign income exclusion limit, and b) covered by a bilateral tax treaty between the country where I have lived for the past 49 years, the IRS wants to tax it fully, leaving me with an effective tax rate of 61% from now on.
One of the reasons is that many of the required subforms, e.g. W-2, do not exist in this country (Finland). I sent them my Finnish tax decision along with a translation. They accepted the amount of my earnings, but gave me no credit for the local national tax paid. They have given me three weeks to refile, but the information that they want, such as Social Security and Obamacare payments, doesn't exist here or is irrelevant to my situation. I am a pensioner whose sole source of income is a Finnish state pension, and I am fully covered by the Finnish health care system. Having worked only in Finland, I never paid into and am ineligible for Social Security and cannot, of course, sign up for Obamacare. They are threatening with draconian fines and seizure of assets so as to leave me destitute for the rest of my life.
So, you may find the ideal country that welcomes you with open arms. You can learn the language and start a new life, but no matter how far you go, the I.R.S. will track you down and demand their pound of flesh.
Oh, and there's a sweet little federal law, FATCA (Federal Account Tax Compliance Act) that requires foreign banks to reveal the identity of Americans with accounts over $50,000. They have to hand over names, addresses, account balance, account numbers and Social Security or other U.S. identification numbers. Banks who do not comply are punished, by the United States, with a withholding tax of 30% on payments from U.S. banks. Naturally, this has caused many foreign banks to refuse Americans wishing to open accounts, and who can blame them?
The Treasury Department has been unable to cite any constitutional, statutory, or regulatory authority which allows it to compel foreign institutions to collect and share the financial information of U.S. citizens.
Americans living abroad must file an annual report, the FBAR (Foreign Bank and Financial Accounts Report), by June 30, of each year, if they have a foreign account holding more than $10,000. Failure to file that report, and ignorance of the law is no excuse, can result in fines up to $500,000 and up to 10 years in prison!! Spreading that money between multiple banks may help you disguise the sum total for a while, but not forever. And, $10,000 is a pathetically small amount of money, considering the fact that the I.R.S. collected over $1 trillion in the most recent fiscal quarter — October, 2014 through January, 2015.
It looks like FATCA, FBAR, and these draconian policies are here to stay, forever, so it's just one more consideration if you're planning on leaving the U.S.
By the way, a little civics lesson here. FATCA was included in a quietly passed jobs bill. If a Senator or Representative would have voted against this bill, they would have been excoriated by the opposing party for voting against a "jobs bill". The next time a politician you favor is accused for voting against a bill that seems altruistic, dig a little deeper to find out what else, exactly, was in that bill.
Loopholes & confusion
Countries that have lenient ancestry requirements still don't make it easy for applicants. Take Ireland, for example. You may be granted permanent residency and citizenship:
SovereignMan.com
A couple of years ago I was on New Zealand's website, looking for information about residency and came away with a massive headache. A few forms on the Switzerland website were in German only.
To complicate matters (is that even possible?), these laws can change quickly and without notice. A country friendly to American expats could become hostile with just the election of a new president.
Lessons learned?
- Research, research, research!
- Simplify your lifestyle now and prepare to live on less money and with fewer belongings.
- Have your vital documents at the ready.
- Read the fine print.
- Take your time.
- Be patient.
Oh, be wary of professional expat advisers. I've come across a few that paint an alluring picture of the country and people but after more research, I discovered they were more interested in selling their services than in providing accurate info.
Why leave?
I answer that question and provide several historical examples of relocating — in fact, it's highly likely your own ancestors relocated and that's how you ended up an American citizen!
Are you ready to relocate?
After researching, studying, praying, and discussing a relocation, you've decided to take the plunge. But! Have you considered whether or not you are a good candidate for this major step?
One of the most critical factors in transitioning to a new location, whether foreign or domestic, is your ability to adapt to new situations. Is your basic temperament and personality one that is flexible? Do you enjoy new experiences and meeting new people? When faced with an abrupt change in your life, do you adapt easily or do you resist the change? I know one woman who, after several years following a divorce, insists that she's still married in spite of the fact that her husband is remarried to someone else!
A move to another country is going to plunge you and your family into a world in which most everything is different and new:
- Language
- Customs
- Food
- Holidays
- Housing
- Attitudes
- Entertainment
- Technology accessibility
- Laws
- Climate
Some personality types adjust to these changes more easily. Others will require more time.
Along with adaptability are expectations. How realistic are your expectations for this move? Are you expecting a smooth and seamless transition? Thorough research, talking with other expats, and then actually visiting and spending time in the country or area of your choice will help keep your expectations well grounded.
Then there are the practical issues of age, health, time, and money. There's no perfect age for moving out of the country. Younger people are likely in better health but with fewer career skills and less saved money. Young couples have each other to depend on but having younger children will make this quite difficult.
Imagine, or remember, taking all the kids to Target or the grocery store. That's no easy task! Now, imagine taking them to a foreign country where English isn't spoken and trying to find a place to live, decipher even the most basic written information, stand in line in various bureaucratic offices to get one license or document or another, and adapt to a completely different lifestyle. No matter how young and fit you are, this just might push you over the edge into insanity!
The process will be easier if your kids are older but then, at the high school age, they often don't want to leave their friends, sports, and other activities. How easy will it be for them to develop new friendships in this new location and how will they go to college, in particular, if they aren't fluent in the language?
Growing up in this new country, the kids will probably meet their future spouse, who may very well be a local. Now, with grandkids in a country that is not the U.S., will you ever want to leave them? Those with grown kids and grandkids now, face the challenge of moving away and, possibly, never again being a part of their lives. As we age, health issues ultimately become a fact of life.
The health of each family member may impact whether or not a country allows residency. For example, Australia has been known to prevent families with autistic kids from coming into their country, even when the parents have viable, well-paying jobs waiting for them. And, if there are health issues of any kind, will you be able to find the doctors and care necessary in this new location and how will you pay for those services? Some countries, upon granting residency, require a fee for their national health insurance. Fair enough.
Now, the issue of money. Bottom line: the more you have, the easier it will be to find a country willing to grant residency quickly and the easier it will be to settle into a comfortable lifestyle. No surprises there.
But expenses add up even for the non-millionaires among us. It's highly recommended that you visit the country, or area of the U.S., first before taking the plunge. That's going to require travel expenses and time off from work. One family I know had their hearts settled on Belize. They did the research, had contacts in the country, visited once, and on the second visit, realized the country was not for them at all, but by then, they had sunk a few thousand dollars into the venture.
The moving process can be quite expensive. What do you take with you? If it's just the clothes on your back and whatever a suitcase or two can hold, that's no problem. Most of us, though, will want to take other possessions. Yes, you can sell it all, but how expensive will it be to replace those items once you relocate and will the quality be what you want? A shipping container costs money and may take several weeks to arrive at the dock of your new country. In the meantime, you may have to live in a hotel or a furnished apartment.
In addition to the expenses of checking out different locations and the moving process is the financial requirements of just about every country I know of. Examples:
- Costa Rica requires a deposit of $60,000 in a Costa Rican bank for those in the "rentista" category. You are paid $2500 per month out of that balance for 24 months and this becomes your monthly income, at least in part.
- Antigua has an "economic citizenship" program that requires a government donation of $250,000, plus another $50,000 per family member.
- Belgium requires that you have a salary of at least € 50,000 per year.
- Hungary has a residency bond program. Deposit a little over $300,000 in one of their banks and you'll have to pay another $60,000 as a processing and administration fee.
All countries will have fees for visas and whatever other bureaucratic fees they choose to apply. If the paperwork is not in English, that's a hurdle to overcome and many countries require a face-to-face interview. In their language.
So what if you have little to no money? Is becoming an ex-pat out of the question? Not at all. In fact, if you're adventurous, you may even prefer the much simpler lifestyle it brings. Rather than being barricaded in a luxurious neighborhood behind guarded gates, you can live among the locals, shop where they shop, hang out where they hang out, and learn the language and customs very quickly. This is pretty much how I lived when I traveled for months at a time and ended up living in both Germany and Israel.
In this video, I explain a few more considerations before you jump into the decision to leave the U.S.
Emotional ties
I'd be remiss if I didn't bring up the issue of deep, emotional ties to your home country and the loved ones you'll leave behind. It's interesting to see who can do this easily, without looking back, and who can't. It's not a matter of being callous and without emotional attachments, as these people wholeheartedly love the family members they leave behind. In some cases, they plan to help move them to their new location as soon as possible.
Deeply felt ties to America aren't quite as easily cut as many think. "America" isn't just a land mass but a way of thinking and how you view the rest of the world. And, it works the other way, too. Locals in other countries will have a different worldview and cultural norms. One article asks, "Does everyone in Chile lie?" You'll miss living in a country where everyone pretty much has the same social norms.
You're going to miss favorite foods and restaurants and ease of living. You'll miss your favorite brands of clothing, your church, holidays spent with friends and family, and Amazon Prime! Depending on where you move, you will probably have to leave pets behind.
On their own, these may not seem like much, but together, combined with the foreign-ness of a different country may make assimilation far more difficult than you'd ever imagined, which circles back to my original question: How adaptable are you?
Is it even worth the bother?
Based on the huge number of hurdles and hassles, is it even worth considering leaving the U.S.? Well, that depends on your reasons for leaving. One family who chose to relocate to Chile did so because they believe a nuclear war is coming, it will mostly affect the northern hemisphere and they don't care to suffer the long-term consequences. (Both have backgrounds as scientists in the nuclear energy field.) Based on their last email, they are still very happy with their choice.
If you're convinced beyond the shadow of a doubt that war is coming to the U.S., or an EMP, then why would you stay here and subject your family to the aftermath? Some believe that God's judgment is coming on America — why not escape that, if possible?
My point is that the hassles and hard work of leaving will be worth the effort, or not, depending on your motivation. Once you make the move, remember that it's not necessarily forever — if that thought helps get you through the rough patches.
A reader on Facebook wrote, "We tried it out in Panama for 2 years. I did not like it at all. I wanted to kiss the ground when we arrived back in the US a year ago. We made a ton of expat friends (and some local friends). But it wasn't for me. You have to adjust to a very different way of life. I was unable to adjust. For those who are interested in learning more about Panama, there is a group, ExPats in Panama, that my friend admins. There are tons of people who'd love to talk to you about it.
We saved a ton of money by living there. We work remotely for a company (get a paycheck, even though the company was our own company), and so we were able to claim the foreign earned income tax credit for 2 years. It is fairly easy to become a resident of Panama, but I don't know why you'd want to become a citizen. If you lived like the locals live, you could easily live on $1,000/mo. If you want to live the same lifestyle in the US, then it would be more toward $3,000/mo as reasonable."
Could you ever leave the U.S. for good? What is your motivation to leave, or stay?
Learn more
I've learned a lot from these resources:
- Expat forums — get the nitty gritty from expats all over the world
- Sovereign Man website and other resources
- Strategic Relocation by Joel Skousen
- Unpacking Central America
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