Escaping Amerika

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The only way
for a U.S. citizen or permanent resident to sever all ties with
the United States is to expatriate. That is, you give up your citizenship
and passport, or, in the case of a permanent resident, your green
card, and live as a foreigner outside the United States.

The “official”
number of people who take this admittedly radical step is tiny –
only a few hundred annually. Their names are published in the Federal
Register each quarter. But the real numbers are probably much higher.

My own firm
helped six people expatriate in 2009, and we have several more in
the pipeline for 2010. There’s nearly a one-year wait to make
an appointment to expatriate at the U.S. consulate in London. Waiting
times are almost as long at numerous other consulates worldwide…

But perhaps
I’m getting ahead of myself. Why would anyone want to expatriate?
There are numerous reasons.

  • To permanently
    disconnect from U.S. tax obligations, a U.S. citizen must not
    only become a non-resident, but also give up U.S. citizenship
    and passport. If you’re wealthy, giving up U.S. citizenship
    and residence can save millions or even billions of dollars in
    future taxes.
  • Expatriation
    also eliminates the increasing difficulties U.S. citizens face
    investing or doing business outside the USA. As a consequence
    of the U.S. government’s intensifying crackdown against anything
    “offshore,” most offshore banks now prohibit anyone
    with any connection to the United States from opening an account.
    Giving up U.S. citizenship and passport eliminates this problem.
  • Finally,
    expatriation frees you from the possibility of your non-U.S. assets
    becoming subject to any future exchange or currency controls the
    U.S. government might impose to protect the value of the dollar
    or to shore up its shaky finances.

Fortunately,
you can make nearly all of the preparations for a possible future
expatriation without leaving the United States.

This is a four-step
process. Once you’ve accomplished the first three steps, the
final step – expatriation – is much easier than if you’re
starting from scratch…

Step 1.
Move Your Assets to Safer Havens Where There Is Enhanced Protection
for Wealth

Some of the
most popular wealth havens include:

  • Switzerland,
    Liechtenstein, and Austria in Europe
  • Panama and
    Uruguay in Central and South America
  • Hong Kong
    and Singapore in Asia
  • Dubai in
    the Middle East

Visit the country
where you’re thinking about placing your wealth. Talk to bankers,
insurance agents, etc. Increasingly, you’ll be required to
make a personal visit before you can open a foreign bank account.
You may also find that the bank requires that you invest through
an offshore structure, not in your own name.

Step 2.
Find Another Country to Live in that Offers Greater Personal Freedom

These are the
countries that you may wish to relocate to in the future. Or buy
property there, “just in case.” Popular countries for
U.S. expats to live in and/or buy property include:

  • Canada
  • Belize,
    Costa Rica, Ecuador, Mexico, Nicaragua, Panama, and Uruguay in
    central and South America
  • The Bahamas,
    Cayman Islands, and the Dutch islands in the Caribbean
  • Belgium,
    Malta, Switzerland, and the United Kingdom in Europe
  • Australia,
    Hong Kong, New Zealand, and Singapore in Asia

What else should
you consider in choosing a freedom haven?

One obvious
consideration is the availability of residence rights. What do you
have to do to gain residence? You may only have to demonstrate some
minimal level of income in some countries to obtain a residence
visa. Others require a guaranteed pension. In others you may have
to make a substantial investment in the country. In others you may
need to qualify on a points system. Some countries have multiple
programs you can consider.

You should
also consider security and enforcement of legal rights for foreign
investors; infrastructure (especially if you need specialized medical
attention); language; prejudice against Americans; and taxes.

Read
the rest of the article

January
26, 2010

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