United States
The US taxes citizens on worldwide income regardless of where they live — one of only two countries (with Eritrea) that does this.
Tax situation for Americans
- - FATCA reporting: all foreign accounts over $10,000 must be reported via FBAR (FinCEN 114)
- - FEIE: Foreign Earned Income Exclusion allows ~$126,500 (2024) of foreign earnings tax-free
- - Foreign Tax Credit: offset US tax with taxes paid to other countries
- - State taxes: some states (CA, NY) continue to tax ex-residents for years after departure
- - Social Security Totalization Agreements with 30+ countries
Exit tax & departure rules
The US has a covered expatriate exit tax (IRC §877A). If your net worth exceeds $2M or average net income tax exceeds ~$190k/5yr, you pay mark-to-market capital gains on worldwide assets on the date of renunciation. Renunciation fee: $2,350.
Free citizenship by ancestry
Americans may qualify for citizenship in these countries through ancestry — often free or near-free:
Top destinations for Americans
Portugal
D7 passive income visa, NHR 2.0 tax regime, EU access, warm climate
Panama
Friendly Nations Visa, territorial tax, USD economy, no FATCA pressure
United Arab Emirates
0% income tax, Golden Visa, world-class infrastructure
Mexico
Proximity, low cost, temp resident visa easy to obtain, Ibero-American treaty for fast citizenship
Malta
EU citizenship path, English-speaking, Global Residence Programme
Costa Rica
Pensionado visa, affordable healthcare, stable democracy
Tax situation for Americans
The unique US worldwide taxation system means Americans can never fully escape US tax obligations without renouncing citizenship. However, the FEIE + Foreign Tax Credit can reduce the effective rate significantly. Territorial tax countries (Panama, Paraguay, UAE) are popular because foreign-source income is untaxed locally.
Best countries to move to from United States
Americans moving abroad typically prioritize English-speaking countries, proximity to US time zones, and quality healthcare. Portugal, Mexico, and Costa Rica dominate.
Second passport options for Americans
Americans seeking a second passport typically pursue Caribbean CBI ($100-200k), EU ancestry routes (free), or long-term naturalisation. A second passport provides travel optionality but does NOT remove US tax obligations.
Remote work & digital nomad visas for Americans
Americans can use the FEIE while working remotely abroad on digital nomad visas. Popular combos: Portugal D8 + FEIE, or Thailand LTR + no local tax on foreign income.
Retiring abroad from United States
Social Security is payable in most countries via Totalization Agreements. Popular retirement destinations: Portugal (D7), Mexico (temp resident), Costa Rica (Pensionado), Panama (Pensionado).
Renouncing American citizenship
Renouncing US citizenship requires being tax compliant, attending an embassy appointment, paying $2,350, and potentially the exit tax. It's irreversible — you cannot regain US citizenship after renunciation.
Renunciation note: Wait times for renunciation appointments are 12-24 months at most embassies. You must file 5 years of back taxes and be tax compliant.