Dateline: Kuala Lumpur, Malaysia
Trump has people worried.
Despite the support that has powered his current success in the campaign for the Republican presidential nomination, there are more than a few people who believe that a Donald Trump presidency could mean the worst for the Land of the Free.
My concern about freedom in the US began long before Trump ever decided to run for office, but it seems that Trump’s popularity has made more and more people realize that something has gone terribly wrong and — in the event that Trump actually becomes president — they have begun to look for a way out.
Unfortunately, the only place many people know to look is to Canada.
As Trump took state after state on March 1st, Google searches for “How can I move to Canada?” went up 350% and eventually reached a 1000% increase. Since then, a number of big names have threatened to move to Canada.
While I can sympathize with the desire to escape the US, I can’t say I follow the logic of those who look to Canada as the answer.
Yes, they share the same language and a similar culture with the US, but they also have the same high taxes (although corporate taxes are substantially lower) and a penchant for socialism.
It would be like jumping from one frying pan to another.
As a resident of Canada you would be subject to their tax obligations and — though the US and Canada have a tax treaty that prevents you from paying double taxes — you would still be on the radar of another large, western tax-happy nation.
And let’s be totally honest, if you’re the one who searched how to move to Canada, would you really do it? Would you really leave the United States for “greener pastures”, or were you just blowing off steam?
I know people who have been saying that they’re going to move to this country or that country for 20 years, and yet they still reside in the USofA.
If you are one of the few who intend to act, allow me to share some perspective from my personal experience as a seasoned expat who helps people move abroad on a regular basis.
The one assumption that will ruin your plans
The first thing you need to realize is that you shouldn’t just assume you can up and move to another country whenever you feel like it.
Sure, a US passport allows you to travel visa-free to quite a few countries, but not all of them. In fact, in places as popular as Brazil or as business-driven as China, Americans have to obtain permission before they are allowed to enter.
Visa-free or not, traveling to any country is just that: touristy, non-permanent, strings-still-attached-to-the-US, sight-seeing travel.
With the proper preparation and plan, however, you can make traveling work for you, or you can even choose to line things up and officially move to another country as a resident.
For instance, if you have a location independent business, you could become a perpetual traveler and split your time between Canada and Mexico (yes, Mexico. It may even be a better option for you than Canada). And that’s if you really are set on moving to Canada and don’t want to leave North America.
Both Canada and Mexico allow foreigners to stay in their country for up to six months at a time, so splitting your time between both countries while running your location independent business is a very plausible way to stay close to home without staying too close to Trump.
If you’re not averse to seeing more of the world, you can travel just about anywhere with a location independent business or any other online work. Plus, by working overseas you can claim the Foreign Earned Income Exclusion (FEIE) on up to approximately $100,000 of your income.
However, if you plan on working in Canada or wherever else you decide to go, you will need to obtain the proper permission to work in that country. And that requires a substantial amount of paperwork and preparation.
That doesn’t mean it can’t be done. It just means you need to prepare now if you actually want the option — a Plan B — if the need should arise.
So don’t just search Google for instructions on how to move to Canada and assume it will be easy. Do the soul searching and decide if you really are committed to leaving the United States if the populist insurgency is successful.
Then, once you make your decision, do your homework.
Your expat homework list
Some of that homework might include a few geography lessons. If you only know of five other countries where you could go and over half that list is occupied by Canada, the UK and Australia, you’re not in very good shape.
They’re all among the most difficult countries for immigration.
Consider other countries where English is an official or widely spoken language before settling on the obvious options. And be sure to look at the paperwork needed to travel to country XYZ, or to move there permanently.
If you’re not set on going to an English-speaking country, your options are almost limitless. Have you ever heard of Malta? How about Malaysia? Do you know about your options for citizenship through ancestry? How about economic citizenship? Have you considered residency options in South America? Or affordable cities in Europe where you could live year-round as a perpetual traveler?
More importantly, do you have a US passport?
If you’re determined to cut all ties with the US by renouncing your US citizenship, understand that this will mean that you will more than likely have to get a visa every time you want to visit family still in the US.
While you may not go to such an extreme as to renounce your US citizenship, moving to another country to escape the US is a decision that merits study and commitment. If you identify the real reason why you want to leave the US, you will realize that Canada is not the best answer. It’s just the knee-jerk reaction of someone who doesn’t know where else to look.
But you actually have plenty of options.
My suggestion is to find a country that is more flexible and less tax-prone. In fact, the countries with lower taxes — though you may have never heard of them — are oftentimes the ones more open to accepting you. More developed countries with high taxes aren’t necessarily looking for new residents.
In the end, it may be easier for you to live as a perpetual traveler, splitting your time between two or three countries. If you’re looking for a more permanent solution, however, start working now to set up your Plan B so you can move to your second residency at the drop of a hat should the need arise.
Each month I select a small number of individuals to work with who are committed to moving, investing, or setting up a business offshore. If you are serious about the decision to move abroad, apply for a consultation or email me with your questions.