How to Leave the United States and Where to Go Next: 5 Easy Steps

The US has come a long way since its independence in 1776.

Once a country synonymous with pride, freedom and opportunities, the US, for many, has turned a bleak corner.

US citizens and residents are starting to grasp what much of the rest of the world has understood for quite some time – no one country is perfect, not even the good old USA, the land of the brave and free.

So why aren’t Americans just moving out of the country and settling somewhere else?

Well, that’s where some of the complications start.

As veterans of the holistic offshore strategy industry, at Nomad Capitalist, we’ve come across just about every loophole, complication and myth that exists about why Americans can’t just move offshore, especially without renouncing their citizenship.

And we are here to tell you that’s simply not true, so don’t let misinformation hold you back. 

Rather, learn from professionals who’ve done it all before. We’ve helped over 2,000 clients (mostly US citizens) legally reduce their taxes, navigate the offshore world and go where they’re treated best. We can do the same for you. 

Common Myths and Questions About Leaving the United States

Before we get into the nitty and gritty of how to leave the US, let’s first address a couple of the most common and intimidating myths associated with this topic.

• Is there a penalty for leaving the United States permanently? To leave the US, Americans have to pay an exit tax. But it’s not a penalty, and it’s certainly not a huge fraction of your net worth, as it’s often portrayed to be.

• Can you come back to the US after leaving it for good? It all depends upon your passport. Some passports may require you to get a visa for re-entry, while others may not. That’s why we recommend owning a diverse passport portfolio with Tier-A and Tier-B passports.

• Do you still have to pay US taxes after renouncing your citizenship?  The US taxes its citizens and residents on their worldwide income. However, non-residents may also be liable to pay taxes in certain circumstances (like having a US trade or business). If you give up your citizenship and transfer all your assets, including your business, to another country, you will no longer be responsible for paying US taxes. In essence, US citizens can not only move offshore, settle abroad and purchase foreign real estate, but they can also do so completely legally while paying only a fraction of the taxes that they are paying currently.

• Is it easy? No. Moving out of the US is not as easy as taking a yearly trip up north. It requires comprehensive planning and professional guidance at every step.

At Nomad Capitalist, we’ve not only been serving our clients successfully for years, but we have gone through this whole tunnel ourselves.

In fact, Nomad Capitalist’s CEO, Andrew Henderson, has also renounced his US citizenship to pursue a perfectly nomadic life abroad.

So, who better to help you understand your post-US life than the team who has done it themselves?

How to Leave the United States: Five Things to Get in Order

What do people mean when they say, ‘I want to move out of the US?’

It may seem like an odd question, but the answers can vary wildly.

For some people, moving abroad or having a second passport (Plan B) equals ‘moving out’ of a country, while for others, moving out may mean cutting all ties (Plan A).

Our list of steps applies to both these situations, but more so to people who are ready to cut all ties with the United States permanently and pursue a life of offshore freedom and opportunities.

1. Manage Your Finances

Why is it so important to manage your finances?

Money is, oftentimes, a core factor in many of our life’s decisions. Getting a new car, moving to a different country, acquiring a second passport – all of these decisions primarily depend on your finances.

If you manage your finances properly, they can provide significant relief in case of an international move. However, if you leave them scattered and disorganised, you may face extremely stressful and costly consequences.

First, let’s talk about US citizens who are finally ready to take the plunge, cut all ties and renounce their citizenship.

In that case, you may want to move a major portion of your finances offshore and limit any financial factor tying you to America.

With a clean slate, you can rebuild your finances in a tax-friendly region and gain significant tax advantages.

But if you are not quite there yet, and you still consider your American passport to be an asset, then it would be wise to move only a fraction of your wealth outside of the country while leaving some sort of banking presence in the US.

Why? Because, in our experience, getting a credit card and earning a decent credit score could be tricky in a foreign country.

In this case, your US bank account can help you to pay certain bills and invest in certain assets.

However, it’s important to note that as long as you are an American passport holder, you will have to pay US taxes and report back to US authorities regarding all your income and assets outside of the US.

Merely moving out of the US does not grant you immunity from US taxes.

2. Organise Your Assets

Asset management is another crucial step toward a safe and hassle-free move out of the country.

Ask yourself these three questions:

• What are my assets?
• Where are my assets?
• What am I going to do with my assets?

Let’s start with the first one. List all your assets – real estate, precious metals like gold and silver, IRAs and so on.

Once you’ve listed down all your assets, make sure that you know exactly where all your assets are.

If you have one or two properties, that’s not a problem. However, if you have several assets in different locations, it might be a good idea to assess their current condition.

Lastly, the most important part is to ask yourself what you’re going to do with those assets.

Why is it the most important part? Because the answer has to align with your reasons for moving abroad.

Let’s discuss what you can do with some of your most important assets:

Real Estate

If you want to cut all ties, then the best way forward is to sell your properties and put the money into offshore real estate opportunities.

This is because, as a US expat, you may find that managing properties in the US requires significantly more stress and paperwork compared to other countries.

It also doesn’t make sense to leave ‌real estate in the US if you’re moving out to pay fewer taxes since you will still have to pay the property tax for these assets.

Precious Metals

Precious metals like gold and silver may be easier to manage and move than real estate, but it does not mean that you show up at an airport carrying your pot of gold. Not only is it inconvenient, but it may even lead to a reporting situation.

It’s far better to hire a credible logistic service to move these assets for you. This way, it will be their headache to deal with the shipping, customs and every little detail associated with this type of task.

You can move your precious metals offshore to a vault in countries like Switzerland or Singapore. You can also move these assets to non-bank safe deposit boxes, which is a huge advantage as they’re outside the banking system.

IRAs

When it comes to IRAs, many people have come to us with concerns about the ever-increasing government regulations.

Here’s what you can do about it – you can either liquidate it or stop adding to it.

Another thing that you can do, especially if you have an IRA containing six or seven-figure amounts, is to move it offshore through an offshore IRA.

An offshore IRA lets you invest in offshore non-US assets while being under the banner of the IRA, hence giving you more control over your purchases and assets.

3. Deal with Your Business

When it comes to your ‘moving out’ plan, your business could prove to be an asset or a liability.

It all depends on how you handle it.

The ideal situation is when the business is location-independent and hence can be easily moved offshore to reduce your taxes dramatically. This is because you can set up your company in a country with little or no corporate taxes, like in Hong Kong.

But if that is not the case, and you have a running, location-dependent business that you’re not ready to pack up yet, then you should be ready to pay a certain amount of tax on it.

You will still save on personal income taxes by moving abroad, but you will not be able to eliminate the high corporate taxes in the US.

4. Residence Permit

Now that we’ve talked about your finances, assets and business and how to handle them in the event of leaving the US, let’s talk about where you will be living and, more importantly, how.

That’s where a residence permit comes in.

Generally speaking, US passport holders have more freedom than many other people when it comes to leading a nomadic life.

But if you want to live somewhere, rather than booking tickets all the time, it’s best to get a second residence, especially because we are seeing more and more countries regulating visa runs.

Here, it’s important to note that you have to periodically renew a residence permit, and it does not necessarily allow you the status of a permanent resident unless you’ve lived in the country for a certain number of years.

A residence permit can serve you in the following ways:

Second Residence

‘I can go to any country I want; why get a residence permit?’

That’s the question some Americans ask when they hear about residence permits.

The answer is simple. If you don’t get a residence permit, you will have to leave the country at the end of your certain ‘visiting period’, even if you don’t want to.

For example, Americans can visit the European Schengen zone visa-free and stay there for 90 days in a 180-day period. If you want to live there for more than that, you need a residence permit.

Furthermore, you can have one or multiple residence permits from different countries and enjoy your time experiencing different cultures, food and the overall vibe of these countries.

If you’re wondering how many residence permits to go for, check out our Trifecta strategy, which discusses how to select three countries to live in and divide your time in.

We also have tons of content discussing the details of the most attractive second residency programs and Golden Visa programs all over the world.

Back-Pocket Residence

Think of a back-pocket residence as your insurance policy in the event that something happens to your original Plan B.

If, for any reason, you find yourself stuck in your country, not being able to move to your Plan B residence, your back-pocket residence can offer you the out you desperately want at that moment.

Ideally, for a back-pocket residence, you should select a country with the most flexible or non-existent visiting regulations.

That way, it can comfortably sit in your back pocket without consuming your time and effort, and you can use it whenever the need arises.

5. Citizenship

We’ve already established that the only way to completely get out of the US system (tax rates, business regulations, reporting back, etc.) is by renouncing your US citizenship.

Even if you’re not ready to make that move right now, we still advise you to get a second citizenship.

In our experience, second citizenship offers the kind of freedom that every US citizen should have in these unprecedented times.

The most common way to get second citizenship is through a citizenship-by-investment program.

We’ve helped countless clients obtain a second citizenship this way. In fact, doing what we do, if there is a citizenship-by-investment program out there, we know about it.

You can also apply for a citizenship-by-descent program if your ancestors belonged to another country, although proving a lineage is often not that easy.

These are the five steps that you can follow to leave the United States, either tax-free or with a lower tax burden.

Easiest Countries to Move to as a US Expat

Once you’ve made up your mind about leaving the US, the very next question is where to go.

This question can feel pretty overwhelming and intimidating, especially if you’re a person who has only ever known life in the United States.

But we assure you, no matter what your motives are, be it more autonomy over your choices, attractive tax incentives or raising your quality of life, there is a country out there for you that will offer you exactly what you want and more.

You just have to take a leap of faith.

Next, let’s look at some of the easiest countries to move to as an American expat.

1. Mexico

Let’s start with a country that’s close to ‌home: Mexico.

It’s really surprising that all the memes about leaving the US at the time of the 2016 election mentioned Canada as the ultimate go-to location when Mexico is right there.

Aside from being close to the US, with great weather, friendly people and some of the best food in the world – there are many other things to love about Mexico.

But the best part is that Mexico has the largest US expat population in the world.

You will find American expats everywhere, especially in San Miguel de Allende.

The transition is further eased by the availability of Americanised amenities and experiences.

Given the lenient annual income and physical presence requirements, it’s not hard to get a second residency and citizenship in Mexico.

2. Panama

Panama, a Central American country known for the Panama Canal and the Panama Papers, offers another attractive option.

One immediate benefit for Americans is that Panama uses the US dollar, which eliminates currency exchange hassles.

The financial requirements to gain residency in Panama are especially lenient if you’re a citizen of a country on its ‘Friendly Nations’ list, and the United States is one of those. 

Even better, you can maintain your permanent residency with just one day in the country every two years – perfect for a ‘back-pocket’ plan.

Beyond the practical benefits, the local culture is great, the beach towns are beautiful and high-quality medical care is provided at an affordable cost, making Panama a stellar option to move to from the United States.

3. Portugal

If you have your heart set on a move to Europe, Portugal just might be the place for you.

Apart from being a beautiful country with a rising number of digital nomads, Portugal also has one of the best Golden Visa Programs in the world.

While the visa recently changed, removing the option for real estate investments, you can still gain residency through other investment options (starting at €250,000).

A bonus is that you don’t have to worry about the language barrier that much, as English is widely spoken.

Another attractive aspect of Portugal for US citizens is that getting a residence visa there allows them to live, work and study anywhere in the EU, while still keeping them tethered to the Western world.

4. Singapore

If you decide to look toward Asia, you probably won’t find a better country than Singapore.

Living in Singapore, you’ll never have to compromise on the quality of your life, no matter what level of luxury you were previously accustomed to.

In fact, it is one of the favourite destinations for ultra-high-net-worth individuals because of the luxury they can enjoy.

According to the Safe Cities Index, Singapore consistently ranks in the world’s top five countries in terms of digital, health, and infrastructure security, making it one of the most progressive and safest countries in the world.

For Americans who don’t feel safe in the US anymore, this is a hugely encouraging factor.

The government’s strict regulations on guns and firearms have made violent crimes a very rare occurrence in Singapore.

How to Leave the United States and Where to Go Next: FAQs

How to Leave the United States Behind

Many US citizens feel that the US is not the ‘best’ country for them anymore.

If you’re one of them, don’t wait for the situation to get any worse before making a decision for the betterment of your life.

Contact us today. 

Our clients are paired with experts in tax, investment strategy, asset protection and immigration to create a unique plan based on their personal and professional goals. Not only will we hear your concerns, but we will also devise a holistic strategy that best suits your life, choices and dreams.