Stages of Expatriation.
- Foreign Residency. Determining where to live is the first step in Expatriating. For those Americans who have not already established residency in a foreign country, an investigation of another country should include location, climate, culture, customs, tax structure, economy, bureaucracy, employment, medical care and stability. Until one has acquired an alternate citizenship or passport, renouncing US citizenship or residency status can render the declarant stateless.
- Transferring Assets. US taxation does not favor Non-Resident Aliens who have property or earnings stateside. Thanks to lower travel costs and international communication, assets can be moved economically offshore as venture capital without raising eyebrows. Attention should also be given to opening foreign financial accounts and establishing some credibility in the foreign country of choice.
- Renouncing Ties to US. Expatriation includes the process of relinquishing US citizenship or terminating long term residency (LTR). It is further affected by whether the emigrant is considered a covered expatriate. The date of expatriation is the later of the date you notify the relevant agency of your expatriating act or the date Form 8854 is filed.
- Exit Tax. Applicable to covered expatriates, be prepared to pay or arrange to pay this tax. Otherwise the paperwork, comparable to prepared a comprehensive financial plan or estate tax return, must be done.