The number of Americans renouncing their citizenship rose to a new record of over 5,000 people last year. According to the latest government data, the 2016 trend showed a 26% year-on-year increase.
News Agency talked to veteran traveler, entrepreneur and blogger, Andrew Henderson, asking him to comment on the issue.
Henderson is a founder of Nomad Capitalist, a Texas-based organization that helps its clients diversify their assets and save taxes. The organization, whose motto is “find a legal way to pay zero and be in compliance,” has created its own passport and citizenship index to access the value of living in a certain country.
“We decided to put out the first ever index that actually studies the value of passport and of citizenship. We looked at more than just travel. If you are a US citizen, and you can go to as many countries as a Slovenian citizen, but the Slovenian citizen has a greater tax freedom, personal freedom and many other things, then one is better than the other. And so we said let’s take into account a number of factors like dual citizenship, freedoms, taxes and etc.”
Surprisingly, US citizenship wasn’t listed even in the top 20 in the latest passport index conducted by Nomad Capitalist. The top ranked country is Sweden followed by several other European Union nations, whereas the US is placed 35th.
According to Henderson, this can be explained by several factors, including US citizenship taxation law.
“The United States is one of two countries in the world that basically taxes the citizens no matter where they live. […] The only other country that does that is Eritrea which they call a ‘North Korea’ in Africa,” Henderson said.
He also noted that “it is very difficult to be a business person overseas as an American,” which could be another reason behind people’s desire to change their citizenship. In case of incompliance with US regulations, a person doing business in another country can get into a lot of trouble, like, for example, getting their assets frozen, etc.
“So, just the compliance alone can cost a fortune. It’s not even about tax, it’s about people being priced for doing business as an American citizen,” Henderson concluded.