Renouncing U.S. citizenship has been a popular trend in the last decade. Each year there are thousands of U.S. citizens renouncing their U.S. nationality.
According to the Federal Register, 337 persons had renounced their citizenship in Q1 2024. While the Federal Register does not state their reasons, tax, dual citizenship, and personal matters are the main reasons.
If you are still thinking about renouncing your U.S. nationality, this article is going to help you make an informed decision. We are going to tell you why U.S. citizens renounce their citizenship, the pros and cons, the benefits that you lose, and how to do it.
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Contents
Why Renouncing U.S. Citizenship
There are many reasons U.S. citizens renounce their U.S. citizenship including:
- Tax: This might be the most common reason. Being a U.S. citizen, your worldwide income is subject to U.S. tax. So, many people do not want to do this anymore and decide to eventually renounce their U.S. citizenship.
- Accidental citizens: Anyone born in the U.S. is an automatic citizen. While many move to the U.S. to give birth for this reason, some people from Europe or some other countries with a strong passport happen to be in the U.S. for a job assignment, give birth there, and leave a few years later. The accidental citizen was born there but has had no connection with it since. They often want to avoid being bothered with the situation when it comes to reporting taxes and other citizen duties, so they see it as a burden. Some people born dual citizens must give up their U.S. citizenship to maintain another one. Many Asian countries like Japan and Singapore do not allow dual nationality.
- Obtaining a new nationality: There are some countries in the world that do not allow dual citizenship, including Japan, Singapore, Slovakia, Ukraine, Montenegro, and more. So, to get their citizenship, you may need to renounce your current citizenship.
- Personal Reasons: Some people renounce their citizenship since they feel like it helps them better in a new country. They may feel renouncing their U.S. citizenship is the best sign of loyalty and integration in whatever country they choose to live in. Many U.S. citizens might move abroad for decades and don’t feel like coming back, so they feel being a U.S. citizen is unnecessary. People might do this to avoid other legal obligations. There are cases where people do it to get out of child support or to escape probation.
The Lost Benefits
Once you renounce your U.S. citizenship, it’s impossible to change the decision anymore. It’s final and you will immediately lose all of these benefits of being a U.S. citizen:
- You can no longer vote.
- You can no longer use any U.S. embassies for help.
- You can’t move to the United States as easily as a citizen.
- If you want to move back, you must do the paperwork like everyone else immigrating there. While it’s possible if you have family or a U.S. spouse to sponsor you, the process is still complex.
- You can be deported from the United States if you commit a crime or visit too long without a proper visa.
- If you have a criminal record, U.S. officials can decide to make you inadmissible to enter the country.
Please remember that you do not get out of whatever legal and financial obligations you had before renouncing your citizenship.
- You still have to pay if you owe money in taxes, child support, or something like that.
- If you have a child in the U.S., you still have to adhere to the custody rules and requirements for child support.
- The same applies if you have criminal obligations or are on probation; everything still applies.
Is It Worth It?
Generally, no, it isn’t. But it can be, depending on your circumstances. In the case of taxes, in my opinion, I would still generally say it isn’t for many reasons:
- Double Taxation
- If it is the case of some U.S. citizen who makes around the threshold for double taxation and obtaining a second nationality that allows dual citizenship, then it isn’t necessary.
- Chances are, if you live in another country and obtain citizenship, the country has treaties set with the U.S. to limit your tax obligations, where you owe either nothing or a negligible amount. It’s mainly for super-wealthy people who have more to worry about.
- Tax professionals also deal with U.S. expat taxes, which can help minimize your U.S. taxes.
- Things Tied to the U.S.
- If you still own property there and have other things tied to the U.S., such as kids, you could have to deal with a lot more paperwork once you renounce your nationality.
- You will still owe some taxes as a non-citizen on whatever assets you have in the U.S.
- Personal Reasons
- If you have personal reasons, such as wanting to fit into another country more or being dissatisfied with the U.S. government and policies, that is up to you. However, even if you give up U.S. citizenship, people are still likely to see you as American anyway.
- The country can change during your lifetime as well. As mentioned above, it is final. So, any professional opportunity in the U.S. will take more work. If you have family or children there, visiting for extended periods might take a lot of work.
- So, generally, if you are young or have personal connections, it might be better to hold off on renouncing your citizenship unless some circumstances make it worth it.
When Is It Worth It?
- It makes the most sense to renounce if you are an accidental U.S. citizen.
- It makes sense if you don’t want to deal with the IRS bothering you every few years for not filing taxes to a country you have nothing to do with.
- It might be worth it when you can obtain a better passport for more opportunities. The U.S. has a strong passport, but quite a few, such as Singapore, Japan, and many E.U. passports, are even more robust according to the Henley passport index. To become a citizen of some of these countries, you must renounce your current nationality.
However, in the case of E.U. nationalities, more countries are starting to allow dual citizenship than previously didn’t.
Some countries with solid passports, such as Austria and the Netherlands, are reluctant to allow dual citizenship so that it could work in your favor.
Citizens of those countries can visit the U.S. for 90/180 days visa-free anyway. One thing to note is that travelers from visa-waiving countries can lose their privileges if they visit certain countries.
For example, suppose someone with a passport from Japan or Germany visits places like Syria, Iran, and Iraq. In that case, they will lose visa waiver privileges and must get an expensive tourist visa to visit the U.S.
Each Situation is Different
However, these factors really can heavily depend on your case. For example, professional tennis player Naomi Osaka did this to keep her Japanese citizenship. Japan makes dual citizens choose before they are 20 years old.
The Japanese passport is one of the highest-ranked in the world. Another situation could be for older people who are deeply settled in their retirement and have no plans to return. Tina Turner did this after becoming a Swiss citizen in her old age.
However, both cases also involved wealthy people who could obtain a U.S. green card if they wanted to. It might be different for someone who is not a super-wealthy celebrity.
Should You Do It?
Ultimately, it depends on you. Many people have done it and were happy with their decision. Others are more mixed about it.
Some of them found it, but then they decided to move to the U.S. with their U.S. spouse for personal reasons and had to deal with applying for a green card.
It depends on your circumstances and relationship with the country.
How to Renounce Your U.S. Citizenship
If you want to renounce your U.S. citizenship, you can’t just tear up your passport and be done with it.
According to the Department of State, you must do it in person to renounce U.S. citizenship. You can’t do it in the mail. You usually do it at a U.S. embassy or consulate.
You can do it at some offices in the U.S. in front of a State Department official.
Here’s what you need to do:
- You have to be 18 years old.
- Fill out these two forms: Request for Determination of Possible Loss of United States Nationality, and Statement of Understanding Concerning the Consequences and Ramifications of Renunciation or Relinquishment of U.S Nationality.
- Provide proof of other citizenship. It can be a certificate of nationality or a passport.
- Sign an oath of renunciation.
- Pay a US$2,350.00 fee.
If you have children who are U.S. citizens, you cannot renounce their U.S. citizenship on their behalf.
