Wednesday, June 26, 2013

Citizenship and Residency Services for the Rich

Image of a mansion.
Wealth Has Its Privileges
CC Photo Courtesy Brian Harte
Note: this is not a paid post and I've never been in touch with Henley & Partners or any associates of theirs. I'm merely familiar with their reputation.

Generally when I write about how to become an expat, I focus on things like the UK Entrepreneur Visa, teaching English, or the European Blue Card. These and many other strategies are broadly applicable to people who are determined to get out, but don't necessarily have lots of money, a marriage proposal, or other easy means of moving abroad.

Today I'll talk about Henley & Partners. They're a firm which specializes in providing those with spare money the opportunity to move abroad.

Monday, June 24, 2013

Reverse Culture Shock - You Can't Go Home Again

My wife and daughter playing with bubbles
in a friend's back yard in Portland.
My sincerest apologies for having dropped out of sight for a bit. I spent two weeks in the US, part of which was in Austin for a conference and also visiting my mother, sister and niece.  It was my first time back in Texas in 27 years.

The rest of two weeks was spent in my beloved Portland, Oregon visiting friends and my uncle and aunt. While enjoying the thrills of jet lag, I'm remembering that there is no past, only a future. I love Portland, but it's no longer home despite all of my wonderful friends there. It was with relief that I arrived at Charles de Gaulle airport in Paris and knew I would soon be collapsing in my bed. I had experienced reverse culture shock.

Tuesday, June 11, 2013

Australia Seeking Foreign Students

Sydney Harbor
Photo by Paul Bica
Australia — the land of sunshine, drop bears and Olivia Newton-John — is working to make Australia an attractive destination for skilled expats. I've previously written about how Australia is making it much easier for skilled US workers to seek work in Australia, but now they've changed the Australian Temporary Graduate Visa to make it easier for international students to remain in Australia.

Saturday, June 8, 2013

PRISM's Impact on Europe

Over on my personal blog, I've written a post about the US government's PRISM surveillance program. It's going to impact Europe, too, which is why I mention it here. In short: this program mean that many large US companies have been violating EU law and were probably explicitly lying about it. This is not going to end well.

Friday, June 7, 2013

A Trio of Painful Stories for Americans Abroad

IRS Logo
IRS Logo
Given the recent scandals involving the IRS, it's probably no surprise to anyone that the IRS has now been accused of "entrapment" of Americans who live abroad and — gasp! — have bank accounts where they live. Many of the punitive US laws against offshore bank accounts, such as FBAR, FATCA and others, and programs such as OVDP and OVDI are specifically intended to catch tax evaders. This is the IRS description of their objective for the OVDP (Offshore Voluntary Disclosure Program) (emphasis mine):
The objective remains the same as the 2009 OVDP and 2011 OVDI – to bring taxpayers that have used undisclosed foreign accounts and undisclosed foreign entities to avoid or evade tax into compliance with United States tax laws.
But the problem is that many people abroad who have met all of their tax obligations but never knew about little-publicized laws are having huge portions of their assets confiscated, despite no demonstration of intent to avoid or evade taxes. The American Citizens Abroad director has this to say (again, emphasis mine):
“By luring them into the OVDP in a form of entrapment then hitting them with ruinous penalties based on the overseas assets, instead of using the discretion which was within IRS purview for benign actors, the IRS treated ordinary, hard-working Americans like criminals. Most of the unreported accounts were pension funds and basic financial accounts used for living expenses and were not being used to hide assets.”
In the next painful story, the Atlantic writes about the unintended consequences of these laws against expat banking. In particular, the article points out that the laws being passed will have little effect on the wealthy they're designed to target but will continue to hurt middle-class Americans who live abroad and have bank accounts for the sole purpose of paying their bills. After all, as I live in France, it would not be particularly easy or convenient for me to drive all of my banking through a US account.

Americans living abroad are also sometimes getting their bank accounts frozen due to the new US laws. Writes one lawyer from the Atlantic article:
“I know of one client whose parents live outside the US. They are in their 90s, and have a bank account in their home country. They added their son as a signatory because if they become incapacitated, they want him to have access to money to pay their bills. But their account has now been frozen because he's American. The bank wants the son to provide the last five years of his tax returns before it will unfreeze the account. He has had to hire a lawyer to sue the bank to let his parents access their own money.”
That article also discusses how some companies have simply stopped hiring Americans for jobs with signing authority over accounts because that would require these foreign firms to spend money and time reporting to the IRS, even if they have no US business. I have personally lost a business opportunity as a result of this. 

And for the third painful story, a tax lawyer writes to the House Ways and Means committee to explain how US tax law for expatriates is hurting many innocent people. He talks about how Americans are often double-taxed on social security (this is usually in countries without tax treaties with the US — about two-thirds of the world's countries), how we're taxed on our retirement plans, and many other areas. While I've read that the Committee on Tax Reform was interested enough in the letter to fix the problem, I've no evidence that this is true. I list this as a "painful story" because this problem is still very real and I do not believe the government wants to fix it. When you have such factually void stories as this Mother Jones hit piece against Rand Paul (a man I otherwise don't particularly care for), it's hard to get politicians to look past the emotion and try to get to the truth. Nobody cares about the one in fifty Americans living abroad.

On the bright side, for most Americans living abroad, this actually won't impact you very much. You'll annually spend several hundred dollars filing a tax return with the US government but not owe any money. However, for those unlucky enough to get caught up in the IRS' web of hunting down those who fall afoul of little-publicized laws, it's a tough time being an expat. Of course, that's why we have far more Americans renouncing their citizenship than ever before.

Monday, June 3, 2013

Spit, Shoes, and Austin

Austin Skyline at Night
Photo by LoneStarMike
I'm writing this from Austin, Texas. I grew up more or less in Texas and it's been 26 or 27 years since I've been back. I'm only here for three days where I'll be speaking at a conference, and while I'm looking forward to seeing some of my professional colleagues again, I'm really looking forward to meeting some family members I've not seen in years (or in some cases, ever). I'm also craving Tex-Mex cooking. I've not had proper Tex-Mex in a long time and in Europe it's almost invariably rubbish. As I explain to my European friends who tell me that they don't like Mexican food: "you've probably never had it."