Passport Legacy Cites Surge In American Citizenship Renunciations To Benefit UAE And Global CBI
More than 150,000 people have now been awarded the UAE's Golden Visa since 2019
Passport Legacy, a Swiss boutique firm with over 25 years of combined experience in the investment migration industry, has observed a surge in the number of expatriate high-net-worth individuals (HNWIs) who are renouncing their US citizenship; a reported 2,872 HNWI expatriates renounced their US citizenship through the first three-quarters of 2022, exceeding the 2,421 who did so throughout 2021. Passport Legacy highlights how the UAE and renowned global CBI programs will benefit.
A recent poll found that American expats are reaching their wit’s end; 4% are planning to relinquish their US citizenship, while 18% are seriously considering it. Furthermore, 69% of American expats don’t think they should have to pay US taxes while living abroad, 72% had to file extra tax forms for financial reporting, and 85% feel that they are not represented fairly by the US government. This likely contributes to the growing increase of expatriate HNWIs who have renounced their US citizenship. With nine million American expats living outside of the US, and more than four in 10 proclaiming they would abandon their US citizenship due to the burden of filing taxes, it is seemingly becoming an unreasonable expectation for many to file income taxes on worldwide earnings such as salaries, interest, rental income, business profits, and more.
The aftermath in the coming months and years will see countries like the UAE, where tax-free incentives are highly desirable for such investors, benefit. The country’s residency-by-investment (RBI) program, the UAE Golden Visa, was incepted in 2019 and has been granted to more than 150,000 people. This has simultaneously accelerated Dubai’s growth with the emirate now being home to over 65,000 millionaires and counting, ranking as the 23rd most popular city for ultra-wealthy residents, and on pace to become a top 20 destination by the end of this decade. In addition to this, the world has increasingly noticed the assortment of benefits of several citizenship-by-investment (CBI) programs around the world which come at a lower cost of investment.
According to the 2022 CBI Index, a standard rating system developed to measure the performance of such programs across various indicators, Caribbean countries have the most sought-after CBI programs in the world; Dominica, St. Kitts & Nevis, St. Lucia, Grenada, and Antigua & Barbuda respectively rank as the top five. Accounting for considerations like ease of processing, the standard of living, freedom of movement, and more[4], these countries have solidified their standing as ones that span from the oldest to the most renowned. With the COVID-19 pandemic, global turbulence, and rising inflation rates being key contributors, American expats along with countless people around the world are accordingly re-prioritizing to protect both their earnings and savings as key commodities.
Jeffrey Henseler, Founder and Managing Partner of Passport Legacy, UAE HQ said: “A recent survey of 3,100 American expats found that more than 25% of the respondents were living overseas as a result of a job relocation, nearly 30% because they wanted to be closer to their significant other, and around 15% because of their love of travel. Implementing changes such as repealing citizenship-based taxation or simplifying the tax-filing process would likely drive down the number of US expats who are renouncing or planning to renounce their citizenship. However, the likelihood of this happening is slim to none. With that said, this is the primary reason that many American expats are eyeing alternate opportunities and this is irrespective of their tax bracket. The hindrance of having to disclose financial accounts like savings, or report the slightest of investment growth, are ordeals that many are no longer willing to accept. The UAE and a variation of Caribbean countries have stood to benefit with several appealing factors being a driving force.”
The UAE owns the first-ranked passport in the world in 2022 and the introduction of the country’s Golden Visa program has enhanced the country’s appeal by providing several expats with an opportunity to avail a plethora of benefits that would otherwise not be accessible to them. On the other hand, with Dominica retaining its first-place ranking in the 2022 CBI Index for the sixth consecutive year, St. Kitts & Nevis holding the oldest and one of the most renowned programs in the world, and Grenada having generated more than $33 million in revenue during the first quarter of 2022, there are several esteemed locations for American expats and HNWIs to consider relocating to.
