What Americans on the Move Need to Know
“The future may be borderless, but it is not tax-free.”
“The future may be borderless, but it is not tax-free.”
“The future may be borderless, but it is not tax-free.”
Introduction
The world is more mobile than ever. Remote work and digital-first entrepreneurship have made it possible to live in one country, run a business in another, and invest across multiple jurisdictions all from a laptop. Americans are embracing this freedom, perhaps like never before. And it is no longer just the ultra-wealthy. Founders, solo professionals, remote families, and retirees are charting new lives in places like Portugal, Spain, Mexico, and the UAE.
But while life can move easily across borders, tax obligations for Americans cannot. Too many Americans only discover this once they are already abroad. The U.S. tax system stays with you, and foreign systems quickly catch up. If you do not plan carefully, you could be exposed to double taxation, compliance burdens, investment restrictions, and estate planning conflicts. The future may be borderless, but it is not tax-free.
At Areia Global, we work with Americans who are building mobile lives. Here is what we are seeing on the ground in Portugal, and what every globally minded American should know before they move.
You Do Not Leave the U.S. Tax System. You Add Another One.
The United States taxes based on citizenship, not just residency. This is unusual. Most countries only tax their residents. As an American, you are required to file and pay U.S. taxes every year, no matter where you live. This includes reporting your global income, foreign bank accounts, and many types of non-U.S. investments.
When you establish residency in a new country, you likely become taxable there as well. For example, under Portuguese rules, if you spend more than 183 days in Portugal or have a home there that is your habitual residence, you may be a tax resident. This would mean you now have two systems requiring filings, payments, and disclosures. Double tax treaties provide some coordination, but they do not eliminate tax exposure. They allocate taxing rights between countries and set rules for credits. In practice, Americans usually end up paying whichever country imposes the higher rate.
The Foreign Earned Income Exclusion (FEIE) is a strategy that can reduce your U.S. tax liability, but it comes with tradeoffs. Using the FEIE may disqualify you from foreign tax credits, limit your eligibility for local retirement programs, and restrict how you structure your income. Once elected, it impacts multiple years of future tax strategy. It is not a short-term fix. It is a decision that affects your whole cross-border financial picture.
Choosing a Visa Is a Tax Strategy, Not Just an Immigration Decision
In Portugal, one of the most overlooked tax traps happens right at the beginning: visa selection.
Many Americans apply for the D2 visa, which is tailored for entrepreneurs. To qualify, you must establish a Portuguese company. This company may seem like a simple shell to meet the visa requirement, but it has serious tax implications. For U.S. purposes, a foreign corporation that is majority-owned by a U.S. person is typically considered a Controlled Foreign Corporation (CFC). That triggers complex reporting and possibly U.S. tax under the Global Intangible Low-Taxed Income (GILTI) regime.
GILTI requires U.S. shareholders of CFCs to report certain types of foreign income each year, regardless of whether the company has distributed dividends. In other words, you may owe U.S. tax on money you never received. This income is calculated on an aggregate basis and is subject to different rules depending on whether you hold the company directly or through a U.S. corporation. If you are an individual, it often results in a punitive inclusion unless you plan ahead.
Other visa categories, such as Portugal’s Startup Visa or the Highly Qualified Activity (HQA) Visa, may involve incubators, government grants, or IP transfers. These can create new types of income that need to be classified and reported correctly. Your immigration attorney may not consider the U.S. tax treatment of those income streams. Your U.S. accountant may not even know they exist. Structuring your visa strategy without tax advice is one of the fastest ways to turn a promising relocation into a long-term liability.
Be Careful with Offshore Investments
Americans abroad are not always prepared for the challenges around investing abroad. Many U.S. brokerages and retirement account custodians restrict access once you change your mailing address to a foreign country. Sometimes that will push Americans to look to local investment platforms.
But investing in foreign funds, companies, or insurance products without a U.S. tax review can be precarious. Many foreign mutual funds and ETFs are considered Passive Foreign Investment Companies (PFICs) under U.S. law. These are subject to extremely unfavorable tax treatment and require detailed annual disclosures. Penalties for noncompliance are steep, and gains may be taxed as ordinary income with interest charges.
This is particularly relevant in the Portuguese Golden Visa context. Many local private equity or venture capital funds used for visa purposes are structured in ways that trigger PFIC classification. Investors often do not realize this until years later, when the IRS begins questioning their returns. A local fund that looks fully compliant under Portuguese law may still be difficult from a U.S. tax perspective.
Cryptocurrency and precious metals are also increasingly popular among Americans seeking financial sovereignty, but they are not free of complexity. Crypto wallets held abroad may require FBAR or FATCA disclosures. Gold stored in a foreign vault might need to be reported as a financial asset. The logistics of buying, storing, and reporting these assets as a U.S. taxpayer living overseas are often more complicated than expected.
Currency Matters: Plan for the Dollar to Weaken
If your income is in dollars but your expenses are in euros, you are taking on currency risk. A strong dollar may stretch your retirement distributions or U.S. salary further, but if the dollar weakens, your purchasing power can drop suddenly. For many Americans living abroad, a currency swing of 10 to 15 percent can stretch an otherwise stable budget.
There are ways to hedge this risk. In Portugal, certain euro-denominated products can provide stable local income, but these products must be reviewed carefully from a U.S. tax perspective. Some are considered PFICs. Others may require international disclosures. The right solution depends on your overall structure, your residency status, and your long-term financial goals.
Your U.S. Accounts May Not Follow You
Many Americans are surprised to learn that moving abroad can disrupt their existing accounts. U.S. retirement account custodians, for example, may no longer act as custodian once they learn you are a nonresident. They may freeze trading, remove named beneficiaries, or restrict distributions. This is not a tax issue; it is an administrative one. But the financial impact can be significant.
If you are relying on your IRA, 401(k), or brokerage account to fund your life abroad, make sure those institutions allow continued access and management once your address changes. Some may force a liquidation or apply early withdrawal penalties if you do not follow the proper steps in advance.
Cross-Border Families Face Unique Estate Risks
International estate planning is often overlooked in the conversation around global mobility.
If you are married to a non-American, the U.S. estate tax system does not offer the same protections. A U.S. citizen may be able to leave unlimited assets to a U.S. citizen spouse. But if your spouse is not a U.S. citizen, the unlimited marital deduction is not available. The U.S. estate tax exemption for non-U.S. persons holding U.S. assets is $60,000 as of the date of this publication, even if you are both living abroad. Anything over that amount will be subject to U.S. estate tax. In Portugal, the problem is compounded by forced heirship laws. These laws may entitle your spouse to a fixed portion of your estate, regardless of what your will says or the tax implications of transfers to non-citizen spouses. And if your assets span multiple jurisdictions, a U.S.-only estate plan simply will not work.
Expatriation Comes With an Exit Tax
Some Americans decide that they don’t want to be subject to U.S. tax obligations for the rest of their lives. They want to give up U.S. citizenship to escape the tax net entirely. This is a serious decision, and it potentially comes with one last cost: the exit tax.
If you are a “covered expatriate,” which generally means your income or assets exceed certain thresholds, or you have not been fully compliant with your filings for five years, the U.S. treats you as if you sold all your assets the day before you expatriated. Unrealized gains may be taxed immediately. Retirement accounts may be deemed distributed. Certain gifts to U.S. persons after expatriation may also trigger a tax.
Expatriation must be approached with years of planning. Cleaning up past compliance, managing appreciated assets, and timing your exit are all critical to reducing the financial impact. This is a strategy that must be executed carefully and deliberately.
Your Kids May Still Be Americans
Some American parents abroad believe that if they do not apply for a passport for their child, that child is not a U.S. citizen. Unfortunately, that is not how it works. U.S. citizenship is transmitted automatically if certain conditions are met, such as one parent being a citizen who lived in the U.S. for the required period. That means a child born abroad may be a U.S. citizen at birth, even without a passport or Social Security number. And if they are citizens, they are subject to the same tax filing and reporting requirements as any other U.S. person.
This includes FBARs, FATCA reporting, and potentially even tax filings depending on income. If you do not address this early, you may create a compliance mess for your child in adulthood that takes years to unwind.
Plan Early
Most tax-saving opportunities happen before you move. If you are planning to sell U.S. real estate, restructure a business, or rely on draws from retirement accounts while abroad, the time to act is at least one to two years before your departure. Once you are abroad, the options narrow. International relocations are tax events, not just a lifestyle changes.
At Areia Global, we help Americans live globally without getting caught in systems that may not contemplate modern mobility. The tax systems of the world are complex, overlapping, and unrelenting. The earlier you plan, the more options you will have. The future is mobile. The future is global. The future is taxed. Plan accordingly.
About the Author
Sasha Young da Silva, Managing Partner at Areia Global, is a U.S. attorney who advises American private clients living in Portugal on tax and estate planning matters. Her globally informed perspective is shaped by a life spent across cities, including Miami, Mexico City, Bogotá, and now Lisbon, allowing her to craft nuanced strategies for internationally mobile families. Sasha began her legal career at White & Case and McGuireWoods, later serving as in-house counsel at Amazon Prime Video, where she advised on production, licensing, and international tax issues across Latin America. She holds a J.D. from Northwestern University, is licensed in Florida and Washington, and speaks English, Papiamento, Spanish, and Portuguese.
Introduction
The world is more mobile than ever. Remote work and digital-first entrepreneurship have made it possible to live in one country, run a business in another, and invest across multiple jurisdictions all from a laptop. Americans are embracing this freedom, perhaps like never before. And it is no longer just the ultra-wealthy. Founders, solo professionals, remote families, and retirees are charting new lives in places like Portugal, Spain, Mexico, and the UAE.
But while life can move easily across borders, tax obligations for Americans cannot. Too many Americans only discover this once they are already abroad. The U.S. tax system stays with you, and foreign systems quickly catch up. If you do not plan carefully, you could be exposed to double taxation, compliance burdens, investment restrictions, and estate planning conflicts. The future may be borderless, but it is not tax-free.
At Areia Global, we work with Americans who are building mobile lives. Here is what we are seeing on the ground in Portugal, and what every globally minded American should know before they move.
You Do Not Leave the U.S. Tax System. You Add Another One.
The United States taxes based on citizenship, not just residency. This is unusual. Most countries only tax their residents. As an American, you are required to file and pay U.S. taxes every year, no matter where you live. This includes reporting your global income, foreign bank accounts, and many types of non-U.S. investments.
When you establish residency in a new country, you likely become taxable there as well. For example, under Portuguese rules, if you spend more than 183 days in Portugal or have a home there that is your habitual residence, you may be a tax resident. This would mean you now have two systems requiring filings, payments, and disclosures. Double tax treaties provide some coordination, but they do not eliminate tax exposure. They allocate taxing rights between countries and set rules for credits. In practice, Americans usually end up paying whichever country imposes the higher rate.
The Foreign Earned Income Exclusion (FEIE) is a strategy that can reduce your U.S. tax liability, but it comes with tradeoffs. Using the FEIE may disqualify you from foreign tax credits, limit your eligibility for local retirement programs, and restrict how you structure your income. Once elected, it impacts multiple years of future tax strategy. It is not a short-term fix. It is a decision that affects your whole cross-border financial picture.
Choosing a Visa Is a Tax Strategy, Not Just an Immigration Decision
In Portugal, one of the most overlooked tax traps happens right at the beginning: visa selection.
Many Americans apply for the D2 visa, which is tailored for entrepreneurs. To qualify, you must establish a Portuguese company. This company may seem like a simple shell to meet the visa requirement, but it has serious tax implications. For U.S. purposes, a foreign corporation that is majority-owned by a U.S. person is typically considered a Controlled Foreign Corporation (CFC). That triggers complex reporting and possibly U.S. tax under the Global Intangible Low-Taxed Income (GILTI) regime.
GILTI requires U.S. shareholders of CFCs to report certain types of foreign income each year, regardless of whether the company has distributed dividends. In other words, you may owe U.S. tax on money you never received. This income is calculated on an aggregate basis and is subject to different rules depending on whether you hold the company directly or through a U.S. corporation. If you are an individual, it often results in a punitive inclusion unless you plan ahead.
Other visa categories, such as Portugal’s Startup Visa or the Highly Qualified Activity (HQA) Visa, may involve incubators, government grants, or IP transfers. These can create new types of income that need to be classified and reported correctly. Your immigration attorney may not consider the U.S. tax treatment of those income streams. Your U.S. accountant may not even know they exist. Structuring your visa strategy without tax advice is one of the fastest ways to turn a promising relocation into a long-term liability.
Be Careful with Offshore Investments
Americans abroad are not always prepared for the challenges around investing abroad. Many U.S. brokerages and retirement account custodians restrict access once you change your mailing address to a foreign country. Sometimes that will push Americans to look to local investment platforms.
But investing in foreign funds, companies, or insurance products without a U.S. tax review can be precarious. Many foreign mutual funds and ETFs are considered Passive Foreign Investment Companies (PFICs) under U.S. law. These are subject to extremely unfavorable tax treatment and require detailed annual disclosures. Penalties for noncompliance are steep, and gains may be taxed as ordinary income with interest charges.
This is particularly relevant in the Portuguese Golden Visa context. Many local private equity or venture capital funds used for visa purposes are structured in ways that trigger PFIC classification. Investors often do not realize this until years later, when the IRS begins questioning their returns. A local fund that looks fully compliant under Portuguese law may still be difficult from a U.S. tax perspective.
Cryptocurrency and precious metals are also increasingly popular among Americans seeking financial sovereignty, but they are not free of complexity. Crypto wallets held abroad may require FBAR or FATCA disclosures. Gold stored in a foreign vault might need to be reported as a financial asset. The logistics of buying, storing, and reporting these assets as a U.S. taxpayer living overseas are often more complicated than expected.
Currency Matters: Plan for the Dollar to Weaken
If your income is in dollars but your expenses are in euros, you are taking on currency risk. A strong dollar may stretch your retirement distributions or U.S. salary further, but if the dollar weakens, your purchasing power can drop suddenly. For many Americans living abroad, a currency swing of 10 to 15 percent can stretch an otherwise stable budget.
There are ways to hedge this risk. In Portugal, certain euro-denominated products can provide stable local income, but these products must be reviewed carefully from a U.S. tax perspective. Some are considered PFICs. Others may require international disclosures. The right solution depends on your overall structure, your residency status, and your long-term financial goals.
Your U.S. Accounts May Not Follow You
Many Americans are surprised to learn that moving abroad can disrupt their existing accounts. U.S. retirement account custodians, for example, may no longer act as custodian once they learn you are a nonresident. They may freeze trading, remove named beneficiaries, or restrict distributions. This is not a tax issue; it is an administrative one. But the financial impact can be significant.
If you are relying on your IRA, 401(k), or brokerage account to fund your life abroad, make sure those institutions allow continued access and management once your address changes. Some may force a liquidation or apply early withdrawal penalties if you do not follow the proper steps in advance.
Cross-Border Families Face Unique Estate Risks
International estate planning is often overlooked in the conversation around global mobility.
If you are married to a non-American, the U.S. estate tax system does not offer the same protections. A U.S. citizen may be able to leave unlimited assets to a U.S. citizen spouse. But if your spouse is not a U.S. citizen, the unlimited marital deduction is not available. The U.S. estate tax exemption for non-U.S. persons holding U.S. assets is $60,000 as of the date of this publication, even if you are both living abroad. Anything over that amount will be subject to U.S. estate tax. In Portugal, the problem is compounded by forced heirship laws. These laws may entitle your spouse to a fixed portion of your estate, regardless of what your will says or the tax implications of transfers to non-citizen spouses. And if your assets span multiple jurisdictions, a U.S.-only estate plan simply will not work.
Expatriation Comes With an Exit Tax
Some Americans decide that they don’t want to be subject to U.S. tax obligations for the rest of their lives. They want to give up U.S. citizenship to escape the tax net entirely. This is a serious decision, and it potentially comes with one last cost: the exit tax.
If you are a “covered expatriate,” which generally means your income or assets exceed certain thresholds, or you have not been fully compliant with your filings for five years, the U.S. treats you as if you sold all your assets the day before you expatriated. Unrealized gains may be taxed immediately. Retirement accounts may be deemed distributed. Certain gifts to U.S. persons after expatriation may also trigger a tax.
Expatriation must be approached with years of planning. Cleaning up past compliance, managing appreciated assets, and timing your exit are all critical to reducing the financial impact. This is a strategy that must be executed carefully and deliberately.
Your Kids May Still Be Americans
Some American parents abroad believe that if they do not apply for a passport for their child, that child is not a U.S. citizen. Unfortunately, that is not how it works. U.S. citizenship is transmitted automatically if certain conditions are met, such as one parent being a citizen who lived in the U.S. for the required period. That means a child born abroad may be a U.S. citizen at birth, even without a passport or Social Security number. And if they are citizens, they are subject to the same tax filing and reporting requirements as any other U.S. person.
This includes FBARs, FATCA reporting, and potentially even tax filings depending on income. If you do not address this early, you may create a compliance mess for your child in adulthood that takes years to unwind.
Plan Early
Most tax-saving opportunities happen before you move. If you are planning to sell U.S. real estate, restructure a business, or rely on draws from retirement accounts while abroad, the time to act is at least one to two years before your departure. Once you are abroad, the options narrow. International relocations are tax events, not just a lifestyle changes.
At Areia Global, we help Americans live globally without getting caught in systems that may not contemplate modern mobility. The tax systems of the world are complex, overlapping, and unrelenting. The earlier you plan, the more options you will have. The future is mobile. The future is global. The future is taxed. Plan accordingly.
About the Author
Sasha Young da Silva, Managing Partner at Areia Global, is a U.S. attorney who advises American private clients living in Portugal on tax and estate planning matters. Her globally informed perspective is shaped by a life spent across cities, including Miami, Mexico City, Bogotá, and now Lisbon, allowing her to craft nuanced strategies for internationally mobile families. Sasha began her legal career at White & Case and McGuireWoods, later serving as in-house counsel at Amazon Prime Video, where she advised on production, licensing, and international tax issues across Latin America. She holds a J.D. from Northwestern University, is licensed in Florida and Washington, and speaks English, Papiamento, Spanish, and Portuguese.
Introduction
The world is more mobile than ever. Remote work and digital-first entrepreneurship have made it possible to live in one country, run a business in another, and invest across multiple jurisdictions all from a laptop. Americans are embracing this freedom, perhaps like never before. And it is no longer just the ultra-wealthy. Founders, solo professionals, remote families, and retirees are charting new lives in places like Portugal, Spain, Mexico, and the UAE.
But while life can move easily across borders, tax obligations for Americans cannot. Too many Americans only discover this once they are already abroad. The U.S. tax system stays with you, and foreign systems quickly catch up. If you do not plan carefully, you could be exposed to double taxation, compliance burdens, investment restrictions, and estate planning conflicts. The future may be borderless, but it is not tax-free.
At Areia Global, we work with Americans who are building mobile lives. Here is what we are seeing on the ground in Portugal, and what every globally minded American should know before they move.
You Do Not Leave the U.S. Tax System. You Add Another One.
The United States taxes based on citizenship, not just residency. This is unusual. Most countries only tax their residents. As an American, you are required to file and pay U.S. taxes every year, no matter where you live. This includes reporting your global income, foreign bank accounts, and many types of non-U.S. investments.
When you establish residency in a new country, you likely become taxable there as well. For example, under Portuguese rules, if you spend more than 183 days in Portugal or have a home there that is your habitual residence, you may be a tax resident. This would mean you now have two systems requiring filings, payments, and disclosures. Double tax treaties provide some coordination, but they do not eliminate tax exposure. They allocate taxing rights between countries and set rules for credits. In practice, Americans usually end up paying whichever country imposes the higher rate.
The Foreign Earned Income Exclusion (FEIE) is a strategy that can reduce your U.S. tax liability, but it comes with tradeoffs. Using the FEIE may disqualify you from foreign tax credits, limit your eligibility for local retirement programs, and restrict how you structure your income. Once elected, it impacts multiple years of future tax strategy. It is not a short-term fix. It is a decision that affects your whole cross-border financial picture.
Choosing a Visa Is a Tax Strategy, Not Just an Immigration Decision
In Portugal, one of the most overlooked tax traps happens right at the beginning: visa selection.
Many Americans apply for the D2 visa, which is tailored for entrepreneurs. To qualify, you must establish a Portuguese company. This company may seem like a simple shell to meet the visa requirement, but it has serious tax implications. For U.S. purposes, a foreign corporation that is majority-owned by a U.S. person is typically considered a Controlled Foreign Corporation (CFC). That triggers complex reporting and possibly U.S. tax under the Global Intangible Low-Taxed Income (GILTI) regime.
GILTI requires U.S. shareholders of CFCs to report certain types of foreign income each year, regardless of whether the company has distributed dividends. In other words, you may owe U.S. tax on money you never received. This income is calculated on an aggregate basis and is subject to different rules depending on whether you hold the company directly or through a U.S. corporation. If you are an individual, it often results in a punitive inclusion unless you plan ahead.
Other visa categories, such as Portugal’s Startup Visa or the Highly Qualified Activity (HQA) Visa, may involve incubators, government grants, or IP transfers. These can create new types of income that need to be classified and reported correctly. Your immigration attorney may not consider the U.S. tax treatment of those income streams. Your U.S. accountant may not even know they exist. Structuring your visa strategy without tax advice is one of the fastest ways to turn a promising relocation into a long-term liability.
Be Careful with Offshore Investments
Americans abroad are not always prepared for the challenges around investing abroad. Many U.S. brokerages and retirement account custodians restrict access once you change your mailing address to a foreign country. Sometimes that will push Americans to look to local investment platforms.
But investing in foreign funds, companies, or insurance products without a U.S. tax review can be precarious. Many foreign mutual funds and ETFs are considered Passive Foreign Investment Companies (PFICs) under U.S. law. These are subject to extremely unfavorable tax treatment and require detailed annual disclosures. Penalties for noncompliance are steep, and gains may be taxed as ordinary income with interest charges.
This is particularly relevant in the Portuguese Golden Visa context. Many local private equity or venture capital funds used for visa purposes are structured in ways that trigger PFIC classification. Investors often do not realize this until years later, when the IRS begins questioning their returns. A local fund that looks fully compliant under Portuguese law may still be difficult from a U.S. tax perspective.
Cryptocurrency and precious metals are also increasingly popular among Americans seeking financial sovereignty, but they are not free of complexity. Crypto wallets held abroad may require FBAR or FATCA disclosures. Gold stored in a foreign vault might need to be reported as a financial asset. The logistics of buying, storing, and reporting these assets as a U.S. taxpayer living overseas are often more complicated than expected.
Currency Matters: Plan for the Dollar to Weaken
If your income is in dollars but your expenses are in euros, you are taking on currency risk. A strong dollar may stretch your retirement distributions or U.S. salary further, but if the dollar weakens, your purchasing power can drop suddenly. For many Americans living abroad, a currency swing of 10 to 15 percent can stretch an otherwise stable budget.
There are ways to hedge this risk. In Portugal, certain euro-denominated products can provide stable local income, but these products must be reviewed carefully from a U.S. tax perspective. Some are considered PFICs. Others may require international disclosures. The right solution depends on your overall structure, your residency status, and your long-term financial goals.
Your U.S. Accounts May Not Follow You
Many Americans are surprised to learn that moving abroad can disrupt their existing accounts. U.S. retirement account custodians, for example, may no longer act as custodian once they learn you are a nonresident. They may freeze trading, remove named beneficiaries, or restrict distributions. This is not a tax issue; it is an administrative one. But the financial impact can be significant.
If you are relying on your IRA, 401(k), or brokerage account to fund your life abroad, make sure those institutions allow continued access and management once your address changes. Some may force a liquidation or apply early withdrawal penalties if you do not follow the proper steps in advance.
Cross-Border Families Face Unique Estate Risks
International estate planning is often overlooked in the conversation around global mobility.
If you are married to a non-American, the U.S. estate tax system does not offer the same protections. A U.S. citizen may be able to leave unlimited assets to a U.S. citizen spouse. But if your spouse is not a U.S. citizen, the unlimited marital deduction is not available. The U.S. estate tax exemption for non-U.S. persons holding U.S. assets is $60,000 as of the date of this publication, even if you are both living abroad. Anything over that amount will be subject to U.S. estate tax. In Portugal, the problem is compounded by forced heirship laws. These laws may entitle your spouse to a fixed portion of your estate, regardless of what your will says or the tax implications of transfers to non-citizen spouses. And if your assets span multiple jurisdictions, a U.S.-only estate plan simply will not work.
Expatriation Comes With an Exit Tax
Some Americans decide that they don’t want to be subject to U.S. tax obligations for the rest of their lives. They want to give up U.S. citizenship to escape the tax net entirely. This is a serious decision, and it potentially comes with one last cost: the exit tax.
If you are a “covered expatriate,” which generally means your income or assets exceed certain thresholds, or you have not been fully compliant with your filings for five years, the U.S. treats you as if you sold all your assets the day before you expatriated. Unrealized gains may be taxed immediately. Retirement accounts may be deemed distributed. Certain gifts to U.S. persons after expatriation may also trigger a tax.
Expatriation must be approached with years of planning. Cleaning up past compliance, managing appreciated assets, and timing your exit are all critical to reducing the financial impact. This is a strategy that must be executed carefully and deliberately.
Your Kids May Still Be Americans
Some American parents abroad believe that if they do not apply for a passport for their child, that child is not a U.S. citizen. Unfortunately, that is not how it works. U.S. citizenship is transmitted automatically if certain conditions are met, such as one parent being a citizen who lived in the U.S. for the required period. That means a child born abroad may be a U.S. citizen at birth, even without a passport or Social Security number. And if they are citizens, they are subject to the same tax filing and reporting requirements as any other U.S. person.
This includes FBARs, FATCA reporting, and potentially even tax filings depending on income. If you do not address this early, you may create a compliance mess for your child in adulthood that takes years to unwind.
Plan Early
Most tax-saving opportunities happen before you move. If you are planning to sell U.S. real estate, restructure a business, or rely on draws from retirement accounts while abroad, the time to act is at least one to two years before your departure. Once you are abroad, the options narrow. International relocations are tax events, not just a lifestyle changes.
At Areia Global, we help Americans live globally without getting caught in systems that may not contemplate modern mobility. The tax systems of the world are complex, overlapping, and unrelenting. The earlier you plan, the more options you will have. The future is mobile. The future is global. The future is taxed. Plan accordingly.
About the Author
Sasha Young da Silva, Managing Partner at Areia Global, is a U.S. attorney who advises American private clients living in Portugal on tax and estate planning matters. Her globally informed perspective is shaped by a life spent across cities, including Miami, Mexico City, Bogotá, and now Lisbon, allowing her to craft nuanced strategies for internationally mobile families. Sasha began her legal career at White & Case and McGuireWoods, later serving as in-house counsel at Amazon Prime Video, where she advised on production, licensing, and international tax issues across Latin America. She holds a J.D. from Northwestern University, is licensed in Florida and Washington, and speaks English, Papiamento, Spanish, and Portuguese.
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