In the past decade, thousands of U.S. citizens have made the radical — and often emotional — decision to give up their American passports. Once considered unthinkable, renouncing U.S. citizenship has become a rising trend, especially among high-net-worth individuals, global entrepreneurs, and dual citizens living abroad.
But why are more Americans making this move? What are the legal, financial, and emotional reasons behind it? And what are they choosing to do instead?
In this article, we’ll unpack the data, explore real-life motivations, and offer practical options for those considering a smoother and smarter exit strategy.
The Numbers: A Quiet but Steady Rise
According to the U.S. Treasury Department, the number of Americans renouncing their citizenship has increased steadily over the past 15 years. While the numbers fluctuate each year, one thing is clear: it’s no longer a fringe decision.
- In 2010, around 1,500 Americans renounced citizenship.
- In 2020, the number spiked to over 6,700 — a record at the time.
- Even with pandemic disruptions, 2023 saw over 3,000 renunciations.
- Experts estimate that 2025 will surpass 4,000 again, largely driven by tax fatigue and global mobility needs.
And these are just the official numbers. Many more are in the process, waiting for embassy appointments, or strongly considering their options.
Who’s Renouncing — And Why?
Most people giving up U.S. citizenship fall into one of the following groups:
1. Long-Term Expats
People who have lived abroad for years or decades and no longer have ties to the U.S. Many of them hold dual citizenship, work overseas, and raise families in their adopted country.
Why they renounce:
- U.S. tax reporting remains burdensome despite living abroad
- Want to simplify finances and enjoy local benefits
- No longer feel connected to the U.S. system
“I’ve lived in Spain for 20 years. My children are Spanish. Filing my U.S. taxes every year is expensive and pointless. I’m not going back.” – Ana S., dual citizen
2. High-Net-Worth Individuals
Entrepreneurs, investors, and crypto millionaires who face significant tax exposure under U.S. global income laws.
Why they renounce:
- U.S. taxes worldwide income, even if you live elsewhere
- The Foreign Account Tax Compliance Act (FATCA) makes banking abroad difficult
- Wealth planning and tax optimization becomes limited by U.S. obligations
“I sold my startup while living in Dubai. I still had to file and pay U.S. taxes. It was infuriating.” – Michael B., former tech founder
3. Digital Nomads & Global Citizens
People building flexible lifestyles across borders. They want freedom to live, invest, and move without the U.S. government’s reach.
Why they renounce:
- Banking restrictions in other countries due to U.S. citizenship
- Tired of complicated forms like FBAR, FATCA, and PFIC rules
- U.S. passport is no longer needed for their lifestyle
“The U.S. passport used to feel like a privilege. Now it feels like an anchor.” – Chloe D., remote business owner
The Tax Trap: Why Citizenship Equals Tax for Americans
Unlike most countries, the United States taxes citizens based on nationality — not residency. That means:
- You pay U.S. tax on income earned anywhere in the world
- You must file every year, even if you owe nothing
- There are complex foreign account disclosures (FBAR, FATCA)
- Investment income abroad can be heavily penalized
- Certain countries won’t open bank accounts for Americans
For high earners or business owners living abroad, this becomes a nightmare. Even if you don’t live in the U.S., your tax and compliance burdens never leave.
The Emotional Side: What It Feels Like to Renounce
Renouncing citizenship isn’t just a legal procedure — it’s a deeply personal experience.
Some report feeling relief, clarity, and control. Others feel guilt, uncertainty, or judgment from friends and family.
“It wasn’t an easy decision. But it was the right one for my business and my kids’ future.” – Jonathan, renounced in 2022
“I cried after the embassy appointment. But it was freeing. I felt like I got my life back.” – Danielle, renounced in 2021
What They’re Doing Instead
Most people who renounce U.S. citizenship don’t do so to be stateless. They make sure they have a second passport or permanent residency lined up. Here’s what they choose:
1. Caribbean Second Citizenship (CBI Programs)
Grenada, Antigua & Barbuda, Saint Kitts & Nevis, and Dominica offer citizenship by investment for as little as $100,000.
Why it works:
- Visa-free access to 140+ countries
- No global income tax
- Fast process (4–6 months)
- Entire family included
Grenada is especially popular due to E-2 Visa access to the United States — allowing you to live and run a business in the U.S. without being a citizen.
2. UAE Residency Through Investment
The UAE offers a 10-year Golden Visa for investors, entrepreneurs, and property owners (starting around AED 2M or $545K).
Why it works:
- 0% income tax
- Global banking access
- Strong lifestyle and infrastructure
- No citizenship required to live long-term
3. European Residency or Citizenship Programs
Portugal, Spain, Malta, and Austria all offer pathways to residency — and eventual citizenship.
Portugal Golden Visa example:
- €200,000+ donation or fund investment
- Stay requirement: 14 days every 2 years
- Citizenship possible after 5 years
Malta Citizenship by Investment:
- €750,000 contribution + real estate
- Citizenship in 12–36 months
- Full EU rights
4. Re-domiciling to Tax-Friendly Nations
Some simply change their tax residency while keeping citizenship — using tools like:
- Tax treaties
- Non-residency declarations
- Company relocation (e.g., Dubai Free Zone)
- Strategic bank accounts and trusts
This is often a first step before renunciation.
How to Renounce U.S. Citizenship Legally
Renouncing U.S. citizenship is a formal legal act with lasting consequences.
Here’s the process:
- Acquire a second citizenship first
You must have another nationality before renouncing, or you risk becoming stateless. - Book an embassy appointment
You must appear in person at a U.S. embassy or consulate. - Pay the exit fee
Currently $2,350 — one of the highest in the world. - Sign a Statement of Voluntary Renunciation
- File final U.S. tax returns
Including IRS Form 8854 (to determine if you’re a “covered expatriate”)
Are There Exit Taxes?
Yes — but only for individuals who meet the criteria of a “covered expatriate.” This includes:
- Net worth of $2 million+
- Average annual income tax over ~$190,000 (updated annually)
- Failure to certify 5 years of tax compliance
In those cases, unrealized capital gains may be taxed at the time of exit.
Final Thoughts: A Hard Decision, A New Beginning
Renouncing U.S. citizenship is a bold step. It comes with emotional weight, complex paperwork, and tax consequences. But for many, it also comes with freedom — financial, logistical, and personal.
At Soland, we help high-net-worth individuals and global entrepreneurs build legal, tax-efficient pathways to second citizenship, international residency, and long-term wealth freedom.
Want a Personalized Exit Strategy?
Our experts can help you:
- Choose the right second passport
- Understand exit taxes and avoid costly mistakes
- Set up residency in the UAE, Europe, or the Caribbean
- Transition your business and finances across borders
📩 Contact us today for a private consultation.
🌐 www.solandworld.com
📞 info@solandworld.com
