A U.S. guide to second residence & citizenship abroad

Full transcript

0:00 Hi, everyone. I'm Max Dilendorf, founder of Dilendorf Law Firm in New York. My firm represents global investors, tech, and business owners, as well as high-net-worth families. And recently, we've seen a major increase in U.S. clients exploring second residences or citizenships abroad for asset protection, tax optimization, and a greater global mobility. But before Before choosing any residency or citizenship program, it's critical to understand the full picture.

0:45 You need to know if the residency you are applying for actually leads to citizenship, how it will affect both your US and foreign taxes, and if you need special structures like trusts or family limited partnerships to hold real estate and assets overseas.

1:04 You also want to understand what local estate planning documents you may need, what reporting rules apply when you move assets abroad and if the jurisdiction you are considering has wealth taxes or exit taxes that could impact you in the long term.

1:22 From working closely with clients, we see that a handful of jurisdictions stand out as the most practical options today.

1:31 These jurisdictions are Malta, UAE, Panama, Greece, Italy, Saint Kitts, and Antigua.

1:38 But choosing the right jurisdiction is never one size fits all decision.

1:44 The analysis must be tailored to your individual goals, whether you focused on long-term wealth preservation, getting these free travel options, or relocating to zero e-contacts jurisdictions such as the UAE or Panama. Taxation is another big one and often the most critical factor for US citizens. Places like Spain, France, Switzerland could impose annual wealth taxes on worldwide assets or could apply exit taxes when you are giving up your residency. That's That's why it's essential to work closely with local tax professionals to understand the specific nuances and obligations of your chosen residency.

2:34 And regardless of where you move, US citizens remain subject to full worldwide income reporting, including health bar if you have any foreign bank accounts or financial accounts, FATCA, form 8938. Reviewing if the US has a double tax treaty with the jurisdiction you are moving to is essential. For example, some jurisdictions have tax trees with the US that provide critical protection against a double taxation on certain types of income. Estate planning is another area with people often get confused. In Europe, places like Spain or France do not typically recognize US wills and trusts. Spain in particular could treat US grantor trusts as a separate taxpayer overseas. And so these conflicts often require a hybrid planning approach. For example, holding foreign assets through US family limited partnerships or irrevocable trusts while executing including jurisdiction-specific wills for assets located abroad.

3:45 Another important point, we see a lot of US citizens make expensive mistakes when buying real estate overseas, and many people purchase foreign real estate in their own name or through a simple local company, thinking it's the easiest option.

4:00 But that often creates unnecessary liability, higher taxes and major probate issues for their family later on. And so a much smarter approach is to buy a foreign real estate through U.S. Trust, U.S.

4:14 Family Limited Partnership or when appropriate a foreign trust or foundation that fits with your U.S. Tax and estate plan.

4:24 In the UAE, for example, GIFC and ADGM foundations work well with U.S. trusts and partnerships And our often the preferred way for Americans to call Dubai or Abu Dhabi real estate.

4:39 Using the right structure from start gives you better asset protection, better estate planning and more favorable tax treatment.

4:48 The bottom line is this, obtaining a second residency or citizenship as a US citizen requires careful planning.

4:56 And so if you are on this path and have any questions, please feel free to reach out to us. for watching and I will see you in the next episode.

A transcript of the recording, so it reads as speech rather than as prose. It explains the law in general terms and is not advice on your own situation, which turns on facts this video cannot know.