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Dual Nationality
A foreign country might claim you as a citizen of that country
if:
- You were born there.
- Your parent or parents are or were citizens of that country.
- You are a naturalized U.S. citizen but are still considered
a citizen under that country's laws.
If you fall into any of the above categories, consult the embassy
of the country where you are planning to reside or are presently
living. While recognizing the existence of dual nationality, the
U.S. Government does not encourage it as a matter of policy because
of the problems it may cause. Claims of other countries upon dual-national
U.S. citizens often place them in situations where their obligations
to one country are in conflict with U.S. law. Dual nationality
may hamper efforts by the U.S. Government to provide diplomatic
and consular protection to individuals overseas. When a U.S. citizen
is in the other country of their dual nationality, that country
has a predominant claim on the person. If you have any question
about dual nationality, contact the nearest U.S. embassy or consulate
or the Office of Overseas Citizens Services at the address in
the previous section.
FINANCIAL AND BUSINESS MATTERS
U.S. Taxes
U.S. citizens must report their worldwide income on their Federal
income tax returns. Living or earning income outside the United
States does not relieve a U.S. citizen of responsibility for filing
tax returns. However, U.S. citizens living and/or working abroad
may be entitled to various deductions, exclusions, and credits
under U.S. tax laws, as well as under international tax treaties
and conventions between the United States and a number of foreign
countries. Consult the Internal Revenue Service (IRS) for further
information.
For information on taxes and locations of IRS offices overseas,
contact any office of the IRS or write to the Forms Distribution
Center, Post Office Box 25866, Richmond, Virginia 23289. That
office also has copies of Publication 54, Tax Guide for U.S. Citizens
and Resident Aliens Abroad; Publication 901, U.S. Tax Treaties;
Publication 514, Foreign Tax Credit for Individuals and Publication
520, Scholarships and Fellowships. The IRS has also put together
a package of forms and instructions (Publication 776) for U.S.
citizens living abroad. The package is also available through
to the Forms Distribution Center. During the filing period, you
can usually obtain the necessary Federal income tax forms from
the nearest U.S. embassy or consulate.
If you have access to a personal computer and a modem, you can
get forms and publications electronically from the IRS. The forms
and publications are available through IRIS, the Internal Revenue
Information Services on FedWorld, a government bulletin board.
On the Internet, you can telnet to fedworld.gov. or for file transfer
protocol services, connect to ftp.fedworld.gov. If you are using
the Internet's World Wide Web, connect to http://www.ustreas.gov.
Foreign Country Taxes
If you earn any income while you are overseas, you may be required
to pay tax on that income. You should check the rules and regulations
with that country's embassy or consulate before you leave the
United States, or consult the nearest U.S. embassy or consulate
abroad.
Bank Accounts
Some countries will permit you to maintain a local bank account
denominated in dollars or in another foreign currency of your
choice. This may be a good idea if the U.S. dollar is strong and
the local currency in the country you reside in is weak. If that
country does not permit you to maintain U.S. dollar bank accounts,
another idea would be to keep your dollars in a bank in the United
States. That way you could convert them to the local currency
as you need them rather than all at once. This would protect you
in the event that the country you are living in devalues its currency.
Wills
To avoid the risk of running afoul of foreign laws, if you own
property or other assets both in the United States and overseas,
consider the idea of having two wills drawn up. One should be
prepared according to the legal system of your adopted country,
and the other according to the legal system of the U.S. Each will
should mention the other.
Having two wills should ensure that your foreign property is
disposed of in accordance with your wishes in the event of your
death.
Property Investment
A major decision that you will have to face when you live abroad
is whether or not to purchase a home or property. Because prices
in many foreign countries may seem like a bargain compared to
the United States, there may be some merit to investing in real
estate. However, you will need to keep several things in mind.
First, check to see whether the country where you plan to invest
permits foreigners to own property. Many foreign countries do
not permit foreigners without immigrant status to buy real estate.
Also, there may be restrictions on areas in which you may buy
property and on the total number of foreigners who may purchase
property in any one year.
One way for a foreigner to purchase real estate overseas may
be to set up a bank trust and then lease the property. For your
protection, you should first consult with a local real estate
agent and then hire a reputable attorney. Check with the U.S.
embassy or consulate in the country where you plan to purchase
property to obtain a list of lawyers. A good lawyer will provide
you with information about having your real estate contract notarized,
registered, and if necessary, translated. Your attorney should
also be able to advise you on protection against unscrupulous
land deals.
Before you make a real estate purchase, learn the customs and
laws of the foreign government with regard to real estate. In
the event of a dispute, you will have to abide by local and not
U.S. laws. A good rule to follow is that before you invest in
any real estate take the same precautions which you normally would
take before you make a sizeable investment in the United States.
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