Originally Published in Newsweek
Americans are renouncing their citizenship at record levels, with twice as many people giving it up in the first six months of 2020 than the entire previous year -- a statistic some are attributing to the current political and social climate in the U.S.
A total of 5,816 Americans voluntarily relinquished their citizenship in the first half of 2020, compared to the 2,072 who gave it up in all of 2019, according to research conducted by Bambridge Accountants New York. The first six months of 2020 saw a 1,210 percent increase in renunciation compared to June through December 2019, in which just 444 cases were recorded.
Alistair Bambridge, a partner at Bambridge Accountants, attributed the sharp increase to the coronavirus pandemic and U.S. political climate.
Those who choose to renounce their citizenship must pay a $2,350 fee to the U.S. government, but are then free from filing U.S. tax returns. Renunciation is different from expatriation, as expats potentially still have to pay U.S. taxes and report their foreign bank accounts.
"For many Americans this intrusion is too complicated, and they make the serious step of renouncing their citizenship as they do not plan to return to live in the U.S.," Bambridge said.
There are approximately 9 million U.S. expats, meaning Americans living abroad. Those choosing to keep their citizenship but continue living and working overseas are still able to receive federal benefits, including the $1,200 stimulus checks sent by the U.S. Treasury in April meant to help eligible Americans ease the financial burden caused by the pandemic.
Caba chose the latter, creating Avvinue, an all-in-one relocation platform which coordinates the logistics for anyone wanting to move abroad. It was a resource Caba didn't have for her own move to Lyon, and she wanted to help make the complicated process more streamlined for others.
"People are moving left and right and we want to guide them in the process because it's really stressful," she said.
Caba, the daughter of an immigrant, moved to Lyon without knowing French or ever having visited the city. Her desire to live abroad and experience a new culture grew stronger as she reached her mid-twenties, she said.
"I always had this mindset of, 'You can live wherever you want,'" Caba said. "Your dreams could be somewhere else."
When she first founded her relocation company, Caba noticed that many Americans were interested in moving abroad to either live a nomadic lifestyle or to study or work abroad.
"There was definitely an increase, and I think a lot of it has to do with people seeing on Instagram and YouTube that like, 'Wow, there's another world outside of the U.S.,'" she said. "There's so much to explore, and I think that really increased the interest for people."
"Look at the climate in the U.S. with politics, Black Lives Matter movement — all of these different things that are coming out around the time of the pandemic really makes people wonder, 'O.K., why am I still tied back to the U.S. if I really have nothing connected?'" Caba said.
Complicated tax laws and the difficulties surrounding opening a foreign bank account are other significant factors in the decision to renounce one's citizenship, Caba agreed. For Americans who may have already lived abroad for many years, started families in another country and no longer have ties to the U.S., renunciation might be the best route, she said.