Moving to the U.S. but Concerned with Taxes?

June 21, 2022

Pre-Immigration Tax Planning

The United States of America is an amazing place to live and to do business. The quality of life, safety, market freedom, among other things, attract thousands of immigrant investors every year. A key aspect often concerning a high net-worth immigrant is the fiscal aspect, especially if the income sources will continue to come from their home country.

That is when a pre-immigration tax plan becomes a valuable tool for the immigrant. There are several different organizational strategies to protect the immigrant assets, depending on the visa type and the goals when moving to the U.S. This planning should be prepared in advance, prior to becoming a U.S. resident, to minimize U.S. Tax exposure.

An experienced tax advisor is prepared to advise the immigrant, analyzing a series of factors including:

  • Country of origin and citizenship
  • Visa status
  • Residency status
  • Tax treaties
  • Current ownership of assets in trust or business entities
  • Asset protection from U.S. lawsuits
  • Willingness to disclose world-wide assets and income
  • Family and business partner dynamics
  • Cross border taxation, etc.

Number of Days in the U.S. Could Make You a Resident for Tax Purposes
A common misconception is that an individual will become a fiscal resident once he or she receives their “Green card” or when becoming a U.S. Citizen. That is not true. Many foreign individuals may not be aware that permanency in the U.S. for as little as 120 days a year, could expose them to become a fiscal resident, resulting in the taxation of their world-wide income and disclosure of their world-wide assets and bank accounts.

Foreign Asset and Bank Account Reporting
Foreign individuals who become permanent residents (long term resident) of the U.S. must report their foreign bank accounts and assets (including interests in foreign entities), under the Foreign Account Tax Compliance Act (FATCA) and Foreign Bank Account Reporting (FBAR).

The good news is: there may be solutions to minimize your tax exposure, as well as alternatives to preserve wealth while complying with U.S. reporting requirements. Our experienced advisors could present the immigrant different options, tailored to address their personal circumstances.
Should you wish to schedule a consultation or receive more information, please contact us directly.

About AbitOs
AbitOs specializes in the unique accounting needs of high net-worth individuals with international lifestyles, LATAM, Canadian, and other non-US entities doing business in the US, as well as US entities doing business in those countries and across the globe. Pre-Immigration Tax Planning can be quite complex. If you would like to benefit from our expertise in these areas or if you have further questions on this Alert, do not hesitate to contact us.