49% of Expats Are Thinking About Renouncing — Here's Why

Half the Table Is Thinking About It

There’s a specific moment that happens at expat gatherings — usually after the second glass of wine — where someone mentions renouncing their citizenship and instead of the room going quiet, six people start nodding. Not dramatically. Just quietly, like someone finally said the thing everyone was already thinking.

That’s what 49% looks like in a room.

The Greenback Tax Services 2025 Annual Survey found that 49% of American expats are considering giving up their US citizenship — a 63% increase year-over-year from the roughly 30% who reported the same in 2024. Nearly half. Not a fringe position. Not a political statement. Half of the people living the American expat life are seriously thinking about ending their formal relationship with the country they were born in.

The political explanations get the most airtime, but they’re not the whole story. To understand the 49%, you have to understand what daily life as a US citizen abroad actually costs — not in dollars, but in friction.

The FATCA Effect: When Your Passport Becomes a Problem

I applied to open a brokerage account in the Netherlands in 2023. Everything was going smoothly until the online form reached “Tax Residency.” When I selected “United States” as a tax residency (I’m a dual national, still filing with the IRS), the form threw an error. Not an error I could call to resolve. A dead end. The account application closed itself.

I was denied access to an investment account because of where I pay taxes. That’s FATCA in practice.

The Foreign Account Tax Compliance Act, enacted in 2010, requires foreign financial institutions to report information about accounts held by US persons to the IRS. The compliance burden is substantial — foreign banks must build reporting systems, maintain records, and submit annual disclosures on US-account holders. The penalty for non-compliance is a 30% withholding tax on US-sourced payments. For many smaller institutions, the cost of FATCA compliance simply exceeds the revenue they can generate from US-person accounts.

The result: foreign banks are increasingly shutting US clients out or charging premium fees rather than absorbing compliance costs. The banking problems are even worse than most Americans realize — FATCA: Why Your Foreign Bank Hates Your American Passport has the full picture. In some countries — particularly Germany, Switzerland, and several Gulf states — entire categories of financial products are simply unavailable to US persons. Retirement accounts, certain funds, insurance-linked investments. The US passport that was once a convenience has become a liability at the bank counter.

The Double Taxation Burden

The US is one of two countries in the world that taxes its citizens on worldwide income regardless of residence. (The other is Eritrea, which imposes a “diaspora tax” on its nationals abroad — a comparison the IRS probably doesn’t love.)

In practice, most expats don’t actually pay taxes twice on the same income. The Foreign Tax Credit and the Foreign Earned Income Exclusion offset most of the double liability for most people. But “you won’t actually pay twice” misses the point of why this is grinding people down.

The obligation exists. The filing requirement exists. Every year, you’re required to prove to the IRS that you already paid your taxes somewhere else. You need documentation. You need forms. You need a preparer who understands the interaction between US tax law and the tax law of wherever you live. In countries with different tax years or different income-classification rules, that interaction gets complicated quickly. US expat tax preparation runs $1,500 to $5,000+ annually for anyone with meaningful assets or income — even if the final tax bill is zero.

And zero isn’t always zero. The alternative minimum tax, PFIC rules on foreign investment funds, and various anti-deferral provisions can create real US tax liability even for people who’ve already paid full tax in their country of residence.

The Compliance Cost Goes Beyond Money

There’s a specific kind of anxiety that comes from knowing that a mistake on a foreign bank account disclosure could cost you $165,000. It changes how you think about financial decisions. It affects which accounts you’ll open, which investments you’ll make, whether you’ll accept a position as a director of a local company that might create reporting obligations.

The FBAR threshold — $10,000 aggregate across all foreign accounts at any point during the year — catches people who aren’t wealthy by any reasonable standard. The penalty for willful non-compliance is $165,353 or 50% of the account balance, whichever is greater. That’s not a fine for wealthy tax evaders. That’s a life-altering penalty that has been applied to ordinary people who simply didn’t know the rules.

The people most affected by this aren’t necessarily high earners. They’re ordinary expats who moved abroad for work or love, opened a local bank account, and had no idea the US government expected a report on it every year. These are the people seriously considering letting go of US citizenship — not out of anger, but out of exhaustion.

Who’s Actually Following Through

The number of Americans formally renouncing citizenship runs in the thousands annually — about 5,000 in 2024, according to State Department data, down from the 2020 record of 6,705. The 49% who are “considering” it will mostly not act on that consideration, at least not quickly. The process is expensive, slow, and permanent, which creates natural friction that filters out anyone who’s on the fence.

The people who actually go through with it tend to share a few characteristics: they’ve been abroad long enough to have built a life that doesn’t depend on returning, they’ve secured alternative citizenship, they have the financial resources to absorb the legal fees and potential exit tax, and they’ve hit enough practical walls — banking rejections, compliance hassles, investment restrictions — that the daily friction has tipped the cost-benefit calculation.

That last point matters. The 49% figure isn’t primarily about politics, even in a politically charged moment. People who renounce because of political anger often regret it. People who renounce because their financial life has become structurally complicated by their citizenship status — and who have done the math — generally don’t.

What the 49% Figure Actually Signals

Half of American expats considering renunciation is not a crisis in the conventional sense. It’s a signal that US tax and compliance policy has systematically underpriced the cost of imposing citizen-based taxation on people who’ve chosen to live abroad.

The US government collects relatively little additional revenue from most expats — the foreign tax credit and exclusion mechanisms mean that the actual incremental tax is small for most. But the compliance burden, the banking restrictions, and the legal exposure are real. The policy is essentially extracting friction from millions of people while collecting relatively little additional revenue in exchange. The 49% figure suggests that the people bearing that friction are increasingly aware that it’s a bad trade.

Whether that produces actual political pressure to reform citizen-based taxation is a different question. The US expat community is geographically dispersed, politically diverse, and has historically had limited lobbying power relative to the compliance industry that profits from the current system.

What Someone in That 49% Should Actually Do

Not every one of the 49% is in the same situation, and the right answer varies significantly based on individual circumstances. But here’s a framework that works for most:

If you’re in the “frustrated but not sure” category: Start by calculating your actual compliance cost. Add up annual tax prep, FBAR filing, and any banking or investment costs attributable to your citizenship. Compare it to what you’d pay for an immigration attorney consultation and the renunciation process. If the ongoing cost is less than the one-time cost, renunciation probably doesn’t make financial sense — at least not purely on cost grounds.

If you’re being actively denied financial services: Document every denial. Account applications rejected, products you can’t access, fees you’re charged as a US person. That documentation will be useful to an expat tax attorney, and it’s also a reminder to yourself that this friction is real and ongoing.

If you’ve already made the mental decision: The path forward is linear. Get tax-compliant for the last five years, secure alternative citizenship if you don’t have it, model the exit tax (do you have over $2M net worth or an average $211,000+ annual income tax bill?), and work with an attorney who specializes in expatriation. The renunciation process step by step isn’t short, but it’s knowable.

If you’re mostly reacting to political anxiety: Wait six months. If the practical day-to-day friction is still there in six months — and it will be, because FATCA isn’t going anywhere — and you still want to renounce, make the decision then. If the anxiety fades and the friction doesn’t feel worth the hassle of renouncing, you have your answer.

The 49% aren’t all wrong about the calculation. Some of them should renounce. Most of them won’t. The ones who should are the ones for whom the compliance burden is structurally affecting their financial and professional life, who have thought through what they’re giving up, and who are acting from a clear-eyed cost-benefit analysis rather than a bad week with the IRS.

Figure out which group you’re in first.